CH2M Hill v State of NSW

The case of CH2M Hill v State of NSW involved a dispute between CH2M Hill, a consultancy firm, and the State of New South Wales regarding indemnity costs associated with a legal proceeding. The case was heard in the Supreme Court of New South Wales. CH2M Hill sought indemnity costs from the State after prevailing in a litigation matter. The State argued that CH2M Hill was not entitled to such costs as there was no real element of compromise in the proceedings, specifically referring to a Calderbank letter, which is a letter proposing a compromise settlement in litigation.

The central legal issue before the court was whether the presence of a Calderbank letter constituted a real element of compromise for the purposes of indemnity costs. The court had to determine whether a Calderbank letter, which was not accepted by the opposing party, could still be considered as a genuine offer of compromise. The case hinged on the interpretation of the term "real element of compromise" and whether a genuine offer, even if rejected, was sufficient to warrant indemnity costs.

The Supreme Court of New South Wales ruled that a genuine offer of compromise, regardless of its acceptance, constituted a real element of compromise. The court found that the Calderbank letter, despite not being accepted, represented a genuine attempt at settlement. Consequently, the court determined that CH2M Hill was entitled to indemnity costs. The decision underscored that the presence of a Calderbank letter, even if not accepted, was sufficient to establish a real element of compromise.

The court ordered the State of New South Wales to pay CH2M Hill the indemnity costs as claimed. This ruling clarified that for indemnity costs to be awarded, the court must find that there was a genuine attempt to compromise, which need not have been accepted by the opposing party.