Sperandio v Lynch

REASONS FOR JUDGMENT 1 On 19 December 2006, I made orders in this matter - [2006] FCA 1838 - for reasons then expressed and also those contained in my earlier judgment on 1 December 2006 - [2006] FCA 1648. I gave the parties leave to file written submissions on the question of costs. They did so, the most recent submissions having been filed on 2 March 2007. These reasons deal with the parties' submissions on costs as so filed. 2 There are three aspects of the parties' costs claims which I need to resolve: (a) whether the applicant is entitled to a proportion of her costs on the basis that she succeeded on her claim in contract; (b) whether the applicant is entitled to a proportion of her costs because of the operation of the exception in s 170CS(1)(b) of the Workplace Relations Act 1996 (Cth) ("the WR Act"); and (c) whether the respondents are entitled to a proportion of their costs because of the operation of the exception in s 170CS(1)(b) of the WR Act. 3 At the time relevant to this proceeding, s 170CS(1) of the WR Act provided as follows: Subject to this section, a party to a proceeding under section 170CP must not be ordered to pay costs incurred by any other party to the proceeding unless the court hearing the matter is satisfied that the first-mentioned party: (a) instituted the proceeding vexatiously or without reasonable cause; or (b) caused the costs to be incurred by that other party because of an unreasonable act or omission of the first-mentioned party in connection with the conduct of the proceeding. The subsection applied to all claims made by the applicant in the proceeding, including those in the accrued jurisdiction of the court: Goldman Sachs JBWere Services Pty Limited v Nikolich [2007] FCAFC 120. It follows that an entitlement to costs does not arise by reason only that the applicant succeeded on her claim in contract. 4 Turning to the parties' claims under s 170CS(1)(b), those claims are of two distinct kinds. First, both the applicant and the respondents allege that they were forced to incur costs because, at various times, reasonable settlement offers were rejected. It is said that the failure of the other party or parties to accept such offers constituted an unreasonable omission. I shall deal with the applicant's claim first. 5 The applicant's first settlement offer was made on 18 March 2005 (14 days after the termination of her employment, and six days before her application in the Industrial Relations Commission under s 170CE of the WR Act). The offer was to provide a confidential release to the respondents, upon them paying the applicant all her statutory entitlements, and an amount of compensation equivalent to six months' pay, structured in the most tax effective manner permitted by law. On the assumption that the respondents had no choice but to pay the applicant her statutory entitlements, the question is whether it was unreasonable of the respondents to have declined to settle on the basis that they pay her also six months' pay by way of compensation. As events turned out, the applicant achieved less than the equivalent of six months' pay by way of damages on her contract claim, and I held that the damages which she did receive effectively extinguished any claim for further compensation which might otherwise have been available pursuant to s 170CR(1)(c) of the WR Act. Counsel for the applicant submitted that the reasonableness of the respondents' conduct in March 2005, should be approached on the basis of their state of knowledge at that time. He submitted that the respondents could not have been aware that the applicant would have secured earnings in mitigation which would have reduced the damages, or compensation, otherwise payable. Indeed, he submitted that the applicant's then state of health, as reasonably apparent to the respondents, ought to have led them to the view that she would have been unlikely to secure mitigating remuneration within the time frame which was relevant to the offer which she made. I do not accept these submissions. Appreciating the applicant's obligation to mitigate as I must assume that they did at the relevant time, the respondents were entitled to proceed on the basis that the applicant would promptly attempt to obtain alternative employment (which in fact she did, an attempt which was successful). It is true that the respondents thereby took the risk that the applicant would not obtain alternative employment, and the risk that she would obtain, by way of damages or compensation, a sum greater than that for which she offered to settle on 18 March 2005. However, their taking of that risk was not unreasonable - indeed, as events transpired, it was well justified. In the circumstances, I do not consider that the respondents' failure to accept the applicant's offer of 18 March 2005 was unreasonable. 