In the light of the decision in Harrison v Schipp the "relevant delinquency" to which their Honours referred must be understood as related in some way to the institution, defence or conduct of the proceedings, not to the nature of the cause of action out of which they have arisen.
3 It is unnecessary for an understanding of the questions raised upon the present application, and of the basis on which I have concluded it must be determined, to examine in detail all of the circumstances that may justify an order for indemnity costs, but I shall refer to one further decision of the Court of Appeal, Rosniak v Government Insurance Office (1997) 41 NSWLR 608. There, Mason P (with whom Clarke AJA relevantly agreed, Meagher JA dissenting, not upon a question of principle, but upon the exercise of the discretion in the circumstances) referred (at 615) to the case as one where the trial judge had held "this was a case where the plaintiff, properly advised, should have known that she had no chance of success on the [particular] issue". After citing several authorities, Mason P said (at 616):
"Later cases have emphasised that the discretion to depart from the usual 'party and party' basis for costs is not confined to the situation of what Gummow J described as the 'ethically or morally delinquent party' [his Honour referred to a number of further authorities]. Nevertheless the court requires some evidence of unreasonable conduct, albeit that it need not rise as high as vexation. This is because party and party costs remain the norm, although it is common knowledge that they provide an inadequate indemnity."
4 The first of the matters in which an order for indemnity costs is sought is a motion for leave to terminate the contract out of which the whole stream of litigation between the parties arises, of which specific performance had been ordered and in relation to which a rectification order had been made only shortly before the motion was taken out. By way of counter-motion, declarations and orders in respect of the contractual rights and obligations of the parties were sought by Mr Muriti and Keanlong. I delivered judgment on 2 June 2005 on these issues, after a hearing which occupied 23, 24, 25 and 26 May 2005: Muriti v Prendergast [2005] NSWSC 526.
5 The basis on which indemnity costs are sought in respect of the proceedings upon the motion for leave to terminate the contract is that the bringing and prosecution of it were, in the circumstances, "unreasonable conduct" in the sense in which Mason P used that expression in Rosniak v Government Insurance Office or a "relevant delinquency" in the sense in which that expression was used by Gaudron and Gummow JJ in Oshlack v Richmond River Council. It is contended that Mr Prendergast, properly advised, should have known his application was bound to fail, and furthermore that the manner in which it was conducted was high-handed, extreme and entirely unjustified.
6 It is unnecessary to describe the issues in detail in these reasons since the judgment to which I have referred is itself quite full. It is sufficient to say that the fundamental basis on which it was attempted to show that Mr Muriti and Keanlong had repudiated the contract was that certain contentions put forward by their solicitors, in relation to the effect of the contract and the basis on which settlement of it should proceed, were so plainly erroneous as to demonstrate a lack of bona fides and a determination not to be bound by the contract according to its true meaning. Not only did the Court reject these contentions, but it also made declarations, upon the counter-motion brought by Mr Muriti and Keanlong, that the propositions their solicitors had maintained were indeed correct. At the hearing of the present application, much was said by counsel for Mr Prendergast and the companies on his side of the record to demonstrate that the propositions for which they had contended, although rejected, were reasonably arguable. It seems to me that this misses the point. Accepting that there was an argument available, and assuming they wished to have it determined, it was open to them to do what Mr Muriti and Keanlong eventually did, that is, to take out a motion for declarations. They did not do that. What they did was assert with much vehemence, but no discernible logical foundation, that the mere raising of the issues by the solicitors for Mr Muriti and Keanlong demonstrated repudiation of the contract. Upon the authorities dealing with repudiation, which are discussed in the earlier judgment, and in the circumstances of the case, this was really a hopeless proposition. In my opinion, the application for indemnity costs succeeds in respect of the costs of and incidental to the motion for leave to terminate the contract for alleged repudiation. But as there were issues to be determined in respect of the propositions which were involved in the counter-motion for declarations and orders in respect of the contractual rights and obligations of the parties, Mr Muriti and Keanlong should have those costs referable only to the counter-motion, which succeeded, but on the usual party and party basis.
7 The second application for indemnity costs relates to certain proceedings for winding up orders in which oppression was alleged by Mr Prendergast and winding up of several of the companies involved was sought on the just and equitable ground. The application for indemnity costs is brought in matter number 2889 of 2005. However, upon the termination of the proceedings in respect of the motion and counter-motion in matter number 5094 of 2004 to which I have just referred, it was accepted that the winding up proceedings could not succeed and orders were made for their dismissal with costs. The costs order, made in unqualified terms, must be construed as an order for party and party costs. It has since been entered, and that was done before the argument of the present application. In those circumstances, there is a difficulty about making now an order for indemnity costs in relation to the application for winding up orders. But in any case, the application did not get very far at all before Mr Prendergast agreed not to proceed with it and quite shortly thereafter agreed to its dismissal. I would not be inclined, in the circumstances, to make an order for indemnity costs in that matter. The "relevant delinquency" related, not so much to it, but to the motion for leave to terminate the contract.
8 The third matter in which indemnity costs are sought is an application which was made for an order requiring the resignation of Mr Prendergast as a director pursuant to a clear and express term of the contract. The application was made in matter number 2883 of 2005. This application involved a relatively small amount of evidence, but Mr Prendergast's resistance of it was plainly without any arguable justification. Yet the attitude adopted by Mr Prendergast was such as to compel Mr Muriti to incur the expense of pursuing the issue to the point of seeking an order authorising a Court official to sign a resignation on Mr Prendergast's behalf before finally Mr Prendergast signed a resignation. In my opinion, Mr Prendergast's defence and persistence in his defence of this application require an order for indemnity costs from the date of service of the application. In respect of the costs up to the date of service and including service, the order should simply be an order for party and party costs.
9 The final matter with which these reasons are concerned is the question of interest on costs, which relates to proceedings number 5094 of 2004 and also the related proceedings in 2271 of 2005, 2883 of 2005, 2889 of 2005 and 4395 of 2005.
10 By s 95(4) of the Supreme Court Act 1970, it was provided:
"If an order is made for the payment of costs, the Court may order that interest is to be paid on the amount so ordered, at the prescribed rate referred to in subsection (1), from the date or dates when the amount in respect of costs was duly paid."