On 20 March 1995 the Master heard argument as to costs, and on the basis of the offer of 24 February 1995 he ordered that the respondent pay the appellant's costs on a party/party basis up to and including 24 February 1995 and that the appellant pay the respondent's costs thereafter.

On appeal by the appellant to this court the Master's substantive order was varied by altering the sum of $110,000 to $175,000.

The appellant submits that the respondent should be ordered to pay the costs both of the appeal and of the proceedings at first instance. The respondent submits that the appellant should be ordered to pay the costs of the appeal and that the Master's costs orders of 20 March 1995 should stand.

So far as the costs of the proceedings at first instance are concerned, the result of the appeal does not affect the reasoning which led the Master to make the costs orders of 20 March 1995 and we see no reason to disturb those orders.

In respect of the costs of the appeal, the respondent relied on the decision of this court in Ettingshausen v Australian Consolidated Press (1995) 38 NSWLR 404 to the effect that on the true construction of the Supreme Court Rules, an offer of compromise does not cease to have effect once the claim to which it relates has been the subject of a complete trial, but continues to have costs consequences for any appeal in respect of that claim. We are not however in the present case concerned with the effect of an offer of compromise under the Rules, because the relevant offers in the present case were not made under the Rules. Indeed, offers in the terms of those made by the respondent on 24 February 1995 and on 8 March 1995 could not have been made under the Rules (see eg Part 22 rule 3(3)).

On the one hand, the appellant's appeal has been successful in that she has shown that the Master erred and has obtained a further $65,000. On the other hand, she failed on the question of construction of the Act which was a matter of significance in the hearing of the appeal and she has still not obtained a result more favourable to her than that which she might have obtained by accepting one or other of the respondent's offers.

In all the circumstances, we are of opinion that the appropriate result is that there be no order as to the costs of the appeal.

The respondent should have a certificate under the Suitors' Fund Act.

PRIESTLEY JA: The facts relevant to the costs arguments are set out in the reasons of the other members of the Court.

I agree with what they say concerning the costs of the proceedings at first instance.

As to the costs of the appeal, I take a different view. The last offer concerning costs made by the respondent, which must be regarded as having been a reasonable one in light of the outcome of the appeal, was made before the decision of the Master at first instance. The appellant, by her counter offer rejected the respondent's offer. After that, no further offer was made by the respondent. The appellant then succeeded in obtaining a significantly larger money judgment on appeal than the Master's judgment. Had she accepted the respondent's offer there would have been no appeal, and she would have been in a better position than she was after her success in the appeal. On the other hand, having rejected the respondent's offer and then having obtained the Master's judgment, if she had not appealed she would have been in a significantly worse position than she now is.

Taking the foregoing matters into account, along with the considerations mentioned by the other judges in their reasons, it seems to me that the appellant should have at least half the costs of her appeal paid by the respondent.

In my opinion therefore the costs order concerning the appeal should be that the respondent bear half the appellant's costs of the appeal.