These are Commercial List proceedings in which I delivered an interlocutory judgment in January this year: Zoobury Pty Ltd v Cariste Pty Ltd [2022] NSWSC 18. Among other things, I made orders which determined as preliminary questions issues which had arisen as to the construction of the contract which was the subject of the dispute between the parties. I decided these issues in favour of the plaintiff. This meant that part of the defendant's cross-claim fell away. I adjourned the proceedings to allow the remainder of the cross-claim to proceed in due course.
The defendant later abandoned the remainder of the cross-claim. In May, I made orders by consent disposing of the substantive aspects of the proceedings. The costs of the proceedings remain in dispute and are the subject of this judgment.
The judgment assumes familiarity with my January judgment, to which I refer as "J1". It also uses abbreviations used in the January judgment. In particular, the agreement styled "Deed of Option to acquire Property Share" between the parties will be referred to as the "Property Share Contract" or "PSC".
[2]
Background, procedural history and decision
The background to the case is set out at J1 [28]-[39]. The dispute concerned the ownership of a commercial property at Galston on the north-western outskirts of Sydney. It arose out of the redevelopment of the property into a shopping centre. The defendant ("Cariste") was (and remains) the owner of the property. The first plaintiff ("Zoobury") acted as project manager for the development. The other plaintiffs did not figure in the dispute and it is unnecessary to say anything about them.
The individuals who control the corporate parties to these proceedings are members of the same family. Cariste is controlled by Mr Peter Roach. Zoobury is controlled Mr Tim Roach, who is one of his children.
From the outset of the project in 2004, the parties operated under an informal agreement that Zoobury would receive a share of the property in return for acting as project manager (Zoobury was otherwise not remunerated for undertaking this task). The agreement was not however formalised until the PSC was executed in July 2010. This was after the redevelopment had been completed (which happened in November 2009), but before all of the space in the shopping centre had been let.
In broad terms, the PSC gave Zoobury a share in equity of the property. Zoobury was entitled, when it chose, to require Cariste to transfer a specified share of the property. Zoobury was also entitled, before transfer, to that specified share of the net profit generated by the shopping centre.
The quantum of the share (defined in the PSC as the "Property Share") was to be determined in accordance with a formula based on the value of the property following the redevelopment, less the costs of the project (including the land). The value of the property was to be calculated in accordance with the revenue generated by the shopping centre once the shops were all let, capitalised at an agreed rate of seven per cent.
The PSC was expressed to begin operation from May 2010. It contained estimated figures for the rent on the shops which had not been let to calculate the value of the property, and for the development costs. This resulted in a Property Share for Zoobury of 16.51%.
The PSC contemplated that initial determination of the Property Share would be on an interim basis. The Property Share would be calculated on a final basis when the final cost of the development and value of the property were known. But no such recalculation ever happened. Cariste continued to pay Zoobury a 16.51% share of the profits of the company for nine years, up to and including the financial year ended 30 June 2019.
The dispute which resulted in the proceedings arose in September 2019. It was asserted on behalf of Cariste that Zoobury's Property Share was in fact 4.85%. In a "settlement" notified unilaterally by Cariste in June 2020, Cariste declared itself entitled to withhold previous "overpayments". On this basis Cariste made only some small further part-payments of the net income from 2019-2020. No payments were made thereafter.
The dispute appears to have been triggered by the fact that in April 2010, three months before the PSC was executed, Mr Tim Roach obtained an independent valuation of the Galston property for $12.3 million. This was considerably less than the valuation which resulted from the rental figures in the PSC. Presumably (although this was never tested) Mr Peter Roach only learned about the report in 2019.
Part of the reason for the lower figure in the April 2010 valuation was that it used a higher discount factor than the agreed rate of 7% (see J1 [94]-[99]). Nevertheless, Mr Peter Roach appears to have thought that his son had in some way concealed relevant information from him and misled him about the terms of the PSC, and that, as a result, the PSC had become "void".
Cariste holds the Galston property as trustee for a discretionary family trust. In August 2020, as the sole director of Cariste, Mr Peter Roach resolved to make distributions from the trust in favour of his four children. Mr Tim Roach's "distribution" equated to the "overpayment" under the PSC, which was calculated at $2.432 million. The other three children received distributions of between $1.885 million and $2.283 million (how these figures were calculated, and the explanation for the differences between them when the ostensible purpose was to equalise the position between the four children, are not revealed by the evidence). Although expressed to be distributions, these were documented as loans, so that if Mr Peter Roach was successful in his dispute with Mr Tim Roach about the amount due under the PSC, they could be clawed back.
