Diamond v Simpson (No 2)

Diamond (appellant) appealed against a decision of the Supreme Court of New South Wales concerning damages awarded in a previous proceeding. Simpson (first respondent) was the party against whom the appeal was brought. The appeal concerned a substantial reduction in the damages awarded to the appellant, who had succeeded on approximately half of the sixteen heads of damage claimed.

The primary legal issue before the Court of Appeal was whether an offer of compromise made by the appellant prior to the trial, which had been rejected by the respondent, continued to have cost consequences for the appeal. Specifically, the court considered the application of Supreme Court Rules Pt 52A r11 and the exercise of discretion regarding costs in light of the offer and the outcome of the appeal.

The court reasoned that the offer of compromise, made before the trial, was relevant to the costs of the appeal. Despite the appellant's success on only half of the heads of damage, the substantial reduction in the awarded damages meant that the appellant had achieved a better outcome than that offered. The court exercised its discretion under Pt 52A r11 to order that the first respondent pay a proportion of the appellant's costs of the appeal. The costs order of the lower court was not disturbed. The first respondent was ordered to pay 66% of the appellant's costs of the appeal.