6 The applicant's second settlement offer was made on 23 June 2005. Again, the applicant agreed to settle on the basis of the respondents paying her an amount equivalent to 26 weeks' pay, structured in the most tax effective manner permitted by law. By then, the applicant had secured alternative employment and, although it is not apparent that the respondents were aware of that circumstance, it clearly does not lie in the mouth of the applicant to assert that the respondents should have considered her offer by reference to assumptions which would have been contrary to the facts. In other respects, the offer of 23 June 2005 was relevantly indistinguishable from that of 18 March 2005 (particularly when regard is had to the circumstance that the respondents would have had no choice but to pay the applicant her statutory entitlements), and I likewise consider that the respondents did not act unreasonably in refusing it. 7 The applicant's third offer of settlement was made on 18 November 2005. It was an offer of compromise made under O 23 of the Rules of Court. The applicant thereby offered to settle on the basis that she would be paid by the respondents the sum of $22,500.00 "inclusive of costs and interest". In relation to the matter of interest, the offer did not comply with O 23 r 4(2)(b). Overlooking that transgression, the fact is that the applicant did not obtain judgment on terms not less favourable than those set out in the offer: see O 23 r 11(4)(b). Counsel for the applicant has submitted that the offer would have been inclusive of any costs to which the applicant became entitled, and should have been viewed in that context by the respondents. However, the notice did not specify the amount that was in respect of costs, as permitted by O 23 r 4(1), and, particularly given what the respondents would have regarded as the applicant's prima facie lack of entitlement to costs arising from s 170CS of the WR Act, I consider that the applicant is now in no position to assert that the respondents should have paid the sum of $22,500.00 in November 2005, or be regarded as having acted unreasonably not to have done so. As at that time, the applicant had established no entitlement to costs, and I do not think that it was reasonable for her to have expected the respondents to settle the proceeding by paying a sum of money which, by definition, included costs. Thus I would hold both that the respondents' failure to accept the applicant's offer of compromise of 18 November 2005 did not enliven the operation of O 23 r 11(4) of the Rules of Court and that that failure was not unreasonable for the purposes of s 170CS(1)(b) of the WR Act. 8 Turning to the respondents' claim for costs, they rely first upon a settlement offer made by them on 28 August 2006. The offer was to settle for a monetary payment of $15,000.00, together with provisions for releases, confidentiality and certain other incidental matters. The respondents point out that the total amount recovered by the applicant on judgment was $13,464.07. They rely upon the principle for which Calderbank v Calderbank [1976] Fam 93 is authority. They also submit that a purpose of s 170CS(1)(b) was to encourage the resolution of litigation by settlement, and that an applicant's refusal to accept a settlement offer, the reasonableness of which may be measured by reference to the sum for which the applicant ultimately obtained judgment, should be regarded as unreasonable within the meaning of the provision. 9 Before proceeding further, I should refer to the other offer upon which the respondents rely. On 13 September 2006, they increased their then existing settlement offer to $18,000.00. They point out that this sum is greater than the aggregate of the damages and interest secured by the applicant on judgment, together with the amount ($5,000.00) which the applicant's own counsel submitted would be an appropriate penalty to impose upon the respondents for their contravention of s 170CK of the Act. 10 The applicant resisted the respondents' claim on a number of bases, but I need refer to one only of them, which I propose to accept. The applicant pointed out that one of the remedies which she sought under s 170CR of the WR Act was reinstatement in her former employment. It was submitted on her behalf that, in a context in which it was later found that the respondents had contravened s 170CK, her refusal to settle for something less than reinstatement could not be described as unreasonable. As against this, the respondents submitted that reinstatement was but one of a number of discretionary remedies under s 170CR, and that the applicant had no right to assume that she would achieve it. They also relied upon my reasons, given on 1 December 2006, for not ordering the reinstatement of the applicant. They submitted that it ought to have been apparent to the applicant that her claim for reinstatement had little prospect of success. 11 I would not go so far as to say that, in all cases, an applicant who claims reinstatement should not be regarded as acting unreasonably by refusing a monetary offer of settlement, however generous that may be. But the offers which the respondents made in the present case, although in excess of the amounts which the applicant received on judgment, were not so substantially so, in my opinion, to have made the applicant's continued attempts to achieve reinstatement unreasonable in all the circumstances. I am prepared to accept that the applicant, properly advised, might well have taken the view that her attempt to secure reinstatement was not without its problems, but I do not think that s 170CS(1)(b) should, save in an obvious case, be so applied as to require an applicant to place a money value on the remedy of reinstatement. For employees who have been dismissed, reinstatement has a qualitative value which, I consider, would always be difficult to measure in money terms. The strength of considerations such as this will vary from case to case, and I would not want these observations to be construed as in effect formulating a proposition that reinstatement will always be more valuable than any sum of money. I do consider, however, that, where claims for reinstatement are involved, the reasonableness of an applicant's insistence on litigation, rather than accepting an offer of settlement, will generally involve issues beyond those which are capable of calculation in dollars and cents. 