At some point after the dispute arose, the solicitors for Cariste discovered that Zoobury had been deregistered. In fact, it had been deregistered in 2007, several years before the execution of the PSC. According to Mr Tim Roach, this was purely as a result of an oversight. He made arrangements to have Zoobury's registration as a company reinstated. This was done in late September or early October 2020.
The reinstatement restored Zoobury's corporate existence. But it did not necessarily give retrospective legal effect to actions purportedly taken on Zoobury's behalf during the period of its deregistration. Validation of those actions required a court order.
Zoobury began these proceedings by summons in the Commercial List in October 2020. Zoobury's solicitor was Mr Jonathan Alexander Stephens, whose firm is called Automic Legal.
Zoobury sought an order verifying the actions purportedly taken on its behalf during its deregistration (including entry into the PSC itself). By way of substantive claim against Cariste, Zoobury sought a declaration that for the purposes of the continued operation of the PSC its Property Share was 16.51%. Zoobury also sought judgment for the distributions which had been short paid since 1 July 2019.
Soon after the summons was filed, a notice of appearance was entered for Cariste in the name of Cornwalls Solicitors. At Cornwalls the case was handled by a senior associate, Mr Bishoy Genday, who reported to one of the Cornwalls partners, Mr Paul McCann.
On 24 November, Mr McCann wrote to Mr Stephens. The letter was headed "without prejudice save as to costs" and enclosed what purported to be an offer of compromise in accordance with rule 20.26 of the Uniform Civil Procedure Rules 2005 ("UCPR").
Mr McCann stated:
We are instructed that our client's director [Mr Peter Roach], who is nearly 80 years of age, is appalled at your clients' conduct in commencing these proceedings and at Timothy's loud, abusive behaviour in a public place towards members of his family and their children. Our client is of the view that Timothy has acted with devious intent, despicable dishonesty and unconscionably, putting unfettered greed ahead of family relationships.
The letter continued that the original 2004 informal agreement had been "in the nature of a joint venture in equal shares". The PSC (described as "the deed your clients are seeking to reinstate") did not reflect this. For example, sale at the April 2010 valuation of $12.3 million would have resulted in a profit to Zoobury of $2 million and a loss to Cariste of $800,000.
Mr McCann went on to state that the offer of compromise was being made because:
Our client has no desire to become embroiled in legal proceedings or to expose the family affairs and vulnerable members of the family to public scrutiny.
…
Our client makes no admissions with respect to the issues in dispute. The Offer of Compromise is made on a commercial basis notwithstanding the strength of our client's contentions.
The proposed orders contained in the Offer of Compromise are a mechanism by which our client proposes to sever the commercial relationship between the parties in accordance with the interest claimed by your clients. It is difficult to envision a scenario where your client achieves a better outcome by pursuing the subject proceedings.
The offer of compromise proposed the following orders:
a. The [Galston property] (Property) be sold at public auction by no later than 31 March 2021 with settlement to occur by no later than 30 June 2021 (Sale).
b. The net proceeds of the Sale (deducting any expenses associated with the Sale) be distributed between the parties in the following proportions, and each party be liable for any capital gains tax associated with the sale in the proportions set out below:
i. 16.5% to the Plaintiffs; and
ii. 83.5% to the Defendant.
c. Pending the Sale, all net income derived from the Property be distributed between the parties in the following proportions:
i. 16.5% to the Plaintiffs; and
ii. 83.5% to the Defendant.
d. The parties agree all disputes between them are resolved and all existing claims are released.
e. These proceedings be dismissed.
f. No order as to costs such that each party pay its own costs.
The offer was expressed to be open for acceptance until 12 noon on the thirtieth day after service. But on the following day Mr Stephens wrote to Mr Genday rejecting the offer. No further explanation was given.
Notwithstanding the rejection, Mr Genday suggested a "without prejudice" discussion to which Mr Stephens agreed. In an affidavit filed for the purposes of the costs application, Mr Genday gave an account of the conversation which was not disputed.
According to Mr Genday's account, Mr Stephens pointed out that the offer would not result in full recoupment by Zoobury of outstanding payments under the deed. Mr Genday said that that was something which could be addressed. Mr Stephens also raised the scope of the release pointing out that it went beyond the proceedings. Mr Genday said the release was intended to be "in relation to the Galston property" only, but invited Mr Stephens to get instructions as to what formulation of a release would be acceptable.
