Cosmedia Productions Pty Ltd v Australia and New Zealand Banking Group Ltd

[1996] FCA 434

COSMEDIA PRODUCTIONS PTY LTD v. AUSTRALIA AND NEW ZEALAND BANKING
GROUP LTD
No. NG 892 of 1993
FED No. 434/96
Number of pages - 11

COURT

IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION SHEPPARD J

HEARING

SYDNEY, 20 December 1996 #DATE 22:1:1997 #ADD 24:1:1997

Counsel for the Applicant: J.R. Young

Solicitors for the Applicant: Newman and Associates

Counsel for the Respondent: J.W. Stevenson

Solicitors for the Respondent: Norton Smith and Co.

JUDGE1

SHEPPARD J SUPPLEMENTARY REASONS FOR JUDGMENT (On questions remaining after delivery of judgment on 5 June 1996) 1. I delivered reasons for judgment in this matter on 5 June last. These reasons left outstanding a number of questions upon some of which I had not had submissions. In respect of others, although I had had preliminary submissions, the parties could not deal with them until such time as they had my conclusions on other questions which arose for decision in the case. The outstanding matters all relate to matters raised by the respondent's cross-claim.

1. I should mention that attempts were made by the parties to settle the outstanding questions. These continued during the months that have elapsed between the delivery of the earlier judgment and the further hearing of the matter which took place on 20 December last. Because matters did not seem to be progressing, I put the matter in the list for directions on 4 December 1996. There was discussion about mediation and provisional arrangements were made for this to occur. In the result there was no mediation of the matter. It was fixed for further hearing by the Court, as I say, on 20 December last.

2. In the earlier reasons I decided (p.53) that the bank was entitled to charge back transactions in two circumstances, namely where the transaction in question was not authorised by the cardholder and where the cardholder disputed liability for any reason. I said (p.54) that the next matter concerned the particular transactions which the bank was entitled to charge back. I remarked that this was a difficult and complex area because of the nature of the evidence. The parties agreed that the documents could be divided into four categories. The first of these related to cases where there was direct evidence of dispute by the cardholder in the form of an affidavit or letter. It was agreed that there were 73 such transactions and that the value of them was $42,899.19. There is no question but that the bank is entitled to succeed in respect of those transactions.

3. The second category related to cases where there was no evidence. There were two such transactions amounting in value to $1051.36. Upon the basis of my conclusions, counsel for the bank conceded that he could not press these. For the moment I pass over category 3 and come to category 4 which comprised cases where, in the submission of the bank, it was to be inferred that the cardholder communicated the dispute to the issuer in accordance with both Mastercard and Visa rules. There were 42 transactions in this category with a total value of $25,368.61. In the earlier reasons I concluded that the bank was not entitled to succeed in respect of these (pp.54-55).

4. That leaves category 3 which comprised cases where, in the bank's submission, there were purported authorisations for credit from a company, The WorldNet Corporation, described on its letterhead as "International Database Specialists". In the submission of counsel for the bank the authorisations had not been issued. There were 38 of these transactions with a total value of $20,819.24. A selection of these transactions appeared in a schedule which was given to me before I published the reasons on 5 June 1996. A copy of this schedule is attached to the earlier judgment. I was asked to draw conclusions as to whether the bank was entitled to succeed in respect of these transactions which were said to be a cross-section of the transactions in category 3. I declined to do this. In the interval that has followed the delivery of the earlier reasons, counsel have agreed that a typical transaction is that referred to as being found in Volume II Tab 52 of the documents in evidence. This transaction appears on the fourth page of the schedule. Counsel have agreed that the determination whether this transaction is one which the bank is entitled to charge back will determine the outcome of the issues raised by the category 3 transactions. In other words it is necessary only to reach a conclusion in respect of the transaction to which I have referred for the dispute which concerns category 3 transactions to be resolved.

5. In order to assist me, there was handed up an agreed bundle of documents which is a copy of the documents which appear in Volume II at Tab 52. Included in the bundle is a letter dated 26 April 1993 from WorldNet Corporation to a customer. It is obviously a form letter sent to a number of customers. There accompanied it a document on the letterhead of WorldNet Corporation which was entitled "Authorisation to Charge Back". The document is dated 23 April 1993. It said that WorldNet Corporation was issuing the letter "as authorization to charge back (Credit) the account of Name: Wm. Flaherty Acct. No. 5398800009150238 Exp. Date: 10/94 Credit Amount: $398.00." The letter went on to say that the charge appeared on the statement "as Cosmedia". Mr Flaherty was asked to send the letter along with his credit card statement to his issuing bank. There was an apology for inconvenience that may have been caused and a telephone number to ring if there were any questions.

