Mitchell Asset Management Pty Ltd v Di Pasquale (No 2)
[2025] VSC 346
•16 June 2025
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S ECI 2022 04903
| MITCHELL ASSET MANAGEMENT PTY LTD | Plaintiff |
| v | |
| MARISSA DI PASQUALE | Defendant |
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JUDGE: | COSGRAVE J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF RULING: | 16 June 2025 |
CASE MAY BE CITED AS: | Mitchell Asset Management Pty Ltd v Di Pasquale (No 2) |
MEDIUM NEUTRAL CITATION: | [2025] VSC 346 |
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COSTS — Court has broad discretion — Whether costs to be awarded on a standard or indemnity basis — Failure to observe the rule in Browne v Dunn (1894) 6 R 67 — Groundless allegations of fraudulent or deceitful behaviour — Plaintiff to pay 40% of the defendant’s costs of the proceeding on an indemnity basis, the remainder on a standard basis — Refusal of Calderbank offers not unreasonable — BHP Billiton Olympic Dam Corporation Pty Ltd v Steuler Industriewerke GmbH (No 3) [2012] VSC 414, applied — Whether defendant liable for the costs of its withdrawn third party notice — Supreme Court(General Civil Procedure) Rules 2015 (Vic) rr 25.05, 63.15 — Soteriadis v Nillumbik Shire Council [2015] VSC 363 and GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 201 ALR 55, applied.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M McKillop with Ms P Blackadder | Gadens |
| For the Defendant | Mr J Ribbands with Mr T Gorton | Walpole Johnson |
HIS HONOUR:
Introduction
I handed down my reasons for judgment in this matter on 30 May 2025 (“the principal reasons”).[1] At that time, I set a timetable for the parties to confer about the form of order which would give effect to those reasons and the question of costs. If the parties could not agree, they were to file submissions setting out the orders sought and the reasons therefore. I now address those matters. This judgment uses the same abbreviations and terminology as the principal reasons.
[1]Mitchell Asset Management Pty Ltd v Di Pasquale [2025] VSC 307.
Di Pasquale, who succeeded at trial, seeks orders that:
(a) the proceedings be dismissed; and
(b) the plaintiff pay the defendant’s costs of and incidental to the proceedings, including reserved costs and the costs of the defendant’s third party notice, on an indemnity basis.
MAM seeks orders that:
(a) the proceedings be dismissed;
(b) the plaintiff pay the defendant’s costs of the proceeding against the defendant, including reserved costs, on an standard basis; and
(c) the defendant pay the third party’s costs of the third party notice on a standard basis.
Court’s discretion on costs — general principles
Section 24(1) of the Supreme Court Act 1986 (Vic) and Part 4.5 of the Civil Procedure Act 2010 (Vic) (“CPA”) (which deals with the Court’s powers as to costs) provide that the Court has a broad discretion in determining questions of costs.
Rule 63.02 of the Supreme Court (General Civil Procedure) Rules2015 (Vic) (“Rules”) provides that:
“The power and discretion of the Court as to costs under section 24 of the Act shall be exercised subject to and in accordance with this Order.”
The Court’s discretion must be exercised judicially and not capriciously. Perhaps the only immutable rule about costs is that there are no immutable rules. However, there is a general principle that, subject to limited exceptions, a successful litigant is entitled to an award of costs in their favour. In the absence of disqualifying conduct, costs generally follow the event. The successful party usually recovers its costs even if it does not succeed on all heads of claim or defence (as the case may be). This principle is grounded in reasons of fairness and policy and operates whether the plaintiff or defendant is successful. The main aim of a costs order is to indemnify the successful party and not to punish the unsuccessful party. If the litigation had not been brought or defended by the unsuccessful party, then the successful party would not have incurred the needless expense which it did. In this context, considerations of fairness usually dictate that the unsuccessful party should be responsible for the costs of the other party.[2]
[2]Latoudis v Casey (1990) 170 CLR 534 at 566–7; Oshlack v Richmond River Council (1998) 193 CLR 72 at [67] (“Oshlack”); Bell Lawyers Pty Ltd v Pentelow (2019) 269 CLR 333 at [33].
