Ghunaim v Bart (No 2)

This case concerned an appeal regarding costs orders made by Rein DCJ. The appellant, Mr. Ghunaim, sought to set aside the costs orders made by the trial judge and have the respondent, Mr. Bart, pay the appellant's costs of the trial. The dispute arose from an unaccepted offer of compromise made by the appellant on the morning of the first day of trial, which remained open for acceptance for only two to three hours.

The primary legal issue before the court was whether the appellant had acted unreasonably in rejecting the respondent's offer of compromise, thereby justifying an award of indemnity costs against the appellant for the period after the offer was made. The court was required to consider the discretion to award indemnity costs following an unaccepted Calderbank offer, taking into account all the circumstances of the case, including the strengths and weaknesses of each party's position at the time the offer was made.

The court reasoned that the discretion to award indemnity costs following an unaccepted Calderbank offer should be exercised in accordance with the principles applicable to offers of compromise under the District Court Rules. Specifically, a defendant seeking indemnity costs must demonstrate that the plaintiff's rejection of the offer was unreasonable. The court noted that indemnity costs do not automatically follow from an unaccepted offer and that the authorities emphasize the width of the discretion and the unusual nature of awarding indemnity costs in relation to Calderbank letters. The court also considered the relevant District Court Rules regarding offers of compromise, including the minimum period for which such offers must remain open and the consequences of an unaccepted offer made during trial.

The court ordered that the costs orders made by Rein DCJ on 17 October 2002 be set aside. The respondent was ordered to pay the appellant's costs of the trial. The respondent was also directed to inform the appellant of the judgment and orders by letter to his last known address.