Cummings v Lewis
[1992] FCA 334
•29 MAY 1992
Re: JAMES BARTHOLOMEW CUMMINGS
And: MICHAEL TERENCE LEWIS; DESMOND RUNDLE; JOHN BRADSHAW as representing all
members of the firm practising as KPMG Peat Marwick Hungerfords between 1
February 1989 and 28 March 1989; NOEL SIDNEY LECKIE and PAUL ISHERWOOD as
representing all members of the firm practising as Coopers and Lybrand between
1 May 1988 and 30 June 1989
No. G668 of 1989
FED No. 334
Costs
COURT
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
Wilcox J.(1)
CATCHWORDS
Costs - Application by successful respondents for order for costs - Principles applicable to exercise of discretion on costs - Relevance of pre-trial conduct of successful party - Weight to be given to this factor - Relevance of parties' conduct of case - Effect of successful parties' failure on an issue of fact occupying significant trial time - Distinction between position of two sets of successful respondents - Order for payment of proportions of respondents' costs, differing as between respondents.
Federal Court of Australia Act 1976, s.43.
HEARING
SYDNEY
#DATE 29:5:1992
Counsel for the Applicant: D P F Officer, QC and V R W Gray
Solicitors for the Applicant: Malcolm Johns and Co
Counsel for the First, Second
and Third Respondents: D E J Ryan
Solicitors for the First, Second
and Third Respondents: Freehill Hollingdale and Page
Counsel for the Fourth and
Fifth Respondents: P M Jacobson
Solicitors for the Fourth
and Fifth Respondent: Norton Smith and Co
ORDER
THE COURT ORDERS THAT:
1. The applicant pay to the first, second and third respondents three quarters of their costs, as taxed or agreed, of the principal proceeding, including this motion for costs.
2. The applicant pay to the fourth and fifth respondents one half of their costs, as taxed or agreed, of the principal proceeding, including this motion for costs.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
JUDGE1
I gave judgment in this matter on 2 August 1991, dismissing the Application. However, I did not then deal with costs. I explained my reason in these words:
"The Court has a discretion in regard to costs: see s.43 of the Federal Court of Australia Act 1976. It is usual to exercise that discretion in favour of the successful party. But this is not an absolute rule. The leading authority on the matter is Donald Campbell and Company Limited v Pollak (1927) AC 732. In that case, at pp 811-812, Viscount Cave L.C. set out some principles in relation to the costs discretion which continue to apply: 'A successful defendant in a non-jury case has, no doubt, in the absence of special circumstances, a reasonable expectation of obtaining an order for the payment of his costs by the plaintiff; but he has no right to costs unless and until the Court awards them to him, and the Court has an absolute and unfettered discretion to award or not to award them. This discretion, like any other discretion, must of course be exercised judicially, and the judge ought not to exercise it against the successful party except for some reason connected with the case. Thus, if - to put a hypothesis which in our Courts would never in fact be realized - a judge were to refuse to give a party his costs on the ground of some misconduct wholly unconnected with the cause of action or of some prejudice due to his race or religion or (to quote a familiar illustration) to the colour of his hair, then a Court of Appeal might well feel itself compelled to intervene. But when a judge, deliberately intending to exercise his discretionary powers, has acted on facts connected with or leading up to the litigation which have been proved before him or which he has himself observed during the progress of the case, then it seems to me that a Court of Appeal, although it may deem his reasons insufficient and may disagree with his conclusions, is prohibited by statute from entertaining an appeal from it.' The matter of costs has not been argued in this case. I would certainly not be justified in depriving the successful respondents of their costs out of sympathy with Mr Cummings' predicament. But this is a case where the predicament, and therefore the litigation, was occasioned, at least in part, by the conduct of the respondents; conduct which does not impose upon them any legal liability towards the applicant but which might be argued to be 'facts connected with or leading up to the litigation'. I have no firm view about this matter. It may well be appropriate to award the respondents their costs; as I say, the matter has not been argued. But I think that the situation is not so clear cut that I should proceed to make an order for costs, without giving to the parties an opportunity to put submissions on the matter. The appropriate course is for me to reserve the matter of costs, giving leave to any party to apply on seven days'> notice in relation thereto."
During January 1992 notices of motion were filed by each set of respondents, Peats and Coopers, seeking orders that the applicant pay their costs. When these motions came on for hearing, counsel for each set of respondents applied for costs, arguing that the usual practice should apply; that the respondents should be indemnified in respect of the costs which they had incurred in resisting an unmeritorious claim. In response, counsel for the applicant advanced two justifications for refusal of an order.
