Coregas Pty Limited v Penford Australia Pty Limited (No 2)

Coregas Pty Limited (the appellant) sought a special costs order against Penford Australia Pty Limited (the respondent) following litigation. The dispute concerned an offer of compromise made by the appellant pursuant to the principles established in *Calderbank v Calderbank*.

The central legal issue before the Court of Appeal of New South Wales was whether the appellant's *Calderbank* offer was sufficiently favourable to warrant a special costs order. Specifically, the court had to determine if the offer, when assessed against the judgment ultimately obtained by the respondent, justified departing from the usual rule that costs follow the event.

The court reasoned that the appellant's offer, despite providing calculations for pre-judgment interest in an accompanying explanatory letter, did not explicitly include an allowance for such interest within the offer itself. Consequently, when compared to the respondent's achieved outcome, which included pre-judgment interest, the offer was less favourable than the judgment. The court found no basis for compromise was clearly set out in the explanatory letter, and therefore, the appellant had not established grounds for a special costs order. The appellant's application was dismissed with costs.