According to Mr Genday, Mr Stephens also said that it was difficult to assess the reasonableness of the offer without seeing a defence, particularly in the light of the "harshness" of the covering letter. Mr Genday acknowledged that the letter was "quite harsh" and said that it had been sent on Mr Peter Roach's instructions, but urged Mr Stephens to "focus on the commercial terms and see if we can reach agreement". He said that the reason the offer was made at such an early stage was to avoid the costs associated with defending the proceedings and putting on a cross-claim.
This discussion was followed by a further telephone discussion between the parties a few days later. According to Mr Genday, Mr Stephens told him that Mr Tim Roach wished to be paid the $2.4 million trust distribution referred to in the resolution. If he was right in the construction of the PSC, then he was also entitled to the distribution. Mr Genday demurred, pointing out that the trust was a discretionary one. He was then told by Mr Stephens that payment of the $2.4 million was an essential term of any settlement. Mr Stephens also indicated that Mr Tim Roach wanted an apology or retraction of statements made by Mr Peter Roach. Mr Genday undertook to seek instructions but said it was unlikely that these terms would be acceptable. They were not, and discussion between the parties ceased.
In February 2021, a cross-claim was filed on behalf of Cariste. The cross-claim sought orders setting aside the PSC or declaring it unenforceable. This relief was sought under s 87 of the Trade Practices Act 1974 (Cth), which had been in force at the time the parties entered into the PSC, or under the Contracts Review Act 1980. In place of the PSC, the cross-claim sought orders declaring and enforcing the parties' respective rights and obligations in accordance with the informal 2004 agreement.
Although there was no specific prayer for relief seeking restitution of the difference between what Cariste had paid to Zoobury and what it allegedly ought to have paid, such a claim was expressly foreshadowed in the Commercial List Cross-Claim Statement. Damages were sought in the alternative under s 82 of the Trade Practices Act.
Cariste's Commercial List Response did not admit Zoobury's claim, but did not advance any affirmative defence or raise any issue as to the construction of the PSC if, contrary to Cariste's cross-claim, the PSC was enforceable in accordance with its terms. Cariste did, however, raise an issue about the form of the validation orders sought by Zoobury.
An apparent difficulty with Cariste's claim under the Trade Practices Act (and particularly the claim for damages under s 82) was that it would be statute barred. Cariste's assertion was that any validation order should be framed in such a way, or be made upon condition, which would allow such a claim to be pursued without any limitation barrier.
Of course, Cariste itself needed a validation order so that the actions in question would in law be actions of Zoobury for which it could be sued. Thus, in its cross-claim Cariste sought its own validation order to achieve that result.
Cariste's claim to have the PSC set aside, or enforcement of it refused, was based in part on allegations that Mr Peter Roach had been misled by Mr Tim Roach, or at least that Mr Tim Roach had failed to make disclosure which he was obliged to make before persuading his father, as it was put, to enter into the PSC. I will refer to this as the "misrepresentation allegation".
There was a second basis for the claim. This was that Mr Peter Roach had entered into the PSC as a result of threats made by, and in fear of, Mr Tim Roach. I will refer to this as the "duress allegation" for short.
Particulars were later sought of the duress allegation. In the particulars, serious allegations were made about the character of Mr Tim Roach. It was said that he had engaged in violent and threatening behaviour towards other people and allegations were made that he was in possession of at least one firearm and some compound bows.
The case was prepared for hearing in the usual way. The trial date was fixed for 6 December last year.
Cariste's written submissions were lodged with the Court at about 7:00 pm on 1 December. Accompanying those submissions was a foreshadowed application by Cariste to amend its pleadings. The proposed amendments introduced for the first time a contention that, as a matter of construction of the PSC, Zoobury's Profit Share was 5.37% (this was of course different from the 4.85% for which Cariste had been contending; that figure was apparently based in some way on the 2004 joint venture agreement, as interpreted by Mr Peter Roach). At the same time, the duress allegation was removed from the pleadings.
The amendments were permitted but the new issues made it impossible to conduct the hearing on the scheduled dates. The hearing was deferred until 16 December and allocated to me. In the end, the two days which had been set aside were only enough to deal with the application for validation orders and the argument about construction of the PSC.
