Duke Group (in Liq) v Pilmer & Ors (No.4) No. Scciv-92-1874

DUKE GROUP (In Liq) v PILMER & ORS
(No.4)
[2001] SASC 451
Full Court: Doyle CJ, Duggan and Bleby JJ

DOYLE CJ, DUGGAN & BLEBY JJ: The history of these proceedings is outlined by Doyle CJ in his reasons in Duke Group (In Liq) v Pilmer & Ors (No.3) [2001] SASC 215. We repeat that outline, which is as follows:
“What follows is a simplified summary of the proceedings so far. Further detail can be found in the decision of the trial Judge, Duke Group Limited (In Liq) v Pilmer & Ors [1998] SASC 6529; (1998) 144 FLR 1; in the judgment of the Full Court on appeal: Duke Group Limited (In Liq) v Pilmer & Ors [1999] SASC 97; (1999) 73 SASR 64, in the further reasons of the Full Court dealing with the issue which the Court is now asked to reopen: Duke Group Limited (In Liq) v Pilmer & Ors (No 2) [2000] SASC 418, (2000) 78 SASR 216 and in the decision of the High Court on appeal from the first decision of the Full Court: Pilmer & Ors v The Duke Group Limited (In Liq) & Ors [2001] HCA 31; (2001) 75 ALJR 1067.
Duke was originally called Kia Ora Gold Corporation NL. I will continue to refer to it as Duke. Duke sued the defendants for loss suffered by it as a result of a takeover by it of Western United Ltd. NWP was a firm of accountants who prepared a report, at the request of Duke by its directors, to be put before a meeting of shareholders of Duke, which meeting was asked to, and did, approve of the takeover. The report dealt with the price to be offered by Duke for the shares of Western United Ltd. The report advised that the price was fair and reasonable. The other defendants, who included Mr Quilty and Mr Somes, were the directors of Duke at the time.
Duke alleged that the report by NWP was prepared incompetently, and that the Directors breached duties that they owed to Duke.
The trial of the action is thought to have been the longest civil action in this Court, and possibly in Australia. It occupied some 471 sitting days. The Judge found for Duke against all defendants, and assessed damages at $93,863,796.81 including interest. The Judge published his reasons on 30 January 1998.
The action began as an action in which Duke was plaintiff and NWP was defendant.
Early in the proceedings NWP joined two directors of Duke, Mr Quilty and Mr Singleton, as first third parties. Later NWP joined another three directors of Duke, Mr Abbott, Mr Somes and Sir Ernest Lee-Steere as second third parties. Later still Duke joined the five directors as second, third and fourth defendants respectively.
On 15 April 1994 the Judge made a number of procedural orders. The effect of these orders may later fall for consideration. What follows is my summary of the orders made, without the benefit of full submissions.
The Judge ordered that the Defences filed by the directors to NWP’s third party Statements of Claim stand as Defences filed by the director defendants to the Statement of Claim filed by Duke in the action. That avoided the need for the director defendants to file Defences.
The Judge also made orders relating to the position as between NWP and the directors in their capacity as third parties joined by NWP. He ordered that the pleadings between NWP and the director third parties have effect as “Contribution Notices and pleadings thereon” between NWP and the directors as defendants. On its face that order appears to provide for reciprocal contribution claims as between all of the defendants, but it may be that the order was intended to have some other effect.
The Judge also ordered that the pleadings between NWP and the directors as third parties have effect as “Third Party Notices and pleadings thereon” as between NWP and the director third parties. This order recognised the third party claim by NWP against the directors, and does not appear to provide for such claims by the directors against NWP.
The other order that the Judge made related to the position as between the fifth defendant and the director defendants, but as the fifth defendant has been found not to be liable, that order can be put to one side.
In his reasons (144 FLR at 131-132) the trial Judge dealt with the claim by NWP by third party proceedings for contribution or indemnity from the director defendants. He dealt with this claim by ordering, on the third party proceedings, that there be judgment for NWP for contribution to the damages payable to Duke as to 50 per cent by Mr Abbott, and as to 5 per cent each by the Mr Somes, Mr Quilty, Sir Ernest Lee-Steere and Mr Singleton. The effect of this was that, if all parties were able to meet their liabilities, NWP would have been liable for 30 per cent of the amount of the judgment.
