Adelaide Congregation of Jehovah's Witnesses Incorporated v Pegasus Securities Ltd (in Liquidation) and Pegasus Leasing Limited No. SCGRG 93/733 Judgment No. 5968 Number of Pages 12 Procedure Costs

[1996] SASC 5968

COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA OLSSON J

CWDS
Procedure - costs - departing from the general ruleorder for costs on an indemnity basis - consideration of question of costs arising between the plaintiff, the defendant and Pegasus Securities Limited (PSL) - defendant and PSL conceded that costs must follow the event - issue was whether award should be based on party and party costs or full indemnity costs - discussion of basis on which full indemnity costs awarded - conduct of litigation on behalf of defendant such as to warrant departure from normal order as to costs - order that the plaintiff's costs be taxed and paid on the basis of a full indemnity for the costs reasonably incurred. Colgate-Palmolive Company &; Anor v Cussons Pty Ltd (1993) 46 FCR 225; Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (Federal Court (WA) WAG G55/88 French J, 3 May, 1991 unreported); Casley-Smith &; Ors v FS Evans &; Sons Pty Ltd &; Anor.
(1989) 149 LSJS 483; Walton v McBride (1995) NSWLR 440, applied. Degman Pty Ltd (in liq.) v Wright (No 2) [1983] 2NSWLR 354, discussed. Australian Guarantee Corporation Limited v De Jager and Anor. [1989] VR 483 at 502; Singleton and Anor v Macquarie Broadcasting Holdings Ltd. (1991) 24 NSWLR 103 at 105; Iannotti v Corsaro (1983-84) 36 SASR 127; Sheahan and Anor v Norther Australian Land and Agency Co and Ors (Full Court (SA), 18 December, 1995, unreported, Judgment 5365), considered.

HRNG ADELAIDE, 10-11 December 1996 (hearing), 24 December 1996 (decision) #DATE 24:12:1996 #ADD 29:1:1997

Counsel for plaintiff :     Mr R J Whitington QC

Solicitors for plaintiff :    Grope Hamilton

Counsel for defendants:     Mr P McNamara

Solicitors for defendants: Kelly &; Co

ORDER
Judgment for plaintiff.

JUDGE1 OLSSON J

1. On 29th October 1996 I published detailed reasons for decision in relation to the issues arising for decision as between the parties to these proceedings, following the conclusion of a very lengthy trial. At that time I merely confined myself to making those reasons available to the parties so that draft minutes of a judgment to give effect to them could be prepared.

2. The proceedings again came before me on several subsequent occasions. On 11th December 1996 I formally entered judgment in respect of the substantive matters arising at trial. I adjourned further consideration of the question of costs arising between the plaintiff , the defendant and Pegasus Securities Ltd. (in liquidation) ("Pegasus Securities"), a plaintiff by counterclaim. These reasons are limited to a consideration of that question.

3. Mr. Whitington QC, of senior counsel for the plaintiff, contends that, in all of the circumstances of this litigation, it is appropriate to order that the defendant and Pegasus Securities be required to pay the plaintiff's costs of action on the basis of a full indemnity. Mr. McNamara, of counsel for the defendant and Pegasus Securities, concedes that costs must follow the event, but argues that the proper order is for payment of costs of action as between party and party. He also submits that, in any event, there ought to be some abatement of costs in favour of his clients, for reasons which will emerge in due course.

