Arnott v Choy (No 2)

In *Arnott v Choy (No 2)*, the dispute before the Court of Appeal of New South Wales concerned the ability to rely on a *Calderbank* letter in proceedings brought under the *Motor Accidents Compensation Act 1999* (NSW). The appellant sought to rely on a *Calderbank* offer to justify an order for indemnity costs.

The primary legal issue before the court was whether the provisions of the *Motor Accidents Compensation Act 1999* (NSW) precluded the application of the general principles governing costs, specifically the ability to rely on a *Calderbank* offer to seek indemnity costs. The court was required to determine if the statutory scheme for motor accident claims displaced the court's inherent jurisdiction to award costs on an indemnity basis in circumstances where a reasonable offer of settlement had been unreasonably rejected.

The court reasoned that the *Motor Accidents Compensation Act 1999* (NSW) did not expressly or implicitly exclude the court's power to award indemnity costs based on a *Calderbank* offer. The court affirmed that the Act's cost provisions were not exhaustive and did not prevent the court from exercising its discretion to award costs on an indemnity basis where appropriate, particularly when a party had made a reasonable offer of settlement that was subsequently rejected. The court found that the appellant's *Calderbank* offer was reasonable and that the respondent's rejection of it was unreasonable, justifying the award of indemnity costs from the date of the offer.

The court ordered that the respondent pay the appellant’s costs of the appeal, including the costs of the application, assessed on an ordinary basis up to and including 2 July 2009, and thereafter on an indemnity basis. Each party was ordered to pay their own costs of the cross-appeal, and the respondent was granted a certificate under the *Suitor’s Fund Act 1951* (NSW).