6. The circular letter from WorldNet Corporation dated 26 April 1993 was as follows: "Dear Valued Customer, It is with all due embarrassment that I am writing to inform you of an inadvertent billing error regarding your purchase of our service. Worldnet is a multi-faceted marketing and database service specializing in the matching of buyers and sellers of a variety of goods, including Automobiles, Boats, Airplanes and Heavy Equipment. We have relationships and joint venture agreements with several subsidiaries as well as separate companies who handle our billing and accounting needs.

The fee for our service might mistakenly appear on your credit card bill as Cosmedia. This is an error. We have enclosed a 'Credit Memo' for your convenience and hereby advise you to enclose this form with your credit card bill should that charge appear. You are not responsible for that charge or any finance charge related to it. If no such charge appears, disregard this advise. We have corrected this error in our billing department and you will now be billed appropriately. Very Truly Yours, Edmond Valpoort, President"

1. There is then a Mastercard document which is dated 12 July 1993. It refers to an original transaction dated 13 April 1993 for an amount of $595.86. The amount was originally $409.41 but this was crossed out and replaced with the figure $595.86 which is in handwriting. It will be remembered that the amount shown on the authorisation to charge back document was $398 which was presumably in United States dollars. The transaction was said to be in respect of "Retail Sales". Further down the document is a side note, "Reason Description". The reason given is "Credit Not Processed". Counsel for the bank explained to me that that was a reference to the fact that the "issuer" received a complaint from the cardholder.

1. The next document in the bundle is a copy of the mail/telephone order transaction summary filled out by Mr Gordon on 8 April 1993. It shows the Flaherty transaction which was credited to Cosmedia's account as a consequence of its inclusion in the summary.

2. There is then a document from the bank to Cosmedia which informed Cosmedia that the amount of $565 had been debited to its account. The document said that the credit was not processed to the cardholder's account. There is a reference to the number of the Mastercard earlier mentioned, which is apparently Mr Flaherty's Mastercard. The transaction date was said to be 8 April 1993.

3. The final document in the bundle is a document passing between the Universal Bank and the ANZ Bank which was the document pursuant to which the amount of $565 was apparently "charged back" to the bank.

4. In the submission of counsel for the bank the transaction in question was unauthorised or, if not unauthorised, disputed. In the submission of counsel for Cosmedia, the documents do not enable one to tell what the circumstances of the charge back were. One cannot say whether what was involved was a disputed or unauthorised transaction or arose because of some other circumstances.

5. I think that the documents to which I first referred, namely, the letter of 26 April 1993 and the authorisation to charge back dated 23 April 1993 indicate that WorldNet Corporation authorised the charge back to be made. What is being said to Mr Flaherty is apparently that an inadvertent billing error regarding a purchase led to a charge being made to his Mastercard account which ought not to have been made. But the documents do not, in my opinion, disclose why it was that the charge was made in the first place. Obviously there has been a mistake, but the reason for the mistake is not disclosed. The only information one has as to a reason is on the Mastercard schedule which ascribes the reason as being "credit not processed".

6. Having considered the submissions of counsel and examined the documents with more care since I reserved my decision, I am unable to say that they establish what the bank claims they establish. I am not persuaded that the transaction involved was either unauthorised or disputed. For all that emerges from the documents, Mr Flaherty knew nothing about it at all until he received the letters in April 1993.

7. I understand that it may have been very expensive to endeavour to prove the matter strictly. Evidence may have had to be taken from the United States. The fact that it could have been taken by video link does not mean that it may not have proved a quite expensive exercise. I thought that it may have been possible for an appropriate employee of Mastercard in Australia to have given evidence which would have explained the Mastercard documentation and shed more light on the matter. But this apparently was not thought to be helpful. No such evidence was called, presumably because it would not have been of assistance.