In my January judgment, I determined both of these issues in Zoobury's favour. This meant that Cariste had no right of restitution for overpayments in accordance with the terms of the PSC. But Cariste's claim for orders that the PSC be set aside, or that enforcement of it refused (based on the misrepresentation allegation) remained current. In the course of the argument, counsel for Cariste had also foreshadowed an amendment to the cross-claim to seek relief under s 80 of the Trade Practices Act. The significance of this was, so it was suggested, that it would, or arguably would, evade any problem with limitation.
When I delivered my January judgment, I contemplated that there would be a further hearing where these issues would be determined. If Cariste were unsuccessful, judgment would then be entered in favour of Zoobury in accordance with the interpretation of the PSC which I had upheld.
Following delivery of the January judgment, the parties entered into settlement negotiations. Those negotiations resulted in Cariste abandoning the remainder of its cross-claim. On 25 May I made consent orders which provided for the cross-claim to be dismissed, but expressly noting that it had not been determined on its merits. The orders also provided for a declaration to the effect that Zoobury's Property Share entitlement under the PSC was 16.51%. The orders did not expressly provide for the short-payments to Zoobury to be made up, but I understand that has been done, together with interest.
[3]
Costs of proceedings
On the face of it, Zoobury has succeeded in obtaining significant relief in the proceedings and is therefore entitled to costs in accordance with the general rule that costs follow the event (UCPR, r 42.1). But it was contended on behalf of Cariste that the general rule was displaced in this case because of Zoobury's refusal to accept the offer of compromise made in November 2020. For Zoobury, this contention was disputed and a costs order on an indemnity basis was sought for part of the costs of the proceedings.
[4]
Cariste's application for costs
Counsel for Cariste drew attention to the fact that the November 2020 offer gave Zoobury a Property Share of 16.5%, which was effectively what Zoobury was claiming under the PSC. Counsel for Cariste characterised the offer, despite the hostile language in the covering letter, as a "capitulation". Counsel submitted that Zoobury could have avoided the whole litigation simply by accepting it.
There are technical difficulties with this view. In the first place, as Mr Stephens pointed out to Mr Genday during their "without prejudice" discussions, the offer did not, or at least did not expressly, provide for full payment to Zoobury of 16.5% of the income from the property back to 2019-2020, which Zoobury ultimately succeeded in recovering. And, in providing that there was to be no order as to costs, the offer contravened UCPR r 20.26(2)(c). It was non-compliant for that reason alone.
A further problem was that the offer provided for the execution of a release (the terms of which were not specified). An offer under the Rules must generally be made in a form which, upon acceptance, is capable of being recorded in orders by the Court: see Scott v Scott (No 2) [2022] NSWSC 914 at [72]. Such orders may prevent re-litigation of the claims in the proceedings by means of res judicata and issue estoppel. But the Court would have no power to go further and order a party to give a release.
It follows that in seeking a release the offer went beyond the scope of the relief available in the proceedings. Similarly, it is at least unclear that it would have been open to Cariste, over Zoobury's opposition, to obtain orders to bring the PSC to an end and forcing the sale of the property.
In the end, I did not understand counsel for Cariste to contend that the offer was actually one which took effect in accordance with the Rules. Rather, the argument was that the offer, and the evidence of the accompanying discussions between Mr Genday and Mr Stephens, showed that a commercially acceptable settlement along the lines of the offer was available. The "dealbreaker" in November 2020 had been Mr Tim Roach's insistence on receiving a distribution of $2.4 million. Mr Peter Roach proposed mediation on a number of occasions, but these proposals were rebuffed. I was asked to infer that this was because his son's position was unchanged.
In the end Mr Tim Roach did not obtain the further cash distribution of $2.4 million which he sought. No such relief was sought in the proceedings; nor, on the face of it, could it have been. The point made by Mr Genday in his discussions with Mr Stephens that the making of distributions was a matter for Mr Peter Roach does not seem to have been disputed. Counsel submitted that what had happened was that Mr Tim Roach tried to use the proceedings to achieve a collateral objective and failed. If he had not done so, the proceedings would never have gone ahead.
In my view there are two difficulties with this submission. The first is that it would require the Court to make what is ultimately a factual finding about what would have occurred if Mr Tim Roach had adopted a different approach to settlement negotiations.
