Bassal v Savills (NSW) Pty Limited (No 2)

The appeal was brought by Bassal against Savills (NSW) Pty Limited regarding a joint venture agreement for the construction of an outlet shopping centre. The primary dispute centred on whether the respondents were liable for certain costs incurred by the appellant, particularly indemnity costs, following an offer of settlement. The matter was heard in the Supreme Court of New South Wales, Court of Appeal.

The legal issues that the Court was required to address included whether it was appropriate to make a gross sum costs order under the Uniform Civil Procedure Rules. Specifically, the Court needed to determine whether the indemnity costs provision in the settlement agreement was enforceable, and if so, whether a gross sum costs order was justified given the nature of the settlement offer and the subsequent litigation.

The Court held that the indemnity costs provision was enforceable and that the settlement offer was a significant factor in determining the appropriate costs order. The Court concluded that a gross sum costs order was appropriate because it reflected the reality of the settlement offer and the nature of the litigation. The indemnity costs were a significant component of the settlement offer, and the Court found it appropriate to order that the respondents pay the costs of the proceeding in a gross sum, which included the indemnity costs.

The final orders of the Court were that the respondents were to pay the appellant’s costs of the proceeding in a gross sum as assessed or agreed. This included the indemnity costs as stipulated in the settlement offer, reflecting the Court’s view that the gross sum costs order was appropriate under the circumstances.