4. In addressing the contentions advanced by counsel it is necessary to make some preliminary observations.

5. First, it is to be noted that the trial of the substantive issues in these proceedings occupied no less than 50 hearing days. In the course of the trial there were a number of occasions on which I was sorely tempted to interfere with the manner in which the defence cross- examination and case were being conducted. In various instances the cross-examination appeared interminable and related to issues which were, to say the least, peripheral; and the manner of leading defence evidence in chief was at times, slow and detailed, to the extent of almost being excruciating. Indeed, at times, I was moved to indicate some frustration, if not impatience. Whilst I do not question the bona fides of Mr. McNamara, I was, by the latter stages of the trial, distinctly of the impression that his instructions were to take and pursue every conceivable point, which he did, almost remorselessly. To be frank, there were a number of occasions on which, having adjourned the trial for the day, I was moved to comment to my Associate that it seemed obvious to me at the time that the defendant was manifestly attempting to defeat the plaintiff by a process of financial attrition by virtue of the costs of the ongoing trial. Despite that assessment I felt unable to intervene, beyond any comments which I may have made at times, because I simply did not know what was in the defence brief.

6. Added to the foregoing situation was the enormous amount of time occupied by the defence laboriously tendering a large volume of documents, many of them of minimal value, one at a time. It emerged that some of the documents produced - particularly related to joint venture arrangements - had never been discovered to the plaintiff.

7. Second, and, in a sense, by way of example of the first point which I have made, the defence pursued a number of topics, particularly by way of cross examination, in great detail, which, eschewing the wisdom of hindsight, were either largely collateral and irrelevant, or without merit and doomed to findings adverse to it. I see no merit in plumbing each of these aspects to the depths. All that need be said, as an illustration of this aspect, is that much time was spent in an attempt to demonstrate that, in relation to the acquisition of several sites for Kingdom Halls, the witness Griggs was acting in his own interests and not, in fact, as trustee for the church. In my assessment these were futile exercises, because the documentation and evidence to the contrary was, to say the least, compelling to the degree that the defence contention was patently untenable. I waited in vain for substantial evidence to the contrary to emerge. The cross examination of a claim by CSR - Readymix in relation to Griggs - was a classic illustration of unhelpful, collateral cross-examination which took the situation nowhere.

8. Third, even given the fact that a number of amendments to the pleadings were made by the plaintiff at a fairly late stage of the proceedings, the defence agitated and/or led evidence with regard to a number of factual issues in a manner which indicated to me that either the defence case had not adequately and realistically been got up and assessed, or a deliberate decision had been taken to pursue aspects based upon evidence which must, on any realistic appraisal, have been suspect or unreliable on the face of it. A series of examples of this readily come to mind. However, I do not propose to explore all of them in these reasons. One or two will suffice, by way of illustration.

9. In my reasons as to the substantive issues I made specific reference to the almost ludicrous situation which developed when Mr. McNamara was driven to seek to impugn his own deponent. Moreover, any careful analysis of the combined evidence of the witnesses Knox, Davies, Carter and McLean, against the background of the affidavit of the deponent Gore, must have indicated, in the mind of any objective appraiser, that all was not well with the line which the defence sought to pursue concerning the circumstances related to the advancing of moneys to Griggs and the execution of the mortgage in issue in these proceedings. Such a comment is not the mere product of hindsight, but is a simple counsel of common sense in light, particularly, of the relevant documentation.

10. Equally, a great deal of time was occupied in considering the vexed questions of the 1984 Deed of Loan (referred to in my primary reasons for decision), alleged collateralisations to it and the associated stamp duty issues. All that need be said concerning those topics is that any careful consideration of a properly got up case in that regard would immediately have revealed the problems identified in my findings and indicated both the unsatisfactory nature of the evidence sought to be led and relied upon by the defenceÑparticularly that of the witness Curtis. Moreover, the true state of the evidence and records of the witnesses from Thomsons only emerged as a result of persistent cross- examination. In that regard, it is to be recalled that important file notes had been removed from the Thomsons file and/or privilege inappropriately claimed, with the result that a great deal of time was wasted until the full, true picture eventually emerged. Even if it be accepted that some documentation may have been overlooked, the fact remained that, when it did come to light, the disclosure was far from prompt. In the final analysis some of this material was quite important for fact finding purposes.

