Vieira v O'Shea (No 2)

In Vieira v O'Shea (No 2), the New South Wales Court of Appeal considered appeals and cross-appeals concerning costs orders made in the District Court and by the Court of Appeal itself. The dispute involved a plaintiff and multiple defendants, with issues arising from offers of compromise made under the Uniform Civil Procedure Rules 2005 (NSW) and a *Calderbank* offer.

The primary legal issues before the Court of Appeal were whether a plaintiff's offer of compromise, which required the defendant to pay the plaintiff's costs, was compliant with Rule 20.26 of the Uniform Civil Procedure Rules 2005 (NSW), which contemplates offers exclusive of costs. The court also had to determine whether a *Calderbank* offer made jointly to defendants with differing interests was unreasonable for one defendant to reject, and whether an appellant had bettered their offer in respect of appeal costs, considering the uncertainty surrounding trial costs.

The Court of Appeal reasoned that Rule 20.26 of the Uniform Civil Procedure Rules 2005 (NSW) requires offers of compromise to be exclusive of costs, meaning an offer demanding payment of the offeror's costs is non-compliant. The court found that the plaintiff's offer was therefore invalid for the purposes of attracting the cost consequences under the Rules. Regarding the *Calderbank* offer, the court considered the differing interests of the defendants and the reasonableness of rejecting the offer. The court also addressed the appellant's entitlement to indemnity costs for the appeal, assessing whether the outcome of the appeal was more favourable than the offer made.

The Court of Appeal revoked earlier cost orders relating to the trial and the appeal, set aside a District Court cost order between the plaintiff and the first defendant, and made new orders. These new orders stipulated that the first defendant pay the plaintiff's costs of the plaintiff's claim against the first defendant on an ordinary basis. The first respondent was ordered to pay the appellant's costs of the appeal on an ordinary basis up to a specified date, and thereafter on an indemnity basis. There were no orders as to the costs of the motion.