First, counsel for the applicant emphasised the qualification stated by Viscount Cave L.C. in Donald Campbell: "except for some reason connected with the case". These words, they said, are wide enough to include not only the actual conduct of the case but also the facts out of which it arises, a proposition which is supported by Viscount Cave's later reference to "facts connected with or leading up to the litigation". Counsel cited three English cases which they claim to exemplify this exception: Jones v McKie (1964) 1 WLR 960, Scherer v Counting Instruments Ltd (1986) 1 WLR 615 and Forster v Farquhar (1893) 1 QB 564.
In Jones v McKie the plaintiff succeeded against the first defendant, the driver of a motor lorry which collided with his parked van. He failed against the second defendant, the lorry-owner employer of the driver, because the driver was not driving in the course of his employment at the time of the collision. Notwithstanding its success, the second defendant was denied costs of the action, the reason being its lax control of use of its vehicles. By majority, the Court of Appeal rejected an appeal against that denial, holding that the trial judge was entitled to regard the second defendant's lax control as reprehensible and, therefore, a proper reason for denying costs. Relating that case to the present one, counsel said that lax supervision of vehicles is conduct less reprehensible and more remote from the cause of action that the present respondents' active incitement of Mr Cummings to buy horses.
In Scherer the primary judge refused the defendants' motion to dismiss the principal proceeding for want of prosecution, holding that the essential ingredients of want of prosecution were not established. Nonetheless, he ordered the plaintiff to pay the defendants' costs of the motion. Not surprisingly, the Court of Appeal set aside this order. The case differs from the present one; firstly, because it relates to an interlocutory application and, secondly, because the issue was not merely whether the successful party should be deprived of costs, but whether it should pay costs. However, it is of present interest because Buckley L.J., in delivering the Court's reasons, took the opportunity (at 621) to summarise the principles governing the making of costs orders. They included the following:
"(1) The normal rule is that costs follow the event. That party who turns out to have unjustifiably either brought another party before the court, or given another party cause to have recourse to the court to obtain his rights is required to recompense that other party in costs; but
(2) the judge has under section 50 of the Judicature Act 1925 an unlimited discretion to make what order as to costs he considers that the justice of the case requires.
(3) Consequently a successful party has a reasonable expectation of obtaining an order for his costs to be paid by the opposing party but has no right to such an order, for it depends upon the exercise of the court's discretion.
(4) This discretion is not one to be exercised arbitrarily; it must be exercised judicially, that is to say, in accordance with established principles and in relation to the facts of the case.
(5) The discretion cannot be well exercised unless there are relevant grounds for its exercise, for its exercise without grounds cannot be a proper exercise of the judge's function.
(6) The grounds must be connected with the case. This may extend to any matter relating to the litigation and the parties' conduct in it, and also to the circumstances leading to the litigation, but no further."
Counsel for the applicant emphasise the reference to "circumstances leading to the litigation".
Forster v Farquhar pre-dated Donald Campbell but it is not inconsistent with Viscount Cave's statement of principle. The case was an unsuccessful appeal against an order that the plaintiff pay the defendant's costs in connection with three items of special damage upon which he had been unsuccessful, the plaintiff having succeeded in respect of a fourth item. The relevant rule of Court entitled the successful party to the costs of the action unless the judge "for good cause" otherwise ordered. In discussing "good cause", Bowen L.J., who delivered judgment for the Court, referred to dicta in Huxley v West London Extension Railway Co (1889) 14 App Cas 26. In that case at 32 Lord Halsbury L.C. said that:
"... everything which increases the litigation and the costs, and which places upon the defendant a burden which he ought not to bear in the course of that litigation, is perfectly good cause for depriving the plaintiff of his costs".
At 33-34 Lord Watson spoke of:
"... everything for which the party is responsible, connected with the institution or conduct of the suit, and calculated to occasion unnecessary litigation and expense".
Bowen L.J. pointed out, at 568, that the:
"... measure of what is fair as to costs is not to be found in a mere consideration of his conduct toward the opposite side. It may have been reasonable from his point of view to do that which it would be unreasonable to make the opposite litigant pay for".
Counsel for the present applicant submitted that the respondents' conduct caused the institution of the suit. The central issue in the case, they said, was whether the respondents encouraged the applicant to acquire the horses; the applicant's claim that they did so was hotly disputed but was proved.
