Dr Ross Gregory Pedrana v Racing NSW (No 3)

Dr Ross Gregory Pedrana initiated legal proceedings against Racing NSW, the governing body of horse racing in New South Wales, in a case that was ultimately determined by the Supreme Court of New South Wales. The dispute centred on the costs associated with the proceedings, particularly an application for indemnity costs based on a purported Calderbank offer. The essence of the defendant's offer was that the plaintiff would pay 90% of the defendant's assessed costs, effectively a walk away offer given that the plaintiff had already secured an interlocutory injunction against the defendant's opposition. The court was tasked with deciding whether the circumstances warranted the Court to depart from the ordinary rule regarding indemnity costs.

The legal issues before the court included whether the defendant's offer constituted a substantial compromise warranting indemnity costs and whether the Court should depart from the ordinary rule. The court noted that a Calderbank offer does not necessarily lead to indemnity costs, particularly when the offer is a walk away offer and the plaintiff has already secured a significant procedural benefit. The court emphasised that the ordinary rule should not be departed from lightly, and the circumstances must be exceptional for such a departure to be justified. The plaintiff's already obtained interlocutory injunction and the nature of the defendant's offer were critical factors in the court's analysis.

The court found that the defendant's offer did not amount to a substantial compromise. It held that the plaintiff had already benefited significantly from the interlocutory injunction, and the defendant's offer did not provide a meaningful opportunity for resolution that was substantially different from the status quo. Consequently, the court concluded that the ordinary rule should not be departed from, and the plaintiff was not entitled to indemnity costs based on the defendant's offer. The court's decision underscored the importance of substantial compromise in the context of indemnity costs and the cautious approach required in departing from the ordinary rule.