SMEC Testing Services Pty Ltd v Campbelltown City Council

The dispute in *SMEC Testing Services Pty Ltd v Campbelltown City Council* concerned an appeal to the New South Wales Court of Appeal regarding the award of costs. The primary plaintiff, SMEC Testing Services Pty Ltd, had succeeded in its claim against the defendant, Campbelltown City Council. The Council, in turn, had cross-claimed against three cross-defendants, including one who made an offer of compromise. The Council succeeded against all cross-defendants, but for amounts less than the offer made by one of them.

The central legal issue before the Court of Appeal was whether the primary judge had erred in departing from the ordinary rule that a successful party should recover their costs. Specifically, the court had to consider whether the offer of compromise, which did not attract costs consequences under the relevant rules, and a separate *Calderbank* letter, warranted ordering the successful defendant to pay the costs of one of the cross-defendants.

By majority, the Court of Appeal held that a departure from the ordinary rule was not warranted in this instance. The majority reasoned that while the offer of compromise and the *Calderbank* letter were relevant considerations, they did not, in the circumstances of the case, justify ordering the successful defendant to bear the costs of the successful cross-defendant. The court applied the principles governing the award of costs, emphasizing that a successful party should generally recover their costs unless there are compelling reasons to the contrary.

Leave to appeal was granted, but the appeal was ultimately dismissed with costs.