Roads and Traffic Authority of New South Wales v Turner and Anor [No 2]

The dispute before the Court of Appeal of New South Wales concerned the costs of an appeal following a judgment in favour of the plaintiff, Mr Turner, against the Roads and Traffic Authority of New South Wales. While the primary judgment had been reduced on appeal, the reduced amount remained greater than an offer of compromise made by the plaintiff prior to trial. The central question was the effect of this offer on the costs of the appeal.

The court was required to determine whether the plaintiff's offer of compromise, made before the trial commenced, should influence the award of costs for the appeal, particularly in light of the fact that the judgment ultimately awarded to the plaintiff, though reduced on appeal, still exceeded the amount of the offer.

The court reasoned that the offer of compromise, having been made before trial and exceeding the final judgment amount, was a significant factor in assessing costs. The court applied the principle that where a plaintiff makes an offer of compromise which is not accepted by the defendant, and the plaintiff ultimately obtains judgment for an amount greater than the offer, the plaintiff is generally entitled to their costs of the proceedings up to the date of the offer, and the defendant is liable for the plaintiff's costs thereafter. This principle was extended to the costs of the appeal, with the court noting that the offer was made before the trial and therefore encompassed the entire litigation, including the appeal.

Consequently, the court ordered that the defendants pay the plaintiff's costs of the action on the ordinary basis up to 26 May 2005, and on an indemnity basis thereafter. The Notice of Motion was otherwise dismissed, and the plaintiff was ordered to pay the costs of the appellant and the second respondent of that Notice of Motion.