The Nominal Defendant v Lane (No 2)

The Nominal Defendant appealed to the Court of Appeal of New South Wales against orders made by a District Court judge concerning costs. The dispute arose from a claim brought by the respondent, Lane, against the Nominal Defendant. The Nominal Defendant had made an offer of settlement in writing, commonly referred to as a Calderbank letter, which it contended was more favourable to the respondent than the ultimate judgment.

The primary legal issue before the Court of Appeal was whether the Nominal Defendant was entitled to an order for indemnity costs, rather than the standard party-and-party costs, by reason of the respondent's failure to accept its Calderbank offer. The court was required to consider whether the offer was of such a nature that it warranted departing from the usual rule regarding the assessment of costs.

The Court of Appeal held that there was no question of principle involved in the assessment of costs in this matter. The judge below had considered the Calderbank offer and the outcome of the litigation and had made a determination regarding costs. The Court of Appeal found no error in the judge's exercise of discretion.

Consequently, the Nominal Defendant's notice of motion was dismissed, and it was ordered to pay the respondent's costs.