Hennessy v Lynch (No. 4)

The court was presented with an application by the defendant, Lynch, to vary an earlier order for costs made in the defamation case of Hennessy v Lynch. The earlier order, made on 13 December 2007, allocated the costs of the litigation between the parties up until a specified date. Lynch sought to adjust this order in light of a more recent offer of compromise made by Lynch to Hennessy on 20 April 2007. The legal issues before the court were centred around the application of section 48A of the Defamation Act 1974 (NSW), which deals with offers of compromise in defamation cases and its impact on the apportionment of costs.

The court considered the statutory provisions and relevant case law in relation to offers of compromise and their effect on the costs orders in defamation cases. The court recognised that an offer of compromise can be a significant factor in determining the costs order, particularly if it is made at a stage where the plaintiff has not achieved a significant success. The court found that Lynch's offer of compromise, made before the litigation reached a stage where Hennessy had a significant advantage, was a relevant consideration. The court decided that the costs should be apportioned in a manner that reflected the fact that the litigation did not progress significantly beyond the point at which the offer of compromise was made.

Accordingly, the court varied the earlier order to reflect the new costs apportionment. The defendant was ordered to pay three-quarters of the plaintiff's costs up until the final date for acceptance of the offer of compromise, with the plaintiff bearing the defendant's costs thereafter on an indemnity basis. This decision recognised the impact of the offer of compromise on the progression and outcome of the litigation, and adjusted the costs order to reflect the stage of the proceedings at the time of the offer.