12 In the present case, I do not think that the applicant, properly advised, need necessarily have viewed her claim for reinstatement as doomed to fail, or even as most likely to fail. Without acting unreasonably, I consider that the applicant might well, in August and September 2006, have taken the view that, if her action were otherwise successful, reinstatement was within the range of outcomes which she might well have secured, notwithstanding that, as I have said, she could well have considered that the claim had its problems. It was only after I had heard all of the evidence in the case that I formed the view, without requiring to be addressed by counsel for the respondents, that reinstatement would be inappropriate. It is not obvious to me that, before the trial started, the applicant herself was in a position to make such an assessment, even if she should otherwise be regarded as capable of seeing the matter in an objective light. For the reasons I have expressed, therefore, I am not persuaded that the applicant acted unreasonably in declining to accept either of the settlement offers made by the respondents. 13 The second kind of claim under s 170CS(1)(b) is made by the applicant only. She claims to come within the exception for which par (b) provided because she was obliged to incur additional costs by reason of the following acts or omissions of the respondents: (a) failure to comply with an order made by Merkel J on 11 November 2005 that an Amended Defence be filed by 2 December 2005; (b) failure to comply with an order made by Merkel J on 17 March 2006 that a Defence to the Amended Statement of Claim be filed by 24 March 2006; (c) failure to comply with an order I made on 19 July 2006 to exchange outlines of evidence on or before 21 August 2006; (d) attempting "to obfuscate the orderly progress of the proceeding by making an improper Defence"; and (e) attempting "to launch a totally baseless strike-out application". 14 In what follows, I shall refer to a deal of correspondence and other communications between, or involving, the parties, or one of them, which have been put before me on affidavit or which, to a limited extent, are apparent from the court file. In so doing, for the sake of simplicity, I refer to the applicant and to the respondents as such, although it should be understood that, in all cases, it was the parties' respective solicitors who were directly involved. 15 On 11 November 2005, Merkel J ordered that, on or before 18 November 2005, the applicant deliver an amended Statement of Claim setting out full particulars of her loss. His Honour ordered that, on or before 2 December 2005, the respondent deliver an Amended Defence. He also gave directions down to the trial of the proceeding, which would have involved steps being taken on 16 December 2005, 20 January 2006, 10 February 2006, 24 February 2006 and 10 March 2006. Under cover of a letter dated 18 November 2005, the applicant delivered an Amended Statement of Claim. However, on 22 November 2005, the respondents informed the applicant that the Amended Statement of Claim did not disclose a cause of action, and drew attention to the absence of any pleaded facts "linking or showing a causation" between the temporary illness of the applicant and the "alleged" termination of her employment. They said that they proposed to make a strike-out application. I have read the Amended Statement of Claim dated 18 November 2005, and I am satisfied that there was no substance in the allegation that it did not allege facts sufficient to link the applicant's illness (or, more correctly, her absence on account of illness) and the termination of her employment. 16 By letter dated 28 November 2005, the respondents informed the applicant that they were seeking a date for their strike-out application, and inquired as to the availability of counsel. On 29 November 2005, the applicant wrote to the respondents, asserting that there were no legitimate grounds for a strike-out application, and putting the respondents on notice that she may seek her costs pursuant to s 170CS(1)(b) of the WR Act. The applicant insisted that, regardless of any strike-out application, the respondents file their Amended Defence by the date ordered, 2 December 2005. By letter dated 30 November 2005, the respondents told the applicant that they did not intend to file their Amended Defence until after their strike-out application had been dealt with. This was said to be in order to save costs. There followed some correspondence between the parties, and involving the court, as to the dates upon which a strike-out application might be made returnable. 17 The respondents did not file their Amended Defence by 2 December 2005. On 8 December 2005, the respondents wrote (by facsimile) to Merkel J, enclosing an affidavit by their solicitor and a draft Notice of Motion in which they would have sought to dismiss the proceeding. In this affidavit, the solicitor said that he believed that the Amended Statement of Claim did not make out a cause of action, but did not state why. Rather than fix a return date for the Notice of Motion, Merkel J invited the respondents to provide an outline explaining why, when directions had previously been made carrying the proceeding through to trial, he should list a motion to dismiss the proceeding in the manner proposed. There is nothing in the evidence, or on the court file, that would indicate that the applicant knew anything of these developments. On 14 December 2005, the applicant wrote to the respondents indicating her intention to resist any strike-out application, and protesting against the respondent's failure to deliver an Amended Defence as previously ordered. On 15 December 2005, the respondents wrote to the applicant, stating that Merkel J had required that they provide reasons for their motion to strike-out the Amended Statement of Claim. The letter continued: We intend to do so. It will be a matter for his Honour to decide whether to list the motion. We will provide you with a copy of our submission to his Honour and you will then appreciate why your client has failed to make out a cause of action and why her application is wholly lacking in merit and/or vexatious and/or an abuse of the powers of the court. 