Johnston v Herrod

The plaintiffs, Johnston, sought damages from the defendants, Herrod, in the Supreme Court of New South Wales. The claim arose from an alleged breach of contract, where Johnston claimed Herrod failed to honour an agreement to purchase Johnston's business. The trial resulted in a judgment in favour of the plaintiffs, and the defendants appealed the decision. The appeal was dismissed, and the matter proceeded to a costs hearing. The defendants argued that the plaintiffs' conduct during the proceedings warranted costs on an indemnity basis. The plaintiffs, on the other hand, argued for costs on the standard basis.

The legal issue before the court was whether the defendants' conduct warranted costs on an indemnity basis or if the general rule that costs follow the event should apply. The court considered the defendants' conduct, including their failure to make a genuine offer to settle the matter, and the plaintiffs' overall success at trial. The court determined that the defendants' conduct was not egregious enough to warrant indemnity costs and that the general rule should apply.

The court held that the defendants' conduct did not warrant indemnity costs, and therefore, the costs should be assessed on the standard basis. The court found that the plaintiffs' success at trial and the defendants' failure to make a genuine offer to settle were not sufficient grounds to deviate from the general rule. The court noted that while the defendants' conduct was not ideal, it did not reach the level of egregiousness required for indemnity costs. The court's decision was based on a careful consideration of the defendants' conduct and the principles of costs in Australian law.

The final order of the court was that the defendants pay the plaintiffs' costs of and incidental to the proceeding to be assessed on the standard basis. The court acknowledged the plaintiffs' success at trial and the defendants' failure to make a genuine offer to settle, but determined that these factors were not sufficient to warrant indemnity costs. The court's decision was based on a thorough analysis of the legal principles and the facts of the case.