The Judge also noted (144 FLR at 132) that the director defendants had not formally sought contribution from NWP, or from each other. In saying this, the Judge may have overlooked the order he had made on 15 April 1994, summarised above. In any event, the Judge gave liberty to each of the director defendants to apply for contribution against NWP and the other director defendants.
It appears that the director defendants did not pursue the application that they were given liberty to make, although this is not to say that that application is to be treated as abandoned. I note that Mr Quilty filed a submission dated 2 March 1998 in which he sought an indemnity or alternatively contribution from NWP.
Most of the defendants appealed against the trial Judge’s decision, although some appeals fell by the wayside. The appeal was heard by the Full Court over fourteen days in November 1998. Mr Quilty did not appeal against the trial Judge’s decision.
The reason for this is that in February 1998, four weeks after the trial Judge’s decision, Mr Quilty and Duke had reached a settlement. The Full Court was informed of the fact of the settlement, and that Duke no longer sought an order against Quilty. The Full Court was reminded of the fact of the settlement during submissions on the question of contribution on 10 August 1999.
The Full Court upheld most of the findings of the trial Judge, and increased the amount of the damages awarded to Duke. We published our reasons in May 1999. We invited further submissions on the appeal by NWP against the contribution orders and on the question of contribution as between the defendants generally. The procedural position in relation to contribution between the defendants was not clear, but it is not necessary to go into the reasons for that at this stage.
The Full Court heard submissions on the question of contribution and other outstanding issues on 10 August 1999. The submissions put were quite brief, although they were supported by earlier written submissions. NWP, Mr Quilty and Mr Somes, sought to vary the contribution orders made by the trial Judge.
Mr Quilty did not appear at the hearing, although he had put in written submissions. Mr Quilty’s written submissions appear to seek a reduction in the percentage of the liability apportioned to him, by reference to the 35 per cent reduction for contributory negligence that the Full Court would have ordered had it been open to it to do so. (In our reasons we found that Duke had been guilty of contributory negligence, that its damages in tort should be reduced by 35 per cent on account of its own fault, but that the contribution provisions in the Wrongs Act 1936 had no application because Duke’s claim was for damages for breach of contract: see Duke Group Limited (In Liq) v Pilmer & Ors [1999] SASC 97 at [1080]; 73 SASR 64 at 300.) The submission did not challenge the approach that the trial Judge had taken in allocating a specific percentage to each defendant.
Mr Somes did appear at the further hearing, and he also filed a written submission. That written submission also referred to the apportionment of liability as between NWP and Duke the Full Court would have made had it the power to do so. By reference to that he argued that liability should be apportioned as to NWP 65 per cent, as to the defendant Abbott 17.5 per cent, and as to each of the other director defendants 1.75 per cent. In the alternative he argued that the apportionment of liability as found by the trial Judge should not be disturbed.
NWP appeared at the hearing, and also filed a written submission. Its written submission argued that the Directors should bear the primary liability, and that their contribution to the overall loss of Duke ought to be no less than 85 per cent. It was submitted that liability should be divided according to the ratio NWP 15 per cent, and the defendant directors 85 per cent. It was further submitted that Mr Abbott should bear 25 per cent “of the primary loss” and that Lee-Steere, Somes, Quilty and Singleton should bear 15 per cent each. I take that latter submission to be a reference to the manner in which the 85 per cent apportioned to the Directors should be apportioned as between the Directors.
The Full Court published further reasons in December 2000. On the claim by NWP for contribution from the directors, we ordered that the directors contribute to the extent of fifty percent of the liability of NWP. In this respect we departed from the basic approach of the trial Judge. This was a majority decision. The majority noted (78 SASR at [21], 222) that this order might be less favourable to NWP than the order made by the trial Judge, the effect of which was that NWP could recover in total seventy percent of its liability from the directors. Our reasons stated that we would allow NWP to consider whether, in light of that, it wished the Court to interfere with the order for contribution made by the trial Judge. We dismissed the appeals brought by two of the directors against the making of contribution orders against them. The Court invited the parties to prepare minutes of order to effect its decision.
