Macquarie Radio Network Pty Ltd v Arthur Dent (No 2)

Macquarie Radio Network Pty Ltd (the appellant) appealed a decision of the Supreme Court of New South Wales. The dispute concerned an offer of compromise made by the appellant under the Uniform Civil Procedure Rules 2005 (NSW) which was not accepted by the respondent. The appellant subsequently obtained judgment in its favour, which was no less favourable than the terms of its offer. The appeal was heard by Mason P, Beazley JA, and Basten JA in the Court of Appeal of New South Wales.

The primary legal issue before the Court of Appeal was whether the appellant was entitled to an order for indemnity costs from the date the offer of compromise was made, given that it had obtained judgment no less favourable than the terms of that offer. The respondent argued that the judgment amount was only slightly greater than the offer and that it had a reasonable expectation of success on appeal, particularly concerning the defence of comment which embodied a right to freedom of speech. The court was therefore required to consider whether there were any exceptional circumstances that would justify refusing the appellant's entitlement to indemnity costs.

The Court of Appeal reasoned that the appellant was entitled to indemnity costs pursuant to rule 42.14 of the Uniform Civil Procedure Rules 2005 (NSW) because the judgment obtained was no less favourable than the offer of compromise. The court found that the respondent's submissions regarding the slight difference in the judgment amount and its reasonable expectation of success on appeal did not constitute exceptional circumstances warranting a departure from the general rule. The court also considered that the appeal on the defence of comment, while raising important issues of freedom of speech, did not negate the appellant's entitlement to indemnity costs.

Consequently, the Court of Appeal ordered that the appellant pay the respondent's costs on an ordinary basis up until 16 August 2006, and on an indemnity basis from 17 August 2006.