Gordon v Lever (No 3)

The appeal concerned an application to vary a costs order made in the Supreme Court of Victoria. The parties were Gordon (appellant) and Lever (respondent). The dispute arose from the respondent's success in a prior proceeding, which led to a costs order in their favour. The appellant sought to have this costs order varied.

The central legal issue before the Court of Appeal was whether the primary judge had erred in exercising their discretion regarding the costs order. Specifically, the court had to consider whether a *Calderbank* letter, which is a letter written by a party offering to settle a dispute on certain terms, had been adequately considered by the primary judge in making the costs order. The appellant argued that the *Calderbank* letter demonstrated that they had made a reasonable offer of settlement, and that the respondent's refusal of this offer should have influenced the costs order against the respondent.

The Court of Appeal found no error in the primary judge's exercise of discretion. The court held that the primary judge had indeed considered the *Calderbank* letter and had given it appropriate weight in the context of all the circumstances of the case. The principles applied were those governing the exercise of judicial discretion in awarding costs, which requires a broad consideration of all relevant factors. The court emphasised that a *Calderbank* offer, while relevant, does not automatically entitle the offeror to a costs order in their favour, nor does it mandate a reduction in the costs awarded to the successful party.

Consequently, the Court of Appeal dismissed the appeal and made no variation to the costs order of the Supreme Court.