Petroni v Prats

The plaintiff sues the defendants by statement of liquidated claim for an amount of $6392.37 for the cost of repairs to her motor vehicle, a 1989 Toyota Corolla registration number VEE296 (the vehicle). The owner of the vehicle is the first defendant and the second defendant the driver at the time of the collision on 1 December 2003 (the defendant). Liability of the driver is not in issue.

The vehicle was towed to Maroubra Automotive Refinishers Pty. Ltd (MAR) following the collision. An initial estimate for repairs and expenses dated 5 January 2004 by MAR was in the sum of $6,666.20. Mr. Wild, a loss assessor, of some 32 years experience amended the assessment to an amount of $6260.37. In evidence, Mr Wild said the pre accident value was $6,800.00 made up of market value of $6,100 plus $700 for the car air conditioner. This value was taken from the Glasses Guide, a guide used in the motor industry.

The defendant through her insurance company AAMI disputes the quantum of the repairs. Parts of the defence were not pressed, eg questions of retainer, standing and GST issues. The defendant asserted that the vehicle had a current market value of $4,100, also a value taken from the Glasses Guide and, a salvage value of $700. It was also asserted that a fair and reasonable cost for reinstating the vehicle to pre accident condition was not greater than $4,240.04. No allowance was made for the air conditioning because of the age of both the car and the air conditioning system.

The following questions require consideration. Has the plaintiff proved her case on the balance of probabilities? Did the plaintiff fail to mitigate her loss? Should the vehicle have been repaired at all, that is, was it economical to do so? If the answer to that question is "yes", were the costs of repair fair and reasonable?

In relation to the first question, the defendant challenged the admissibility of the evidence of Mr. Wild, the plaintiff's loss assessor on various grounds, namely, was the opinion independent, that is, was the opinion expressed by Mr. Wild an objective and unbiased opinion? Were the facts and assumptions founding the report sufficiently exposed? The defendant also submitted that the whole of the evidence of Mr Wild was inadmissible because there was no acknowledgement or agreement by Mr. Wild to be bound by the Expert Witness Code of Conduct (the expert code). The written material comprised a repair quotation of MAR marked and amended by Mr. Wild and his affidavit.

I will consider the admissibility of Mr. Wild's, the plaintiff's loss assessor, evidence first.

The defendant argued that the long professional relationship between MAR and Mr Wild was sufficient to establish bias. There was also some reference to a conspiracy between MAR and Mr Wild in relation to the provision of assessments.

The question of admissibility of biased evidence has been considered in many cases.

In Kirch Communications Pty Ltd v Gene Engineering Pty Ltd (2002) NSWSC 485 (Kirch) similar questions to those raised in this case. Part of an affidavit attaching a report prepared by a director of a respondent company to a statutory demand was challenged. The report had been prepared for the purpose of being sent to loss adjusters engaged by insurers of a damaged winch the subject of the dispute between the two parties. The evidence was that of a director of one of the party companies. It was this close connection that founded the basis for the challenge to the independence of the evidence.

The plaintiff in Kirch relied on Liverpool Roman Catholic Archdiocesan Trustees Inc v Goldberg (No.3) (2001) 1 WLR 2337. In that case the evidence of an expert witness who was a long-standing friend of the defendant was rejected. The Court [at 13]:

"I accept that neither section 3 of the 1972 Act [the Civil Evidence Act 1972] nor the authorities under it expressly exclude the expert evidence of a friend of one of the parties. However, in my judgment, where it is demonstrated that there exists a relationship between the proposed expert and the party calling him, which a reasonable observer might think was capable of affecting the views of the expert so as to make them unduly favourable to that party, his evidence should not be admitted, however unbiased the conclusions of the expert might probably be."

That decision was not followed in Fagenblat v Feingold Partners Pty Ltd (2001) VSC 479 where the evidence of a brother-in-law of one of the parties was considered. Pagone J said [at 7]: "An expert witness has a special and important role in judicial proceedings to assist the Court by provision of objective and unbiased opinions about matters that bear upon the determination which the Court is called upon to make.

The exclusion of an expert's evidence should only occur when the Court is satisfied that the evidence to be led by the expert is unsound and cannot provide probative material of value to the court's task of determining the issues in the proceedings. The possibility of a witness having a bias in favour of a party (directly or indirectly) is undoubtedly a matter to be taken into account by a court when deciding what weight to give to the expert evidence, but it is not a ground for rejecting evidence that may be of assistance to the Court in reaching the correct result".

