Hungry Jack's Pty Ltd v Fourtounas (No 2)

Hungry Jack's Pty Ltd (the applicant) sought to vary an earlier costs order made by the Court of Appeal of the Supreme Court of New South Wales in favour of Fourtounas (the respondents). The dispute concerned the basis on which the applicant should pay the respondents' costs following an application for leave to appeal.

The primary legal issue before the court was whether the earlier costs order, which directed the applicant to pay the respondents' costs on an ordinary basis, should be varied to include an order for indemnity costs from a specific date. This question turned on the application of rule 42.15A of the Uniform Civil Procedure Rules 2005 (NSW), which allows for indemnity costs to be ordered in certain circumstances, particularly where an offer of compromise has been made. The court also considered whether an offer of compromise made by the respondents was open for a reasonable period and genuinely involved a compromise.

The court reasoned that the onus was on the applicant to establish why a costs order should depart from the usual rule that costs follow the event. While the applicant argued that the respondents' offer of compromise was not open for a reasonable period, the court found that the offer was made in circumstances where the applicant had already indicated a lack of interest in settlement. Furthermore, the court determined that the offer did involve a compromise, as it was made in response to the applicant's application for leave to appeal. Consequently, the court concluded that the respondents were entitled to an order for indemnity costs from the date of their offer of compromise.

The court varied the order made on 10 December 2020. The applicant was ordered to pay the respondents' costs assessed on the ordinary basis up to and including 15 October 2020, and thereafter on an indemnity basis. This indemnity costs order was to include the costs of the motion to vary the earlier order.