Horswill v McClellan (No 2)

In the matter of Horswill v McClellan, the plaintiffs sought indemnity costs from the defendants in relation to a dispute over the sale of land. The plaintiffs claimed that the defendants had entered into an oral agreement to sell the property, and they sought specific performance of that agreement. The defendants denied the existence of such an agreement and defended the claim on various grounds. The case reached the court, which was required to determine whether the plaintiffs were entitled to indemnity costs and, if so, under what circumstances.

The central legal issue before the court was whether the first defendant's resistance to the plaintiffs' claim for specific performance of the alleged oral agreement had no real prospects of success. The plaintiffs argued that the first defendant's resistance was unreasonable because his evidence was materially similar to the plaintiffs' evidence, and he failed to substantiate certain claims in his Amended Defence. The court needed to assess whether the first defendant's resistance was indeed unreasonable and, if so, whether it warranted the award of indemnity costs.

In delivering its judgment, the court held that the first defendant's resistance was not unreasonable, even though his evidence was materially similar to the plaintiffs' evidence. The court found that the first defendant had provided a credible defence and had not acted unreasonably in resisting the plaintiffs' claim. As a result, the court ordered the first defendant to pay the plaintiffs' costs on the ordinary basis, denying the plaintiffs' application for indemnity costs. The court's decision was based on the assessment that the first defendant's resistance had real prospects of success, despite the similarities in the parties' evidence.