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Maximising Your Costs Recovery

Running a court case can be a time consuming and expensive process.  Sometimes your opponent amplifies the costs and time involved by acting unreasonably.  In that situation it can be very satisfying when a special costs order is made that enables you to seek recovery of the majority of your costs of running the case.

Special Costs Order

In the recent decision of Forte Sydney Construction Pty Ltd v N Moit & Sons (NSW) Pty Ltd (No. 2) [2022] NSWDC 57 his Honour Russell SC DCJ made such an order and ordered that the plaintiff pay to the defendant what is known as “indemnity costs”.  In practical terms that means the defendant would be entitled to the majority of its costs.

Why Was it Ordered?

After the evidence had been served and the parties were well acquainted with the facts, the issues in dispute, and the evidence relied by each side, the defendant made an offer which his Honour accepted as being:

  1. A significant compromise of the defendant’s cross claim against the plaintiff;
  2. Was made at a late stage of the proceedings so that the plaintiff had a reasonable opportunity to consider all relevant material in assessing the offer;
  3. The offer was open for a period of time that was reasonable in which to consider the offer and obtain legal advice about it;
  4. The plaintiff’s claim had poor prospects of success (based on the evidence available);
  5. The offer made it plain to the plaintiff that the defendant would seek a special costs order if it achieved an outcome that was materially better than the terms of the offer.

When Does a Special Costs Order Start?

There was also some argument about the date from which the special costs order should apply.  His Honour accepted the principles in Leichhardt Municipal Council v Green [2004] NSWCA 341 when ordering the special costs order to apply from the date the offer was made.

Takeaway

Calderbank offers are a common device used to persuade the court that a special costs order should be made.  When making such an offer it is important to ensure that it represents a genuine compromise of your position.  In other words if you are seeking $100,000.00 plus costs and your offer is $100,000.00 plus costs then that is not a genuine compromise and it would be very unlikely that the court would make a special costs order based on that offer.  However, if your offer was to settle for $60,000.00 plus costs then that would be a genuine compromise on a claim of $100,000.00 plus costs.

Our experienced litigators are able to assist in preparing a case for trial and recommending a strategy that not only provides the best opportunity for a successful outcome but also to the subsequent application for a special costs order.

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