The Full Court did not, during the submissions before it, intimate that it might depart from the trial Judge’s approach of allocating a particular percentage to each defendant.
On 13 May 2001 the High Court published its reasons dealing with an appeal by NWP against the Full Court decision. The effect of that decision is that NWP remains liable to Duke, but the damages are reduced to an amount of about $20m plus a claim for loss of use of the money and for interest. The High Court remitted the matter to the Full Court to make orders consistent with the High Court’s reasons. The parties have not yet asked the Full Court to do so.”
The decision of the trial Judge is also reported at (1998) 27 ACSR 1.
The Full Court has now heard submissions on the orders that it should make, in light of the orders made by the High Court in allowing the appeal to that Court. The Full Court has also heard submissions on the costs of the trial and of the appeal, in light of the High Court decision.
The formal orders made by the High Court were as follows:
“THE COURT ORDERS THAT:
1    The appeal from part of the judgment and order of the Full Court of the Supreme Court of South Australia given and made on 20 May 1999 and 13 August 1999 be allowed with costs.
2    Paragraphs 2,7,9 and 10 of the order made by the Full Court of the Supreme Court of South Australia on 13 August 1999 be set aside, but only to the extent that those orders affect the parties to the appeal to this Court.
3     The matters be remitted to the Full Court of the Supreme Court of South Australia for the making of orders consistent with this Court’s reasons for decision.”
Orders as to the appeal and cross-appeal
Paragraphs 1 and 2 of the Full Court Orders were as follows:
“1. That the appeals by the first, second and fourth defendants against the judgment herein of the Honourable Justice Mullighan dated 30 January 1998 be dismissed. (In this order and hereafter a reference to the second defendant is a reference to the defendant Keith David Singleton only.)
2. That the cross-appeal by the plaintiff against the said judgment be allowed in part and that:
2.1The said judgment be varied by setting aside paragraph 6 thereof and substituting an order that judgment be entered for the plaintiff against the first defendants in the sum of $117,073,842.91 inclusive of interest to 30 January 1998 and against the second, third and fourth defendants in the sum of $188,662,619.12 inclusive of interest to 30 January 1998.
2.2The said judgment be further varied to provide that the plaintiff is not entitled to recover from the defendants more than $188,662,619.12 inclusive of interest to 30 January 1998 and any entitlement to interest on that amount.
And that otherwise the cross-appeal be dismissed.”
The effect of the decision of the High Court is that the Full Court should have allowed the appeal by the first defendant, should have reduced the damages payable by the first defendant to the plaintiff from $93,863,796.81 including interest to $31,737,464.87 including interest, and should have dismissed the cross-appeal by the plaintiff.
Although the High Court Order leaves paragraph 1 of the Full Court Order standing, our own inclination would be to vary that paragraph to provide that the appeal be allowed and the award of damages be reduced as indicated, and to vary paragraph 2 of the Order to provide that the cross-appeal should be dismissed.
However, the High Court did not set aside paragraph 1 of the Full Court Order. As the parties are content to give effect to the decision of the High Court by a variation of paragraph 2 of the Full Court Order, we order that the introductory part of paragraph 2 and subparagraph 2.1 be varied to provide as follows:
“2. That the cross-appeal by the plaintiff against the said judgment be dismissed and that:
2.1The said judgment be varied by setting aside paragraph 6 thereof and substituting an order that judgment be entered for the plaintiff against the first defendants in the sum of $31,737,464.87 inclusive of interest to 30 January 1998 and against the second, third and fourth defendants in the sum of $188,622,619.12 inclusive of interest to 30 January 1998.”
Costs of the Full Court appeal
Paragraphs 9 and 10 of the Full Court Order dealt with the costs of the appeal to the Full Court. They awarded the costs of the appeal and of the cross-appeal to the plaintiff. Those orders have been set aside to the extent that they affect the plaintiff Duke and the first defendants.