His Honour went on to say that, "While it is undoubtedly the task of the Court to do justice between the parties, and necessary for the court to be not only independent, but perceived to be independent, a biased witness does not impugn the independence of the decision-maker. Rather, any bias is a matter to be taken into account as a matter of weight in assessing the evidence, not as a matter of admissibility". Mr Wild gave evidence that he had been a Loss Assessor for many years. He was engaged by Mr Schumack of MAR to provide an independent loss assessment on the assessment done Mr. Mr Schumack. It is this amended assessment which is in contention not that of Mr. Schumack. Mr. Wild said he provided approximately 25 loss assessments per week for various repairers including MAR. An estimate of one or two of the 25 assessments were said to be prepared for MAR.

I am not satisfied that the above connection between MAR and Mr. Wild is even sufficient to establish a close relationship. There was no evidence before the Court that Mr Wild was not independent when provided his amendment to the MAR repair quote. Mr. Wild prepared his amended assessment for the plaintiff to consider prior to the repair and well before the commencement of litigation. I do not accept that the evidence establishes bias and, in any event, the question of bias or connection between parties, if there is any, must be considered together with s.79 of the Evidence Act 1995.

That section is expressed in broad terms. It states:- "79 Exception: opinions based on specialised knowledge If a person has specialised knowledge based on the person's training, study or experience, the opinion rule does not apply to evidence of an opinion of that person that is wholly or substantially based on that knowledge."

As stated by Austin J in Collins Thomson v Clayton - [2002] NSWSC 366 "the section does not in terms articulate any requirement that the expert must be independent of the party to the proceedings who wishes to adduce the expert's evidence"(see para 16). The issue of whether or not Mr Wild is independent would only go to weight, not to admissibility. The relationship between MAR and Mr. Wild, I am satisfied was of a professional nature only. As stated in ASIC v Rich (2005) 218ALR 764 and in Collins (supra) the question raised may require consideration in a Court's exercise of its discretion under ss.135 and 136 of the Evidence Act 1995 to exclude evidence but not to admissibility. (See also Fagenblat v Feingold Partners Pty Ltd (2001) VSC 454 where it was found that even where there are grounds for suspecting that an expert may be biased, it was not sufficient to require the expert's evidence to be excluded. Collins (supra)). No application under ss.135 or ss136 was made, nor would it appear appropriate on these facts. The admissibility of an expert report where there is non-compliance with the Expert Code of Conduct

The defendant objects to Mr Wild's affidavit, the assessment attached and his oral evidence on the basis that he has not adopted the expert witness code of conduct.

Under the Uniform Civil Procedure Rules 2005 Regulation 31.23 there is provision and requirement for an expert engaged as a witness to be provided with and to read the code of conduct. An expert is required to agree to be bound by it. If an expert's report does not contain such acknowledgments and agreement, the report is inadmissible in evidence, unless the Court orders otherwise.

"Expert Witness" is defined as:- "An expert engaged for the purposes of (a) providing a report as to his or her opinion for use in evidence in proceedings, in proposed proceedings, or (b) giving opinion evidence in proceedings or proposed proceedings. As I have stated Mr Wild amended the MAR assessment for repairs and expenses dated 5 January in or about January 04, well before proceedings commenced. To adopt the words of Campbell J in Kirch it "does not seem to me that that definition of "expert witness" is able to catch the situation involved here, where an officer of a party, not engaged for any particular purpose, has, at a time before court proceedings were contemplated, expressed an expert opinion in a report, and that report is tendered in later proceedings."

The defendant was critical of the fact that Mr Wild was not requested to adopt the code at Court even though the opportunity was available. I was not referred to any case on this point however, there is authority for this course to be taken in some circumstances, see Commonwealth Development Bank of Australia Pty Limited & Anor v Claude George Rene Cassegrain; Gerald Cassegrain & Co Pty Limited & Ors v Commonwealth Development Bank of Australia Pty Limited & Ors (2002) NSWSC 980.

