K'Mart Australia Ltd v McCann [No 2]

In *K'Mart Australia Ltd v McCann [No 2]*, the Court of Appeal of the Supreme Court of New South Wales considered an application for costs on an indemnity basis. The application arose from proceedings in the District Court, where the appellant, K'Mart Australia Ltd, had made an offer of compromise.

The central legal issue before the Court of Appeal was whether it was bound by the District Court Rules in determining the application for costs on an indemnity basis, and if not, what considerations were relevant in exercising its discretion to award costs on such a basis.

The Court of Appeal held that it was not bound by the District Court Rules when considering an appeal from a decision of the District Court concerning costs. Instead, the Court of Appeal would exercise its own discretion, guided by the principles applicable to indemnity costs. These principles generally require a high degree of unreasonableness or misconduct on the part of the party against whom indemnity costs are sought. In this instance, the Court found that the conduct of the respondent did not meet the threshold for an award of costs on an indemnity basis.

Consequently, the application for costs on an indemnity basis was dismissed.