Motorcycling Events Group Australia Pty Ltd v Kelly (No 2)

Motorcycling Events Group Australia Pty Ltd (the appellant) and Kelly (the respondent) were parties to proceedings in the Court of Appeal of New South Wales. The dispute concerned the basis upon which the respondent's costs in the Court of Appeal should be assessed, specifically whether an order for indemnity costs should be made in favour of the respondent.

The Court was required to determine whether to depart from the general rule regarding costs and order that the respondent's costs be assessed on an indemnity basis. This question arose in circumstances where an offer of compromise had been made, but it failed to make provision for the disposal of the appeal. A further issue was whether the respondent had defended the appeal on a substantially different basis to that which the Court ultimately decided.

The Court reasoned that the respondent was entitled to an order for costs on an indemnity basis from 17 October 2012 onwards. This decision was based on the fact that the respondent had made an offer of compromise which, although it did not specifically address the appeal, was considered by the Court to be a relevant factor in departing from the ordinary costs rule. The Court also considered that the respondent had defended the appeal on a basis that was ultimately successful.

The Court ordered that the appellant pay the respondent's costs of the proceedings in the Court of Appeal, including the motion to vary a previous order, to be assessed on the ordinary basis up to 17 October 2012 and thereafter on the indemnity basis.