In that case an expert was engaged for the purpose of giving opinion evidence in proceedings against the bank. The expert witness had not signed the acknowledgment required to be included in an expert's report pursuant to Part 36 Rule 13 C(2) of the Supreme Court Rules. It is not necessary to set out that part but suffice to say that the Uniform Civil Rules follow that Part.

The expert witness in Commonwealth Development Bank (supra) was not aware of the Code. During a voir dire the witness agreed to be bound by the Code and also said that, for the purpose of the opinions expressed in the report, the report was accurate and not incomplete. The Court was referred to the decision of Barak Pty Limited v W T H Pty Limited Trading As Avis Australia (2002) NSWSC 649, where a similar problem had arisen. The witness, an architect, had annexed a report which did not contain the relevant acknowledgment nor agreement to be bound by the Expert Code of Conduct.

The witness in Barak (supra) gave evidence that he was aware of the Code of Conduct and that he had complied with its requirements during the preparation of the opinion. The Court was satisfied with the expert's unequivocal statements and that they were sufficient to relate back to the time he prepared his report.

In Commonwealth Development Bank (supra) the Court refused to make an "otherwise order". It said:- "In my view the problems which confront the opposing party when such an otherwise order is sought, clearly include, importantly, the fact that an expert not having committed to the Code Of Conduct at or as soon as practicable after his or her engagement in circumstances such as the present, will have committed to a particular form of opinion."

The Court also stated that it should not, without exceptional cause, permit an otherwise order to be made:- "For one thing, the form of the report may well have been quite different. For another thing, the report may have been qualified. In the interests of justice in complex commercial litigation before the Supreme Court of New South Wales, where the provisions of the Part 36 Rule 13C and Schedule K regime have been in place for some time, the court should not, without exceptional cause, permit an otherwise order to be made."

As also stated, the proper exercise of a discretion is determined on its own facts, merits, matters and circumstances and where an otherwise order is made other applications to exclude it based on s.135 of the Evidence Act 1995 may be involved.

It would appear that the knowledge of the code and the impact of it on the nature, quality and transparency of a report may have been of relevance to the making of an "otherwise" order.

Mr Wild's loss assessment document was not made "for the purpose of giving an opinion in proceedings or proposed proceedings". In the circumstances of this case, the fact that Mr Wild did not acknowledge or agree to be bound by the expert code is not a ground for the exclusion of his affidavit evidence nor his oral evidence.

Application to reject plaintiff's expert evidence for failure to meet the duties and responsibilities of expert witnesses in civil cases.

The defendant's application to have the plaintiff's expert evidence ruled inadmissible on the basis that its underlying assumptions had not been separately proven or exposed was made early in the hearing. The affidavit was provisionally admitted.

In Makita (Australia) Pty Ltd v Sprowles (2001) NSWCA 305 and also to ASIC v. Rich (supra) Hayden JA referred to National Justice Companions Naviera SA v Prudential Insurance Co Ltd ("The Ikarian Reef")(1993) 2 Lloyd's Rep 68, which listed the duties and responsibilities of expert witnesses in civil cases. What is required is, amongst other things, that the reasoning process leading to the formation of the opinion be exposed.

The Evidence Act 1995 does not contain a provision that reflects the common law rule that the admissibility of expert opinion depends upon proper disclosure and proof of the factual. As stated in Quick v Stoland (1998) 1200 FCA; 157 ALR 615 at 617 :- "The Act does not contain a provision which reflects the common law rule that the admissibility of expert opinion depends upon proper disclosure and proof of the factual basis of the opinion. This is not an accidental omission. The ALRC considered no such pre-conditions to admissibility of expert opinions should be imposed." It is clear that the determination of this issue of admissibility should not be made until all the evidence is complete. In ASIC v Rich (2005) NSWCA 152 at 136 Spigelman CJ quoted the following paragraph from Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) FCAFC 157 at 16: 55 IPR 254 at 359 "The requirement than an expert opinion be wholly or substantially based on the witness's specialised knowledge is not, in my view, intended to require a trial judge to give meticulous consideration, before ruling on the admissibility of the evidence of the opinion, to whether the facts on which the opinion is based form a proper (in the sense of logically or scientifically or intellectually proper) based for the opinion. Were the position otherwise the smooth running of trial involving expert evidence could be expected to be interrupted by the need to explore in detail, the context of admissibility, matters more properly considered at the end of the trial in the context of the weight to be attributed to the evidence. It is sufficient for admissibility, in my view, that the trial judge is satisfied on the balance of probabilities on the evidence and other material before the judge that the expert has drawn his or her opinion from known or assumed facts by reference wholly or substantially to his or her specialised knowledge. (see discussion also in the Judicial review 7 (2006) 329 'Expert Evidence, the Honourable Frank Marks). A Court must first consider the degree of reliability of the application of the field of expertise to the particular issue in question. Mr Wild's qualifications and experience as a Loss Assessor are sufficient to bring him within the exception to s.79 of the Evidence Act 1995, that is, opinion evidence is inadmissible unless the person has the relevant experience. In evidence, Mr Wild stated that for the past 7 years he has run a business "P & R Assessments South". Prior to that time he was motor vehicle loss assessor for Royal Sun Alliance Insurance for twenty-two years. He performs some 25vehicle assessments per week. It is clear Mr. Wild has specialised knowledge on which to base an opinion.

