Welcome to today’s Chamberlains Selection, where we will discuss with James d’Apice on the matter of Cao v Zhu (No 2) [2020] NSWSC 647. We will talk about a rejected settlemtn by which the parties agreed that the plaintiff should have its costs on an indemnity basis from the date of that offer.

In a case we have previously discussed (Cao v Zhu [2020] NSWSC 321) P enjoyed complete success over D. P made a settlement offer that was rejected. (Interestingly) The parties agreed that P should have its costs on an indemnity basis from the date of that offer. [2] The P said (i) the D ought to have known its defences were hopeless and untenable, (ii) that a certain defence and cross-claim that led to a transfer to a different Court was disingenuous, and (iii) that the D knew the defences he was advancing were untrue. [17] Further, the P said the D’s defence of the claim was an abuse of process designed to generate delay. [18] The Court did not find the D lied. [20]

The Court considered it was easy to say a claim was doomed to fail in hindsight when in fact – as was the case in this decision – the outcome depended on disputed evidence being accepted, which it might not have been. [22] Among other things: nor was the suggestion of an abuse of process accepted [23] nor was the D warned about potential indemnity costs [26] The P got his costs on the ordinary basis up to the date of the offer, and indemnity basis from that time. [4], [28]