Erskine as liquidator of North Shore Property Developments Pty Ltd (in liq) v 72-74 Gordon Crescent Lane Cove Pty Ltd (No 2)

In the matter of Erskine as liquidator of North Shore Property Developments Pty Ltd (in liq) v 72-74 Gordon Crescent Lane Cove Pty Ltd (No 2), the respondent, as liquidator, sought to vary a previous costs order to include indemnity costs in their favour. The appellant had previously offered to settle the case, which the liquidator had rejected. The court was tasked with determining whether it was unreasonable for the liquidator to reject the settlement offer and whether this rejection justified an order for indemnity costs.

The primary legal issue before the court was whether the liquidator's decision to reject the settlement offer was unreasonable and whether this unreasonableness justified the imposition of indemnity costs. The court considered the circumstances under which the offer was made, the merits of the case, and the principles of costs in the event of a refusal to accept a settlement offer. The court needed to balance the need to encourage settlement offers against the risk of penalising parties for making genuine offers.

The court found that the liquidator's rejection of the settlement offer was not unreasonable, considering the merits of the case and the potential outcomes. The court concluded that the settlement offer was not such that it could be said to be a "compelling" offer which, if accepted, would have resulted in a significant saving of costs. As a result, the application to vary the costs order to include indemnity costs was dismissed. The court also ordered that the respondent pay the appellant's costs of and in connection with the application.