Sampson v Prest & O'Connor Pty Ltd & Anor (No.3)

The matter before the court involved a dispute between Sampson and Prest & O'Connor Pty Ltd & Anor. The central issue in this case was whether the successful defendant could recover costs from the unsuccessful defendant, given the failure to call evidence at an arbitration hearing. Additionally, the court considered whether the successful defendant was entitled to indemnity costs against the unsuccessful defendant, relying on the non-acceptance of an offer to contribute as outlined in a Calderbank letter.

The primary legal questions the court had to address were the applicability of the principle that a successful defendant cannot recover costs from an unsuccessful defendant due to the latter's failure to call evidence at arbitration, and whether the unsuccessful defendant's refusal to accept a Calderbank offer to contribute constituted unreasonable conduct. The court was required to determine whether such conduct warranted indemnity costs for the successful defendant.

In its judgment, the court ruled that the principle preventing a successful defendant from recovering costs from an unsuccessful defendant due to the latter's failure to call evidence at arbitration does not apply in all circumstances. The court found that if the successful defendant can establish that the unsuccessful defendant's conduct in failing to call evidence was unreasonable, then the successful defendant may be entitled to indemnity costs. The court held that the unsuccessful defendant's non-acceptance of the Calderbank offer to contribute constituted unreasonable conduct, thereby allowing the successful defendant to recover indemnity costs against the unsuccessful defendant.

The final orders of the court included granting the successful defendant indemnity costs against the unsuccessful defendant, reflecting the unreasonable conduct in the non-acceptance of the Calderbank offer to contribute.