Stuart Pty Ltd v Condor Commercial Insulation Pty Ltd (No 2)

This matter concerned an application by the respondent, Condor Commercial Insulation Pty Ltd, for indemnity costs of the appeal heard by Beazley JA, Ipp JA, and Tobias JA in the New South Wales Court of Appeal. The dispute arose from an earlier decision in *Stuart Pty Limited v Condor Commercial Insulation Pty Limited* [2006] NSWCA 334, where the appellant, Stuart Pty Ltd, had abandoned certain arguments on appeal.

The primary legal issue before the Court of Appeal was whether there was "good cause" to depart from the ordinary rule that costs follow the event, thereby justifying an order for indemnity costs in favour of the respondent. This question was considered in light of an offer of compromise made by the respondent prior to the trial, which had not been renewed subsequently.

The Court of Appeal determined that there was no good cause to depart from the ordinary rule. While acknowledging the respondent's offer of compromise, the Court found that the appellant's abandonment of certain arguments on appeal did not, in itself, constitute sufficient reason to award indemnity costs. The Court reasoned that the offer of compromise, not having been renewed, did not provide a clear basis for penalising the appellant in costs. Consequently, the Court concluded that the ordinary rule should apply, meaning the appellant would generally be liable for the respondent's costs.

The parties were directed to bring in short minutes of order to accord with the reasons of the Court of Appeal and the earlier decision in *Stuart Pty Limited v Condor Commercial Insulation Pty Limited* [2006] NSWCA 334, to be filed by 22 January 2007.