The issue of whether to award costs on other than the standard basis — that is on an indemnity basis or some other basis — is a matter that is in the discretion of the Court.[3] In Oshlack v Richmond River Council,[4] McHugh J summarised the general position concerning the “usual order as to costs” as follows:
·the “usual order as to costs” embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour;
·costs are not awarded to punish an unsuccessful party. Rather, their primary purpose is to indemnify the successful party; and
·the successful party may be deprived of their costs if it engages in misconduct relating to the litigation or the circumstances leading up to the litigation.[5]
[3]Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 at 230; Bass Coast Shire Council v King [1997] 2 VR 5 at 29.
[4]Oshlack (n 2).
[5]Ibid at [67], [69].
More recently, in Northern Territory v Sangare,[6] the High Court explained that the power to award costs “must be exercised judicially, by reference only to considerations relevant to its exercise and upon facts connected with or leading up to the litigation”.[7] The guiding principle that the successful party is generally entitled to their costs may be modified or displaced where that party’s conduct of the litigation justifies a different outcome.[8]
[6](2019) 265 CLR 164.
[7]Ibid at [24].
[8]Ibid at [25].
Accordingly, when considering how to exercise its discretion as to costs, the Court is entitled to have regard to the conduct of the respective parties in the litigation.
The exercise of the discretion to award costs to the successful party over and above the ordinary or usual basis is generally reserved for those cases where the losing party has engaged in unmeritorious or improper conduct or where the pursuit of the action was “a high-handed presumption” (to adopt Tadgell J’s description in Australian Guarantee Corp Ltd v De Jager)[9] such as to warrant the Court expressing its disapproval and doing what it can to ensure the successful party is not out of pocket over it.
[9][1984] VR 483 at 502 (“De Jager”).
Di Pasquale seeks indemnity costs on two bases — the unproven allegations of fraud and the failure by MAM to accept Calderbank offers which were said to be more advantageous than the outcome of the trial.
Fraud allegations
In relation to the fraud allegation, Di Pasquale pointed to a number of matters which she said the Court should consider in exercising the general discretion it has on the question of costs.
First, she argued that MAM adopted the position that Di Pasquale:
·engaged in a “phoenix” operation regarding Cashtivity and its assets; and
·deliberately or intentionally concealed the 2015 Transfer Deed from MAM in a calculated decision not to inform it of the Deed.
Although MAM operated on the basis of those allegations during the litigation, it did not cross-examine Di Pasquale about those matters in the trial or put the allegations to her. Instead, it relied upon some material from the receiver’s examination.
Secondly, the plaintiff’s conduct of the litigation in this respect was aggravated by the failure to actually plead fraud in the statement of claim. Di Pasquale suggested that MAM’s conduct was more questionable because it sought to attack her indirectly and not give her the chance to defend herself against serious allegations.
Thirdly, she said that MAM ran the trial against her based on an allegation of deceit. In the opening, MAM alleged that the 2015 Transfer Deed was part of a phoenix operation. In final submissions, MAM said that the defendant engaged in phoenixing activity.[10] Due to the allegations of Di Pasquale’s knowing involvement in the alleged misleading or deceptive conduct by Cashtivity, MAM effectively alleged deceit against Di Pasquale. The failure by MAM to observe the rule in Browne v Dunn[11] was serious, particularly when the unput matters concern grave allegations.
[10]See the principal reasons at [119].
[11](1894) 6 R 67 at 70.
Finally, given the circumstances, the Court should infer that MAM had an ulterior motive in pursuing the proceedings against Di Pasquale in this way — to damage her reputation in the commercial world.
For its part, MAM submits that it did not plead or allege fraud. To the extent that the principal reasons identified matters which were raised but not put to Di Pasquale, MAM said that such matters do not, individually or cumulatively, warrant an order for indemnity costs. The plaintiff’s conduct did not involve such a breach of accepted practice that an order for indemnity costs was appropriate. For example, it was not a case of making allegations of fraud knowing that the allegations were untrue or where the allegations were irrelevant to the issue and served only to increase the costs unnecessarily.
