Bathurst Regional Council as Trustee for the Bathurst City Council Crown Reserves Reserve Trust v Thompson (No 2)

In Bathurst Regional Council as Trustee for the Bathurst City Council Crown Reserves Reserve Trust v Thompson (No 2), the New South Wales Court of Appeal considered an application for a special costs order following an appeal. The dispute concerned the entitlement to indemnity costs of an appeal, with the respondent arguing for indemnity costs from an earlier offer of compromise made in the court below.

The primary legal issue before the Court of Appeal was whether an offer of compromise made in the District Court, which was not accepted, could entitle the respondent to indemnity costs for the entirety of the subsequent appeal proceedings. The respondent contended that pursuant to rule 51.49 of the Uniform Civil Procedure Rules 2005 (NSW), the Court could consider the earlier offer when exercising its discretion on costs for the appeal, relying on the authority of *Channel 7 Sydney Pty Ltd v Mahommed (No 2)*. The appellant, however, argued that the appeal proceedings should be treated as distinct from the original proceedings for the purposes of costs rules, and that the offer made during the appeal was not a mere renewal of the earlier offer.

The Court of Appeal varied the costs order of 26 October 2012. It ordered that the appellant pay the respondent's costs of the appeal on a party/party basis up to 27 March 2012, and thereafter on an indemnity basis. The respondent was ordered to pay the costs of the application before the Court of Appeal.