8. The documents which have been received in evidence are tendered as business records. I have done my best to read them constructively, bearing in mind the undesirability of imposing on parties to litigation the need to call evidence of the detail of transactions, particularly when they relate to a running account as was the case here. I have endeavoured to see how they could be used to establish that the transaction was either unauthorised or disputed.

9. In my consideration of the matter, I have paid particular attention to two matters. There is firstly the statement of counsel for the bank that the expression "Credit Not Processed" on the Mastercard document referred to the fact that the issuer received a complaint from the cardholder. The explanation comes from the Mastercard documents in evidence. But I am not prepared, without more, to accept this statement as a necessarily correct explanation of the nature of the transaction. The matter is not within Mr Gordon's knowledge. He can shed no light on it. The nature of the transaction, whatever it was, is within the knowledge of the two banks, Mastercard and perhaps Mr Flaherty, although the documents are equally consistent with his never having been aware of it.

10. The other matter that I have considered in reaching my conclusion is the fact that the amount was credited to the Cosmedia account with the bank and was subsequently charged back to that account. The Cosmedia deposit slip and the document passing between the Universal Bank and the ANZ Bank establish this. But the critical question is what was the reason for the charge back. Was it because of an unauthorised or a disputed transaction or was it for some other reason? The documents do not enable one to say.

11. In those circumstances I have reached the conclusion that the bank does not succeed in respect of the category 3 transactions. The result is that the transactions in respect of which it is entitled to charge back are those comprised in category 1. The amount in question is $42,899.19.

12. There is no dispute about the amount owing in respect of the fully drawn advance. That amount is $38,203.11. The total of the two amounts thus owing to the bank by Cosmedia is $81,102.30. But for reasons which will emerge when I come to deal with interest, that may not be the precise amount of the principal debt which is outstanding. There may be other items making up the total of Cosmedia's overdraft account of which I am unaware.

13. The next question is the amount of interest for which Cosmedia is liable. That matter is determined, in my opinion, by the contract of loan between the bank and Cosmedia. The agreements are comprised in two letters dated 23 July 1991 written by the bank to Mr Gordon as director of Cosmedia. One letter dealt with the fully drawn advance and the other with the overdraft. The letters said, in the one case, that the bank had approved a fully drawn advance of $50,000 and, in the other, that the bank had approved an overdraft limit of $20,000 on Cosmedia's "cheque account". Terms and conditions of the loans were set out. They are in similar, but not identical, terms. Interest was to be charged at the bank's retail index rate current from time to time plus a margin of 1 per cent per annum in the case of the fully drawn advance and 2.25 per cent per annum in the case of the overdraft. Interest was to be calculated daily on the final balance of the loan. Interest unpaid on any monthly charging day was to be capitalised and thus turned into principal. The letter said that "thereafter (interest) will itself bear interest."

14. During the discussion that ensued in the course of counsel's submissions, reference was made to s.51A of the Federal Court of Australia Act 1976. I do not consider this to be relevant to the circumstances of this case. This is a case where the parties have expressly contracted for the amount of interest which is to be paid. It is the contract rate that applies.

15. Counsel for Cosmedia developed an argument that, for reasons mainly associated with Cosmedia's partial success in reducing the amount of the charge backs, I should apply the provisions of s.51A of the Federal Court Act rather than those of the contracts. His purpose was principally to avoid the capitalisation of interest which para. 51A(2)(a) forbids. There is no warrant for the course contended for by counsel in relation to the fully drawn advance. Cosmedia's indebtedness on this account was never in dispute. Nor do I see any reason to adopt a different approach in relation to the overdraft, which is likely to be found to exceed $20,000. The letter relating to the overdraft provided that, in this event, an additional margin above the "recorded arrangement" was to be charged.

16. There is, I think, a question whether I have a discretion to apply s.51A in circumstances where there is a contract which provides for a rate of interest to be charged. The determination of that question would necessitate an analysis of the history and purpose of provisions such as s.51A which are commonly in force in Australian courts and in those of the United Kingdom. I refer, however, to s.94 of the Supreme Court Act 1970 (NSW) and to the discussion of that section in Ritchie's Supreme Court Procedure NSW at 1153-1153.1. In the present case it is enough for me to say that, if I had a discretion to do as counsel asked, I would see no reason to depart from the agreement of the parties.

17. That determines the rate of interest and the manner of charging interest to be applied in respect of both the fully drawn advance and the overdraft. Upon the basis of the conclusions reached in the earlier judgment and in this one, the parties can calculate the precise amount of Cosmedia's indebtedness.

