{“content”: “Harvey v Henderson (No 3) NSWSC 1186 (10 October 2025)nnLast Updated: 10 October 2025nnSupreme CourtnNew South WalesnnCase Name: Harvey v Henderson (No 3)nMedium Neutral Citation: [ NSWSC 1186](/cgi-bin/viewdoc/au/cases/nsw/NSWSC/2025/1186.html “View Case”)nHearing Date(s): On the papersnDate of Orders: 10 October 2025nDecision Date: 10 October 2025nJurisdiction: Common LawnBefore: Rothman JnDecision: (1) The Court vacates orders (3), (5) and (6) of thenorders that issued on 12 June 2025, as amended, and makes the following ordersnin lieu:(3) The defendants, jointly and severally, shallnpay interest at the rate of 3% per annum on $32,500 from 1 July 2020 to 12 Junen2025 (date of judgment) in the sum of $4,826.92.(5) Thendefendants, jointly and severally, shall pay the plaintiff’s costs of andnincidental to these proceedings on an indemnitynbasis.(2) The proceedings are dismissed.nnCatchwords: COSTS — party/party — indemnity basis — defamationnproceedings — where defendants did not accept two settlementnoffersn— where defendants failed to make settlement offer in replyn— indemnity costs awardednnLegislation Cited: [Civil Procedure Act 2005](/cgi-bin/viewdoc/au/legis/nsw/consol_act/cpa2005167/index.html) (NSW), [s 98](/cgi-bin/viewdoc/au/legis/nsw/consol_act/cpa2005167/s98.html)[Defamation Act 2005](/cgi-bin/viewdoc/au/legis/nsw/consol_act/da200599/index.html) (NSW), [sn40](/cgi-bin/viewdoc/au/legis/nsw/consol_act/da200599/s40.html)Legal Profession Uniform Law (NSW)Uniform Civil Procedure Rules, rrn14.14, 42.1, 42.2, 42.14nnCases Cited: Harvey v Henderson [ NSWSC 601](/cgi-bin/viewdoc/au/cases/nsw/NSWSC/2025/601.html “View Case”)Oshlack v Richmond River Council [(1998) 193 CLR 72](/cgi-bin/LawCite?cit=%281998%29%20193%20CLR%2072 “View LawCiteRecord”); [ HCA 11](/cgi-bin/viewdoc/au/cases/cth/HCA/1998/11.html “View Case”)nnCategory: CostsnnParties: Laurae Harvey (Plaintiff)Gary Henderson (Defendant)nnRepresentation: Counsel:R Rasmussen / A M Cheeman(Plaintiff)Solicitors:Kalantzis Lawyers (Plaintiff)CarrollnLawyers (Defendant)nnFile Number(s): 2020/348051nnPublication Restriction: N/AnnJUDGMENTn1. HIS HONOUR: The Court is required to deal with an application for indemnityncosts. On 12 June 2025, the Court as presently constituted, issuednjudgment fornthe plaintiff (“the PrincipalnJudgment”),^[](#fn1)^ in which thenCourt ordered the defendants to pay damages, interest and costs. It alsonrestrained the defendants from publishing onnthe internet or anywhere elsenmaterial that repeated the imputations found to be defamatory.n2. Thenorders that issued with the Principal Judgment granted leave to make anynapplication for any special order as to costs and tonfile a short minute ofnorder reflecting the judgment and orders otherwise issued.n3. Onn26 June 2025, the plaintiff filed the application for orders that costs be paidnon an indemnity basis and filed a short minutenof order in accordance with thendirections.n4. Onnor about 17 July 2025, on request, the Court made orders extending the time fornthe filing of submissions by the defendantsnonnthe question of costs. Thenextension of time permitted the defendants to file any submissions they soughtnon the application fornindemnity costs by 5pm, 2 September 2025. Further, itndirected that any reply to such submissions be filed by the plaintiff by 5pm, 9nSeptember 2025.n5. Onn9 September 2025, the plaintiff communicated with the Court to the effect thatnthe defendants had filed no submissions in replynto the application fornindemnity costs made by the plaintiff in accordance with the extended timetablenor at all. Further, no objectionnhad or has been taken to the plaintiff’sncalculation of interest or the terms of the short minute of order filed with thensubmissionnon costs on 12 June 2025.n6. Thenshort minute of order varies the terms of orders (3) and (5) of the ordersnissued with the Principal Judgment. Those orders relatednto the calculation ofninterest and the payment of costs.n7. ThisnCourt, being a Court of general jurisdiction with jurisdiction in both equitynand common law has an inherent jurisdiction tonorder costs. Over and above theninherent