Newcastle City Council v Wieland (No 2)

In *Newcastle City Council v Wieland (No 2)*, the Court of Appeal of New South Wales considered an application by the respondents for indemnity costs against the unsuccessful appellant, Newcastle City Council. The dispute arose from the Council's appeal against a decision, where leave to appeal had been granted on the condition that the Council pay the costs of both sides of the appeal in any event. The respondents sought indemnity costs on the basis of two Calderbank offers they had made prior to and after the granting of leave to appeal, arguing that the Council's refusal of these offers was unreasonable, particularly given the public interest nature of the issue raised by the appeal.

The primary legal issue before the Court was whether to depart from the general rule that costs follow the event and order the unsuccessful appellant to pay the respondents' costs on an indemnity basis. This required the Court to assess the reasonableness of the Council's conduct in refusing the Calderbank offers, taking into account the circumstances of the case, including the offers themselves, the stage at which they were made, and the nature of the appeal. The Court also had to consider the impact of the condition imposed when leave to appeal was granted.

The Court reasoned that while the respondents had made Calderbank offers, the condition imposed by the Court when granting leave to appeal – that the appellant pay the costs of the appeal in any event – was a significant factor. This condition effectively meant that the Council was already liable for the costs of the appeal, regardless of the outcome. The Court found that the respondents had not demonstrated that the Council's refusal of the Calderbank offers was so unreasonable as to warrant a departure from the standard costs order and the imposition of indemnity costs. The fact that the appeal raised an issue of general public interest did not, in itself, justify an order for indemnity costs.

Consequently, the Court of Appeal dismissed the respondents' application for indemnity costs and ordered that the costs of that application be paid by the respondents.