(3) Direct that costs payable under these orders be set off and that the orders be executed only in respect of any balance.
15 The same considerations lead me to make similar orders in relation to the Fourth Defendant Mr Ambler. The Court should retain its control over security for Mr Ambler's costs and should not release the funds.
16 The plaintiffs sought similar qualifications in respect of the costs orders as between the plaintiffs and the Fifth Defendant, and as between the plaintiffs and the Seventh Defendant. I see the qualifications similarly and will not make them.
17 The Fifth Defendant Mr McCulloch is entitled to a general order for costs against the plaintiffs. He was unrepresented at the hearing and for some time earlier. He is a person of considerable ability and acumen and did not suffer the disadvantages incurred by most unrepresented litigants. The Fifth Defendant made an offer of compromise by a letter written by his then solicitors to the plaintiffs' solicitors on 24 April 1996. That offer was expressed to be without prejudice except as to costs and contained a statement of intention to produce the letter on any argument as to costs. Mr McCulloch was then prepared to settle on the basis that the plaintiffs were to withdraw and Mr McCulloch was to pay his own costs. The letter contained a careful and detailed statement of reasons for its suggestion that the plaintiff would have considerable difficulties in establishing a case against Mr McCulloch. The reasons given outlined the strength of Mr McCulloch's position in a way to which the presentation of his case at the hearing generally conformed. Although the grounds for my decision were not in all respects exactly predicted by the letter, it is remarkable to how high a degree of accuracy the outcome of the litigation against Mr McCulloch and the grounds on which the claim was disposed of were predicted five years before disposition.
18 In my judgment there never was any serious prospect of success against Mr McCulloch. At later stages, particularly in the Fourth Further Amended Statement of Claim a number of grounds of suit against Mr McCulloch were alleged including participation in fraud, a breach of fiduciary duties and breach of duty of care which in my view had no arguable basis, but were quite groundless as appeared clearly from information in the plaintiffs' hands. From beginning to end the evidence showed that Mr McCulloch was in the position that he did not control events and decisions and energetically identified what he regarded as prudential measures and pointed them out, without effect, to the persons who were in control. In my judgment the plaintiffs were seriously delinquent in involving Mr McCulloch in the litigation as a defendant, and the deliquency is all the more evident from their not having accepted his offer of 24 April 1996, and from their having persisted with their claims against him. For these reasons costs payable to Mr McCulloch should in my view be assessed on the indemnity basis. This can extend only to legal costs which he incurred while he was represented in the proceedings.
19 For much of the course of the proceedings including the hearing Mr McCulloch was unrepresented and the costs which may be awarded to him are limited, on the authority of Cachia v. Hanes & Anor (1994) 179 CLR 403 to ordinary witness fees; see p.417. He is not entitled to costs of other time spent in Court and time of his own spent in preparation. I propose to keep the assessment of witness fees to be ordered for Mr McCulloch under my own consideration and I will assess an amount to be paid to him; the costs of his legal representation payable under this order will be sent to assessment.
20 Unrepresented persons who conduct their own litigation are recurringly a source of anxious consideration for courts and a source of practical difficulties for represented litigants who are opposed to them; it is a recurring experience that unrepresented litigants do not use the time of themselves or of the Court or of their opponents well and have difficulty in perceiving what is under debate and what is relevant. None of this applies to Mr McCulloch. He is a professional person with qualifications in management, and displayed considerable ability in the presentation of his own case, always remembering that he is not trained in the law. The limit on the costs power established in Cachia v. Hanes has a very unfortunate effect in its impact on him, having regard to the time and intensity of his involvement in these proceedings and the impact which they must have had on his ability to earn his living. The irresponsible behaviour of the plaintiffs in joining him as a defendant and keeping him in the litigation has caused a very heavy burden to fall on him and he has encountered what I regard as an unfortunate weakness in the state of the law.
21 The plaintiffs conceded that the moneys provided for security for Mr McCulloch's costs ought to be paid to him on account of the moneys to be paid on taxation. I will act on this concession.
22 The costs of the Sixth Defendant Mr Ramsay have already been dealt with.
23 An agreement was reached between the plaintiffs and the Seventh Defendants Clayton Utz as to the orders which should be made disposing of the proceedings between them. The agreement did not cover all matters, and some were left for argument. The orders which should be made under their agreement are as follows:
(1) Upon the plaintiffs' claim, give judgment for the Seventh Defendants Brian Wilson and others practising as Clayton Utz against the First Plaintiff Maronis Holdings Limited.