jurisdiction of the Court, costs may be awarded under [s 98](/cgi-bin/viewdoc/au/legis/nsw/consol_act/cpa2005167/s98.html) of then*[Civil Procedure Act 2005](/cgi-bin/viewdoc/au/legis/nsw/consol_act/cpa2005167/index.html)* (NSW).n8. Itnis unnecessary to repeat or extract the provision. It is sufficient to note thenwell-rehearsed principles that the awarding ofncosts is a matter within thendiscretion of the Court; the Court has full power to determine by whom and onnwhat basis such costsnshould be paid; costs are a means of compensating thensuccessful party (and in exceptional circumstances an unsuccessful party) onnthencosts of enforcing or defending their rights; and costs are intended to bencompensatory and not punitive.n9. Thenusual order for costs is that costs follow the event. The successful party, is, particularly, entitled to its costs.^[](#fn2)nAt common law, there was no inherent jurisdiction to award costs; it was anjurisdiction founded in equity and is otherwisenstatutory.^[](#fn3)n10. Ordinarily,ncosts are awarded on the ordinary basis and are assessed on such anbasis.^[](#fn4)n11. Whennassessing costs on an ordinary basis, bearing in mind that costs arencompensatory and not punitive, an assessor determines whatnis “fair andnreasonable” for each of the items of work charged, assuming that each ofnthe items of work is, itself, reasonablynundertaken. In so doing, the assessornapplies the Legal Profession Uniform Law (NSW).n12. Thenordinary basis, which is referred to as party/party basis, is overwhelmingly thenbasis upon which costs are assessed. However, nit is open to a party, as was thencase in these proceedings, to apply for costs to be assessed on a differentnbasis.n13. Ifnthe Court were to order that costs be paid on an indemnity basis, such costsnthat have been unreasonably incurred or are of annunreasonable amount are not tonbe allowed, but otherwise all costs are payable.n14. Thendiscretion to order costs must be exercisednjudicially.^[](#fn5) Leaving aside fornpresent purposes costs ordered as a consequence of a judgment that issued thatnwas less than an offer of compromise, nthere must be some special or unusualncircumstance that gives rise to the order for indemnity costs, often some kindnof “relevantndelinquency”.^[](#fn6)n15. Relevantndelinquency, in the sense used in the cases dealing with the principle, does notnrefer to some moral delinquency or the conductnthat gave rise to thenproceedings. Rather, it refers to the manner in which the proceedings werenconducted. That may well includenthe unreasonable rejection of an offer ofnsettlement, even if not a formal offer of compromise.n16. Inndefamation proceedings, the provisions of [s 40](/cgi-bin/viewdoc/au/legis/nsw/consol_act/da200599/s40.html) of the *[Defamation Act 2005](/cgi-bin/viewdoc/au/legis/nsw/consol_act/da200599/index.html)*n(NSW) apply to the awarding of costs. The provisions of [s 40](/cgi-bin/viewdoc/au/legis/nsw/consol_act/da200599/s40.html) of then*[Defamation Act](/cgi-bin/viewdoc/au/legis/nsw/consol_act/da200599/index.html)*npermit the Court to take into account the manner in whichnthe parties to the proceedings have conducted their cases or any othernmattersnthat the Court considers relevant.n17. Inncircumstances such as the present, where the plaintiff has successfully broughtnthe defamation proceedings, costs are to be awardednof and incidental to thenproceedings on an indemnity basis if the Court were satisfied that thendefendants unreasonably refused annoffer of settlement or failed to make ansettlement offer. There is no evidence before the Court that the defendants madenany offernof settlement.n18. Innthis proceeding, the plaintiff made two offers to resolve the proceedings. Thenfirst, a Calderbank Letter of 26 May 2022, and thensecond an Offer ofnCompromise, pursuant to the rules, of 15 June 2022.n19. Thenjudgment that issued on 12 June 2025 well exceeded the terms of the CalderbanknOffer of 26 May 2022. The Calderbank Letter wasnsent approximately eight monthsnafter the Amended Statement of Claim was filed and served. The defendants hadnfiled a defence ofntruth and qualified privilege.n20. Therencan be no