The first defendants’ appeal should have been allowed, resulting in the Full Court reducing the award of damages in favour of the plaintiff as indicated above, on the basis that the damages should not have included any component referable to the value of the shares in Duke that were allotted by Duke as part of the takeover by Duke of Western United Ltd. The cross-appeal should have been dismissed, the arguments advanced in support of the claimed breach of fiduciary duty having wholly failed.
On the other hand, Duke successfully resisted the challenge to the trial Judge’s finding of liability. The attack on that finding is summarised at [1999] SASC 97 at [135]-[140]; (1999) 73 SASR 64 at 112-113.
The hearing of the appeal and of Duke’s cross-appeal, and of submissions on the appeals by the other defendants, occupied a little in excess of fourteen days. As between Duke and the first defendants, a number of issues were argued on the appeal. A number of the submissions advanced by the first defendants were not successful. The cross-appeal by Duke was wholly unsuccessful, as a result of the High Court’s decision.
We have to exercise a broad discretion. While the usual rule is that costs follow the event, it is by no means the invariable rule. Quite often the costs order will reflect successes and failures on distinct issues argued in a case. Sometimes costs will be awarded by reference to particular issues, and sometimes a proportion will be struck taking account of the successes and failures on the issues argued.
Our view is that in a case like this it is appropriate to have regard to the fact that the first defendants did not succeed on all issues argued on the appeal, and to the fact that the first defendants’ challenge to an award of damages to Duke failed. But our order must also reflect the fact that the first defendants should have been wholly successful on the cross-appeal.
In place of paragraphs 9 and 10 of the existing Full Court Order, we substitute an order that the plaintiff pay to the first defendant 80 per cent of the costs of the appeal and of the cross-appeal, and that the second and fourth defendants pay to the plaintiff its costs of the plaintiff’s cross-appeal.
Trial costs
The trial was extremely long. The Judge sat for a total of 471 days over a period of about 3½ years.
The result of the trial, reflecting the decision of the High Court on appeal, is that Duke succeeded against the first defendants in contract and in tort, on the basis that their report was prepared incompetently, and Duke is entitled to substantial damages for loss suffered as a result.
Duke failed in its claim that the first defendant and the fifth defendants were members of a single national partnership. The costs of that issue have already been dealt with by the Full Court.
Duke failed in its claim that the first defendants breached a fiduciary duty owed to Duke, and failed in Duke’s claim that the first defendants were in breach of a contractual or tortious duty to act independently.
A lot of time was spent at trial on what has been called the associations issue. This issue turned on a large amount of evidence about a series of transactions involving some of the first defendants, which transactions were said to show a breach of the alleged fiduciary duty and a conflict between the interests of the first defendants and the duty owed to Duke, including the duty to act independently.
In his submissions Mr Myers QC, counsel for the first defendants, suggested that a little less than one-third of the time at trial was spent on the associations issue, the alleged fiduciary duty and the alleged duty to be independent, a little less than one-third of the time on the national partnership issue, a little less than one-third of the time on the issue of the competence of the report, damages and the composition of the Perth partnership between the first defendants, and the rest of the time on the case against the directors.
We have reviewed in a general way the judgment of the trial Judge, and drawn on our own knowledge of the case. Mr Myers’ estimate seems to us to be a reasonable estimate, but we treat it as just an estimate. We remind ourselves as well that the evidence, and events in the course of the proceedings, did not necessarily fall into neat compartments of the kind assumed by the estimate.
The outcome of the national partnership issue was dealt with by the decision of the Full Court. The fifth defendants succeeded on that issue, and the plaintiff was ordered to pay those defendants their costs attributable to that issue, limited to the costs of their separate representation. The order that we made was as follows:
“8.1An order that the plaintiff pay to those defendants their costs of action limited to the costs of their separate representation at the trial of the action, and excluding interlocutory costs.”
We take this opportunity to make it clear that our order does not contemplate that the plaintiff will recover from the first defendant any costs attributable to the time spent on the national partnership issue.
