Porter v Lachlan Shire Council No 2

The appeal concerned an application for indemnity costs following a decision in the primary proceedings between the appellant, Porter, and the respondent, Lachlan Shire Council. The central issue was whether the appellant's refusal of a *Calderbank* offer made by the respondent was unreasonable, thereby justifying an order for indemnity costs.

The Court of Appeal was required to determine whether the appellant's rejection of the *Calderbank* offer was unreasonable in the circumstances, and if so, whether this unreasonableness warranted the imposition of indemnity costs in favour of the respondent.

The Court considered the principles governing *Calderbank* offers and the discretion of the court to award indemnity costs. It found that the appellant's refusal of the offer was unreasonable, having regard to the terms of the offer and the subsequent outcome of the litigation. The Court applied the principle that where a party unreasonably rejects a settlement offer that is more favourable than the ultimate judgment, indemnity costs may be awarded from the date of the offer.

Consequently, the Court ordered that the costs payable by the appellant from 13 May 2005 be paid on an indemnity basis.