(2) By consent the claims in the Fourth Further Amended Statement of Claim by the Second Plaintiff Girvan Corporation (New Zealand) Limited (in Liquidation) against the Seventh Defendants are dismissed; and it is ordered that as between the Second Plaintiff and the Seventh Defendants each party pay its or their own costs.
24 The first of these orders carries costs with it. It will be seen that an effect of the consent orders is that Clayton Utz will not be entitled to recover any costs against Girvan NZ.
25 Clayton Utz asked for the costs payable by Maronis to Clayton Utz to be assessed on the indemnity basis. Clayton Utz asked to this effect:
(a) that all the costs of Clayton Utz be deemed to relate to the claim against Clayton Utz by Maronis;
(b) that costs otherwise payable to Clayton Utz by Maronis be reduced by 10 percent representing the share of Clayton Utz' costs which have been agreed to relate to the Nippon Credit aspect of the case.
26 Clayton Utz also asked for a special order dealing with interest on costs and for an order directing payment out of money held by way of security for costs. A ground on which indemnity costs were claimed was that it was alleged that Maronis has maintained proceedings which had no real prospects of success. I do not uphold this ground because, although the claim was completely unsuccessful, it was not unarguable. There was an arguable basis for alleging that Clayton Utz had acted or presumed to act as the solicitors for Maronis, borne out by written assertions made by Clayton Utz in correspondence. The claims were also supported by expert evidence which, although I did not accept it, required careful consideration and came from an expert whose views were entitled to respect. The weaknesses of the case were many, and it was presented in an extremely complex way which served to obscure such strength as it had. However I do not think that it can be said that there was no real prospect of success; or that the claim was an act of irresponsibility or delinquent. A further ground under which indemnity costs were claimed was that there were allegations of fraud which were made with no proper basis for them. There was, indeed, no substantial basis for repeated allegations and for extended endeavours at the hearing to maintain a case of dishonest or unconscionable conduct. I do not think however that an indemnity costs order should be founded on aspects of the conduct of the case which were excessive or unjustified when there were other aspects which required careful consideration.
27 A further ground was that the length and costs of the case have been greatly increased by the number of parties joined by the plaintiffs, including some in respect of whom there was no reasonable prospect of success. This submission related to claims against Nippon Credit, Mr Petersen, Mr McCulloch and Mr Ramsay. In my view it was correct in respect of Mr McCulloch and Mr Ramsay to maintain that there was no reasonable prospect of the plaintiffs succeeding, but I would not make the same observation of the claims against Nippon Credit and Mr Petersen in respect of whom there was something to adjudicate. I have given some thought to seeking to identify some proportion of the hearing in respect of which an award of indemnity costs might reflect the element of extension of the hearing of the case against Clayton Utz arising from inappropriate joinders, but I have been unable to see any sustainable basis for apportioning the hearing to reflect this. A general order for costs in favour of the Seventh Defendant will itself furnish them with considerable protection and I regard it as the appropriate measure.
28 The costs recoverable by Clayton Utz against Maronis should be the general costs of the proceedings, including costs specifically relating to Girvan NZ's claim. The plaintiffs made common cause against Clayton Utz. I uphold claim (a) referred to in para [25]. I will adopt the 10 per cent reduction which the parties have agreed to.
29 Clayton Utz asks for release now of money held as security for its costs. This is appropriate on the assumption that the costs are likely to exceed the security. If this assumption is wrong Maronis can obtain my reconsideration on a prompt application.
30 The Second Defendant and the Seventh Defendants have each sought an award of interest on costs. I regard it as appropriate to award interest in exercise of the power in subs.95(4) of the Supreme Court Act 1970 so that interest is to be paid on amounts of costs paid from the dates when amounts in respect of costs were paid. I regard this as appropriate because the interlocutory stages of the litigation and the hearing were very protracted, largely because of the conduct of the plaintiffs and complexities arising out of the plaintiffs' having made many amendments to their pleadings. It would in my view be unjust that the defendants should not recover any interest in respect of the period between the dates, which could now be over six years ago, when they were called on to pay costs to their own representatives and the date when an order for costs is made.
31 Clayton Utz has asked that I reserve liberty to make an application by Motion for an order against a non-party in respect of costs if it should later be advised to do so. I will accede to this request, although in doing so I have given no consideration to whether there is any ground upon which any non-party could or should be ordered to make any payment.
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