Merciful Group Incorporated v Norfina Limited t/as Suncorp Bank (Costs)

[2025] NSWSC 972

Supreme Court

New South Wales

Medium Neutral Citation:	Merciful Group Incorporated v Norfina Limited t/as Suncorp Bank (Costs) [2025] NSWSC 972
Hearing dates:	On the papers
Date of orders:	27 August 2025
Decision date:	27 August 2025
Jurisdiction:	Equity
Before:	Hammerschlag CJ in Eq
Decision:	Plaintiff to pay defendant’s costs on the ordinary basis, excluding the costs of and incidental to the application for indemnity costs in respect of which make no order, to the intent that each party is to bear its own.
Catchwords:	COSTS – the successful defendant seeks indemnity costs based on non-acceptance by the unsuccessful plaintiff of a Calderbank offer of payment of a specified sum coupled with a requirement for the unsuccessful plaintiff to agree to an undertaking not to procure a third party to pursue a claim against the defendant, a non-disclosure clause and a non-disparagement clause – HELD – not unreasonable for the plaintiff not to accept the offer containing the additional conditions – indemnity costs order not warranted
Cases Cited:	Calderbank v Calderbank [1975] 3 WLR 586
Category:	Costs
Parties:	Merciful Group Incorporated (Plaintiff) Norfina Limited t/as Suncorp Bank (Defendant)
Representation:	Counsel: M A Cowden (Plaintiff) J Arnott SC / A Poukchanski (Defendant) Solicitors: Cordoba Legal (Plaintiff) Allens (Defendant)
File Number(s):	2025/00173649
Publication restriction:	Nil

JUDGMENT

1. On 29 July 2025, I delivered the principal judgment in this matter dismissing the proceedings Merciful Group Incorporated v Norfina Limited t/as Suncorp Bank [2025] NSWSC 841.

2. Definitions in the principal judgment are used here.

3. Given that the Bank succeeded, I made a provisional order that the plaintiff pay the defendant’s costs giving each party the opportunity to indicate that some other order is sought in which event I would determine costs.

4. The Bank seeks an order for indemnity costs from 26 June 2025, being the day after the expiry of a settlement offer put by the Bank to Merciful in a Calderbank [1] offer dated 11 June 2025.

   1. Calderbank v Calderbank [1975] 3 WLR 586.

5. I have received written submissions from both parties. It is appropriate to deal with costs on the papers.

6. Merciful opposes an indemnity costs order arguing that it was not unreasonable for it to refuse the offer, for a series of reasons.

7. I uphold Merciful’s submission that it was not unreasonable for it to refuse the offer, but for reasons different to those proffered by it.

8. The Calderbank offer was for the Bank to pay Merciful $70,000 in full and final settlement of its claims against the Bank.

9. Given Merciful’s loss of its case and the difficulty it might have faced in obtaining injunctive relief even had it established breach by the Bank, an offer of such payment, without more, would have represented a meaningful compromise which, had things been left there, may have provided a sound basis for the costs order the Bank now seeks. To have refused such an offer may well have been unreasonable.

10. But, that was not the full extent of the offer. In addition to requiring a Notice of Discontinuance, the Bank required a number of other things from Merciful including an undertaking not to procure that a third party pursue a claim against the Bank, a non-disclosure clause and a non-disparagement clause. The Bank’s submissions did not draw attention to these additional requirements.

11. I do not think that it can be fairly said that Merciful acted unreasonably in refusing an offer which imposed the additional requirements. The Bank could not have obtained an outcome in the proceedings which included Merciful being bound by any such obligations.

12. Costs, on the ordinary basis are to follow the event.

13. Merciful is to pay the Bank’s costs of the proceedings on the ordinary basis, excluding the costs of and incidental to the Bank’s application for indemnity costs in respect of which I make no order, to the intent that each party is to bear its own.

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Endnote