Hendriks v McGeoch (No 2)

The parties to this matter were the plaintiff, McGeoch, and the defendants, Hendriks. The dispute concerned the award of costs following an appeal. The Court of Appeal of New South Wales was required to consider whether to vary an earlier costs order in light of pre-trial settlement offers made by the plaintiff, despite the defendants having achieved a reduction in damages on appeal.

The central legal issue before the Court of Appeal was whether the plaintiff's success at trial, which exceeded the settlement offers made by the plaintiff, should be a decisive factor in determining the costs of the appeal, particularly given that the defendants had succeeded in reducing the quantum of damages awarded at first instance. The court also had to consider the weight to be given to the plaintiff's earlier settlement offers in the context of the appeal as a distinct stage of the litigation.

The Court of Appeal reasoned that while the plaintiff's success at trial had exceeded their pre-trial settlement offers, this fact was a discretionary consideration for the court when awarding costs. The appeal represented a new stage in the litigation, and the plaintiff had not made any fresh settlement offers in response to the appeal. Consequently, the court found that the prior offers counted for little in the context of the appellate costs. The court concluded that there was no reason to vary the costs order that had been made on 2 April 2008.

Accordingly, the Court of Appeal ordered that the costs order made on 2 April 2008 would not be varied. The respondent (the plaintiff) was ordered to pay the appellants' (the defendants') costs of the application to vary that costs order.