18 The next correspondence which has been put before the court is a letter from the applicant to the respondents dated 21 February 2006. It says nothing about the proposed strike-out application, or the written submissions which were to have been made to Merkel J. Rather, the letter expressed further protest about the respondents' failure to deliver their Amended Defence. The respondents replied by letter dated 22 February 2006, in which the following appears: Indeed, our clients requested that we consult the Court about the availability of a strike out application in order to save each of the parties the cost and inconvenience of attending a hearing. However, when the judge advised that there needed to be submissions in advance of the application it seemed that it would be better to proceed and have the matter fully determined following the hearing as presently scheduled. Although it is not expressly stated anywhere, it rather seems as though, having turned their minds to the preparation of a written submission in support of a proposed strike-out application, the respondents thought better of that proposal and decided not to move to strike-out the Amended Statement of Claim. In their letter of 22 February 2006, the respondents said that they would use their "best endeavours" to comply with the applicant's request that the Amended Defence be delivered by 24 February 2006. It seems, therefore, that the respondents at this point decided to go to trial, and not to take any further point about the applicant's pleadings. 19 On 23 February 2006, however, the respondents again wrote to the applicant, stating that there were "a number of problems" with the Amended Statement of Claim, one of which was an alleged reference to without prejudice communications passing between the solicitors for the applicant and the original solicitors for the respondents. The letter referred also to a typographical error, to the fact that the Amended Statement of Claim sought compensation for a 12-month period subsequent to termination of employment, and to the absence of any "basis in law" for the applicant's sick leave claim. The respondents invited the applicant further to review her pleading, "failing which an application may be made to strike-out the proposed amendments". It is not clear why the respondents described the applicant's pleading as containing "proposed" amendments: I presume they were referring to the applicant's Amended Statement of Claim delivered on 18 November 2005. 20 It is necessary that I consider the substance of the respondents' objections to the Amended Statement of Claim as set out in their letter of 23 February 2006. The first objection related to the particulars to par 6 of the Amended Statement of Claim. That paragraph, with particulars, was as follows: On or about 4 March 2005 the respondents terminated the applicant's employment. Particulars The notice of termination was in writing by letter to the applicant dated 4 March 2005. The applicant, through her solicitor, wrote to the respondents by letter dated 9 March 2005, seeking contact with the respondents to discuss all relevant matters raised in the letter from the respondents dated 4 March 2005. the respondents' then solicitor, Mr Rob Jackson of Slater & Gordon, responded and confirmed termination of the applicant's employment both verbally in a telephone conversation on 9 March 2005 and in writing by letter dated 10 March 2006. The underlined portion in the particulars was introduced on 18 November 2005, apparently in response to the impression conveyed by par 6 of the original Defence filed on 21 September 2005, namely, that the respondents did not terminate the employment of the applicant. The respondents' point in their letter of 23February 2006 was that the communications involving Mr Jackson referred to in the particulars were without prejudice, and therefore that the particulars themselves were embarrassing. In a subsequent letter dated 28 February 2006, the respondents made it clear that the without prejudice communication to which they referred was the letter from Mr Jackson dated 10 March 2005. 21 The respondents' next objection arose from par 7A of the Amended Statement of Claim, which provided: In consequence of the aforesaid termination the applicant has suffered loss and damage including financial losses expected to amount to approximately $24,743.18 in the twelve month period immediately after termination, in accordance with the attached Schedule. Further, the applicant has lost her accrued sick leave entitlement which to the best of the applicant's knowledge was between 12 and 18 months. The respondents said that par 7A made it appear that the applicant was claiming losses for a 12-month period, notwithstanding that "the maximum compensation awardable is over a six-month period". Although that was probably not a correct statement about the effect of s 170CR(2) of the WR Act, in any event, such limitation as there was upon the power of the court to order compensation under s 170CR(1)(c) could not have made a pleading in the form of par 7A objectionable. Relevantly to this objection, the pleading was no more than a statement of the loss and damage in fact suffered by the applicant. 