Lynch v Bredbo Pty Ltd (No 2)

Cases Cited: Akhtar & Gaber (No. 2) [2018] FamCAFC 176
Baillieu v Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359
BCEG International (Australia) Pty Ltd v Xiao (No 3) [2022] NSWSC 1221
Calderbank v Calderbank [1975] 3 All ER 333; [1975] 3 WLR 586
Currie v Currie (No 3) [2018] WASC 306
Fang v Sun (No 2) [2014] NSWSC 1194
Foundas v Arambatzis (No 4) [2023] NSWSC 1648
Foundas v Arambatzis (No 6) [2024] NSWCA 231
Liu v Lam (No 2) [2025] NSWSC 264
Lynch v Bredbo Pty Ltd [2025] NSWDC 54
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

Texts Cited: G E Dal Pont, Law of Costs (5th ed, 2021, LexisNexis), at [16.71]

Category: Costs

Parties: Mark Geoffrey Streeter (Cross-Claimant)
Insurance Australia Limited (Cross-Defendant)

Representation: Counsel:
Mr C Freeman (Cross-Claimant)
Mr H Neal (Cross-Defendant)
Solicitors:
Williamson Barwick (Cross-Claimant)
Meridian Lawyers (Cross-Defendant)

File Number(s): 2023/00144409

Publication restriction: Nil

Judgment

1. This is an application by the cross-defendant (“IAL”) for payment of its costs of these proceedings, on an indemnity basis, by the defendant/cross-claimant (“Mr Streeter”) following judgment being given by me in IAL’s favour (Lynch v Bredbo Pty Ltd [2025] NSWDC 54).

2. The parties have provided written submissions so that the issue of costs may be determined “on the papers”.

3. IAL’s application for indemnity costs is brought on two bases:

(a) Mr Streeter, the unsuccessful party, falsely and deliberately concocted evidence and/or unnecessarily prolonged a hearing with deliberately false allegations of fact. (b) Alternatively, IAL relies upon an Offer of Compromise made to Mr Streeter’s legal representatives under cover of a letter containing a Calderbank offer (Calderbank v Calderbank [1975] 3 All ER 333; [1975] 3 WLR 586).

Findings of fraud and indemnity costs

4. The Court’s discretion to award costs in accordance with s 98 of the Civil Procedure Act 2005 (NSW) is broad in nature, although it must be exercised judiciously.

5. This is particularly the case where a party seeks an order for indemnity costs of the kind sought here. As Professor Dal Pont sets out in “Law of Costs” (5th ed., at [16.71]), while special costs orders, including costs on an indemnity basis, may be awarded against a party who has engaged in fraud, a finding that a party has fabricated evidence does not automatically justify an indemnity costs order (Walker v Citygroup Global Markets Pty Ltd [2005] FCA 1866 at [31] – [32]; Currie v Currie (No 3) [2018] WASC 306 at [19]). The purpose of an indemnity order is to compensate an opponent for unnecessary costs incurred as a result of the misconduct in question, as what Professor Dal Pont calls “the ills underscoring false evidence” (at [16.71]) may be dealt with in other ways. The purpose of indemnity costs is not to punish the fraudulent party, but to compensate for costs wasted by that conduct.

6. The fact that a fraudulent claim is not only made but persisted with in court is however, a relevant matter. In Ugly Tribe Co Pty Ltd v Sikola [2001] VSC 189 at [12], Harper J stated that in such circumstances, “the rationale for refusing to order that the losing party indemnify an opposite party against that party’s costs is less compelling.”

7. The degree to which a party may be entitled to make such an exceptional claim for costs depends very much on the facts in the case. There is nothing in the costs legislation requiring courts to eschew indemnity costs where there has been dishonesty or misconduct of a serious nature; in fact, Harper J’s observations have been referred to with approval even in courts where there are costs restrictions of a much stricter nature than this court, such as the Family Court of Australia, particularly where the bringing of the claim in the first place may amount to fraud: Akhtar & Gaber (No. 2) [2018] FamCAFC 176 at [28] (citing Baillieu v Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359 as well as Harper J’s observations).

8. The parties referred to Fang v Sun (No 2) [2014] NSWSC 1194, where Slattery J ordered a defendant to pay the costs of the whole of the proceedings on the basis that the defendant knowingly relied on a fabricated documents and gave knowingly false evidence by denying the fabrication. Slattery J’s observations have been adopted by Rees J in BCEG International (Australia) Pty Ltd v Xiao (No 3) [2022] NSWSC 1221 at [65] – [70] (where costs were ordered on an indemnity basis, but for part of the litigation only) and in Foundas v Arambatzis (No 4*)* [2023] NSWSC 1648 at [18], where her Honour noted that the seriousness of the fraud warranted the “exceptional” remedy of indemnity costs of the proceedings (a finding noted on appeal: Foundas v Arambatzis (No 6) [2024] NSWCA 231 at [31]).

