G. Lowe and Sze Tu Holdings Pty Ltd v Cudal Nominees Pty Ltd

[1991] FCA 390

IN THE FEDERAL COURT OF AUSTRALIA)

NEW SOUTH WALES DISTRICT REGISTRY) NO. G 873 of 1989

GENERAL DIVISION 1

Between: G LOWE S SZE TU HOLDINB

PTY LIMTED

Applicant

And: CUDAL NOMINEES PTY LIMITED

First respondent

And: VIETELL PTY LIMITED TRADING
AS "S.L. TARDY DOUBLE BAY"

Second respondent

DETERMINATION ON COSTS

Einfeld J Svdney 8 Julv 1991

On 24 May 1991 I handed down my reasons for judgment on the issues litigated in this case. On 29 May I made orders to give effect to that judgment as submitted by the parties and heard argument on the remaining dispute as to the costs of the application. The applicant asked for an order that the respondents pay its costs. The first respondent's solicitor on the record appeared on the argument as to costs as a matter of courtesy to the Court to advise that his client had gone or was going into liquidation and that his retainer had ceased. He put no argument on costs. The second respondent's solicitor argued that the facts of the case required an order that the applicant receive only part of its costs (he suggested a maximum of one half) and that these be divided between the respondents in the proportion three fifths to be

paid by the first respondent and two fifths by his client.

The argument as to the reduction of the costs overall was based on my findings adverse to the applicant and its principal witness Mr Lowe. The proportioning of the liability for costs and its weighting in favour of the second respondent should flow, so it was said, from the respective culpabilities of the two respondents as found in the judgment.

I do not think that costs orders of this kind may or should be used as if financial penalties for behaviour lacking in morality. In any event, this is not a case for the application of such a principle. If it existed, the tests would have to be applied both ways. The judgment illustrates why no balance of this kind could be drawn in favour of any party against any other.

It is clear that the applicant, having been successful in large measure, is in general entitled to its costs. The only relevant question that can be considered on the issue of some overall limitation of the usual rule that costs follow the

up with presenting and advocating matters on which the	event is whether a recognisable portion of the case was taken
applicant was unsuccessful. The principles guiding a determination of this kind were considered by Pincus J in Greenfield Products Ptv Ltd v Rowe-Scott Bonnar Ltd unreported, 14 September 1990. Applying those principles, relevant matters in this case included especially the applicant's failure on general damages and the claims for the loan fees of the Commonwealth Bank and accounting and other costs. Moreover, Mr Lowers evasiveness in the witness box and his attempts to distance himself from his manifest entrepreneurial expertise are among other things which unjustifiably added to the length and complexity of the case: see Demam Ptv Ltd (In Lia. l v Wriaht (No. 2L [l9831 2 NSWLR 354; Morosi v Mirror NewsDaDers Ltd [l9771 2 NSWLR 749. On the other hand, the case was primarily fought over the competing claims for the return of the deposit or the balance of the purchase price. On this confrontation, the applicant was clearly successful.
In the exercise of my discretion, having regard to the time spent on these various matters, I find that a fair division between these aspects of the case will be achieved by an order that 80% of the applicant's costs as assessed or taxed be paid by the respondents.
I do not think that a division between the respondents is justified. The conduct which misled and deceived the
Nicholas Entemrises Ptv Ltd & Ors C19791 28 ALR 201. applicant was so intermixed between the respondents as to Se incapable of a concept of proportionate culpability: see TPC v
Obviously the first respondent was the primary source of the original falsities and deceptions but, as the judgment points out, the second respondent was no shrinking violet. It was a real estate company seeking a very large commission in what was at the time a rapidly contracting real estate market with the likelihood of a resulting drop in income for agents. It is noteworthy that all the untruths and misleading conduct perpetrated by Veron as brought out in the case were adverse to the applicant. No lie was told or fact withheld that would have disadvantaged either respondent and inured to the benefit of the applicant. This could not have been accidental. The consequence was that the applicant's ultimately successful case was founded on the deceptions of both respondents indivisibly.
I order that the respondents pay 80% of the applicant's costs as agreed or taxed.

I certify that this and the three (3) preceding pages are a true copy of the Reasons for Judgment herein of his Honour Justice Einfeld.

Dated: 8 177 1 Associate: w d " Y