As stated earlier, Mr Wild's assessment and opinion of the fair and reasonable cost of repair was prepared pre-litigation and based wholly on his specialised knowledge and the cost base relying on the MTA repairs guide.

In ASIC v. Rich (supra) the Court makes it plain that whether or not the opinion is based on the "true factual basis" or an "asserted factual basis" approach goes only to weight not admissibility. I am satisfied that the evidence of Mr. Wild is admissible. The weight of the evidence. As stated, this case is about the damage to a car and its subsequent repair. The dispute concerns the cost of the repair to that car and whether or not those repairs were fair and reasonable, economical or uneconomical or necessary in the circumstances.

Both experts based their opinions relating to the time of each repair and subsequent cost on the Motor Trades Association (MTA) Repair Times Manual. This manual is generally used by members of the body repair industry, motor vehicle insurers and loss assessors for the purpose of determining reasonable costs for repair operations. It outlines hourly rates for labour and for various repairs. In relation to paint work, for example, different amounts and times are specified depending the type of paint applied to a vehicle. Labour rates range from $27 p/hr to $32 p/hr and paint rates from $45 p/hr to $70 p/hr.

Mr. Nunn, the defendant's expert witness, is a licensed motor vehicle panel beater and painter and a qualified motor vehicle loss assessor. He has worked as a tradesman, has run his own smash repair business, has demonstrated technical equipment and, at the time of preparing his expert report, was employed with the Australian Associated Motor Insurers (AAMI).

Mr. Nunn, prepared a thorough report that set out the areas of disagreement with the amended assessment of Mr. Wild. He included colour photographs to support his reasons for opinion. An experts code was signed and acknowledged. Mr. Nunn gave extensive and detailed evidence regarding the processes that could be used during a car repair like that undertaken on the plaintiff's car. He provided calculations of time and the rate required for the repair, that is, the cost he considered fair and reasonable in the circumstances.

Mr Nunn attended MAR to view the car some eight months after the repair had been completed that is 1 September 2004. His reported is dated 15 July 2005. In the summary to his report he indicated, amongst other things, that the repair quote of MAR was excessive when compared to industry rates with a number of discrepancies between the work quoted to be carried out and that actually carried out; the method of repair authorised by Mr. Wild was not necessary with a number of areas not requiring repairs. Mr. Nunn stated that the "overall repair of the vehicle was considered satisfactory" but referred to some discrepancies between the charges and replacement of parts, that is authorised new parts were replaced with what is known as "after market parts" or not replaced at all.

Mr. Nunn's assessment of what would be a fair and reasonable cost of repair is $3,869.08 (not $4,240.04 referred to in the defendant's defence). That figure was increased during the hearing by $367 to include the towing and assessment fee. The final figure is $4,236.08 plus GST bringing it to $4,658.69.

Mr. Nunn referred to the December 2003 issue of the Glass's Guide to establish market value immediately prior to the accident at $4,100. This price is not for a vehicle in the best but average condition. An amount of $700 was deducted being the salvage value obtained by telephone from Pickles Auctions. Mr Nunn determined that the car was not economical to repair and should be have been declared a write off at the value of $3,400. I accept that Mr Nunn obtained a salvage value by telephone. The amount I Corresponds with that obtained by Mr. Wild from the same firm.