22 The other objection was that the sick leave entitlement referred to in par 7A had "no basis in law". It was said to be a claim that was not adequately pleaded and which could not be related to the alleged cause of action. I do not agree. It may be that particulars ought to have been provided, but the pleading, as it stood, was an intelligible and, in my view, adequate allegation as to a head of loss which the applicant claimed to have suffered by reason of having had her employment terminated. 23 By letter dated 27 February 2006, the applicant rejected the respondents' criticisms of her Amended Statement of Claim, and said that she looked forward to receiving the respondents' Defence by the end of that week. By letter dated 28 February 2006, the respondents reiterated two of the difficulties which they had previously identified in the Amended Statement of Claim. They wrote again to the applicant on 15 March 2006, noting that they had not received the reply to their letter of 28 February. They said that, unless by noon the following day (16 March), the applicant provided a "satisfactory response" to their letter of 28 February, they would find it necessary to brief counsel, "to seek a strike-out of the embarrassing pleadings". In such an event, the respondent said, they would widen the application to strike-out the whole of the claim "as not disclosing a cause of action". 24 In the meantime, on 1 March 2006 Merkel J listed the matter for directions on 17 March 2006. It appears from the file that his Honour took this step because, save for the filing of the Amended Statement of Claim on 18 November 2005, none of the directions made on 11 November 2005 had been complied with and the respondents had not responded to his Honour's request to provide an outline as to why their Notice of Motion proposed on 8 December 2005 should be listed. When the matter came before Merkel J for directions on 17 March 2006, the only step which his Honour took was to require the applicant to re-plead the particulars to par 6 of the Amended Statement of Claim, in effect to make them more precise and less discursive. The applicant did so that day, as a result of which the particulars were expressed as follows: On or about 4 March 2005 the respondents terminated the applicant's employment. Particulars The notice of termination was in writing by letter to the applicant dated 4 March 2005, and was confirmed by the respondents' then solicitor, Mr Rob Jackson of Slater & Gordon in a telephone conversation with the appellant's solicitor on 9 March 2005. Although counsel for the respondents sought to press upon his Honour the proposition that the original particulars were embarrassing because they referred to without prejudice communications, it is clear from the transcript that his Honour thought little of the point. Counsel referred also to that aspect of par 7A of the Amended Statement of Claim that dealt with the applicant's loss over a 12-month period, but was unable to inform his Honour of the statutory provision which, on the respondent's case, limited the applicant to 6 months. In the result, Merkel J ordered that the applicant file and serve a Further Amended Statement of Claim on or before 17 March 2006 (ie that day). That order related to his concerns about the particulars to par 6. It had nothing to do with par 7A. It had nothing to do with without prejudice communications. His Honour ordered that the respondent file and serve a Defence to the Further Amended Statement of Claim on or before 24 March 2006. He reserved the costs of the hearing that day. 25 The respondents did not deliver a Defence to the Further Amended Statement of Claim by 24 March 2006, as ordered. In response to a letter from the applicant dated 27 March 2006, the respondents wrote that day asserting their inability to provide a Defence at that time, as they were attempting, but had been unable, to obtain details of the conversation involving their previous solicitor which they alleged was without prejudice. The applicant sent copies of the correspondence of 27 March 2006 to Merkel J's associate, in conformity with a request made by his Honour on 17 March 2006 that he be advised if there were any further breaches of orders made by the court. On 28 March 2006, the applicant wrote to the respondents denying that any reference to without prejudice correspondence in the Further Amended Statement of Claim was embarrassing. She said that the respondents' denial of her allegation that her employment had been unequivocally terminated by them was outrageous, and a recent invention. It was, she said, contrary to documents and facts known to the respondents and to their former solicitors. The respondents replied on 30 March 2006 to the effect that they would not consent to the disclosure of without prejudice communications. 