18. The next series of questions relates to the guarantees. I deal firstly with the guarantee given by Mrs Gordon. It will be recalled that I found that, when she executed the guarantee, Clause 13 was not crossed out. It is to be inferred that the amount referred to in Clause 13 was blank because it remained blank after the clause was crossed out when Mr Gordon signed the guarantee. There is no dispute between counsel that for an alteration to a guarantee made after a guarantor has signed it to affect liability thereunder, the alteration must be material. Counsel for the bank submits that the alteration made by crossing out Clause 13 was immaterial because, if the clause had not been struck out, the amount would have remained blank and the guarantee would have remained one for an unlimited amount as indeed it was after the clause was omitted. The striking out therefore made no difference to the situation.

19. My own assessment of the matter is stated in the previous judgment (p.68). I think that, if the clause had not been struck out but had been drawn to Mrs Gordon's attention when she signed the guarantee, she would have said that the guarantee was indeed limited to an amount which was then $65,000. It is clear from the letter that was written in 1991, which is referred to in the earlier judgment (p.66), that Mrs Gordon would have been content with such a limitation. She signed an acknowledgment to this effect. She believed all along that she was liable for the company's debts to an amount of $70,000. In those circumstances I do not think that the subsequent alteration of the guarantee by omitting Clause 13 made any material difference to the situation. In the light of my earlier findings, counsel for the bank has conceded that Mrs Gordon is not liable for any amount beyond the amount of the fully drawn advance and interest payable thereon, as I understand it, up to a limit of $70,000. The bank does not seek to recover from Mrs Gordon the amount owing by Cosmedia in respect of the charge backs. Subject to one matter with which I have to deal when I come to the guarantee given by Mr Gordon, that means that Mrs Gordon is liable for the amount of the fully drawn advance presently outstanding together with interest thereon calculated in accordance with the contractual rates specified in the relevant agreement but not for any amount exceeding $70,000.

20. Mr Gordon is liable for the whole of the amount which is owing by Cosmedia to the bank. He knew exactly what was occurring in relation to the merchant facility and the charge backs. He knew that amounts which became owing to the bank pursuant to the merchant facility would be debited to the overdraft account. Accordingly, his liability is in respect of the amount which Cosmedia owes the bank.

21. Counsel for Mr Gordon made two submissions in opposition to this being the case. Firstly, it was submitted that, because Mrs Gordon was discharged from liability under the guarantee, Mr Gordon himself was discharged. That submission must be rejected in the light of the fact that I have found that Mrs Gordon was not discharged. Then it was submitted that the Gordons had been sued as joint debtors. They had not been sued severally. But Clause 11 of the cross-claim alleges that Mr and Mrs Gordon agreed to guarantee to the bank the indebtedness to it of Cosmedia on the terms and conditions set forth in the guarantee. Paragraph 11 says that the bank claims leave to refer to the guarantee as if it were fully set forth in the cross-claim.

22. Clause 8 of the guarantee (which was not drawn to my attention at the earlier hearing) provided that each guarantor, i.e. Mr and Mrs Gordon, signing the guarantee agreed that he (or she) should be jointly and severally liable to the bank thereunder notwithstanding that some one or more of the guarantors or any other person intended to be a guarantor in respect of all or any of the indebtedness and liability covered by the guarantee should refuse or fail to sign the guarantee in respect thereof. This clause makes it clear that the guarantee was a joint and several guarantee and that the liability under it was joint and several. Paragraph 11 of the cross-claim makes it clear that Mr and Mrs Gordon are sued on the guarantee pursuant to its terms. Those terms involve each of them being jointly and severally liable for the debt of Cosmedia. In those circumstances, I see no problem about the fact that, in the circumstances as I have found them to be, Mrs Gordon's liability will be less than that of her husband. The submission of counsel for Mr and Mrs Gordon to the contrary is therefore rejected.