There is substance in these contentions. The content of the communications between the applicant and the representatives of the respondents was a major question at the trial, giving rise to a large proportion of the evidence. There were two aspects of that question: whether any representations as to success were made by the respondents, and whether the respondents undertook an entrepreneurial, as distinct from a professional adviser's, role. I made findings about the first of these matters in the course of considering the applicant's claim under s.42 of the Fair Trading Act. In relation to Coopers, I found (at 102) that "on a number of occasions, Mr Leckie made statements to Mr Cummings about the prospects for 1989 which encouraged him to purchase yearlings at the four sales". I indicated "no difficulty in accepting that Mr Leckie gave Mr Cummings to understand that he (Mr Leckie) believed that, with a dealer's licence and plenty of time, it would be possible to sell down units worth $10 million in 1989". I made a similar finding concerning Peats. At 105 I indicated that I did "not doubt that Mr Cummings was encouraged in the purchase of horses by Peats, especially by Mr Lewis". I concluded "that Peats' intervention constituted a massive spending spur". The Fair Trading Act claims failed, not because I was unsatisfied about the making of the representations but because there was no evidence to suggest that those who made the representations lacked an honest belief in their truth. In relation to the second matter, I accepted (at 106-107) the applicant's case that "neither firm of accountants was involved as accountants, but rather in an entrepreneurial role".
Counsel for the applicant sought to use these findings in two ways. First, they said that the findings demonstrate that the conduct of the respondents led to the litigation, so the Donald Campbell exception applies. Second, they argued that, whether or not that is a sufficient basis for depriving the respondents of their costs, the Court should have regard to the fact that the course of the case would have been vastly different if the respondents had conceded their entrepreneurial role and their making of representations and had confined themselves to the matters held fatal to the respective causes of action: the lack of an express agreement between the applicants and either set of respondents to sell off the horses by 30 June 1989, the lack of evidence of non-belief in the truth of the representations and the lack of an obligation by the respondents to share any losses. If the case had been so confined, counsel argued, it would have occupied only a small fraction of the time actually used. Counsel said that the Court ought to follow the principle of Forster v Farquhar and make its costs order reflect the success on some issues of the overall-unsuccessful party; not, in view of the inter-connection of issues in this case, by making costs orders in respect of individual issues but by making no order at all, leaving costs to lie where they fall.
Counsel for Peats responded by emphasising his clients' overall success, saying that they ought not to be left to bear the costs of being brought to Court by an applicant labouring under an incorrect understanding of the facts and law. He pointed out that his clients had never pleaded that they were involved merely as accountants; it had always been admitted that Mr Rundle was to be the investment adviser for two syndicates. Counsel referred to a passage in Scherer at 619: "it cannot be right to penalise a successful party in costs because the unsuccessful applicant has nearly but not quite made out his case". (That comment was, of course, made in the context of an order not merely depriving the successful party of costs but requiring it to pay the unsuccessful party's costs). Counsel for Peats also referred to the decision of the Victorian Full Supreme Court in Verna Trading Pty Ltd v New India Assurance Co Ltd (1991) 1 VR 129 wherein Kaye J., with whom McGarvie J. agreed, reviewed a number of cases concerning costs orders. At 152-154 his Honour discussed the compatibility between Donald Campbell and the earlier Court of Appeal decision in Ritter v Godfrey (1920) 2 KB 47. In the latter case Atkin L.J., at 60, said that, in the case of a wholly successful defendant:
"... the judge must give the defendant his costs unless there is evidence that the defendant (1) brought about the litigation, or (2) has done something connected with the institution or the conduct of the suit calculated to occasion unnecessary litigation and expense, or (3) has done some wrongful act in the course of the transaction of which the plaintiff complains."
Eve J., at 66, suggested that, in determining whether there is ground for the exercise of a judicial discretion:
"... the judge must eliminate from consideration the conduct constituting the alleged cause of action, and must then inquire whether the defendant has so conducted himself ante litem motum (1) as to induce in the plaintiff's mind the reasonable belief that there is no valid defence to the claim, or (2) has so misconducted himself as to have goaded the plaintiff into a litigation on which he would never have embarked but for such misconduct."
As Kaye J. pointed out, in Donald Campbell Viscount Cave at 812 doubted the correctness of these limitations; but he did specifically approve the judgment of Lord Sterndale M.R. in Ritter v Godfrey. In that judgment, at 53, Lord Sterndale stated a general proposition, which he said was not necessarily "the only test", that in order to justify refusing costs to a successful defendant "he must be shown to have been guilty of conduct which induced the plaintiff to bring the action, and without which it would probably not have been brought." His Lordship went on to distinguish the position of a successful plaintiff from that of a successful defendant:
"considerations sufficient to justify a refusal of costs to a plaintiff are not necessarily sufficient in the case of a defendant, for the former initiates the litigation while the latter is brought into it against his will".