11. As Mr. Whitington QC pointed out, the trial was further prolonged by the agitation of various other issues. These touched topics such as the joint venture arrangements between the relevant corporate bodies - in an abortive endeavor to prove what always was, realistically, the unprovable, on any reasonable assessment and construction of the objective facts and circumstances. There was the time occupied by a quite unprovable assertion of "warehousing" through the Gleitsmanns of the land at Port Elliot, and other excursions into unrewarding topics to which I find it unnecessary to refer.

12. Such was the standard of the defence that there was also the outrageous attempt to suggest that the witness Swinburne Ñ a patently honest man Ñ had been coached and told to 'stultify' himself.

13. I have, at the outset, dwelt upon these features of the case because it is necessary to examine the conflicting contentions of the parties against that general backdrop. By way of summary it must be said, in the plainest manner, that, in my opinion, the conduct of the defendant and of Pegasus Securities was such as to require unequivocal condemnation, the more so as the plaintiff was forced to initiate these proceedings by virtue of the fraud of the employee of the defendant, acting in concert with other persons engaged on behalf of it, and to meet attempts by or on behalf of the defendant, as assignee of Pegasus Securities, to enforce the mortgage the subject of these proceedings. The defence was, unrealistically, uncompromising at all stages and as to all issues; and it was this approach which led to a very protracted trial, bearing no resemblance to the initial time estimates of the parties.

14. It is beyond question that the making of an order for the payment of costs on the basis of an indemnity is only justified in special circumstances. An order for payment of costs of action is , usually, to be on a party and party basis.

15. There are many reported cases on the subject of circumstances justifying the award of indemnity costs. However, most of them merely stand as examples of particular situations said to justify a specific order. It is possible, nevertheless, to perceive certain principles emerging from the authorities. These may be summarised as underÑ
    - Indemnity costs are only to be awarded where there is
    demonstrated to be some special or unusual feature in the case to
    justify the court in departing from the ordinary practice (Colgate
-Palmolive Company &; Anor v Cussons Pty Ltd (1993) 46 FCR 225 @
    233).

- The categories in which the discretion to award such costs are
    not closed (Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd
    (Federal Court (WA) WAG G55/188 French J, 3 May 1991, unreported),
    Casley-Smith &; Ors v FS Evans &; Sons Pty Ltd &; Anor (1989) 149 LSJS
    483 @ 488 ("Casley-Smith")).

- It is usual to confine orders for indemnity costs to situations
    in which the court considers that it ought to mark its disapproval
    of inappropriate conduct on the part of the party ordered to pay
    costs. This may be either improper motive or conduct on the part
    of the party concerned, which has inevitably imposed an undue
burden on the other party (Walton v Mc Bride (1995) 36 NSWLR 440 @
    451, Casley-Smith (supra) @ 488).

16. A convenient commencement point for a consideration of the competing submissions now under consideration is a realisation that, at all material times, the real motivating force behind the attempted enforcement of the impugned mortgage and the defence of the plaintiff's action has been the Group Assets Management Division ('GAM') of what was the old State Bank of South Australia, an entity which, in practical terms, has been an instrument of the Government of South Australia. So much clearly emerges from the evidence of the witness Curtis, as well as Mr McNamara's written submissions concerning the present issue.

17. Following the de facto collapse of the State Bank Group (of which Beneficial Finance Corporation Limited ('BFCL') and the Pegasus companies were elements) GAM effectively undertook the orderly winding up and disposal of the defendant in particular. It was in that context that Curtis orchestrated the eventual assignment of the subject mortgage from the liquidator of Pegasus Securities to the defendant - as to which I have made relevant findings.

18. Mr Whitington QC, originally urged me, in such circumstances, to make a costs order against the State of South Australia, but assurances given by Mr McNamara, with the specific authority of those instructing him, rendered it unnecessary to pursue that issue.

19. Both Mr Whitington QC and Mr McNamara have proffered detailed written submissions in support of their respective contentions, which each of them amplified by oral submissions. I have carefully studied all of that material.