Analysis
As I indicated in the principal reasons, I regard the plaintiff’s conduct in relation to the allegations of phoenix operations and intentional concealment of information as unsatisfactory. The rule in Browne v Dunn is a long-established and well-known authority amongst lawyers engaged in litigation. I accept that MAM did not formally plead fraud or deceit. However, the unambiguous thrust of part of the plaintiff’s case was to this effect. Failing to plead the deceit or fraud allegation and referring to this in closing submissions while simultaneously making submissions about the dubious nature of Di Pasquale’s behaviour made the plaintiff’s conduct worse rather than better.
Another surprising aspect of MAM’s understanding of its position in relation to the misleading or deceptive conduct allegation was the comment in its letter to Di Pasquale’s solicitor dated 22 August 2023 where Gadens wrote:
“... if we are successful in making out that your client engaged in misleading and deceptive conduct, namely fraud, s 24AM of the Wrongs Act 1958 (Vic) has a specific carve out for apportionment for claims involving fraud.”
Proof of misleading or deceptive conduct does not include any element of intent as fraud does. A person can contravene the ACL by making a representation which is false, misleading or deceptive. The error can be totally honest but nonetheless contravene the ACL. It is for this reason that those pleading a case of misleading or deceptive conduct rarely plead fraud. It is unnecessary and creates needless complexity and risk for the plaintiff with no corresponding benefit.
While I am not prepared to find that MAM deliberately made the allegations of phoenixing and intentional concealment to harm Di Pasquale’s reputation and standing in the business community, I consider that this aspect of MAM’s conduct of the litigation is unsatisfactory.
The Court has a broad discretion regarding costs. A court can take into account groundless allegations of fraudulent or deceitful behaviour. It is partly for this reason that lawyers take special care before making such allegations. In the circumstances, I consider it appropriate that MAM pay 40% of Di Pasquale’s costs of the proceeding on an indemnity basis.
Calderbank offers
Di Pasquale relies upon two offers of compromise she made as the basis for claim for indemnity costs against MAM. Di Pasquale made the first offer on 1 September 2023 (“first Calderbank offer”) and the second offer shortly before trial on 2 September 2024 (“second Calderbank offer”).
Legal principles
In deciding whether a party is entitled to costs taxed on an indemnity basis due to the rejection of a Calderbank offer, Habersberger J set out the relevant legal principles in BHP Billiton Olympic Dam Corporation Pty Ltd v Steuler Industriewerke GmbH (No 3)[12] (“BHP”) as follows:
[12][2012] VSC 414 at [59]–[67].
“First, the fact that a less favourable result is achieved does not give rise to a presumption of a special costs order. The making of an offer and its rejection are “but two albeit important circumstances” to which the Court will have regard in the exercise of its costs discretion.
Secondly, the competing policy objectives relevant to the exercise of the costs discretion are principally the desirability of promoting settlement and reducing litigation costs as against the undesirability of discouraging potential litigants from bringing their dispute to the courts.
Thirdly, the critical question is whether the rejection of the offer was unreasonable in the circumstances. As the Court of Appeal said in [Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2) (2005) 13 VR 435 at [23]]:
In our view, these competing considerations can be sufficiently accommodated by applying a test of (un)reasonableness. The critical question is whether the rejection of the offer was unreasonable in the circumstances. We see no justification for a more stringent test such as “manifestly” or “plainly” unreasonable.
Fourthly, a court considering submissions that the rejection of a Calderbank offer was unreasonable should ordinarily have regard at least to the following matters:
(a)the stage of the proceeding at which the offer was received;
(b)the time allowed for the offeree to consider the offer;
(c)the extent of the compromise offered;
(d)the offeree’s prospects of success, assessed as at the date of the offer;
(e)the clarity with which the terms of the offer were expressed; and
(f)whether the offer foreshadowed an application for indemnity costs in the event of the offeree rejecting it.
Fifthly, as the determination of whether it was unreasonable for the offeree to have rejected the offer is made “as at the time, or within a reasonably short time after, the offer” was made, the Court should not too readily embrace submissions that it was inevitable that the proceedings would fail. As Hamilton J put it in Grynberg v Muller [[2002] NSWSC 350 at [48]]:
These submissions focus the bright light of hindsight. Hindsight sings a siren song of which Judges must be cautious ...