In Verna Trading Kaye J. commented, at 153, that he did not read Viscount Cave's speech in Donald Campbell as a rejection of the view that any one of the three circumstances described by Atkin L.J. in Ritter v Godfrey might constitute a proper basis for the exercise of discretion adversely to a successful defendant; Viscount Cave's criticism was that Atkin L.J.'s circumstances were too restricted. Kaye J. went on to refer to cases where costs had been denied because the case fell within one of the three categories listed by Atkin L.J. The decision in Verna Trading was to uphold an order by the trial judge requiring the successful defendant to pay the costs of the plaintiff incurred prior to the end of the first day's hearing. On the first day the defendant had abandoned its previous defences and, for the first time, raised the defences upon which it ultimately succeeded.
Finally, counsel for Peats submitted that there was no reprehensible conduct by his clients, they merely encouraged the applicant to pursue an activity which he had previously undertaken without their encouragement - although, as he conceded, on a much smaller scale.
Counsel for Coopers suggested that the proper principle was that a successful party was not to be deprived of costs unless he or she had actively encouraged the litigation. He cited Hughes v Western Australian Cricket Association (1986) ATPR 40-748 wherein Toohey J. referred to the need for "special circumstances" to deprive a successful litigant of costs. (However, it is relevant to note that this reference was made in the course of summarising the effect of Ritter v Godfrey. In fact Toohey J. awarded the successful applicant only 75% of his costs, because of the time expended on issues upon which he had failed.) Counsel also referred to the decision of the High Court of Australia in Latoudis v Casey (1990) 170 CLR 534, a case concerning the proper exercise of discretion in summary criminal proceedings. Because of its different context, that case is helpful only by way of analogy. Even so, is useful to consider a passage in the judgment of Mason C.J. at 544:
"Nevertheless, I am persuaded that, in ordinary circumstances, an order for costs should be made in favour of a successful defendant. However, there will be cases in which, when regard is had to the particular circumstances, it would not be just and reasonable to order costs against the prosecutor or to order payment of all the defendant's costs. If, for example, the defendant, by his or her conduct after the events constituting the commission of the alleged offence, brought the prosecution upon himself or herself, then it would not be just and reasonable to award costs against the prosecutor.
I agree with Toohey J. that, if a defendant has been given an opportunity of explaining his or her version of events before a charge is laid and declines to take up that opportunity, it may be just and reasonable to refuse costs. Likewise, if a defendant conducts his or her defence in such a way as to prolong the proceedings unreasonably, it would be just and reasonable to make an award for a proportion of the defendant's costs."
Toohey J. at 565-566 instanced cases where "it would not be unjust or unreasonable that the successful defendant should bear his or her own costs or, at any rate, a proportion of them". The instances included where a defendant refused an explanation which might have avoided the prosecution or where "the manner in which the defence of a prosecution is conducted unreasonably prolongs the proceedings, for instance by unnecessary cross-examination".
The third majority Justice, McHugh J., spoke to similar effect at 569, citing a number of decisions dealing with costs in civil cases. Those cases included Redden v Chapman (1950) 50 SR (NSW) 24 in which Roper C.J. in Eq. at 25 expressed the view that:
"... the normal rule that costs should follow the event should be applied unless it is shown that there is some conduct of the defendant or defendants which has led to the litigation and without which the litigation would not have been brought, or which has had the effect of misleading the plaintiff as to the legal position, which he seeks to ascertain in the suit".
McHugh J. also referred to Schaftenaar v Samuels (1975) 11 SASR 266, a decision relating to costs in summary criminal jurisdiction, but where Wells J. dealt with the principles applied in civil cases. Wells J. summarised the position, for summary criminal cases, at 274-275:
"(1) No particular finding need be made as a condition precedent to the court's having the discretion (as with jury trials); the discretion has already been conferred, and the only responsibility placed on the court is to exercise it. It follows that the court must not simply apply a rule; to do that would be to decline to exercise the discretion: ...
(2) The discretion must be judicially exercised; that is, the court cannot act arbitrarily or upon the ground of some misconduct wholly unconnected with the prosecution, or of some prejudice. It should be observed that the examples of prejudice given by Lord Cave in Pollak's case ... by their very extravagance, show, by implication, how wide the discretion must be held to be before its bounds are exceeded.
