The Court of Appeal ordered indemnity costs of the appeal and solicitor-and-client costs of the District Court proceedings from the date of an unaccepted offer of compromise, where the appellant's eventual judgment ($170,000) substantially exceeded the offer ($50,000). The respondents' argument that the judgment only exceeded the offer due to an unusually high punitive damages award was rejected, the Court holding that the respondents' legal advisers should have appreciated the risk of substantial exemplary damages given the case alleged. The Court confirmed that Fotheringham v Fotheringham applies to District Court Rules offers made after 1 January 1998.
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