real dispute that at the time that the Calderbank Letter issued andnwas received, the defendants were aware of thennature of the case they werenrequired to meet and had considered the manner in which they would meet it. ThenCalderbank Letter was, nto say the least, reasonable.n21. Itnproposed an end of the proceedings with the payment of costs as agreed ornassessed on an ordinary basis. It proposed the end ofnthe proceedings withoutnany payment of damages, but with restrictions in relation to future publicationsnand future allegations.nThose restrictions ultimately were ordered as a resultnof the judgment of the Court of 12 June 2025.n22. ThenOffer of Compromise was made in accordance with the UCPR. It is an Offer ofnCompromise that complies with the rules.n23. Eachnof the Calderbank Letter and the Offer of Compromise were made well before thensubstantive proceedings commenced. Again, thenterms of the Offer of Compromise, if accepted, would have resulted in a settlementnof the proceedings that was notnas generous tonthe plaintiff as that ordered in the Principal Judgment.n24. Pursuantnto the provisions of UCPR r 42.14, in the case of Offer of Compromise, which wasnrejected by the defendants, or, to quotenthe rule, not accepted by thendefendants, and which resulted in judgment no less favourable to the plaintiffnthan the terms of thenoffer, the plaintiff is entitled to an order on annindemnity basis at least from 22 June 2022. The effect of the rule is, in mynview,nmodified by the provisions of [s 40(2)(a)](/cgi-bin/viewdoc/au/legis/nsw/consol_act/da200599/s40.html) of the *[DefamationnAct](/cgi-bin/viewdoc/au/legis/nsw/consol_act/da200599/index.html).*n25. Itnwas unreasonable for the defendants not to accept the Offer of Compromise of 22nJune 2022. Further, it was unreasonable for thendefendants not to accept thenproposal, being a settlement offer that was contained in the Calderbank Letter.nOver and above the foregoing, nit was unreasonable for the defendants not to makena settlement offer themselves in response to the offers made in May and Junen2022.n26. Innmy view, pursuant to the provisions of UCPR r 42.14, the Court should exercisenits discretion to order costs on an indemnity basisnwhere there has been annoffer that was not accepted, and the proceedings resulted in judgment that wasnno less favourable. The UCPRnpermits indemnity costs to be ordered on an“commercial” basis in that, in such circumstances, the ordering ofnindemnityncosts should be the ordinary course unless good reason is shown tondepart from the provisions of the order.n27. Bearingnin mind the provisions of [s 40(2)(a)](/cgi-bin/viewdoc/au/legis/nsw/consol_act/da200599/s40.html) of the *[Defamation Act](/cgi-bin/viewdoc/au/legis/nsw/consol_act/da200599/index.html)*, the twonoffers of settlement of the proceedings, and the failure of the defendants tonmake any offer in response to the plaintiff’snoffers, the application fornindemnity costs should be granted for the entire proceedings.n28. ThenCourt makes the following orders:n> (1) The Court vacates orders (3), (5) and (6) of the orders that issued on 12n> June 2025, as amended, and makes the following ordersn> in lieu:n> “(3) The defendants, jointly and severally, shall payn> interest at the rate of 3% per annum on $32,500 from 1 July 2020 ton> 12 Junen> 2025n> (date of judgment) in the sum of $4,826.92.n> n> (5) The defendants, jointly and severally, shall pay then> plaintiff’s costs of and incidental to these proceedings on an indemnityn> basis.”n> n> (2) The proceedings are dismissed.nnAmendmentsn10 October 2025 – Include counsel to cover pagen—n^[](#fnB1)^ Harvey v Henderson [ NSWSCn601.](/cgi-bin/viewdoc/au/cases/nsw/NSWSC/2025/601.html “View Case”)n^[](#fnB2)^ Uniform [Civil ProcedurenRules](http://www.worldlii.org/vu/legis/consol_sub/cpr216/index.html) (hereinafter “UCPR”), rn42.1.n^[](#fnB3)^ Oshlack v Richmond RivernCouncil [(1998) 193 CLR 72](/cgi-bin/LawCite?cit=%281998%29%20193%20CLR%2072 “View LawCiteRecord”); [ HCA 11](/cgi-bin/viewdoc/au/cases/cth/HCA/1998/11.html “View Case”) at [](/cgi-bin/viewdoc/au/cases/cth/HCA/1998/11.html#para63).n^[](#fnB4)^ UCPR, rn42.2.n^[](#fnB5)^ Oshlack,nsupra.n^[](#fnB6)^ Ibid.n#### Printn* [Print (pretty)](javascript:void(0);)n* [Print (eco-friendly)](javascript:void(0);)n#### Downloadn* [RTF format (233 KB)](/au/cases/nsw/NSWSC/2025/1186.rtf)n* [Signed PDF/A format](/cgi-bin/sign.cgi/au/cases/nsw/NSWSC/2025/1186)n#### Cited Byn* [LawCite records](/cgi-bin/LawCite?cit= NSWSC 1186)n* [NoteUp references](/cgi-bin/sinosrch.cgi?method=boolean&query=2025 NSWSC 1186 or NSWSC 2025 1186)n#### Join the discussionn* [Tweet this page](https://twitter.com/intent/tweet?text=%E2Harvey v Henderson (No 3) NSWSC 1186 (10 October 2025)%E2%80%9D&url=http://www.austlii.edu.au/au/cases/nsw/NSWSC/2025/1186.html&via=austlii&hashtags=austlii)n* [Follow @AustLII on Twitter](https://twitter.com/intent/user?screen_name=AustLII)n* [About](/austlii/)n* [Copyright & Usage](/austlii/copyright.html)n* [Privacy](/austlii/privacy.html)n* [Disclaimers](/austlii/disclaimers.html)n* [Help](/austlii/help/)nhttp://www.austlii.edu.au/au/cases/nsw/NSWSC/2025/1186.htmlEnd of the content of the URLs browsed.”, “title”: “Harvey v Henderson (No 3) NSWSC 1186 (10 October 2025)”, “url”: “http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWSC/2025/1186.html”}
This case, Harvey v Henderson (No 3), decided on 10 October 2025 in the Supreme Court of New South Wales, was about whether the plaintiff, Laurae Harvey, should be awarded costs for her defamation proceedings against Gary Henderson (the defendant) on an indemnity basis. The court looked at whether the defendants had unreasonably rejected settlement offers made by the plaintiff, or failed to make an offer themselves. Ultimately, the court decided to award the plaintiff’s costs on an indemnity basis because the defendants had unreasonably refused the plaintiff’s settlement offers and hadn’t made any counter-offers, which is seen as a “relevant delinquency” in how the proceedings were conducted. The court also ordered that the proceedings be dismissed.
Key Details of the Case
- Case Name: Harvey v Henderson (No 3)
- Court: Supreme Court of New South Wales
- Case Number: 2020/348051
- Date of Decision: 10 October 2025
- Judge: Rothman J
- Parties: Laurae Harvey (Plaintiff) and Gary Henderson (Defendant)
- Area of Law: Costs, specifically indemnity costs in defamation proceedings.
- Legislation Cited: Civil Procedure Act 2005 (NSW), Defamation Act 2005 (NSW), Legal Profession Uniform Law (NSW), Uniform Civil Procedure Rules.
- Key Events:
- Principal Judgment issued on 12 June 2025, ordering the defendants to pay damages, interest, and costs, and restraining further defamatory publications.
- Plaintiff applied for indemnity costs on 26 June 2025.
- Defendants were granted an extension to file submissions regarding costs, with a deadline of 2 September 2025.
- Defendants failed to file any submissions.
- Plaintiff’s calculation of interest and proposed orders were not objected to.
Summary of the Judgment
In this case, the court had to decide on awarding costs to the plaintiff, Laurae Harvey, on an indemnity basis after she had won her defamation case against Gary Henderson. Usually, costs are awarded on an “ordinary” or “party/party” basis, meaning the winning party gets back costs that are considered fair and reasonable for the work done. However, the court has the power to order costs on an “indemnity” basis in special circumstances, which means almost all costs incurred by the successful party are covered, unless they were unreasonably incurred or excessive. This usually happens when a party has behaved unreasonably during the legal proceedings, which is sometimes referred to as “relevant delinquency.”
In defamation cases in New South Wales, Section 40 of the Defamation Act 2005 allows the court to consider how the parties conducted their case when deciding on costs. In this instance, the plaintiff had made two offers to settle the matter before the main judgment was handed down. The first was a “Calderbank Letter” on 26 May 2022, and the second was a formal “Offer of Compromise” on 15 June 2022. The court found that the judgment awarded to the plaintiff on 12 June 2025 was significantly more favourable than both of these offers.