It was suggested by the plaintiff that Mr Nunn, as a loss assessor for AAMI, performed his task with a view to decreasing any assessment already made. This course would be favourable to the insurer. Mr Nunn was under instruction to view the car and prepare a report for the insurer. Those instructions were not available to the Court. However, at all times during his evidence it was apparent that Mr. Nunn made every effort to answer questions regarding the repair process and how his opinion was formed in relation to his report. Questions were asked of him regarding the application of the hourly rates set out in the MTA Repair Times Manual against item in his report. In my view there can be no criticism of him in relation to a lack of knowledge of how the hourly rate in the MTA Repair Manual were determined nor figures in the Glasses Guide. This is particularly so when not only Mr. Nunn but Mr. Wild relied upon the same material to form an opinion regarding the fair and reasonable cost of repair. I accept he is an expert in his field and that he was independent in his view of the assessment. It was his opinion and not influenced by his position with AAMI. Was the repair of the vehicle uneconomical? The defendant submitted that the vehicle should have been written off and not repaired at all. The defendant referred to Darbishire v Warran (1963) 1 WLR 1067 as the leading authority that a plaintiff is not entitled to affect uneconomical repairs to a chattel and request the defendant to pay. The plaintiff accepts this principle. In Darbishire (supra) the plaintiff owned an unusual car that was kept in good condition. It was badly damaged following a collision. Despite advice from the repairer and insurers that repairs would be "uneconomical" the plaintiff had the car repaired. The particular model of car was not available on the market however, similar models were available at a cost of ₤80 - ₤100. The owner preferred his own car which was reliable and suitable to his needs. He received ₤80 from the insurers, repaired the car at a cost of ₤192. The owner then sued the defendant for the cost of the repairs minus the ₤80 received plus hire charges during the repair period. The Court of Appeal in Darbishire (supra) said in relation to the law of damages out of collisions: "It has come to be settled that in general the measure of damages is the cost of repairing the damaged article; but there is an exception if it can be proved that the cost of repairs greatly exceeds the value in the market of the damaged article. This arises out of the plaintiff's duty to minimise his damages." (p 1071) and the question to be asked is "whether the plaintiff acted reasonably as between himself and the defendant and in view of his duty to mitigate damages". (p 1072)

In Darbishire (supra), it was found that the car was not an irreplaceable article. While the particular car was not available, similar or other suitable vehicles were. The court stated that, as the costs of repairs greatly exceeded the value of the car by more than twice, it should be treated as a constructive total loss. The measure of damages was its value ₤80 plus hire of a vehicle during repairs plus $5 for expenses. The Court in Darbishire (supra) also said that the market value of a vehicle may not always be the true measure of damages. There may be exceptional circumstances which justify a higher value eg when a vehicle may be unique. The plaintiff does not claim that the vehicle was unique. It is clear that a plaintiff is entitled to be as extravagant as he/she pleases but not at the expense of a defendant. The defendant's representative referred the Court to other cases that supported the application of the law in Darbishire (supra). One case, The "Pactolus" 116 ER 1079, decided in 1856, concerned damages for the repair of a ship. The dispute related to the inclusion of iron plates and bolts in the repair following a collision that seriously damaged a new ship. It was said that the owners of the ship took the opportunity to strengthen the ship with iron plates and bolts not on the ship prior to the collision. In an initial assessment, excessive shipwrights charges were disallowed "by the opinion of persons conversant with the trade" as was the substantial amount charged for the strengthening work. That work was allowed at a subsequent hearing. The best evidence the Court said was "the evidence of those who saw the vessel after the collision and deposed to the necessity of repairs" (1081 at.5). In the matter before this Court there were at least two days of evidence from the experts regarding the time estimates, the rate applied to particular items and, whether or not new or replacement parts referred to in the MAR amended assessment were purchased and used to repair the vehicle. As the Court said in 1856 in the Pactolus "it is a very arduous task to decide when opinions are conflicting," (p 1081), and "If persons best acquainted with the whole subject matter and with the course of the trade in that great emporium of commerce cannot come to agreement on these matters, I must necessarily conclude that great doubt and uncertainty prevail as to the questions."

