Fotheringham v Fotheringham (No 2)

The appeal concerned an application for indemnity costs of an appeal following a dispute arising from a de facto relationship. The plaintiff had made an offer of compromise prior to the hearing. The Master made an order in favour of the plaintiff for an amount exceeding this offer and awarded the plaintiff costs on an indemnity basis. The defendant appealed this order.

The primary legal issue before the Court of Appeal was whether the plaintiff, despite the defendant's successful appeal which reduced the Master's order, should be awarded costs of the appeal on an indemnity basis. This question arose because the reduced award still exceeded the plaintiff's original offer of compromise.

The Court of Appeal considered the principles governing the award of indemnity costs, particularly in circumstances where an offer of compromise has been made and the ultimate award exceeds that offer. The Court noted that while an offer of compromise can be a significant factor in awarding indemnity costs, it is not determinative, especially when an appeal is partially successful. The Court found that the defendant's appeal had been upheld to a degree that warranted a departure from the general rule regarding costs.

Consequently, the Court ordered that the respondent (the plaintiff at first instance) pay the appellant's (the defendant at first instance) costs of the appeal.