In Poseidon Ltd v Adelaide Petroleum NL (1991) 105 ALR 25, Burchett J (at 26) referred to what he described as the "traditional secretiveness and obliquity of the bargaining process". Nowhere is this more apt than in settlement negotiations. It happens all the time in such negotiations that parties take up positions for negotiating purposes which do not reflect their real or "bottom line" positions. The parties' solicitors' stated positions are an obviously unsound basis for making findings about whether a settlement could have been agreed, and if so, on what terms.
The second problem arises out of the scope of the parties' negotiating positions. It is true that, in seeking a further $2.4 million payment, Mr Tim Roach was negotiating for something he could not achieve in the proceedings. So too with his request for a withdrawal of, and apology for, the allegations made against him by his father. But as already noted Mr Peter Roach was also seeking a settlement which went beyond the orders which could be made in the proceedings.
This is not a criticism. There was nothing illegitimate about negotiating for relief not available in the proceedings, so long as it did not involve an objective so remote from the proceedings as to give rise to an abuse of process (Williams v Spautz (1992) 174 CLR 509 at 526-7). That has not been suggested here.
But where the parties are negotiating outside the bounds of the proceedings, how is reasonableness to be judged by the Court? On the evidence before me on the costs application, Mr Tim Roach may well have been justifiably aggrieved by the allegations against him. If I were able to make a determination on the evidence about what would have happened if the parties kept negotiating in November 2020, and it turned out that Mr Peter Roach would absolutely have refused to make a formal withdrawal and apology, would it necessarily have been unreasonable for Mr Tim Roach to insist on the case going on?
What this means, I think, is that the court needs to confine its consideration to the claims made, and relief sought, in the proceedings. There is no hardship in this for the parties. It is exactly how the settlement rules are designed to work. If an offer is made which falls within the relief obtainable in the proceedings, a refusal to accept for some extraneous reason will not protect the offeree. But that is not what Cariste did with its November 2020 offer.
For these reasons, I reject the argument for Cariste. Zoobury is entitled to an order for its costs of the proceedings.
[5]
Zoobury's application for indemnity costs
Zoobury's application for indemnity costs did not extend to the whole costs of the proceedings. In the orders proposed by counsel for Zoobury, indemnity costs would be limited to costs "of and in connection with":
1. Cariste's cross-claim and defence; and
2. the adjournment of the trial on 6 December 2021 and the "Amended Pleadings" (which expression was defined to mean the amended pleadings which led to the adjournment).
Counsel's proposed orders specifically provided for costs on the ordinary basis "of and in connection with":
1. Zoobury's application for validation orders "and the balance of the proceedings"; and
2. Zoobury's costs application.
Counsel advanced three main arguments in support of the application for indemnity costs. First, counsel submitted that Cariste's cross-claim had had no real prospects of success from the outset. This was, counsel submitted, shown by what happened to the claim. Faced with running it on 6 December, Cariste changed course and ran a construction point instead. When that failed, the claim was abandoned.
Counsel's second point was related. Counsel submitted that the case mounted by Zoobury on construction was in fact inconsistent with the original contention that Mr Peter Roach had been misled. The construction case relied upon communications between the parties which were said to show a mutual understanding about how the PSC would operate (albeit that most of this evidence was rejected: see J1 [114]-[136]). There was no room in such a case for the failure to disclose the April 2010 report having misled Mr Roach in some critical way.
Counsel's third argument focused on the duress allegation. Counsel pointed out that the allegation was squarely based on matters which would, if true, have been within Mr Peter Roach's personal knowledge. It was supported by particulars and later sworn testimony. Yet when the time came for the hearing on 6 December it was simply dropped without any explanation.
Counsel acknowledged that a plaintiff's abandonment of a claim does not, on its own, necessarily call for an award of indemnity costs. But it may, in the circumstances of the case, allow the Court to infer that the proceedings had never had a legitimate object. This can happen, in particular, where there is a "complete abandonment at the last moment without any explanation" (Ghougassian v Fairfax Community Newspapers Pty Ltd [2015] NSWCA 307 at [54]).
Counsel's acknowledgement is consistent with the authorities. The well-known statement of principle in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 (at 401) refers to a weak claim which the plaintiff "properly advised" must have appreciated would be hopeless. The conduct which justifies an award of indemnity costs is not the bringing of a weak claim as such, but doing so in circumstances where the plaintiff must have known that the claim would not succeed, and it may therefore be presumed that the claim was brought for some other purpose. In effect, the Court is able to infer from the weakness of the claim that it was in effect an abuse of process.
