Caltex Australia Petroleum Pty Ltd v Troost (No 2)

The appeal before the Court of Appeal of New South Wales concerned an application for indemnity costs by Caltex Australia Petroleum Pty Ltd (the appellant) against Mr Troost (the respondent), following a dispute over an indemnity and the appellant's success in recovering a significant portion of its claim. The primary dispute revolved around whether the appellant was entitled to costs on an indemnity basis due to the respondent's alleged unreasonable refusal of a compromise offer, and whether the appellant had suffered "losses" under the relevant indemnity.

The court was required to determine whether the appellant was entitled to indemnity costs, specifically considering whether the respondent's failure to accept a compromise offer was unreasonable. This involved an assessment of the circumstances surrounding the offer and the subsequent litigation. Additionally, the court had to consider whether the appellant's claim for costs on an indemnity basis was supported by the terms of the indemnity, which referred to "losses" suffered by the appellant. The court also had to address the question of whether the general rule regarding costs should be departed from in the District Court proceedings, given that the appellant was unsuccessful in a discrete aspect of its claim.

The Court of Appeal allowed the appeal, setting aside the orders of the District Court. The court found in favour of the plaintiff (Caltex) against the defendant (Troost) for a substantial sum, including principal and interest, and ordered that the defendant pay the plaintiff's costs of the District Court proceedings. The court further ordered that the respondent pay the appellant's costs of the appeal and that the respondent be provided with a certificate under the Suitors’ Fund Act 1951 (NSW) if eligible.