20. In essence the key contentions advanced by the former may, briefly, be summarised thus -
    - the plaintiff had no choice but to initiate the present
    proceedings to pre-empt steps taken by the defendant to enforce the
    subject mortgage.

- the fraud which was perpetrated on the church was for the benefit
    of both Griggs and the defendant, who, through the actions of its
    agent Gore, entered into the relevant transaction for commercial
    profit.

- that fraud was compounded by the fraudulent connivance (evidenced
    by wilful blindness) of the defendant's own agents, Carter, McLean
    and Davies. The defendant actively sought to rely upon evidence
    given by them which was transparently false in key respects, and
    engage in a selective use of the Gore affidavit.

- on a fair and objective appraisal of the evidence - particularly
    that evidence from which the defendant itself sought to draw
    comfort - the plaintiff's claim ought never to have been defended:
    at least in the manner and to the extent that it was defended. (As
    to this reference was made to facets of the case such as some of
    those to which I have, initially, referred in those reasons.) As
    to this he particularly stressed the attitude and content of the
    evidence of the witness Knox, when viewed against the background of
    the deceptions to which Gore, Carter, McLean and Davies were
    plainly parties, having regard, inter alia, to the express content
    of relevant documentation and the surrounding circumstances
    generally, as known to them.

- for reasons already adverted to by me (which it is unnecessary to
    re-iterate), the trial was significantly and unnecessarily
    prolonged in various respects by the mode of conduct of the
    defence.

- the defendant not only stood behind and endeavoured to support
    what was clearly an original fraud on the revenue, but was also an
    active party in perpetrating a second fraud of that nature. A very
    considerable amount of time was occupied at trial in plumbing those
    situations to the depths - time which the defendant ought to have
    well realised would unproductively have been spent, at enormous
    cost to all concerned.

- even when the stage was realised at which it must have been
    transparent that there were significant difficulties emerging from
    a contrast of the evidence of Knox and the witnesses, McLean and
    Davies (considered in light of Gore's affidavit) and further
    difficulties patently stemming from the evidence of Curtis, the
    defence made no attempt to confine the issues, but pressed on with
    a full defence on the widest possible front.

- Attention was drawn to what was said to have been the somewhat
    cavalier manner in which the Gore affidavit was prepared and sworn,
    effectively denying the plaintiff any practical opportunity of
    speaking with Gore, much less of cross-examining him. Even so it
    was a document which was, on the face of it, a somewhat double
    edged sword in light of the evidence of other witnesses, to the
    point at which, as earlier recited, Mr McNamara was eventually
    constrained to seek, in part at least, to impugn his own deponent.

- It was contended that the conduct of the defendant, in seeking to
    rely on patently unsatisfactory evidence of the witnesses above
    referred to, necessarily prolonged the litigation, so that the
    plaintiff was caused to incur liability for solicitor and client
    costs far beyond what it could reasonably have expected to incur in
    the litigation of genuine factual issues (cf. Degman Pty Ltd (in
liq.) v Wright (No 2) [1983] 2 NSWLR 254 @ 358).

- Much time was occupied in cross examination of the witnesses
    called by the defendant, ` as a consequence of the difficulties in
    eliciting responsive and accurate responses from them. Most of
    them were found, in greater or lesser degree, to be unsatisfactory
    witnesses.

- A great deal of time was fruitlessly occupied in relation to the
    question of whether McLean Gladstone had or had not been retained
    by the defendant - an issue which was raised by and conclusively
    decided against it.

- The time wasted and costs thrown away in relation to the Thomsons
    conflict of interest situation was a consequence of a failure by
    the defendant's solicitors on file to accept that which had been
    pointed out to them on behalf of the plaintiff, until the very last
    moment.

