Citation: Lynch v Bredbo Pty Ltd (No 2) [2025] NSWDC 125
Court: District Court of New South Wales
Date: 14 April 2025
Judge(s): Gibson DCJ
Background
This costs decision follows the principal judgment in Lynch v Bredbo Pty Ltd [2025] NSWDC 54, in which Gibson DCJ found in favour of the cross-defendant, IAL (an insurer), against the second defendant and cross-claimant, Mr Streeter. The underlying dispute concerned a personal injury claim arising from an accident on 9 September 2022, with the key factual issues being the purpose of a trip taken by Mr Streeter and the plaintiff, Mr Lynch, and the circumstances in which the accident occurred.
The Court found in the principal judgment that Mr Streeter had deliberately fabricated his evidence on the critical factual issues in dispute. Those findings included that Mr Streeter gave knowingly false evidence about the purpose of the trip and the completion of claim forms, and that he persisted with those falsities throughout the proceedings, including by cross-examining the plaintiff, Mr Lynch, on his deathbed while Mr Lynch was gravely ill.
IAL applied for its costs of the entire proceedings on an indemnity basis. It relied on two grounds: first, Mr Streeter's deliberate concoction of evidence and/or his unnecessary prolongation of the hearing with false allegations; and second, in the alternative, a Calderbank offer and formal Offer of Compromise served six months before the hearing.
Legal Issues
- Whether findings of fraud and deliberate fabrication of evidence justify an award of indemnity costs for the whole of the proceedings, not merely part of them
- Whether a "walk away" Offer of Compromise and accompanying Calderbank offer provided an alternative or additional basis for indemnity costs from the date of the offer
- How the court's broad discretion under s 98 of the Civil Procedure Act 2005 (NSW) should be exercised in circumstances of serious misconduct by the unsuccessful party
Decision
Gibson DCJ reaffirmed that the discretion to award indemnity costs under s 98 of the Civil Procedure Act 2005 (NSW) is broad but must be exercised judiciously. A finding of fabricated evidence does not automatically produce an indemnity costs order; the purpose of such an order is to compensate the innocent party for costs wasted by the misconduct, not to punish the wrongdoer.
However, the Court found that the circumstances here went well beyond merely prolonging litigation. Mr Streeter's dishonesty was, in the Court's words, "bound up with the bringing of the claim in the first place." The Court noted particularly that the false claim had required Mr Lynch to give evidence at a bedside hearing shortly before his death, in a state of apparent distress and heavily medicated. Mr Streeter's counsel had cross-examined Mr Lynch at that bedside hearing on the basis of a proposition that Mr Streeter knew to be false.
Drawing on the line of authority from Fang v Sun (No 2) [2014] NSWSC 1194, BCEG International (Australia) Pty Ltd v Xiao (No 3) [2022] NSWSC 1221, Foundas v Arambatzis (No 4) [2023] NSWSC 1648, and most recently Liu v Lam (No 2) [2025] NSWSC 264, the Court was satisfied that the fraud here warranted the exceptional remedy of indemnity costs for the entirety of the proceedings. The fact that IAL had not succeeded on every issue raised did not reduce the weight of this conclusion, given that no challenge was put to the seriousness of the fraud findings.
On the Calderbank and Offer of Compromise ground, Mr Streeter's counsel conceded the alternative basis could not be opposed given the Court's findings. The Court noted it would have ordered indemnity costs from 8 March 2024 (the date of the offer) as an alternative, but this became unnecessary given the primary order covered the whole proceedings.
Orders Made
- Pursuant to s 98 of the Civil Procedure Act 2005 (NSW), Mr Streeter is to pay IAL's costs of the proceedings on an indemnity basis, including any costs payable by IAL consequent upon the consent order made on 18 October 2024.
Key Takeaways
- The District Court confirmed that indemnity costs may be awarded for the whole of proceedings where the unsuccessful party's fraud is inextricably connected to the bringing of the claim itself, not merely to its conduct after filing.
- A finding of fabricated evidence does not automatically warrant indemnity costs; courts assess whether the fraud caused unnecessary costs and whether those costs are properly compensated by such an order.
- Where dishonest conduct permeates the entirety of litigation, the usual reluctance to extend indemnity costs beyond the date of a rejected settlement offer may give way to a whole-of-proceedings order.
- Partial success on discrete issues by the party against whom indemnity costs are sought will not necessarily reduce or limit such an order where the overarching fraud infects the proceedings from their inception.
- Under the Calderbank/Offer of Compromise doctrine, a "walk away" offer made six months before hearing provided an independent and conceded basis for indemnity costs from the date of the offer, although that alternative was rendered moot by the primary order here.
Legislation and Cases Referenced
Legislation
- Civil Procedure Act 2005 (NSW), s 98
Cases
- Lynch v Bredbo Pty Ltd [2025] NSWDC 54 (principal judgment)
- Calderbank v Calderbank [1975] 3 All ER 333
- Fang v Sun (No 2) [2014] NSWSC 1194
- BCEG International (Australia) Pty Ltd v Xiao (No 3) [2022] NSWSC 1221
- Foundas v Arambatzis (No 4) [2023] NSWSC 1648
- Foundas v Arambatzis (No 6) [2024] NSWCA 231
- Liu v Lam (No 2) [2025] NSWSC 264
- RinRim Pty Ltd v Deutsche Bank AG [2017] NSWCA 169
- Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189
- Walker v Citygroup Global Markets Pty Ltd [2005] FCA 1866
- Baillieu v Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359
- Currie v Currie (No 3) [2018] WASC 306
- Akhtar & Gaber (No 2) [2018] FamCAFC 176