Sims v The Commonwealth (No 2)

In *Sims v The Commonwealth (No 2)*, the New South Wales Court of Appeal considered an appeal by the Commonwealth against a judgment of the District Court of New South Wales. The dispute concerned the quantum of damages awarded to Mr Sims at first instance, which had been substantially reduced on appeal. A principal issue on appeal was resolved in favour of the appellant, the Commonwealth, and the court also had regard to settlement offers made by both parties prior to the commencement of the proceedings at first instance.

The Court of Appeal was required to determine the appropriate costs orders for both the trial and the appeal, given the mixed outcome. Specifically, the court had to consider whether it was unreasonable for Mr Sims to have rejected the settlement offers made by the Commonwealth before the first instance proceedings.

The Court of Appeal reasoned that while Mr Sims had achieved a judgment at first instance, the significant reduction in the damages awarded on appeal, coupled with the resolution of the principal issue in favour of the Commonwealth, warranted a departure from the usual order that costs follow the event. The court applied principles relating to the apportionment of costs in circumstances of a mixed outcome and where settlement offers may be relevant to the reasonableness of a party's conduct.

Consequently, the Court of Appeal varied the first instance orders regarding the judgment and interest awarded to Mr Sims, reducing the quantum. The court then made specific orders for costs, requiring the Commonwealth to pay 75% of Mr Sims’ costs at first instance on an ordinary basis, and 90% of Mr Sims’ costs of the appeal on an ordinary basis.