CBA Investments Limited v Northern Star Limited (No. 2)

The dispute in *CBA Investments Limited v Northern Star Limited (No. 2)* concerned an application for indemnity costs following a settlement. The parties involved were CBA Investments Limited (the applicant) and Northern Star Limited (the respondent). The matter came before the Court of Appeal of New South Wales, comprising Beazley and Hodgson JJA and Rolfe AJA.

The central legal issue before the Court was whether the respondent's Calderbank offer was sufficiently reasonable to warrant an order for indemnity costs in its favour. The Court had to assess the terms of the offer against the outcome of the litigation, which had been settled, to determine if the offer was one which the applicant ought reasonably to have accepted.

The Court reasoned that a Calderbank offer is a genuine offer to compromise litigation made without prejudice save as to costs. For such an offer to justify an order for indemnity costs, it must be shown that the offer was a reasonable one for the plaintiff to accept. In this instance, the Court found that the offer made by the respondent was not of such a nature that the applicant ought reasonably to have accepted it. The Court considered the terms of the offer in light of the circumstances of the case and concluded that it did not meet the threshold required for an award of indemnity costs.

Consequently, the Court dismissed the application for indemnity costs.