Duke recovered damages at the end of the day on grounds that were resisted by the first defendant throughout the trial, even though during final addresses the first defendants conceded that their report was prepared incompetently. All sorts of issues of fact and law were contested on what we might call the central issue, but at the end of the day Duke succeeded.
Mr Myers submitted that justice requires that the order for costs reflect the fact that part of the trial as between Duke and the first defendants was spent on the alleged fiduciary duty, and to a lesser extent the alleged duty to be independent, on both of which Duke failed.

Mr Myers submitted that the associations evidence was relevant only to the alleged breach of fiduciary duty, and the alleged duty to be independent. In his submissions in reply he appeared to acknowledge that some of the associations evidence was relevant to the issue of competence.
The trial Judge thought otherwise. The trial Judge’s reasons indicate that he regarded the associations evidence as of considerable relevance to the issue of competence. It apparently disclosed information available to the first defendants and relevant to their report, but not used, and threw light, in an adverse sense, on the care with which the report was compared. For example, at ACSR 205, FLR at 32, S6529 at 236, the Judge referred to the fact that:
“The allegations with respect to independence and the failure to act independently in the preparation and the provision of the report as contained in the initial Statement of Claim are material facts out of which the causes of action for breach of duty in contract and tort arise. ….”
The Judge went on to expand a little on that. In his decision on costs Duke Group Ltd (In liq) v Pilmer & Ors (unreported, Mullighan J, 1/6/98, Judgment No. S6699), (“the costs judgment”) the trial Judge treated the associations evidence as having considerable significance for the purposes of the claim in tort and in contract. In his reasons (S6699 at 4) he said:
“The claim against the first defendants for damages for breach of fiduciary duty was, in my view, nothing more than the product of a legal argument upon evidence also adduced for other purposes. That evidence may be described as the evidence of associations. A vast amount of evidence was adduced by the plaintiff at the trial to prove associations between Kia Ora, Western United and senior management of both companies, including the defendant Harold Abbott on the one hand and members of the firm Nelson Wheeler Perth on the other hand directly and through others. That evidence and its purpose has been discussed in the reasons for judgment on liability and damages. It is contended by the first defendants that the plaintiff amended the Statement of Claim to allege the associations as a basis for the claim for damages for breach of fiduciary duty having come to appreciate that the claim for damages for breach of contract and in negligence should not succeed because the first defendants did not owe a duty of care in negligence to the plaintiff and any damages flowing from breach of contract must be modest. I reject that submission. The plaintiff succeeded on the duty of care issue and the evidence of the associations was relevant to other issues including the issue of competence in preparing the Nelson Wheeler report as is discussed in the reasons for judgment on liability and damages.
The other issues upon which the plaintiff was not successful did not involve a considerable body of evidence discreet to those issues which resulted in a significant increase in the length or cost of the proceedings.”
A little later the Judge said:
“The issues concerning these matters were not raised improperly or unreasonably and there is no reason to deprive the plaintiff of its costs or to order that it pay the costs of any of the defendants on any of these issues in view of the principles which have been mentioned.”
Again, in his judgment after the trial, referring to the application by the first defendants to withdraw their admission that they carried on practice in partnership at all material times, the Judge said (ACSR 122, not reported in FLR, S6529 at 134):
“Later in these reasons the alleged associations and lack of independence are discussed. They are not only of significance in resolving the issue of whether Nelson Wheeler Perth lacked independence, but also, on Kia Ora’s case, as to their knowledge of the manner in which Western United conducted aspects of its business and of its financial circumstances which are relevant to the valuation of Western United.”
The trial Judge is best placed to assess the relevance of the associations evidence to the claim in contract and in tort. For what it is worth, we add that our own view, admittedly a less informed view, is that much of the associations evidence was relevant to the claim in contract and in tort, but we accept that had Duke not pursued the alleged breach of fiduciary duty and duty to be independent, the case would have been shorter.
Although Mr Myers challenged the Judge’s assessment of the relevance and use of the associations evidence, we are not satisfied that the Judge was wrong. We propose to proceed on the basis stated by the Judge, but we emphasise that this does not resolve the matter. It is one thing to say that much or most of the associations evidence was relevant to the case in contract and in tort, and to acknowledge that the associations evidence was also directed, perhaps mainly aimed at, other issues on which Duke failed, but yet another thing to determine how that should be reflected in an order as to costs.
