Commonwealth of Australia v Gretton

The Commonwealth of Australia (appellant) appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales concerning costs. The dispute arose from the appellant's refusal of a Calderbank offer made by Mr Gretton (respondent) prior to trial. Following the trial, the respondent obtained a judgment that was less favourable than the terms offered in the Calderbank offer.

The primary legal issue before the Court of Appeal was whether the appellant's refusal of the Calderbank offer was so unreasonable as to warrant an award of indemnity costs against the appellant. This required the court to consider the genuineness of the offer and the reasonableness of its rejection in light of the subsequent trial outcome.

The Court of Appeal affirmed the discretion of the trial judge in awarding costs. It was held that a Calderbank offer, while not automatically attracting indemnity costs upon a less favourable outcome, requires careful consideration of the circumstances surrounding its rejection. The court found that the appellant's refusal of the offer was not demonstrably unreasonable to the extent that it justified departing from the usual order for costs.

Leave to appeal was granted, but the appeal was ultimately dismissed. The appellant was ordered to pay the respondent's costs of the appeal.