Hutley v Cosco (No 2)

In *Hutley v Cosco (No 2)*, the New South Wales Court of Appeal considered applications by the plaintiff for indemnity costs and for variation of an existing costs order. The plaintiff sought indemnity costs on the basis of two *Calderbank* offers made during the proceedings, arguing that these offers were reasonable when made and that the defendant's non-acceptance was unreasonable. The plaintiff also sought to vary a previous costs order to include interest back-dated to the date costs were paid, pursuant to section 101(5) of the *Civil Procedure Act 2005* (NSW) and rule 36.16(3A) of the Uniform Civil Procedure Rules 2005 (NSW).

The primary legal issues before the Court of Appeal were whether the plaintiff's *Calderbank* offers constituted genuine offers of compromise that were reasonable when made, and whether the defendant's refusal to accept them was unreasonable, thereby justifying an award of indemnity costs. Additionally, the Court had to determine whether it had the power to vary the existing costs order to include interest, and if so, whether the application was made within the relevant time limits and whether such a variation should be granted. The Court also considered the scope of section 40 of the *Defamation Act 2005* (NSW) in relation to the reasonableness of the offers.

The Court of Appeal found that the *Calderbank* offers were not genuine offers of compromise because they made no provision for the plaintiff's existing legal costs. Consequently, the offers were not considered reasonable when made, and the plaintiff's application for indemnity costs was dismissed. Regarding the application to vary the costs order, the Court determined that it lacked the power to make the requested variation, or alternatively, that the application was out of time.

Accordingly, the Court of Appeal refused the application to vary the order made on 23 February 2021. The amended notice of motion dated 6 September 2021 was otherwise dismissed, with no order as to costs.