The trial Judge declined to deprive Duke of its costs of action by reference to its failure on the issue of a fiduciary duty and a duty to be independent. He was obviously influenced by his view about the relevance of the associations evidence to the issue of liability in contract and in tort. However, he separately considered whether costs should follow the event, or whether there was reason to depart from that general rule and to order that Duke be deprived of some of its costs because of its failure on certain issues. The Judge referred to authority supporting the view that the general rule that costs follow the event does not cease to apply simply because the successful party failed on certain issues. He took the view that the matters on which Duke failed were not raised “improperly or unreasonably” (see above).
In this respect, nothing has changed materially. Duke remains unsuccessful on the claim for a breach of fiduciary duty or of a duty to be independent. Admittedly, Duke’s damages were reduced on appeal, but that in itself is not a reason for a change of approach to the costs of the trial. Our understanding is that the matters relevant to the issue of damages on which Duke lost before the High Court did not occupy much time at trial.
As we explain a little later, our view is that the trial Judge’s decision on costs has not been swept aside by the High Court Order. We are, once again, sitting on appeal from the trial Judge, and are now dealing with the orders that he made as to costs. We do so in the light of subsequent developments.
We are not persuaded that the trial Judge erred, or that anything that has occurred since his decision on costs undermines the approach he took. We are influenced by the discretionary element in a decision on costs, and by the difficulty of revisiting the trial Judge’s assessment of the use made of the evidence at trial. Paragraph (1) of the order as to costs is set out below. In our opinion the first part of that order should stand. We so conclude because we are not persuaded that anything has undermined that order, nor are we persuaded that, when made, it was erroneous.
The order will now provide for payment of the costs by the first defendants, not by the Nelson Wheeler defendants. It should also provide that those costs do not include any costs attributable to the plaintiff’s case against the fifth defendants on the national partnership issue.
There were two issues on which the trial Judge ordered that Duke have its costs against the first defendants on a solicitor and client basis. The relevant costs order is as follows:
“(1) That the Nelson Wheeler defendants, with the exception of the Queensland defendants, shall pay the plaintiff’s costs of the action against them to be taxed on a party and party basis save and except with respect to the issues of the composition of the partnership of Nelson Wheeler Perth at relevant times and the competence of that firm in the preparation of the Nelson Wheeler report which are to be taxed on a solicitor and client basis.”
The Judge gave reasons for his decision, in the course of his costs judgment. As to the composition of the partnership, this is what he said (the costs judgment p9):
“The first matter relates to the composition of the partnership Nelson Wheeler Perth. As is mentioned in the reasons for judgment on liability and damages, the first defendants initially admitted that the defendants Stokes and Munachen were members of that firm and made that admission in their Defence and amended Defence. After the plaintiff obtained leave to amend the Statement of Claim to allege breach of the contract of retainer because of lack of independence of Nelson Wheeler Perth from Kia Ora and Western United, the application to withdraw the admission was made and it was asserted that Stokes and Munachen were not partners. The issue was tried and occupied a substantial part of the trial. I concluded that upon all of the evidence only one conclusion was open and that is that the two men were members of the firm at relevant times. In my view, the evidence was overwhelming and the first defendants were aware of the true position. There was no merit in the assertion that they were not partners and the groundless persistence in that allegation unduly prolonged the trial which amounts to a special and unusual feature of the case and justifies an award of costs on a solicitor and client basis on that issue.”
As to the competence of the report, he said (the costs judgment p9):
“The next matter is the Nelson Wheeler defendants not conceding incompetence on the part of Nelson Wheeler Perth in the preparation of the Nelson Wheeler report which is the subject of the proceedings. I must say that the allegation of incompetence was indefensible and obviously so which must have been known to the first defendants once the action was commenced and the proceedings were served. As I observed in my earlier reasons, a very long time was occupied at the trial on the issue of competence. It was not merely a matter of putting the plaintiff to proof. Positive evidence was led in the defence case in an attempt to justify the report. I think the plaintiff should have its costs on this issue on a solicitor and client basis. I do not know why the first defendants took the stance which they did and if the purpose was for tactical reasons, but their conduct in this respect did prolong the trial unreasonably.”
