Great Wall Resources Pty Ltd v O'Sullivan (No 2)

Great Wall Resources Pty Ltd (appellant) sought indemnity costs from O'Sullivan (respondents) following an appeal concerning damages awarded by McLaughlin AsJ. The dispute revolved around whether the respondents were entitled to indemnity costs for a period after the appellant's offer to settle.

The primary legal issue before the Court of Appeal was whether the respondents had made an offer to settle that was more favourable than the final judgment, thereby entitling them to indemnity costs. Specifically, the court considered the effect of a *Calderbank* letter, which is an offer to settle made without prejudice save as to costs, and whether it met the threshold for an award of indemnity costs.

The Court of Appeal determined that the respondents' *Calderbank* offer, made on 8 September 2008, was more favourable than the judgment ultimately obtained by the appellant. The court reasoned that the offer clearly indicated the terms upon which the respondents were prepared to settle the litigation, and the subsequent judgment did not exceed the terms of that offer. Consequently, the court found that the respondents were entitled to indemnity costs from the date of their offer.

The Court of Appeal ordered that the money paid into court by the appellant be paid out to the respondents on account of the damages awarded. Furthermore, the court ordered that the costs previously ordered in favour of the respondents be paid on a party and party basis up to and including 8 September 2008, and thereafter on an indemnity basis.