1 On 28 April 2005 I delivered judgment in this matter ("the first judgment") and reserved for argument the question of costs. The parties agreed that their submissions on costs should be made in writing, without further oral argument. This judgment assumes that the reader is familiar with the first judgment.
2 All parties have now delivered written submissions. Those of Mr Trevor Steele are difficult to follow. I gather, however, that Mr Steele submits that the first judgment is wrong and that the Plaintiffs should have succeeded in their claims against the Defendants, so that, at the least, there should be no order that the Plaintiffs pay the Defendants' costs, each party being left to pay his, her or its respective costs. Alternatively, he says that the Plaintiffs should not have to pay the Defendants' costs because Vestecorp was guilty of wrongdoing in relation to the transaction with Mr Tony Steele.
3 The Defendants submit that no reason has been shown to depart from the usual order that the unsuccessful party pay the successful party's costs. I agree. As I have found in the first judgment, the Defendants have not committed any wrong against the Plaintiffs. The Plaintiffs' case, as it was presented by Mr Trevor Steele, was bound to fail. Accordingly, I order that the Plaintiffs pay the Defendants' costs of the Statement of Claim.
4 In their First Cross Claim against Vestecorp, the Defendants succeeded in recovering their costs in relation to the claim of Mr Tony Steele pursuant to an indemnity provision in the Introducer Agreement; the Defendants did not succeed in recovering their costs in respect of the claim brought by Mrs Steele-Smith. If I were to consider the First Cross Claim in isolation from the rest of the proceedings, I would order Vestecorp to pay half of the Defendants' costs of the First Cross Claim.
5 However, the Defendants only joined Vestecorp as a party to the proceedings because, if the Plaintiffs succeeded against the Defendants, it could only have been because of wrongdoing on the part of Vestecorp for which Vestecorp would be liable to indemnify the Defendants under the Introducer Agreement.
6 In fact, however, no wrongdoing by Vestecorp in relation to Mrs Steele-Smith's and Maxwell Developments' transactions was established. The wrongdoing by Vestecorp in relation to Mr Tony Steele's transaction was not a wrong for which the Defendants were answerable to the Plaintiffs. The wrong did not cause any loss or damage to Mr Steele; rather, the wrong consisted of a breach by Vestecorp of its contractual duty of good faith to the Defendants under the Introducer Agreement in failing to inform the Defendants that Mr Tony Steele was so intellectually disabled that he could not understand the nature of the loan transactions with the Defendants into which Mrs Steele-Smith and Mr Trevor Steele were inducing him to enter.
7 In other words, although Vestecorp has committed a breach of the Introducer Agreement which has been exposed in these proceedings, that wrong must have been initiated and encouraged by Mrs Steele-Smith and Mr Trevor Steele, who both must have desired that the Defendants should enter into the loan transactions with Mr Tony Steele despite his intellectual disability.
8 The Court has a very wide discretion as to costs under s.76 Supreme Court Act 1970 (NSW): Oshlack v Richmond River Council (1998) 193 CLR 72, at para.21ff. The discretion may be exercised in order to do justice in respect of costs orders not only as between parties directly opposed on the record of the pleading, such as between plaintiff and defendant or as between cross claimant and cross defendant; it may be exercised so as to distribute the burden of costs amongst all parties to the proceedings, as justice requires, however those parties come to be joined. So, for example, the Court may make costs orders as between co-defendants - a "Sanderson order": Sanderson v Blyth Theatre Co [1903] 2 KB 533. Again, the Court may require an unsuccessful plaintiff to pay the costs of third parties joined to the proceedings by a successful defendant: Edginton v Clark [1964] 1 QB 367; Thomas v Times Book Co Ltd [1966] 2 All ER 241.
9 The Plaintiffs should never have commenced these proceedings at all. They deliberately withheld essential evidence; the relief which they sought was misconceived in law; their proceedings against the Defendants were bound to fail, and the breach of the Introducer Agreement committed by Vestecorp must have been instigated and encouraged by Mrs Steele-Smith and Mr Trevor Steele. Nevertheless, the Defendants and Vestecorp were forced to incur the expense of the litigation. In my opinion, justice requires that all of the costs of the litigation visited on the Defendants and Vestecorp should be borne by the Plaintiffs.
10 I have no doubt that the costs orders which the Plaintiffs now face are due to the fact that the Plaintiffs have been represented by Mr Trevor Steele, who is not a lawyer and who clearly was a direct participant in at least some of the transactions the subject of the proceedings. However, I do not consider that the fact that Mr Trevor Steele is not a lawyer has any significance in the exercise of the Court's discretion as to costs. There is no evidence or suggestion that the Plaintiffs could not afford competent legal representation. As I have noted in the first judgment, in the course of directions hearings I repeatedly urged Mr Trevor Steele to seek pro bono legal assistance in the conduct of this case but he resolutely declined such assistance on the expressed ground that he did not want to have anything to do with lawyers.
11 If a litigant positively refuses to have legal representation which would otherwise be available, he or she cannot later claim any indulgence when it comes to costs orders on the ground that he or she was at a disadvantage as against a legally represented party. To allow special treatment of litigants in person in such a circumstance would be to reward ignorance of the law and its procedures and to penalise a party's proper reliance upon legal representation. Our system of justice and the confidence of the community in that system are founded upon the principle that all litigants who come into Court are to be treated equally, none receiving any preferential consideration over any other. No Judge can depart from that principle by so much as a hair's breadth without undermining the entire structure of the law.
12 For these reasons, I make the following orders as to costs: