Australian Special Opportunity Fund LP v Equity Trustees Wealth Services Ltd

The dispute in *Australian Special Opportunity Fund LP v Equity Trustees Wealth Services Ltd* concerned the appropriate costs orders following an appeal and a related notice of motion. The parties involved were the Australian Special Opportunity Fund LP (the first, second, and fourth appellants) and Ms Hong Jiang and Mr Yongan Xie (the respondents), along with Equity Trustees Wealth Services Ltd. The case was heard in the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were whether a *Calderbank* offer, which proposed consent to the dismissal of a notice of motion with no order as to costs, constituted a substantial compromise, and whether a different costs order was warranted due to the appellants succeeding on points not raised at first instance.

The Court of Appeal reasoned that the *Calderbank* offer, by seeking dismissal of the notice of motion without costs, did not represent a substantial compromise in the context of the overall proceedings. The court considered the appellants' success on points not argued at the initial hearing, which justified a departure from the usual costs order. The court applied principles relating to the assessment of costs in light of the parties' conduct and the outcome of the litigation, particularly where new arguments were successfully advanced on appeal.

The Court of Appeal made specific orders regarding costs. It varied a previous order to provide that Ms Hong Jiang and Mr Yongan Xie pay the costs of the first, second, and fourth appellants of the appeal and related applications. These costs were to be on an indemnity basis for costs incurred after 2 October 2014 in relation to a specific notice of motion, and otherwise on an ordinary basis. The court also ordered Ms Hong Jiang and Mr Yongan Xie to pay the costs of the appellants concerning applications related to costs. Separately, a notice of motion filed on 25 November 2014 was dismissed with costs.