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The underlying application for leave to appeal and Anglicare’s cross-appeal were heard on 20 March 2026. On 17 April 2026, the Court refused Mr Lau’s application for leave to appeal, granted Anglicare leave to cross-appeal, allowed that cross-appeal in part, and made costs orders in Anglicare’s favour: [1]. Those earlier orders are identified by reference to Lau v Anglican Community Services [2026] NSWCA 53.

The issue in this judgment arose from Anglicare’s 13 February 2026 offer to settle both proceedings. The offer was made by letter and was expressed to be open until 5 pm on 13 March 2026. Among its terms, Anglicare offered a private apology; Mr Lau would abandon his claim for first-instance costs; Mr Lau would discontinue the appeal and Anglicare would discontinue the cross-appeal; each party would bear its own first-instance costs; and each party would bear its own appeal and cross-appeal costs: [3]. The offer was expressed as being made under r 51.47 of the UCPR or, alternatively, in accordance with the principles in Calderbank v Calderbank: [3].

Mr Lau rejected the offer: [4]. Anglicare then sought indemnity costs from the offer date, arguing that it was unreasonable not to accept. The Court agreed. It ordered Mr Lau to pay Anglicare’s costs of the appeal and cross-appeal on an indemnity basis from 13 February 2026: [7].

Why the court decided this way

The Court’s central reasoning was a comparison between what the offer provided and what Mr Lau ultimately achieved. It said a detailed comparison was unnecessary because, by any reasonable measure, accepting the offer would have left Mr Lau in a substantially better position than the eventual result: [5].

The Court also focused on what was known when the offer was made. By 13 February 2026, Mr Lau had already failed at trial to obtain the principal relief he sought, a public apology, and had recovered only nominal damages: [6]. In the Court’s view, that trial result made his realistic prospects in the Court of Appeal clearer than they had been before the trial judge gave reasons. The Court also considered that Anglicare’s pre-trial position, described as having been explained in correspondence supporting an earlier offer, had effectively been vindicated: [6].

Mr Lau argued that Anglicare’s later offer was effectively an offer to capitulate rather than a genuine compromise: [6]. The Court did not accept that characterisation in the circumstances. Its reasoning was not that every offer containing an apology or discontinuance is necessarily a compromise. Rather, it assessed this offer against the litigation position then apparent and the outcome eventually achieved. The offer covered both the appeal and cross-appeal and included terms about costs and discontinuance, as well as the private apology. The Court concluded that refusing it was unreasonable on the facts before it.

The judgment’s reasoning is concise. It does not set out a detailed, general checklist for deciding when an offer is genuine, nor does it give a comprehensive account of the legal principles governing indemnity costs. Its express reasoning is tied to the relative positions shown by the trial outcome, the offer’s terms, and the eventual result in the appellate proceedings.

Before and after state of the law

The judgment is a costs ruling, not a decision that purports to restate the general law of settlement offers or indemnity costs. It identifies Anglicare’s offer as being made under r 51.47 of the UCPR or, alternatively, in accordance with Calderbank principles: [3]. Those references appear in the quoted offer. The Court does not separately analyse the rule’s requirements or explain the principles associated with the cited case.

Accordingly, the decision’s clearest contribution is its application of the offer-and-outcome comparison to this particular procedural history. The Court considered that the offer would have produced a substantially better position for Mr Lau than the result ultimately achieved: [5]. It also treated the information available at the offer date as important. The trial judgment had already rejected Mr Lau’s principal claim for relief and awarded only nominal damages: [6].

The text does not identify a prior legal test that it modifies, narrows, or replaces. Nor does it state that the result changes the law governing all offers of compromise or Calderbank offers. The decision’s reasoning should therefore be described as a fact-specific application, not as a new general rule. The order made was specific: indemnity costs for Anglicare’s appeal and cross-appeal costs from 13 February 2026: [7].

For researchers comparing this decision with other costs cases, the distinction between the judgment’s express reasoning and the language of the offer matters. The offer itself invoked r 51.47 and Calderbank. The Court’s reasons, however, focus on the effect of rejecting the offer in light of the known trial result and the eventual appellate outcome. The judgment does not decide any issue about the formal validity of the offer under the rule or provide a separate exposition of the cited Calderbank principles.