9. The conduct required to warrant the “exceptional” circumstances required for such an order were most recently considered by Walton J in Liu v Lam (No 2) [2025] NSWSC 264 at [59], where his Honour stated that “[T]he parties correctly submitted that indemnity costs may be awarded where the unsuccessful party falsely and deliberately concocted evidence, or unnecessarily prolonged a hearing with deliberately false defences or allegations of fact”, citing the above authorities and additionally referring to decisions at appellate level, such as RinRim Pty Ltd v Deutsche Bank AG [2017] NSWCA 169.

10. The findings of fact that I have made demonstrate that Mr Streeter deliberately made a false claim and has persisted with those falsities in the witness box. Those claims were made in relation to the critical issues of fact as to the purpose of the trip which he and Mr Lynch made on 9 September 2022; the circumstances in which the accident occurred and the manner in which the claim forms were completed. These lies did not merely prolong the litigation, but were bound up with the bringing of the claim in the first place. It was because this claim was brought that Mr Lynch had to give evidence in a bedside court shortly before his death in circumstances where he was, the transcript would suggest, heavily drugged and in a state of some distress. Mr Neal points out at paragraph 8 of his submissions,

“[Mr] Streeter instructed his counsel to cross-examine Mr Lynch on his deathbed to the effect that contrary to Mr Lynch’s evidence, the purpose of the trip was ‘to drive around the farm to have a look at it and to see the animals and to do whatever you were going to do’ – a proposition that Mr Lynch rejected and which [Mr] Streeter knew to be false.”

11. While both counsel acted with impeccable fairness throughout these proceedings, the transcript of Mr Lynch’s evidence and the challenges to that evidence subsequently made before me by Mr Streeter make uncomfortable reading. Mr Lynch’s evidence confirms the direct connection between the plaintiff’s lies and this litigation from the very beginning.

12. Mr Freeman submits that Mr Streeter was successful on some issues, such as issues 6(a) and 6(b). The fact that IAL did not make a clean sweep of all its grounds against the claim brought by Mr Streeter should not be a matter to which any weight should be given. He did not put forward any challenge to the very serious findings made against his client.

13. The second defendant/cross-claimant, Mr Streeter, should accordingly pay the cross-respondent’s costs of these proceedings on an indemnity basis, including the costs (if any) payable by IAL consequent upon the consent order made on 18 October 2024.

The Offer of Compromise/Calderbank offer

14. On 8 March 2024, six months before the hearing, IAL served an Offer of Compromise under cover of a Calderbank offer letter. If IAL is unsuccessful in its application for Mr Streeter to be ordered to pay IAL's costs on an indemnity basis for the whole of the proceedings, IAL seeks costs orders on the ordinary basis up to 8 March 2024, and thereafter on the indemnity basis, including the costs (if any) payable by IAL consequent upon the consent order made on 18 October 2024.

15. The Offer of Compromise was a “walk away” offer of judgment for IAL, with no order as to costs.

16. In his submissions of 28 March 2025, Mr Freeman concedes that he “cannot oppose given the findings of the Court” (at paragraph 7). As noted above, he relies upon the availability of indemnity costs from 8 March 2024 as a discretionary factor in relation to the application by IAL for an indemnity costs order for the whole of the proceedings, in that IAL “still” is provided an indemnity costs order for a substantial part of the proceedings, namely from 8 March 2024.

17. I have made an order for Mr Streeter to pay the costs of the whole of these proceedings as I am satisfied that the entirety of the proceedings and all of the issues are bound up inextricably with Mr Streeter’s dishonest evidence. I formally note that I would have alternatively made an order for costs to be paid on an indemnity basis from 8 March 2025, notwithstanding the apparent “walk away” nature of the Offer of Compromise, by reason of the findings of fact I have made concerning Mr Streeter’s evidence and credibility.

ORDERS

1. Pursuant to s 98 of the Civil Procedure Act 2005 (NSW), the second defendant/cross-claimant, Mr Streeter, is to pay the costs of the proceedings incurred by the cross-defendant, IAL, on an indemnity basis, including the costs (if any) payable by IAL consequent upon the consent order made on 18 October 2024.

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Amendments

14 April 2025

Paragraph 3(b) - typographical errors