The discussion of the assessment figures by the plaintiff and defendant appear to include the basic repair costs and the expenses for towing and the assessment fee. The plaintiff states the repair costs were $6392.37 all inclusive and the defendant $4220.04 all inclusive. The plaintiff states the market value of the car was $6100 and the defendant $4100. On balancing the weight of the evidence, I am satisfied that the plaintiff's figure for market value figure should be accepted. Mr. Wild was the person who saw the car immediately after the accident and prior to repair. In my view, he was the best person competent to say what repairs were required and what category the vehicle fell into in relation to the Glasses Guide. There was some evidence that the car had been sold to the plaintiff by Mr Schumack of MAR a few years earlier for $6,000. I am not satisfied that any relationship between Mr Schumack and the plaintiff's father could influence the independent assessor's opinion of the market value of the vehicle given that I have found his opinion to be independent. There is no evidence that the assessor knew the plaintiff or her father. Market value figures are available in the Glasses Guide and relate to the condition of the vehicle itself. Mr. Wild said that he turned his mind to whether or not the vehicle should be written off and it was half a dozen of one or the other. The car he said was equipped with airconditioning, had low kilometres of 104,332ks. An average car of that age according to the Glasses Guide would have a mileage of 203,000. In his view it was generally was a good motor car and for these reasons he gave it the highest market value allowed in the Glasses Guide. Mr. Nunn said the average mileage for a vehicle of the age of the vehicle was higher than that recorded. There was no evidence to suggest that the vehicle had been tampered with to reduce the mileage reading. There was no evidence regarding the working condition of the airconditioning. Once I have accepted that the market value of the car was correctly categorized at the higher rate, it is clear that the costs of the repairs do not greatly exceed nor are they extravagant in relation to that figure. In fact they barely exceed that cost. There was no evidence of any action by the plaintiff to indicate that the repairs were carried out for her own "personal interest" (see Darbishire (supra)) and were uneconomical. Mitigation A plaintiff must do all that is reasonable in order to mitigate loss. I was referred to a decision of Magistrate Dare in Jones v. Ho, 6 October 2005, amongst others, which sets out in the law in relation to mitigation. Both parties agree I am not required to follow that decision however, I agree that it is a thorough examination of the law on mitigation. The test outlined refers to requirement for a prudent person to do all that is reasonable in order to mitigate loss. The criterion for "reasonableness" is that a plaintiff is not "under any obligation to do anything other than in the ordinary course of business". The question is whether or not the Plaintiff acted reasonably in all the circumstances. (see British Westinghouse Electric and Manufacturing Company Limited Undergrounds Electric Railways Company of London Limited [1912] AC 673 at 689; Payzu Limited v. Saunders [1919] KB 581; Dunkirk Colliery Company v. Lever [1878] 9 Ch D 20 at 25.) In my view all reasonable steps to mitigate the loss consequent upon the damage were taken. The plaintiff was provided with a quote for repairs and that assessment was sent to Mr. Wild for an independent assessment. What more was the plaintiff expected to do. Much of the evidence regarding the vehicle was directed at whether or not the repairs actually performed were fair and reasonable. I have made note of Mr. Nunn's report and to the different opinion he holds in relation to some items in Mr. Wild's report. The differing view on some items required consideration in my determination as to the weight of the evidence. After reading the evidence it is clear that assessments are just that. Items of time and cost may be undervalued and the cost of a repair item also may differ depending on where it is obtained. Mr. Nunn's report was prepared a long time after repair, he did not see the vehicle prior to repair and had no disagreement with many of the items assessed. In any event, these matters cannot be taken as evidence against the plaintiff and are not referrable to mitigation. The burden of proof lies upon the defendant. That burden has not been met. In the circumstances of this case the plaintiff took all reasonable steps to mitigate her loss. I have determined that the repair assessment was not excessive or exaggerated and therefore on the balance of probabilities the plaintiff must succeed against the second defendant. As against the first defendant, the owner of the vehicle, there was no evidence. The plaintiff cannot therefore succeed against this defendant and the claim must be dismissed against that defendant. Orders I make the following orders:

1. Judgment for the Plaintiff against the 2nd defendant in an amount of $6,392.37.
2. The plaintiff's action against the 1st defendant be dismissed.
3. The defendant to pay interest on the judgment debt from 1 December 2003 to be calculated by a registrar pursuant to the Uniform Civil Claims Act 2005 and Rules.
4. The second defendant to pay the plaintiff's costs as agreed or assessed.
5. The plaintiff to pay the costs of the first defendant as agreed or assessed.

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