These are strong findings.
The first defendants appealed against this part of the Judge’s Order. The matter was touched on only briefly in submissions on the appeal, and was left in a way which left it unclear whether the appeal was pursued. However, we do not consider that the appeal should be treated as having been abandoned. It appears that the first defendants might not have obtained leave from the trial Judge to appeal against this aspect of the Judge’s Order: see proviso (2) to s 50(1) of the Supreme Court Act 1935 (SA) for the requirement to obtain leave. However, no point was taken on this on appeal to us, and as the first defendant had appealed against the judgment, leave was not necessary.
The fact that costs are discretionary does not mean that the basis upon which an order for costs is made cannot be challenged. Mr Myers challenged each of the Judge’s conclusions. He said that the composition of the Perth partnership was properly contested, and could easily have gone either way, and the fact that there was no appeal against the finding was of no significance. As to the competence of the report, his submission was that the Judge’s findings (set out above) were wrong and were unsubstantiated. The concession at trial was irrelevant.
Underlying Mr Myers’ submissions was a submission that when the High Court set aside paragraph 7 of the Full Court Order, which paragraph dealt with the appeal by the first defendants against the costs order of the trial Judge, the High Court produced a situation in which there was no Order as to the costs of the trial as between Duke and the first defendants, and it was for Duke to establish to the satisfaction of this Court that it was appropriate to award costs on a solicitor and client basis.
We do not accept the premise upon which Mr Myers’ submissions proceeds. Setting aside the part of our Order disposing of the appeal against the trial Judge’s Order for costs returns things to where they were when the Full Court considered the appeal. As we see it, the Orders of the trial Judge stand, subject to the appeal against them. Of course, we must now take into account the impact of the Orders of the High Court on what we might call the substantive issues, and our decision on the appeal against the trial Judge’s cost orders must reflect that impact. But, as we see it, the Orders of the High Court have no necessary impact on the trial Judge’s conclusion that on the two identified issues Duke should have its costs on a solicitor and client basis.
Our view is that in relation to those two issues the onus is on Mr Myers to satisfy us that the trial Judge was wrong. We are not so satisfied. The Judge was much better placed than we are to decide these issues. Nor does the decision of the High Court have any impact on those orders. Accordingly, we do not propose to interfere.
It is convenient to deal here with an aspect of the order that the first defendants pay the costs of the issue of the competence of the report on a solicitor and client basis.
Counsel for Duke submitted before us, and presumably intends to submit on taxation, that this order entitles Duke to recover the costs of the associations issue on a solicitor and client basis, because the material led on that issue was relevant to the issue of competence. Mr Myers argued that this could not have been intended, and would not be a just result.
An order for the taxation of costs by reference to particular issues can give rise to this sort of difficulty. There is no simple solution. We considered whether we should set aside the orders that the Judge made by reference to particular issues, and endeavour to resolve everything by a single order as to the costs of the trial. However, as we are not satisfied that the trial Judge has been shown to be in error in this respect, and as it would be very difficult to arrive at a single order as to the costs of the trial which adequately reflected the intent of the trial Judge on this issue, we have not done so.
We are not in a position to resolve the difference between the parties which has emerged in this respect. We are prepared to say that we would be surprised to find that the whole of the evidence on the associations issue was relevant to the issue of competence. Nor do we think that the trial Judge would have intended the result for which Duke now apparently contends. But that is not to say that some of the evidence relevant to the associations issue was not relevant to the issue of competence, and is not to be dealt with for the purposes of costs on that basis. We consider that the only practical solution is for the parties to make application to the trial Judge for further orders, should it emerge on the taxation of costs (which appears inevitable) that there is a dispute that the Master cannot resolve.
We publish these reasons and invite the parties to prepare Minutes of Order reflecting the decision of the Court.

[2001] SASC 451

20 December 2001