26 The next item of correspondence to which I have been referred is a letter from the respondents to the applicant dated 13 April 2006, stating that the court commitments of counsel had prevented him from delivering a Defence to the respondents' solicitors. They said that they would endeavour to have the Defence delivered to the applicant by the same time the following week (presumably, 20 April 2006). Save for a brief letter from the respondents on 11 May 2006 referring to the applicant's failure to serve her trial affidavit (which was due on 18 April 2006), the next correspondence to which I have been referred is a letter of 9 June 2006 to the Associate to Goldberg J. In that letter, the applicant informed his Honour that the respondents still had not delivered their Defence to the Further Amended Statement of Claim. She said that the "progress of the case has therefore halted". She sought an order that the respondents file and serve a Defence by 23 June 2006, in default of which judgment would be entered for the applicant. On 16 June 2006, the respondents' solicitor spoke to Goldberg J's Associate and stated that he was trying to obtain a file note from the respondents' previous solicitors about some subject which was apparently necessary for the drawing of the Defence to the Amended Statement of Claim. 27 When the proceeding was transferred to my docket in early July 2006, I listed it for directions on 19 July. By letter to the parties dated 13 July 2006, my Associate indicated that if a Defence were not filed by 18 July 2006, I would be prepared to entertain an application by the applicant under O 35A of the Federal Court Rules. The respondents' Defence to the Further Amended Statement of Claim was filed on 18 July 2006. I have perused that Defence, and I am satisfied that it contains nothing that might not, by a reasonably conscientious approach to the litigation, have been included in a Defence filed on 2 December 2005 as ordered by Merkel J on 11 November 2005. It is also apparent that, save for noting their objection to the applicant relying on without prejudice communications - which would in any event have been a matter to be resolved at trial - the respondents did not maintain any of the objections to the applicant's pleadings expressed in their letter of 23 February 2006. 28 I do not consider it a reasonable basis to resist responding to a pleading on the merits that the particulars imply an intention at trial to rely on a letter which contained without prejudice communications. In the present case, the applicant's Amended Statement of Claim neither relied upon, nor revealed, a communication that was itself without prejudice. Even if there were a concern in that regard, there is no apparent reason why the respondents might not have drawn their Defence, in December 2005, in precisely the terms they ultimately used, in July 2006 (when they added a note of objection to the applicant relying on without prejudice communications). 29 In other respects, none of the objections which the respondents voiced to the terms of the Amended Statement of Claim was ultimately persisted with. The strength of the respondents' conviction as to their 12-month point may be seen in the circumstance that their counsel was unable, as late as 17 March 2006, to inform Merkel J of the statutory provision on which the point rested. Whatever the strength or weakness of that or any other point which the respondents had, however, the fact is that none of them would have justified the striking out of any provision of the Amended Statement of Claim - much less the dismissal of the proceeding as a whole which was at one stage suggested. Considered as objections to a pleading, I am satisfied that the respondents' points never had any merit. 30 I am concerned with the respondents' conduct of the proceeding between late November 2005 and 18 July 2006, when they filed their Defence. That was a longer period than the period subsequently taken to bring the case to trial, to hear the case at trial, to deliver judgment and to make final orders. Shortly after the respondents were first in default, they proposed a Notice of Motion to dismiss the proceeding, but failed to provide an outline of their grounds as required by Merkel J. Even when ordered to file their Defence again in March 2006, they failed to do so - relying variously upon the unavailability of counsel and the need to obtain a file note from their former solicitor. Excuses of this kind are simply not acceptable, particularly in the context of the extended delay for which the respondents had previously been responsible. 31 I am driven to the conclusion that the delay in the proceeding between 2 December 2005 and 18 July 2006 was due to the unreasonable acts and omissions of the respondents. I find that the respondents' failure to file their Defence on 2 December 2005 was an unreasonable omission, as was their continued failure to do so until 18 July 2006. Manifestly, the applicant should have her costs of the directions hearing before Merkel J on 17 March 2006. In addition, it is clear that the applicant was obliged to incur costs at regular intervals over the relevant period as her solicitor strove - vainly for the most part - to hold the respondents to their obligation to file a Defence. The respondents first foreshadowed a challenge to the Amended Statement of Claim by their letter dated 22 November 2005. That was the start of what proved to be a considerable and, I would hold, unwarranted distraction for the applicant. I propose to make an order requiring the respondents to pay all the applicant's costs between 22 November 2005 and 18 July 2006, save where those costs were unrelated to the respondents' failure to file a Defence to the Amended Statement of Claim or to their objections or proposed objections to that Statement of Claim. I realise that, in expressing the order this way, I am in effect imposing upon the respondents the onus of disproving the relevant connection, but I consider that to be an appropriate approach in the circumstances. 32 Otherwise, I do not propose to make costs orders based on what the applicant alleges were the respondents' unreasonable acts or omissions.