21. In summary, Mr Whitington QC, submitted that the circumstances to which I have adverted combine to attract the approach espoused by Tadgell J in Australian Guarantee Corporation Limited v De Jager and Anor (1984) VR 483 @ 502. It was, he said, wholly inappropriate that the plaintiff, as a party forced to embark upon legal proceedings through the wrongful conduct of the defendant and to endure a long running trial despite the defendant's knowledge (either initially, or as the trial proceeded) as to its difficulties, should be left badly out of pocket.

22. He also sought to derive support from what fell from Rogers CJ Comm D in Singleton and Anor v Macquarie Broadcasting Holdings Ltd
(1991) 24 NSWLR 103 @ 105. However, I must confess that, with respect, I have some difficulty in aligning what fell from that experienced Judge with statements of legal principle emerging from other reported cases.

23. However, he went so far as to argue that the facts and circumstances pertinent to this case really attracted my dictum in Sheahan and Anor v Northern Australia Land and Agency Co Ltd and Ors (Full Court (SA), 18 December 1995, unreported - Judgment 5363), when I commented -
    "There can be no doubt that an honest party in the situation of the
    appellants, properly advised, must have realised, at the outset,
    that there was no merit whatsoever in the defence and counterclaim
    as to the issues before Perry J and that there were no prospects of
    success. Instead the appellants, collectively, joined in promoting
    before the court a case which was patently illfounded and bound to
    failure."

24. In response to the submissions of Mr Whitington QC, Mr McNamara contended that the circumstances related to this litigation did not fall within the exceptional category which warranted the allowance of indemnity costs. Moreover, he argued that, in any event, there must be some actual abatement of the plaintiff's costs, for reasons to which I shall come in due course.

25. As to the first aspect he raised a number of issues.

26. First, he contended that the plaintiff succeeded on grounds raised only after the commencement of the trial and that the conclusion that the mortgage was a sham was not pleaded and merely "grew out of the events of the trial". He also asserted that the defence had been conducted by or under the control of the State Treasury and that that entity was simply defending the Register Book and assets of the Crown in right of South Australia.

27. The short answers to those propositions are that, as I have pointed out, the frailties in the defence case should have been apparent at the outset, on any proper getting up of the defence case and an objective appraisal of it. Furthermore, the second point raised is not only a complete irrelevancy, but also a distortion of fact. The obvious sole and only interest of those responsible for the conduct of the defence was of a commercial nature. The defendant, as a commercial entity, was seeking to recover moneys lent, despite the improper actions of its agents. The fact that the State Government was orchestrating the litigation in the background was no more than coincidental. The defendant stood in a position no different from that of any other litigant. The additional fact also relied upon - that the State Government only came into the picture long after the basic transactions had been consummated - is equally irrelevant.

28. Mr McNamara went on to mount a somewhat extraordinary series of contentions to the effect that, somehow, the State Treasury should be distanced from any wrongful acts of the agents of the defendant; and that this ought to place it in the category of an 'innocent' party, which ought not to be penalised in the manner contended for by the plaintiff. Quite apart from the fact that the State Treasury is not the direct party to the proceedings in any event, such an argument conveniently overlooks the fact that, in reality, it was essentially responsible for the mode of conduct of the litigation by reason of the instructions given by it.

29. His basic contention was also not assisted by his plea that the deaths of Gore and of McGregor (the former managing director of the defendant) put it at a forensic disadvantage. I have already made the point that the problems for the defence were readily perceivable, on a proper getting up of the case, from the outset.

30. In view of the broad conclusions initially expressed by me, considered in light of the various contentions advanced by Mr Whitington QC, the substance of which I accept, I see no need to traverse all of the points advanced by Mr McNamara in fine detail.

31. I must, however, comment that I do not see how his suggestion that the fact that the defendant itself was said to have been the victim of fraud advances his argument. If that was so it was as a consequence of the actions of its own senior officer and its own agents. To say that the defendant was entitled to persevere with a bona fide defence is to beg the very question of the extent of its bona fides in the tactics which it in fact adopted.