Sixthly, the onus lies on the offeror to demonstrate the unreasonableness of the offeree’s rejection of the offer. This means that it is necessary to analyse what was proposed.
Seventhly, there is no general rule that the Calderbank offer must set out with specificity the basis for the offeror’s contention that the offeree should accept the compromise. Whether there is a need to do so depends upon a consideration of all of the circumstances existing at the time of the offer.
Eighthly, it is not necessary for the applicant for an indemnity costs order to establish matters which might be relevant to other, well-recognised, grounds for indemnity costs. Such conduct is not a pre-requisite for a finding that the rejection of the Calderbank offer was unreasonable.
Ninthly, an “all in” offer is permitted in a Calderbank offer.”
Further, an invitation for the offeree to capitulate does not usually alter the default costs rule.[13] What is required to trigger the costs consequences is an offer of “compromise”.[14] For example, in Mees v Roads Corporation,[15] the letters in question merely contained assertions that the offerors were in a strong position to defeat the proceeding and that if the offeree were to capitulate at that time, the offerors were prepared to bear their own costs. This led Gray J to conclude that the letters did not invoke the principles in Calderbank v Calderbank[16] and thus did not govern the position with respect to costs.[17]
[13]See GE Dal Pont, Law of Costs (LexisNexis, 5th ed, 2021) at [13.7], [13.78] and the cases cited therein.
[14]Hancock v Arnold [2009] NSWCA at [23].
[15][2003] FCA 410 (“Mees”).
[16][1976] Fam 93.
[17]Mees (n 15) at [17].
First Calderbank offer
By the first Calderbank offer, the defendant made an offer to settle the proceeding on the basis that the parties bear their own costs and grant mutual releases “in respect of all allegations arising directly or indirectly from the facts and circumstances referred to in this proceeding”. The letter then proceeded to set out the defendant’s position in relation to various matters. The offer was said to remain open for seven days.
The plaintiff did not make any submissions regarding the first Calderbank offer.
The defendant submits that it was unreasonable for MAM to have rejected the first Calderbank offer because: (a) it would have been aware of its lack of reliance upon any representation of Cashtivity’s intellectual property; and (b) the letter addressed the weakness of the fiduciary duty claims in detail.
Having regard to the factors listed in BHP, I do not consider that the plaintiff’s rejection of the first Calderbank offer was unreasonable.
First, the offer was not in the nature of a compromise as it essentially required the plaintiff to capitulate and discontinue all of its claims against the defendant. Although the defendant offered to bear her own costs of the proceeding, the extent of her compromise was notably less in comparison to that asked of the plaintiff. The majority of the letter appeared to be directed towards demonstrating why the plaintiff’s case was weak and likely to fail and did not constitute a genuine attempt at compromise. Further, the mutuality of the releases is of limited weight in circumstances where there was no counterclaim by the defendant.
Second, the offer was made approximately one year before the trial and prior to the filing of witness statements and various amended pleadings.[18] Given that the offer was made at a relatively early stage of the proceeding, it is likely that the plaintiff was not able to assess its prospects of success with a sufficient degree of certainty that would warrant it discontinuing the entire proceeding.
[18]The further amended statement of claim, amended defence and amended reply were filed in September 2024.
Second Calderbank offer
The second Calderbank offer comprised an offer by the defendant to settle the proceeding on the following terms:
(a) the defendant’s costs of the allegations withdrawn by the plaintiff at the hearing on 30 August 2024 be paid on a standard basis, such costs to be agreed, or taxed in default of agreement; and
(b) there be mutual releases in respect of the allegations the subject of the proceeding.
As with the first Calderbank offer, the second Calderbank offer outlined what the defendant perceived to be the key weaknesses of the plaintiff’s case, albeit in much greater detail. The offer allowed a period of four days for acceptance.
The plaintiff submits that the second Calderbank offer does not warrant an order for indemnity costs for the following reasons.
First, the four-day window which the offer remained open for was unreasonably short in the context of a complex proceeding and impending trial. The short timeframe constrained the plaintiff’s ability to properly assess the proposal.
Second, the offer included a requirement that the plaintiff pay the defendant’s costs in relation to claims that it had already abandoned in order to narrow the disputed issues for trial. The plaintiff says that requiring costs of discrete issues was not a reasonable position.
