Abstract

.An indemnity costs order may be made in unusual circumstances such as a party’s unreasonableness or relevant procedural delinquency. It is not a punishment but adequate compensation for the party who incurs needless expense due to the delinquency

Article

An indemnity costs order may be made in unusual circumstances such as a party’s unreasonableness or relevant procedural delinquency. It is not a punishment but adequate compensation for the party who incurs needless expense due to the delinquency: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11, at [11], [44]. Those principles are also embodied within the Civil Procedure Act. The prospect of this will provide a problem for a party which has not placed its cards on the table at the appropriate time causing an unfair disadvantage to the other party in the form of an ambush: Nowlan v Marsland Transport Pty Ltd (2001) NSWLR 116; [2001] NSWCA 346, at [28] – [30], [44]; White v Overland [2001] FCA 1333, at [4].

A defendant’s late abandonment of his reliance on a pleaded limitation defence in the face of earlier but ignored requests by the plaintiff for particulars of that defence, is an unusual unreasonable and delinquent event for which the plaintiff should be compensated as to costs for needless expense: Sze Tu v Lowe (No 2) [2015] NSWCA 91, at [37] – [39], applying Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11, at [67], Mahenthirasa v State Rail Authority of NSW (No 2) (2008) 72 NSWLR 73; [2008] NSWCA 201, at [8] – [9]; Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59, at 542. An order for indemnity costs is warranted where, properly advised, which is presumed until shown otherwise, the defendant should have known that his defence had no real prospects of success: Sheridan v Colin Biggers & Paisley [2019] NSWSC 621, at [16] – [17]; Apthorpe v QBE Insurance (Australia) Limited & Ors (No 2) [2019] NSWDC 390 Apthorpe v QBE Insurance (Australia) Limited & Ors (No 2) [2019] NSWDC 390.

For an English statement of the principles of indemnity costs, see Suez Fortune Invest v Talbot U/writing [2019] EWHC 3300 (Comm).