32. I agree that, if this was, as Mr McNamara submitted, simply a case where one party failed on grounds based on lack of credit, then that would not justify the order sought. But, as I have sought to demonstrate, that is not an accurate characterisation of what occurred in the instant case. The gravamen of the present situation is that there has been inappropriate conduct on the part of the defendant which takes the situation well outside the 'normal' litigation scenario.

33. I have read what he has written and considered his oral submission in response to the plaintiff's contentions with care. Whilst, on some specific aspects, a correct assessment of the situation may lie somewhere between the two competing arguments, in essence the plaintiff's application falls to be disposed of in light of the primary assessments which I have earlier expressed, coupled with the fact that, in the main, I prefer the broad analysis of the situation advanced by Mr Whitington QC to the pleas proffered by Mr McNamara. I simply do not accept the primary validity or accuracy in characterisation of many of the points sought to be advanced by the latter.

34. At the end of the day I have no hesitation in concluding that, prima facie, this is a case in which the plaintiff is entitled, in general, to an order for costs by way of an indemnity.

35. Having said that, it is, nevertheless, necessary to examine the submission of Mr McNamara that, having regard to certain incidents in the course of the litigation, there should be some abatement of the total liability for costs.

36. These submissions bear on questions such as -
    - the adjournment of the trial by virtue of the Thomsons conflict
    of interest contention

- the plaintiff's case bearing on certain Stamp Duty issues

- various belated applications for leave to amend the statement of
    claim

- certain arguments as to the admissibility of some content of the
    Gore affidavit

- the time occupied by the service of subpoenas on McLean Gladstone

- what was said to have been the plaintiff's inappropriate attitude
    in relation to proof of service of notices on Griggs

- alleged unnecessary requests and application by the plaintiff for
    discovery, including non-party discovery against BFCL.

37. I will briefly deal with each of these aspects in turn.

38. I do not accept that the adjournment of 10 October 1995 can fairly be sheeted home, in any adverse fashion, to the plaintiff or its counsel. I agree with Mr Whitington QC when he argues that, on the relevant state of the pleadings, the potential for conflict of interest always existed and must have been apparent to any thinking solicitor, having regard to the obvious issues to be addressed and the content of Thomsons file. Counsel for the plaintiff bore no onus of raising this issue prior to trial and there was scarcely any surprise emanating from Mr Whitington's opening. He did no more than articulate what Thomsons ought to have anticipated for themselves, well prior to trial. I summarily reject any assertion that the conduct of those representing the plaintiff was calculated to disrupt the trial. I perceived no evidence whatsoever of such a situation. Even had this issue not been identified at the outset it would, on any view and in any event, have become painfully obvious as the trial proceeded - as my findings in this case abundantly illustrate.

39. As to the plaintiff's case on stamp duty issues, Mr McNamara seeks to contend that some abatement of costs ought to occur because the plaintiff, it was said, did not succeed on its case related to pleaded stamp duty issues concerning the subject mortgage.

40. I accept that some of the matters pleaded in the statement of claim could not succeed in light of the decision in Iannotti v Corsaro (1983- 84) 36 SASR 127. However, I fail to see how they occasioned any significant expense which would not have been incurred in any event. They were, in fact, overtaken and overshadowed by other stamp duty issues as to which the plaintiff did attract a finding in its favour. The evidence and argument on stamp duty issues would have occupied no less time even had the pleaded aspects in question not been pleaded. There is no substance in this contention.

41. It is true that, as time went by, there were various applications, at trial, to amend the statement of claim.

42. Once again it is difficult to see how these generated any additional costs of substance or, in reality, erected issues which were new (in the sense that they ought to have been appreciated and pleaded prior to trial). In part the amendments made reflected the developing state of the evidence and, in part, they did little more than clarify and formalise what must have been appreciated, by all concerned, were contentions clearly and naturally arising for consideration. Furthermore, one feature of this case to be borne in mind was that the plaintiff was beset with a number of evidentiary problems. Some documentation did not emerge until the course of the trial and key witnesses such as McLean, Carter, Davies and Knox declined to be interviewed by the plaintiff's solicitors prior to giving evidence. There were also obvious problems of access by the plaintiff to the evidence emanating from the Thomsons witnesses and the file of that firm. Indeed, it was only the persistence of Mr Whitington QC which, eventually, elicited a vital file note which had been missing from the file. Additionally, until Knox gave evidence, the plaintiff did not even know that none of the defendant's officers involved in the subject mortgage transaction had any authority from or on behalf of Pegasus Securities.

