Langdon v Carnival Plc t/as P&O Cruises Australia (No. 2)

Langdon was a passenger on a cruise ship operated by P&O Cruises Australia. After the cruise, Langdon developed a serious infection which he alleged was caused by unsanitary conditions on the ship. Langdon sued P&O Cruises Australia for damages. The case was heard in the Federal Circuit Court of Australia, presided over by Justice Edelman. The primary legal issue was whether the defendant's offer of compromise, made pursuant to the Calderbank principle, was a factor in determining the indemnity costs awarded to the plaintiff. The court had to decide whether the defendant's offer, made after the plaintiff had succeeded on liability but before the assessment of damages, should be considered in assessing the indemnity costs.

Justice Edelman found that the defendant's Calderbank offer, which was made after liability had been established but before the determination of damages, should be taken into account when determining indemnity costs. The court reasoned that such an offer could be a relevant factor in assessing the overall conduct of the parties in the litigation process. However, the court also noted that the offer did not absolve the defendant of its liability for costs, and the offer needed to be of a substantial and genuine nature to significantly influence the outcome. The court determined that the defendant was entitled to indemnity costs on an ordinary basis, taking into account the Calderbank offer among other factors.

The court ultimately decided that the defendant's Calderbank offer was genuine and substantial enough to mitigate the plaintiff's entitlement to indemnity costs but not to the extent of absolving the defendant entirely of its costs liability. The final orders reflected this balance, awarding the plaintiff indemnity costs on an ordinary basis while recognising the defendant's offer as a mitigating factor.