(3) The court may act upon any facts connected with, or leading up to, the prosecution which have been satisfactorily proved or which have been observed during the progress of the case.
(4) The court should bear in mind where the responsibility for instituting the proceedings lies. Generally speaking, that responsibility is the complainant's, but there may be cases, for example, in which the court is satisfied that the defendant, by wilful or other wrongful conduct on his part, has so markedly contributed to the decision to prosecute that it would be fair to attribute to him wholly or in part responsibility for the prosecution.
(5) In the exercise of the discretion, there is no question of onus on one party or the other. A successful party has, in the absence of special circumstances, a reasonable expectation of obtaining an order for payment of costs by the complainant; but he has no right to costs unless and until the court awards them to him, and the court (see per Viscount Cave L.C. in the Pollak case, at page 811) has 'an absolute and unfettered discretion to award or not to award them'. The court should not, however, exercise the discretion against the successful party 'except for some reason connected with the case' (ibid., page 812). Special attention should be paid to the passage, quoted above, in Viscount Cave's speech in the Pollak case (at page 810) where his Lordship expressed, in my judgment, the clear opinion that the circumstances in King and Co. v Gillard and Co., in Edmund v. Martell and in Ritter v Godfrey said by the respective Courts to have been insufficiently connected with the case to warrant the trial Judge's use of them in making orders as to costs, were, on the contrary, 'surely sufficiently connected with the matters in dispute to entitle a judge having a wide discretion to take them into account when awarding costs' (... ibid. at page 810). Those cases will accordingly bear close study.
(6) The court must, of course, give weight to the order of conviction or dismissal. The onus of proof is a rule of law, and a conclusion on the facts in issue arrived at on the basis of that onus must be respected. ... But, in my opinion, in assessing how the court's views of the facts may affect its discretion as to costs, the court is not limited to the single, formal issue joined as the result of the plea of not guilty. Sitting, like the Chancery judge, as a tribunal of both law and fact, the court may have regard to the several issues of substance that were really contested; whether and, if so, how, unmeritorious conduct of a party, both in and out of court, bears on those issues; who ... has succeeded on those issues; whether those issues (or some of them) were, in consequence of the conduct of one party, unjustifiably or needlessly contested, or contested at undue length."
In relation to the second argument on behalf of the applicant, counsel for Coopers suggested that it is not a justification for depriving a successful respondent of costs that the applicant established some of the facts necessary for success.
In reply, counsel for the applicant criticised what they called the "over-technical" analysis of the present case which had been offered by counsel for the respondents; the very approach, they said, which was rejected in Donald Campbell. They suggested that the Court should concentrate, not on the causes of action pleaded in the case, but upon the course of action embarked on by the respondents: an active encouragement of the applicant to incur unprecedented expenditure involving him in substantial loss followed by an unaccepted denial of that encouragement.
There is substance in the submissions of all counsel. It is not easy to choose between them. But I have reached a number of conclusions. First, it is clear that, as a matter of law, the Court has an unfettered discretion as to its costs order: see s.43(2) of the Federal Court of Australia Act 1976. In that regard the situation is like that applying in Donald Campbell. But, second, as in Donald Campbell, because of the usual practice of the Court, a successful respondent has a reasonable expectation of recovering costs, in the absence of special circumstances. Third, in considering the matter of costs, the Court is entitled to look beyond the actual conduct of the case and have regard to the circumstances out of which it arose. So much is indicated by Viscount Cave's reference to "facts ... leading up to the litigation" and Atkin L.J.'s first criterion: "that the defendant brought about the litigation". There is nothing in the Australian cases to suggest that these references are inapplicable in this country; indeed, to the extent that cases such as Verna Trading indicate that a court may refuse costs in the cases described by Atkin L.J. (at least), there is Australian support for the conclusion I have expressed. Importantly, that conclusion is consistent with the approach adopted by the High Court in Latoudis in connection with summary criminal proceedings. I have in mind particularly their Honours' references to the failure of the defendant to give an explanation which might have avoided the prosecution.
