C and E Critharis Constructions Pty Ltd v Cubic Metre Pty Ltd (No 2)

The dispute before the New South Wales Court of Appeal concerned an application by Cubic Metre Pty Ltd (the respondent) for an indemnity costs order against C and E Critharis Constructions Pty Ltd (the applicant). The application arose from a previous costs order made in chambers under special arrangements during the COVID-19 pandemic.

The primary legal issue was whether the costs order previously made was one granted "in the absence of a party" for the purposes of rule 36.16(2)(b) of the Uniform Civil Procedure Rules 2005 (NSW). A secondary issue was whether the respondent was entitled to an indemnity costs order, given that the applicant had not accepted an offer of compromise which, according to the respondent, required the applicant to capitulate without any compromise on costs or other matters.

The Court of Appeal held that the costs order in question was not made in the absence of a party, as the applicant had been notified of the hearing and had the opportunity to attend. Furthermore, the Court found that the respondent was not entitled to an indemnity costs order. This was because the offer of compromise made by the respondent was not a genuine offer to compromise, as it demanded complete capitulation from the applicant without any concession on costs or other issues.

Consequently, the respondent’s notice of motion seeking an indemnity costs order was dismissed.