Fabre v Lui (No 2)

In *Fabre v Lui (No 2)*, the New South Wales Court of Appeal considered an appeal concerning an offer of compromise made by the defendant, Mr Lui, to the plaintiff, Mr Fabre. The dispute revolved around whether the offer, which proposed that Mr Fabre forego any claim for costs, constituted a valid offer of compromise under the relevant rules of court, particularly given that it was made before significant costs had been incurred by Mr Fabre.

The central legal issue before the Court of Appeal was whether Mr Lui's offer, which stipulated that Mr Fabre should forgo his entitlement to costs, could be characterised as an "offer of compromise" for the purposes of the rules governing offers of compromise. This required the Court to determine if such an offer, made at a stage where the plaintiff had not yet incurred substantial legal expenses, contained any element of compromise as contemplated by the rules.

The Court of Appeal held that an offer to forego costs, particularly when made at an early stage of proceedings before significant costs have been incurred, does not necessarily constitute a genuine offer of compromise. The Court reasoned that the purpose of an offer of compromise is to facilitate settlement by proposing a resolution that involves concessions from both parties. An offer that merely requires the other party to abandon a claim for costs, without offering any substantive concession on the underlying dispute, may lack the essential element of compromise. Consequently, the Court dismissed the Notice of Motion.