Third, the plaintiff argues that the offer was unclear as to whether it intended to resolve the third party claim in addition to the plaintiff’s claim against the defendant. It says that if the offer intended to compromise both the primary claim and the third party claim, it was deficient in that it failed to include any apportionment of liability or costs between the claims. It further notes that the offer was silent as to whether costs were covered. Those omissions rendered the offer uncertain and support the plaintiff’s contention that its rejection of the offer was not unreasonable.
The defendant contends that the plaintiff’s rejection of the second Calderbank offer was unreasonable for the following reasons.
First, it was made when trial preparation was complete. The plaintiff was well aware of its weaknesses, particularly its lack of reliance upon any representation of Cashtivity’s intellectual property.
Second, the plaintiff would have known the weaknesses of its fiduciary duty claims. The defendant had put on an extremely detailed witness statement which would have revealed to the plaintiff that the Di Pasquale’s actions as director of Cashtivity had been wholly consistent with her fiduciary obligations.
Third, the time for which the offer was open was reasonable in light of the closeness of trial. The offer did not require investigation, but merely called for the plaintiff to acknowledge the fundamental flaws in its case.
Analysis
I do not consider that the plaintiff’s refusal to accept the second Calderbank offer was unreasonable in the circumstances.
As with the first Calderbank offer, the terms of the second Calderbank offer required the plaintiff to capitulate, as well as pay certain costs of the defendant. Thus, the extent of compromise on the plaintiff’s part was significant, whilst the defendant did not yield in any considerable aspect. In this regard, I repeat the comments made in paragraph 30 above.
Secondly, I consider that there was substance to MAM’s argument that the outcome of the proceeding would be significantly affected by the oral evidence at the hearing and the Court’s assessment of that evidence. For this reason, MAM did not behave unreasonably in wanting the Court to examine the evidence and make the critical factual determinations.
Thirdly, while a party who receives an offer shortly before trial should be in a position to consider that offer with a comprehensive knowledge of the relevant evidence and applicable law, four days is a short time in which to response to such an offer when parties are busy preparing for an imminent trial.
Finally, the offer was ambiguous or uncertain about whether it included the costs of the third party claim.
In the circumstances, I find that MAM should play 40% of Di Pasquale’s costs of the proceeding between them,[19] including reserved costs, on an indemnity basis and the balance on a standard basis.
[19]This excludes the third party claim.
Third party claim
Parties’ submissions
The plaintiff submits that Mr Andrew Strachan, the third party under the third party notice filed by the defendant on 18 October 2023, is entitled to an order for costs in respect of that notice. That is because:
(a) the defendant abandoned the third party claim on the first day of trial, which caused the plaintiff to incur unnecessary costs in addressing it and highlights the lack of merit in the claim;
(b) the filing of the third party notice meant that Strachan was required to obtain legal representation and participate in the interlocutory stages leading up to the trial. This imposed a significant legal and procedural burden on him, including in relation to discovery, preparation of evidence and engagement in case management processes;
(c) the third party notice alleged that Strachan owed fiduciary duties to the plaintiff and had breached those duties. However, the Court made no finding as to these matters. Thus, the basis for apportionment claimed by the defendant was not made out; and
(d) the joinder of the third party was not necessary to advance the defendant’s case.
The defendant submits that her costs of the third party notice (if any) ought to be paid by the plaintiff and her withdrawal of that notice does not occasion any costs award in Strachan’s favour. This is because:
(a) the defendant did not seek any substantive relief from Strachan, only apportionment under the Wrongs Act 1958 (Vic) or the Competition and Consumer Act 2010 (Vic). Such apportionment would merely reduce the defendant’s liability (if any). Given that Strachan was not the subject of any claim, it is unclear why he had separately incurred costs. He was represented by the plaintiff’s solicitor and filed a defence drawn by the plaintiff’s counsel;
(b) the withdrawal of the third party notice was part of the parties’ general narrowing of issues prior to the commencement of the trial, which also involved the plaintiff abandoning large parts of its fiduciary duty claims. This streamlined the conduct of the trial and did not occasion wasted costs. Further, Strachan was not obliged to give evidence by reason of the third party claim — his participation in the proceedings was as a witness in the plaintiff’s camp;
(c) the Court’s findings were consistent with the factual matters alleged in the third party notice, namely his knowledge of the 2015 Transfer Deed and his failure to inform the plaintiff. Although the Court did not find that Strachan owed fiduciary duties to the plaintiff, it was not required to; and
(d) there was no need for an apportionment defence in any event as the plaintiff’s claims wholly failed.