43. That type of scenario abundantly highlights the backdrop against which the plaintiff was compelled to develop its case and the gradually expanding evidentiary situation in light of which certain amendments were made. None of the amendments prejudiced the defence and I fail to see how they unreasonably generated appreciable costs additional to those which would, necessarily, have been generated in any event.

44. I pass on to the question of the argument concerning the admissibility of the Gore affidavit. It is not to be forgotten that significant time was occupied in relation to arguments proffered by Mr McNamara which were rejected by me on the merits. I ruled that Mr Whitington QC was essentially entitled to pursue the course which he sought to adopt. It always remained open to Mr McNamara to tender the balance of the affidavit if he chose to do so and, eventually, he did make a tender, but on a statutory basis which was rejected. Ultimately, it was allowed in on a quite different footing.

45. The present contention on this score seeks to ignore that, in the main, the major submissions made by Mr McNamara and his attempt to compel the plaintiff to do that which it did not wish to do failed.

46. No costs were generated in this area which could ever, reasonably, be visited upon the plaintiff.

47. It was then contended that costs related to the McLean Gladstone subpoenas and their sequelae ought to be the subject of an abatement against the plaintiff.

48. All that need be said about that is that the process adopted involved a form of third party discovery which was prompted partly by the evolving evidence and factual issues in the case and partly as a practical consequence of the fact that McLean and Carter were not witnesses who were prepared to co-operate with the plaintiff. What was implemented was a legitimate procedure which was of importance to the plaintiff and, in the result, threw up material relevant and useful for the purposes of cross-examination.

49. There is, in my view, no substance in the arguments now sought to be mounted against the plaintiff. As Mr Whitington QC identifies, those arguments appear to go so far as advancing a submission which is, seemingly, on behalf of non-parties as well as the defence.

50. The point sought to be developed by Mr McNamara concerning the proof of service of notices on Griggs is answered by Mr Whitington QC in this fashion -
    - it was no part of the plaintiff's case that notices of demand had
    been served on Griggs and his companies and it did not ever take
    any point as to that question.

- it had no means of knowing whether or not the strict statutory
    procedures had been complied with

- the plaintiff merely requested the defence to provide evidence of
    due service, and invited proof by affidavit.

- later in the trial such an affidavit was produced and it was
    accepted.

51. In absence of any challenge as to the accuracy of that factual history, I accept it. Manifestly, this cannot possibly give rise to any abatement of costs against the plaintiff. There is simply no basis for asserting unreasonable conduct on its part.

52. Finally, there are the assertions by the defence that the plaintiff made unreasonable demands for unnecessary discovery, including non- party discovery against BFCL.

53. To the extent that this appears to develop some argument in the interest of BFCL, it is irrelevant for present purposes. That company is not a party to these proceedings. That aside, the short answer to the point raised is that it has been disposed of by the relevant order of Master Kelly dated 7 September 1995. That order stands and is not affected by any order for costs of the action generally. Any general order must be read subject to that order.

54. It follows that, subject to the point last made, no case has been made out for any abatement of costs against the plaintiff.

55. In the circumstances I unhesitatingly make an order that the plaintiff's costs as to its claim and in relation to the counter claim in these proceedings be taxed and paid by the defendant on the basis of a full indemnity for all costs reasonably incurred. There will be liberty to apply, in the event that the undertaking articulated by Mr McNamara is not honoured.