The court considered it unreasonable for the defendants to reject these settlement offers, especially since they did not make any counter-offers themselves. The defendants also failed to provide any submissions to the court when asked to explain why indemnity costs shouldn’t be awarded. Because the defendants had unreasonably rejected the plaintiff’s settlement offers and failed to make any offer of their own, and given the favourable outcome for the plaintiff, the court exercised its discretion to order that the plaintiff’s costs be paid on an indemnity basis for the entire proceedings. This decision was made under Rule 42.14 of the Uniform Civil Procedure Rules, which allows for indemnity costs when a settlement offer is rejected, and the subsequent judgment is no less favourable than the offer.
Questions and Answers
Q: What is the difference between ordinary costs and indemnity costs?
A: Ordinary costs (or party/party costs) cover costs that are fair and reasonable for the work done in a case. Indemnity costs cover almost all costs incurred by the successful party, unless they were unreasonably incurred or excessive. It’s a much higher level of recovery for the winning party.
Q: When can a court order indemnity costs?
A: A court can order indemnity costs in special or unusual circumstances, often when a party has behaved unreasonably in how they conducted the proceedings. This can include unreasonably rejecting settlement offers or failing to make a reasonable offer themselves.
Q: Does “relevant delinquency” in legal proceedings refer to criminal behaviour?
A: No, “relevant delinquency” in this context doesn’t refer to moral or criminal wrongdoing. It refers to the way a party conducted themselves during the legal proceedings, such as unreasonably refusing a settlement offer.
Q: How does the Defamation Act 2005 (NSW) affect cost orders?
A: Section 40 of the Defamation Act 2005 (NSW) allows the court to take into account the manner in which parties conducted their cases, or any other relevant matters, when deciding on costs. This can include the reasonableness of accepting or rejecting settlement offers.
Q: Did the defendants in this case make any offers to settle?
A: No, the court noted that there was no evidence that the defendants made any offer of settlement throughout the proceedings.
Q: What were the settlement offers made by the plaintiff?
A: The plaintiff made two offers: a Calderbank Letter on 26 May 2022, and a formal Offer of Compromise on 15 June 2022.
Q: Was it legal for the defendants to reject the settlement offers?
A: Yes, it is legal to reject a settlement offer. However, the court can consider the reasonableness of that rejection when deciding on costs. In this case, the rejection was deemed unreasonable.
Q: What does it mean for proceedings to be “dismissed”?
A: When proceedings are dismissed, it generally means the case is over and the plaintiff’s claim is not successful, or in this specific context, it refers to the final orders of the court in relation to the costs application.
Q: What was the significance of the judgment being “no less favourable” than the offer of compromise?
A: Under Rule 42.14 of the Uniform Civil Procedure Rules, if a plaintiff rejects an offer of compromise and then obtains a judgment that is as good as or better than the offer, the plaintiff is usually entitled to an order for indemnity costs from the date of the offer.
Q: Why did the court vacate previous orders?
A: The court vacated previous orders regarding interest and costs (orders (3) and (5)) to replace them with new orders, specifically to award costs on an indemnity basis and to clarify the calculation of interest.
Q: What is a Calderbank Letter?
A: A Calderbank Letter is a type of offer to settle a legal dispute made without prejudice, named after a court case. It’s a way for a party to make a settlement offer that can be used later to argue for indemnity costs if the offer is unreasonably rejected and the other party subsequently does better in court.
Q: Is it always unreasonable to reject a settlement offer?
A: No, it’s not always unreasonable. The court assesses the reasonableness based on the circumstances at the time the offer was made, the nature of the case, and the outcome of the proceedings.
Q: What are the consequences of failing to respond to a settlement offer?
A: Failing to respond to a settlement offer, especially if the offer was reasonable and the subsequent judgment is favourable, can lead to a court ordering indemnity costs against the party who failed to respond or engage in settlement discussions.
Q: Does the outcome of this case mean all defamation plaintiffs will get indemnity costs?
A: No, this case is specific to its facts. Indemnity costs are exceptional and depend on the conduct of the parties, including their approach to settlement, and the specific provisions of legislation like the Defamation Act.
Q: Where can I find more simplified court case summaries in NSW?
A: You can find more simplified summaries of NSW Supreme Court cases on platforms like Medigosa, which aim to make legal information more accessible.
Q: Is it legal for a court to order parties to pay each other’s legal costs?
A: Yes, it is a fundamental principle in Australian courts that costs follow the event, meaning the unsuccessful party generally pays the successful party’s costs. The basis of these costs (ordinary or indemnity) is determined by the court.
You can read the full judgment here: Harvey v Henderson (No 3) NSWSC 1186.