State of NSW v Hatzipetrou

The State of New South Wales appealed to the Court of Appeal of New South Wales against a District Court judgment awarding damages to the respondent, Mr. Hatzipetrou. The primary dispute concerned the assessment of damages for past economic loss and loss of future earning capacity, and a subsequent application for indemnity costs.

The Court of Appeal was required to determine whether the trial judge erred in principle in calculating the damages awarded. Crucially, the court also had to consider whether the trial judge had erred in refusing to award indemnity costs to the plaintiff, despite the plaintiff having made an offer of compromise that was exceeded by the final judgment. The trial judge had refused indemnity costs on the basis that the defendant had not had a sufficient opportunity to assess the offer due to further material being furnished after the offer was made.

The Court of Appeal held that the trial judge's refusal to award indemnity costs constituted a miscarriage of discretion. The court reasoned that the material furnished after the offer of compromise was merely confirmatory of the plaintiff's case as it had always been presented, meaning the defendant had ample opportunity to assess the offer. Consequently, the court found no error in the calculation of damages. The court ordered that the costs of the appeal and the cross-appeal be assessed on an indemnity basis from the date of the offer of compromise.