1. There remains a question concerning the effectiveness of the demands served on Mr and Mrs Gordon prior to the commencement of the action. At the hearing which took place on 20 December 1996, counsel proceeded on the assumption that two demands were served on each of Mr and Mrs Gordon, one demand being intended to found the cause of action on the guarantee and the other a demand served pursuant to s.57 of the Real Property Act 1900 (NSW) to found a claim for possession of the property. None of the demands was then in evidence or in Court. Subsequent enquiries by the solicitors for the bank have established that in fact no demands for possession of the property were served on Mr and Mrs Gordon. The consequence is that the bank's claim for possession must fail. But demands were served on Cosmedia and on the Gordons in order to found the action and, apparently, also to found the bank's right to exercise some of its powers under the mortgage over the property. The demands that were served are now in evidence. The reason why demands were necessary in order to found the causes of action based on the guarantee stems from the fact that it provided for the Gordons to pay the bank "upon the Bank's written request for payment" delivered to them "or any one or more of them".

2. Paragraph 15 of the cross-claim pleads that, on or about 12 December 1993, the bank made demand on Mr and Mrs Gordon for the amount due to the bank pursuant to the guarantee and the mortgage and that the Gordons failed to make payment of that or any amount to the bank pursuant to the demand "or at all". In their defence to the cross-claim, the Gordons, in para. 2, plead to para. 15 of the cross- claim by saying that they admit the allegations made in para. 15 but deny that they are liable to make the payments referred to.

3. The demand served on Cosmedia claimed a total sum of $153,175.25 made up of the amount of the fully drawn advance, what is described as the merchant agreement and an indemnity guarantee. I am not aware of what the significance of the indemnity guarantee is but I am not at the moment concerned with that matter. Demands for the same sum were served on the Gordons. Referred to in a schedule to each of those demands are the guarantee and the mortgage over the land. Each demand was in the following terms: "AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED ACN 005 357 522 HEREBY DEMANDS from you the immediate payment of the sums mentioned in the First Schedule hereunder being monies owing or unpaid to the Bank and which you have undertaken to pay to the Bank and which are secured by the security/ies described in the Second Schedule hereunder and hereby gives you notice that in default of the payment by you of the said sums the Bank intends to exercise the rights and powers and remedies (including any power to sell) conferred upon it under and by virtue of the said security/ies and by law."

4. There was discussion about the amount which was claimed which was said to be excessive. Bearing in mind that the demands must be read as having taking effect at the time they were served, that is in December 1993, that will certainly be the case. It is immaterial that, in the case of Mr Gordon, the accrual of interest may have brought the amount owing closer to the amount originally demanded. But I do not think one would invalidate the demands as demands for the purpose of founding the cause of action because the wrong amount was stated. After all the matter has to be tested and the only way it could be tested was by the service of a demand such as was served here and the subsequent bringing of an action. The Court was then concerned to ascertain whether the amount of the indebtedness was that which was demanded or some other sum, whether greater or less than the amount stated in the demand. The bank claimed $153,175.25. The Gordons denied liability for any sum at all. I have found that the Gordons did owe the bank money in 1993 when the demands were served but that the amount then owing was substantially less than the amount which was claimed.

5. The authorities in relation to the statement of the amount of the indebtedness in a demand, whether for the purpose of an action on a guarantee or for possession under the Real Property Act and similar statutes has been the subject of a great deal of judicial consideration. The relevant authorities are referred to in a number of texts. Reference may be made to The Modern Contract of Guarantee, Phillips and O'Donovan, 2nd ed, 1992, at 421-3, the Conveyancing Service NSW at 4237-4240 and Fisher and Lightwood's Law of Mortgage (Australian Edition, 1995) at 450-452.

6. The High Court considered the matter in Bunbury Foods Pty Limited v National Bank of Australasia Limited (1984) 153 CLR 491. The Court said (at 503-4): "Upon the making of a demand the debtor has a reasonable time to obtain the money. True it is, that in the absence of a specific statement of the debt, he may lack precise knowledge of the amount which he must pay in order to avoid enforcement or realization of the security. On the other hand, to require the creditor in all cases to specify the amount of the debt may operate to impose an onerous burden upon him. Some accounts may be so complex and so constantly changing that it is difficult at any given time to ascertain or to assert the precise amount that is due and payable. Indeed, the ascertainment of the amount may in some instances require the resolution over time of complex issues of fact and law. Yet, in order to preserve the value to the creditor of his security, he may need to call up the debt as a matter of urgency.

