The Court held that a Calderbank letter offering only that each party bear their own costs of the appeal, made at a time when the respondent's costs were minimal, amounted to an invitation to capitulate rather than a genuine compromise, and therefore did not warrant an indemnity costs order. The fact that the appeal was decided by majority demonstrated it was arguable and not one the appellant should lightly have abandoned. A Calderbank letter does not automatically produce a more favourable costs order; the court retains discretion having regard to the circumstances including the strength of the appeal and the nature of the offer.
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