But caution must be used in applying such reasoning. The claim really must be one where the Court may confidently infer that the plaintiff's solicitor would have advised the plaintiff that it had no prospects of success. Implicitly, this form of reasoning accepts that if the real explanation for the claim being brought was the incompetence or blindness of the plaintiff's solicitor, then indemnity costs would not be warranted. Of course, the Court will not usually know what advice was given by the solicitor, and even if the evidence was available, the Court would not encourage an investigation into that peripheral issue.
In a case where a plaintiff abandons proceedings because of events which occur after the proceedings were commenced and which make their further prosecution futile or unnecessary, the applicable principle is the well-established one laid down by McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 (at 624-5). The Court will not, on a costs application, try the case for the purpose of deciding who would have won. Therefore, unless it appears that one side or the other has effectively capitulated, the proper order is that there be no order as to costs.
The situation that arises where a plaintiff abandons a claim and submits to a costs order, and the defendant then seeks indemnity costs, is similar. The Court should not try the claim for the sole purpose of determining whether there should be an award of indemnity costs. Indeed, such a trial would be even less attractive in a case of an indemnity costs application. The Court would be investigating the facts, not to determine whether the plaintiff would have lost, but to determine whether the plaintiff would have lost so badly as to allow an inference to be drawn that the claim was brought for an improper purpose. An award of indemnity costs for an abandoned claim can therefore only be justified if the Court can be satisfied, even without having heard the evidence, of that conclusion.
There is force in some of the criticisms made by counsel for Zoobury about the weaknesses in Cariste's case of misrepresentation. The change in course just before the hearing of 6 December last year was indeed a radical one. But I do not think that I can infer that from that change of course that the decision had been made not to run the misrepresentation case.
When the hearing began before me on 16 December, the position taken by counsel for Cariste was that all issues should be dealt with together. It was only as the case went on that it emerged (perhaps belatedly) that this would not be possible. My decision to isolate separate construction questions and deliver a judgment on those questions was actually opposed by counsel for Cariste: see J1 [24].
Nor do I think it is completely clear, as counsel for Zoobury would have it, that the construction case was actually inconsistent with the misrepresentation case, although its focus was completely different. In any event, there is no sign that any such inconsistency was apparent to Mr Peter Roach and those who were advising him.
The case may be close to the line. But I think it is important that the Court should not discourage a party in the position of Cariste from taking the course of abandoning or discontinuing claims which that party has concluded have insufficient prospects of success, even if that realisation may have been belated. Parties who discontinue in such circumstances will already be facing the heavy burden of bearing all of their own costs, as well as the defendant's costs on the ordinary basis. The last thing the Court should do is to encourage a plaintiff in such a position to go ahead with the claim so as to avoid an adverse indemnity costs consequence.
Ultimately the questions raised by the misrepresentation allegation were factual ones. They turned on what was said between Mr Peter Roach and Mr Tim Roach, and on whether, and to what extent Mr Peter Roach relied on anything which was said. These are quintessentially issues which the Court would be very reluctant to reach a conclusion on without a trial.
There is also an important practical factor which is against the present application. It would not be proper to make an award of indemnity costs in Zoobury's favour for the whole of the proceedings.
Counsel expressly accepted that this was so in the case of Zoobury's claim for validation orders. Zoobury was responsible for the circumstances which made those orders necessary. It could not have been, and was not, suggested that the opposition to the validation orders, such as it was, was unreasonable. Looked at more broadly, that is true of the whole of the hearing which took place before me. Cariste was unsuccessful on the construction issues, but its position was fairly arguable. There was nothing unreasonable in Cariste raising those issues.
It follows that a substantial proportion of the costs assessment will need to take place on the ordinary basis anyway. In these circumstances, making an indemnity costs order limited to specific issues only is unattractive. Such an order will only lead to disputation about whether a particular item of cost incurred at an earlier stage of the proceedings (for instance, affidavit evidence about the circumstances in which the PSC was prepared) was solely relevant to the cross-claim or was ultimately relevant to the issues to be determined at the hearing before me.
Similar observations apply to the duress allegation, especially the practical point. Identifying costs specifically relating to that allegation for the purpose of an indemnity costs order is likely to be far more trouble than it is worth.
For these reasons I reject Zoobury's application for indemnity costs. The costs order in Zoobury's favour will be on the ordinary basis only.
[6]
Orders
The orders of the Court are:
1. Order that the defendant pay the first plaintiff's costs of the proceedings (including the cross-claim) on the ordinary basis.
[7]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 28 July 2022