Melville v Tadros

Melville (the plaintiff) and Tadros (the defendant) were parties to litigation in the New South Wales Court of Appeal. The dispute concerned the application of a mandated costs rule following the plaintiff obtaining a verdict that was less favourable than either of the defendant's offers of compromise.

The primary legal issue before the Court of Appeal was whether the primary judge had erred in exercising their discretion to depart from the general rule that a plaintiff who obtains a verdict less favourable than a defendant's offer of compromise should pay the defendant's costs incurred after the date of the offer. The Court was required to determine if the primary judge's decision to not apply the mandated costs rule constituted a miscarriage of discretion.

Mason P and Powell JA reasoned that the statutory provision governing offers of compromise and the consequences for costs was clear. They held that the primary judge had failed to properly consider the relevant factors and had instead applied an incorrect approach to the exercise of discretion. The Court found that the primary judge's reasons for departing from the mandated costs rule were insufficient and did not demonstrate a proper understanding of the statutory scheme.

Consequently, leave to appeal was granted, and the appeal was allowed. The Court of Appeal set aside the orders of the primary judge and remitted the matter for redetermination of costs according to law.