Ryde City Council v Tourtouras [No 2]

Ryde City Council sought indemnity costs against Mr. Tourtouras following earlier proceedings in the Supreme Court of New South Wales. The dispute concerned the Council's liability for damages arising from a failure to properly maintain a public road, which allegedly caused injury to Mr. Tourtouras. The Council contended that Mr. Tourtouras had unreasonably rejected a settlement offer made prior to the hearing, thereby justifying an award of indemnity costs.

The primary legal issue before the Court of Appeal was whether the settlement offer made by the Council was a "genuine element of compromise" such that Mr. Tourtouras's rejection warranted an order for indemnity costs. This required the court to assess the nature of the offer and the circumstances surrounding its rejection in light of the principles governing the award of indemnity costs in Australia.

The Court of Appeal held that the offer made by the Council was not a genuine offer of compromise. The court found that the offer was made on terms that were effectively the same as those ultimately ordered by the court, but without any concession from the Council. Therefore, it did not present a genuine opportunity for settlement that Mr. Tourtouras could reasonably accept. The court affirmed the principle that indemnity costs are an exceptional remedy and will not be awarded where a party's conduct, while perhaps not ideal, does not rise to the level of unreasonableness required to depart from the usual order for costs.

Consequently, the Court of Appeal made no alteration to the order for costs made on 23 August 2007 and made no order as to the costs of the further application.