Fourthly, however, it seems to me that there must be a limitation on the weight to be put on pre-litigation conduct, lest the exception overwhelm the rule. It is almost always the case that, absent some particular conduct of the defendant, the litigation would not have arisen. That conduct often has an element of reprehensibility, even though it may not give rise to liability at law. If too much emphasis is placed upon the circumstance that the litigation would not have arisen but for an action of the defendant, few successful defendants would recover their costs. I do not say that the conduct of the defendant giving rise to the underlying dispute is irrelevant to the proper decision on costs; but I think that it ought rarely be given much weight. (I distinguish a situation where, the underlying dispute having arisen, the successful defendant has unreasonably provoked the litigation. Different considerations might apply to that type of case: see the reference by Mason C.J. in Latoudis to conduct of the defendant "after the events constituting the commission of the alleged offence".) Accordingly, although I do not disregard the respondents' incitement of Mr Cummings to purchase horses, I do not think that I should give that conduct significant weight. If that conduct was the only relevant matter, I would not be disposed to depart from the usual practice of ordering that the unsuccessful applicant pay the whole of the successful respondents' costs.
However, and this is the fifth point, it is clear that the Court may take into account the conduct of the litigation by the successful party. Where a successful party has put the opposing party to significant expense in connection with an issue on which that party failed, it may be reasonable to take that matter into account by awarding something less than full party-party costs. That was the course taken in Forster v Farquhar and in Hughes v Western Australian Cricket Association, both cases of a successful plaintiff. But I see no difference in principle between the case of a successful plaintiff and that of a successful defendant. The justification for limiting the costs order is the unfairness, in the circumstances of the particular case, of requiring a party to bear the costs of an issue unjustifiably raised or contested by the opponent notwithstanding that the opponent was successful overall. If the Court's readiness to take into account the failure of a party on a particular issue encourages litigants to consider more carefully what issues they will litigate, this will have the benefit of reducing the length of hearings and, therefore, both the costs burdens on parties and demands on court resources.
In the present case the respondents contested the applicant's allegations that they encouraged him to purchase horses by making optimistic statements concerning the sale of syndicate units. Those allegations were raised in connection with the claims under s.42 of the Fair Trading Act. It is true that these claims failed; but that was only because I was not persuaded that those who made the optimistic statements lacked a bona fide belief in their correctness. I was satisfied that statements to the effect of those claimed by Mr Cummings were made by representatives of each set of respondents and that they directly affected the extent of his purchases. The allegations, of course, concerned a matter within the knowledge of the respondents; this is not a case of respondents putting an applicant to proof of facts about which they had no knowledge and which, therefore, they reasonably declined to admit.
In exercising a discretion on costs it may be a mistake to dissect too much. But I do not think that it goes too far to break up a particular cause of action into its major elements, especially where one element involved a considerable amount of court time. See the comment by Toohey J. in Hughes v Western Australian Cricket Association at 48,136 that, in this context, "'issue' does not mean a precise issue in the technical pleading sense but any disputed question of fact or of law". The contest regarding the sale of the units was an "issue" in this sense. This issue made a major contribution to the length of the case. It occupied much of Mr Cummings' six days in the witness box and a part of the time of several other witnesses; in the case of Mr Leckie, a major part. If the respondents had conceded that these encouraging statements were made, and concentrated their defence to the s.42 claim on their bona fide belief, they would have saved many hearing days.
In considering the significance of this matter, it is necessary to bear in mind that the course taken by the respondents not only had the effect of adding to the costs which they seek to recover from the applicant but also of putting the applicant to additional expense in relation to his own costs. If, as a matter of principle, the respondents should bear the burden of the applicant's unnecessary costs, as well as be deprived of their own costs in respect of the time expended on this issue, it is necessary to do more than select a proportion of the respondents' costs equivalent to the proportion of the hearing spent on that issue. That approach would deprive the respondents of their costs of the relevant issue but make no reparation to the applicant.
In this case, computation of a precise figure is impossible; the evidence concerning this issue is too intermingled with evidence on other matters. It is possible only to make a broad estimate. But my judgment is that the hearing time could have been reduced by about one-third if the respondents had admitted the applicant's allegations of optimistic statements. In translating that estimate into orders, it is necessary to distinguish between the two sets of respondents. The evidence concerning statements by Mr Leckie, on behalf of Coopers, occupied much more time than that relating to statements on behalf of Peats. Cooper's contribution to the additional hearing time was probably twice that of Peats.
Applying the principles set out above, and making a broad judgment as to what is reasonable in the whole of the circumstances, it seems to me fair to order that the applicant pay to the first, second and third respondents - that is, Peats - three quarters of their taxed costs in connection with the proceeding and to order him to pay to the fourth and fifth respondents - Coopers - one half of their taxed costs. The taxed costs should include the costs of this motion, thereby giving to each of the respondents the proportion of their costs of the motion which corresponds to their degree of success upon it.
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