Averkin v Insurance Australia Ltd (No 2)

In *Averkin v Insurance Australia Ltd (No 2)*, the New South Wales Court of Appeal considered an appeal from a judgment of the District Court. The dispute concerned the entitlement of the appellant, Mr Averkin, to costs following a successful appeal against a decision that had favoured the respondent insurer. Mr Averkin had been awarded a sum of $38,070 plus pre-judgment interest in the District Court, but the primary judge had entered judgment for the defendant insurer.

The Court of Appeal was required to determine whether the pre-judgment interest awarded to Mr Averkin should be included in the calculation for the purpose of applying the rule that no costs are ordinarily allowed if a plaintiff obtains judgment for less than $40,000. Furthermore, the Court had to consider whether Mr Averkin was entitled to special costs orders, specifically indemnity costs, by reason of offers of compromise made by him.

The Court reasoned that the rule regarding the $40,000 threshold for costs was intended to apply to the total judgment amount, including any pre-judgment interest. As the sum awarded to Mr Averkin, when pre-judgment interest was included, exceeded $40,000, he was entitled to recover his costs on an ordinary basis. The Court also found that Mr Averkin's offers of compromise were more favourable to him than the ultimate outcome of the proceedings, justifying an order for indemnity costs from the dates those offers were made.

Consequently, the Court of Appeal set aside the District Court's judgment and entered judgment for Mr Averkin in the sum of $42,239.70. The insurer was ordered to pay Mr Averkin's costs at first instance and on appeal, with costs to be assessed on an ordinary basis up to specified dates and on an indemnity basis thereafter, reflecting the successful offers of compromise. The insurer was also ordered to pay Mr Averkin's costs of the application for judgment and costs orders on an ordinary basis.