Botany Bay City Council v Latham (No 2)

The appeal concerned the costs of proceedings between Botany Bay City Council (appellant) and Latham (respondent). The dispute arose from an offer of compromise made by the Council to Latham. The primary issue before the Court of Appeal was the appropriate basis for ordering costs, specifically whether Latham was entitled to costs on an ordinary or indemnity basis for certain periods of the litigation.

The Court of Appeal was required to determine whether the Council's offer of compromise, which stipulated that each party bear their own costs, was a valid offer for the purposes of the relevant costs rules. Further, the Court had to consider whether, given the timing of this offer relative to the incurring of substantial costs by Latham, the offer was sufficient to warrant a departure from the usual order for costs on an ordinary basis.

The Court reasoned that an offer to compromise, even one where each party bears their own costs, can be a sufficient offer for the purposes of the costs rules, particularly when made after a party has incurred substantial costs. The Court found that the Council's offer, made at a point where Latham had already incurred significant legal expenses, was a genuine offer of compromise. Consequently, the Court determined that Latham should not recover costs incurred after the making of that offer on an indemnity basis, as the offer should have prompted him to reconsider his position.

The Court of Appeal varied the order made by the primary judge. It ordered that Latham was to pay the Council's costs at first instance and on appeal on an ordinary basis up to 11 am on 14 October 2013. Thereafter, Latham was ordered to pay the Council's costs on an indemnity basis.