Key passages with plain-English translation

At [5], the Court said: “It is unnecessary to descend into a detailed comparison between the result in the proceedings in this Court and the terms of the offer to settle them.” In plain English, the Court considered the gap between the offer and the eventual outcome sufficiently clear that it did not need to compare every term individually.

Also at [5], the Court said the offer “would have left him by any reasonable measure in a substantially better position than the outcome he ultimately achieved”. This is the core factual assessment. The Court regarded the offer as materially more favourable to Mr Lau than the result he obtained after the appeal and cross-appeal were decided.

At [6], the Court explained why the offer’s timing mattered. Mr Lau had already failed to obtain his principal claim for a public apology and had recovered only nominal damages. The Court considered that his realistic prospects in the Court of Appeal were consequently “more clearly illuminated” by the time he received the offer. In ordinary terms, the trial result had given him information relevant to assessing the risk of continuing.

The Court also said Anglicare’s earlier position had “effectively been vindicated”: [6]. That observation connects the trial outcome with the position Anglicare had taken before trial, as described by the Court. The judgment does not reproduce the earlier correspondence in detail, so the point should not be extended beyond the Court’s stated assessment.

Finally, at [7], the Court ordered indemnity costs “on and from 13 February 2026”. This fixes the starting date at the date of Anglicare’s offer, not at the later date when the Court made its costs order.

What fact patterns trigger this precedent

The decision is most directly relevant to a costs dispute where a party rejects an offer that addresses the proceedings later determined by the court, and the court is asked to assess whether the rejection was unreasonable. The particular factors the judgment identifies are:

• the offer was made after the trial judgment had already clarified the recipient’s position;
• the recipient had failed to obtain the principal relief sought at trial and had received only nominal damages;
• the offer covered both an appeal and a cross-appeal;
• the offer would have left the recipient substantially better off than the eventual outcome; and
• the court considered the offer against the recipient’s realistic prospects as they appeared when it was received.

These are features of this case, not a complete legal test. The judgment does not say that any one of them alone will justify indemnity costs. Nor does it decide how a court should assess an offer made before trial, an offer that is close to the eventual result, or an offer whose terms are materially different from those in this matter.

The offer included a private apology and mutual releases, as well as provisions about discontinuance and costs: [3]. The Court did not separately analyse the value of each of those terms. It is therefore grounded in the judgment to say that the offer as a whole was considered substantially better than the eventual outcome, but not to assign a particular legal or monetary value to any individual term.

How later courts have treated it

The judgment text provides no information about decisions made after this costs ruling and does not report any later treatment of it. It would therefore be unsupported to say that later courts have followed, distinguished, applied, or criticised this decision.

The decision itself refers to the earlier judgment in Lau v Anglican Community Services [2026] NSWCA 53 to explain the procedural background: [1]. That earlier decision is not described here as a precedent on the indemnity costs issue. This judgment uses it to identify the earlier orders refusing leave to appeal and allowing Anglicare’s cross-appeal in part.

The judgment also records that Anglicare’s offer invoked r 51.47 of the UCPR and, alternatively, Calderbank v Calderbank: [3]. That is a description of the offer’s stated basis. The Court’s reasons do not discuss subsequent treatment of either source or decide a separate issue about their interpretation.

Still-open questions

Several matters remain outside the decision’s express reasoning. First, the Court did not formulate a general test for when rejection of an offer is unreasonable. It stated its conclusion on the particular facts, especially the trial result, the timing of the offer, and the difference between the offer and the eventual outcome: [5]–[6].

Second, the judgment does not explain whether, or how, each term of the offer affected the assessment. The offer included a private apology, discontinuance of both appellate proceedings, release terms, and provisions about costs: [3]. The Court’s reasons assess the offer overall rather than discussing the relative importance or legal effect of each term.

Third, the Court did not analyse in detail the requirements of r 51.47 of the UCPR or the principles in Calderbank. Those sources appear in the text of the offer, while the stated reasoning concentrates on the practical comparison between the offer and the result. The judgment therefore cannot, by itself, answer questions about formal compliance with that rule or the general operation of Calderbank offers.

Finally, the judgment does not address how the same reasoning would apply if the trial judgment had not yet clarified the recipient’s position, if the offer were not substantially better than the eventual result, or if the offer were rejected for reasons relating to particular terms. Those questions would require consideration of the relevant legal sources and the facts of the other case. This is general legal information, not legal advice. Zoe can make mistakes. Before acting on or relying on this analysis, have a qualified Australian lawyer check it.