It is of some materiality to note that it is not essential to the validity of a notice calling up a debt that it correctly states the amount of the debt. Even a notice given to the mortgagor by the mortgagee as a condition precedent of a power of sale is not rendered invalid because it demands payment of more than is due (Humphery v. Roberts (1866) 5 SCR (N.S.W.) 376, at pp. 385, 387; Campbell v. Commercial Banking Co. of Sydney (1879) 2 LR (N.S.W.) 375, at 385; Clyde Properties Ltd v. Tasker (1970) NZLR 754, at pp.757-758; MIR Bros Projects Pty. Ltd v. 1924 Pty. Ltd (1980) 2 NSWLR 907, at p.926. It may be thought that this provides sufficient reason for insisting that the creditor should specify the amount of the debt in his notice demanding payment for the validity of the notice will not be imperilled by an error in the statement of the amount. However, there is little point in requiring that the notice should state the amount if the correctness of the amount is not essential to the validity of the notice. In this situation insistence on the requirement may result in creditors taking insufficient care in stating the amount of the debt, thereby contributing to confusion on the part of debtors. The foregoing examination supports the view that the interests of the parties will be more adequately protected by the principle that the debtor must be allowed a reasonable opportunity to comply with the demand before the creditor can enforce or realize the security than by the adoption of the suggested proposition that the notice of demand must specify the amount of the debt. In determining whether the debtor has had such an opportunity it will be relevant to take account of the debtor's knowledge, lack of knowledge and means of knowledge of the amount due and of the information which the creditor has provided in that respect, including the response which he has made to any inquiry by the debtor. There is perhaps a stronger case for saying that, when a third party, for example, a guarantor, is called upon to pay the debt of another, the creditor should specify the amount. But in the circumstances of this case it is unnecessary to explore the problem further." Reference may also be made to Bond v Hong Kong Bank of Australia Limited (1991) 25 NSWLR 286.

1. A consideration of the two authorities and the texts to which I have referred as well as of numerous other authorities referred to therein reveals that the law in this area is not settled. I think one has to adopt a realistic and practical approach, particularly in resolving a commercial dispute in which I consider both parties to have acted in good faith. The acceptance of the submission made on behalf of the Gordons would mean the dismissal of the cross-claim. What would the consequence be? That would not be the end of the matter. Counsel for the bank could ask the Court to make a declaration of right declaring the amount of the bank's entitlement. Whether that were done or not, my findings and conclusions would enable the bank to serve further demands for the correct sums. A further action would be brought to which the Gordons could have no defence. The result would be the proliferation of litigation and the wasteful incurring of further expenditure much of which would have to be borne by the Gordons themselves. On the other hand, the entry of judgment in these proceedings brings the litigation to an end and with it the incurring of further costs in an exercise which must already have been most expensive.

1. I think the way to look at the matter is to say that the bank demanded a sum which it believed to be due. The Gordons refused to pay that or any other sum because they said that nothing was due. My conclusion is that no party was right in the stand which was taken. I have resolved the dispute by finding, contrary to the Gordons' submissions, that moneys were due, but that, contrary to the bank's submissions, the amount which is payable was not, at least in December 1993, as great as that claimed by the bank. The exercise which has been undertaken is an everyday affair in courts charged with the task of determining disputes of this kind. To hold in effect that the proceedings were incompetent because demand was made for an excessive amount would be of no ultimate benefit or advantage to any party. In the result I have concluded that one should construe the demands as being in reality demands for a sum which was in fact due. It follows that, in the result, I have decided that I should reject the submission based on the amount claimed in the demands.

2. That completes my consideration of the outstanding questions. I propose to stand the matter over for a short time to enable the parties and their legal advisers to consider what I have said. I direct the parties to confer concerning the amount of the indebtedness of Cosmedia, Mr Gordon and Mrs Gordon. There should be agreement about these amounts. The Court should not be troubled further about a matter which involves a comparatively small sum of money. The matters outstanding are capable of arithmetical calculation upon the basis of the provisions of the agreements and my various conclusions.

3. When the matter is again in the list counsel are to bring in short minutes of order to give effect to my conclusions so that it will be possible to direct the entry of judgment in respect of both the action brought by Cosmedia and the cross-claim brought by the bank. I shall then also hear argument on the question of costs. My provisional view is that there should be a fractional order for costs in favour of the bank rather than separate orders in relation to the costs of Cosmedia's claim and the bank's cross-claim.