AV8 Air Charter Pty Ltd v Sydney Helicopters Pty Ltd (No 2)

AV8 Air Charter Pty Ltd (the appellant) sought indemnity costs of the trial and appeal, as well as interest on those costs, from Sydney Helicopters Pty Ltd (the respondent). The dispute concerned the form of an offer of compromise made before the trial. The respondent argued that had the issue of indemnity costs been raised before the trial judge, different evidence might have been led. The respondent also sought indemnity costs of the appeal, relying on the pre-trial offer, despite making no offer in the appeal proceedings themselves and not indicating an intention to rely on the earlier offer. The application for interest on costs was raised for the first time after the appeal judgment.

The Court of Appeal was required to determine whether the respondent was entitled to indemnity costs of the trial and appeal, and whether it was entitled to interest on those costs. Specifically, the court considered whether the respondent's failure to apply for indemnity costs before the trial judge, and its reliance on a pre-trial offer in the appeal proceedings without prior notification, precluded such an award. The court also examined whether the late introduction of the claim for interest on costs was permissible.

The Court of Appeal refused the respondent's application for indemnity costs of the trial, noting that no such application had been made to the trial judge and that the costs orders made by the District Court in the appeal were not challenged. Regarding the indemnity costs of the appeal, the court found that the respondent's reliance on the pre-trial offer was insufficient, as no offer had been made in the appeal proceedings and no indication had been given to the appellant of the intention to rely on the earlier offer. The application for interest on costs was also refused, as it had not been raised in either the District Court or the appeal, and was only introduced after the appeal judgment.

The Court of Appeal confirmed the costs orders made by the District Court in relation to the trial and the costs orders made by the Court of Appeal in relation to the appeal. The respondent was ordered to pay the appellant's costs of the application.