Perisher Blue Pty Ltd v Nair-Smith (No 2)

Perisher Blue Pty Ltd (the applicant) sought indemnity costs from Nair-Smith (the respondent) following an appeal. The dispute concerned whether the respondent's offers to compromise, made during earlier proceedings, were genuine and whether the applicant's rejection of these offers was unreasonable, thereby justifying an award of indemnity costs. The matter was heard by Gleeson JA and Tobias AJA in the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were whether the applicant was entitled to indemnity costs on appeal, and whether interest should be awarded on costs paid by the successful appellant. Specifically, the court had to consider the nature and validity of two "Calderbank" offers made by the respondent, whether they were genuine offers to settle, and if their rejection by the applicant was unreasonable. The court also examined whether the terms of the offers, particularly the second offer which included costs, complied with the Uniform Civil Procedure Rules (UCPR) and whether a covering letter accompanying one of the offers was inconsistent with those rules.

The Court of Appeal found that the first Calderbank offer was open for only two days, which was considered too short a period to be a genuine offer. The second offer, which included costs, was found to be potentially problematic in its wording. However, the court ultimately determined that the applicant had not established a sufficient basis to depart from the ordinary rule that costs follow the event, and therefore, indemnity costs were not warranted. Regarding interest on costs, the court noted that while the appellant had succeeded on a single issue of causation, there was no specific identification of costs relating to that issue, and the appeal costs were incurred relatively recently, leading to no order being made for interest on costs.

Consequently, the Court of Appeal dismissed the applicant's amended notice of motion seeking indemnity costs and ordered that the applicant pay the respondent's costs of the motion.