Council of the City of Liverpool v Turano (No 2)

The dispute in *Council of the City of Liverpool v Turano (No 2)* concerned the costs of an action where the plaintiff, Mrs Turano, succeeded against one defendant, Sydney Water, but failed against the other, the Council of the City of Liverpool. The appeal was heard by Beazley JA, Hodgson JA, and McColl JA in the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were whether the unsuccessful defendant, the Council, should be ordered to contribute to the plaintiff's costs incurred in prosecuting her claim against the successful defendant, Sydney Water, in circumstances where the Council had asserted that Sydney Water was liable on the plaintiff's claim. Additionally, the Court considered the application of *Bullock* and *Sanderson* orders, and whether a *Calderbank* offer made by Sydney Water was a genuine compromise or an invitation to capitulate, which would inform an application for costs on an indemnity basis.

The Court determined that a *Bullock* order, which typically apportions costs between unsuccessful defendants, was not applicable as the plaintiff had succeeded against one defendant. A *Sanderson* order, which allows a plaintiff to recover costs from an unsuccessful defendant where the plaintiff has been put to unnecessary expense by the unsuccessful defendant's conduct, was also not made. However, the Court held that in the absence of a *Sanderson* order, a plaintiff's costs incurred in prosecuting a claim against a successful defendant could be ordered to be borne by an unsuccessful defendant if the unsuccessful defendant's conduct made it fair to impose such liability. In this instance, the Court found that the Council's conduct did not warrant such an order. Regarding the *Calderbank* offer, the Court found it was not a genuine offer of compromise and therefore did not support an indemnity costs order.

The Court made specific orders regarding the costs of the liability hearing and the appeal. Sydney Water was ordered to pay Mrs Turano's costs of the liability hearing and appeal in relation to her claim against it. Conversely, Mrs Turano was ordered to pay the Council's costs of the liability hearing and appeal in relation to her claim against the Council. The Council and Sydney Water were ordered to pay each other's costs concerning their respective cross-claims. Finally, Mrs Turano was granted a certificate under the *Suitors' Fund Act 1951* in respect of her liability for the Council's costs of the appeal.