Legal principles
Rule 25.05 of the Rules provides that where a claim by third party notice is withdrawn, liability for costs shall be determined in accordance with rule 63.15. Rule 63.15 in turn provides that unless the Court otherwise orders, a party who withdraws a claim by third party notice shall pay the costs of the party to whom the withdrawal relates up to the time of the withdrawal.
Rule 63.15 of the Rules modifies the Court’s wide discretion as to costs by imposing upon the defendant, as the discontinuing party, the onus to satisfy the Court that she should not pay the costs of the withdrawn third party claim.[20] The rule does not give rise to a presumption that costs will be ordered against the defendant.[21] Rather, it creates a starting position for the defendant to pay the third party’s costs, subject to a contrary order.[22] The contrary order involves a discretionary decision to be exercised judicially, in a particularised and principled manner and with regard to all the relevant circumstances, not just the fact of discontinuance.[23] The Court is ultimately required to make such order as it thinks just in the particular circumstances of the case.[24]
[20]Soteriadis v Nillumbik Shire Council [2015] VSC 363 at [12].
[21]Ibid at [12(a)].
[22]Ibid at [12(b)].
[23]Ibid at [12(c)], [12(e)].
[24]Ibid at [12(c)].
In deciding whether an unsuccessful plaintiff ought to bear the costs of a third party joined by the defendant, courts have commonly considered:
·whether it was reasonable or appropriate for the defendant to have made the third party claim;[25]
·whether the plaintiff’s claim was the catalyst for the third party claim (noting that causation alone without regard to the nature of the cross-claim itself is insufficient to justify a “pass on” order);[26] and
·the relationship of the nature of the original claim to that of the third party claim (for example, whether the third party claim raises issues private to the parties to it).[27]
[25]GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd (2003) 201 ALR 55 at [73] (“GEC”); De Jager (n 9) at 500.
[26]GEC (n 25) at [74].
[27]Ibid at [75].
Analysis
I have determined that it is appropriate in this case for the plaintiff to pay the costs of and incidental to the third party notice. My decision is based upon the following factors:
(a) it was reasonable for the defendant to have filed the third party notice. The claim for apportionment was based upon two primary allegations:
(i) that Strachan had actual knowledge of the 2015 Transfer Deed and its substantial effect, namely, that the present and future intellectual property of Cashtivity had been transferred to Cashtivity; and
(ii) that he failed to disclose his knowledge of those matters in breach of his fiduciary duty to the plaintiff.
The first factual allegation was made out at trial. The principal reasons did not definitively address the second allegation. By reason of the finding in paragraph (i), it was not necessary and it was not an issue in dispute at trial;
(b) the third party claim did not seek substantive relief against Strachan but was a means for the defendant to reduce her potential liability;
(c) the plaintiff’s claim was the direct catalyst for the third party claim;
(d) the third party claim did not raise issues private to the defendant and Strachan, but involved the plaintiff too;
(e) the reason for the defendant withdrawing the claim was to narrow the issues in dispute, which is consistent with her overarching obligations under s 7 of the CPA to facilitate the just, efficient, timely and cost-effective resolution of the real issues in dispute; and
(f) the quantum of costs incurred by reason of the third party claim ought to have been minimal, as the claim was for apportionment of liability only and was contingent on the plaintiff succeeding at trial. It is therefore unclear how the third party claim would have imposed a “significant legal and procedural burden” on Mr Strachan in the lead-up up to the trial. The plaintiff’s solicitors acted for him and those solicitors were familiar with the details of the case and planning to call him as a witness.
Thus, I am satisfied that it is just in the circumstances for the plaintiff to pay the costs of the defendant’s third party notice.
Conclusion
For the reasons set out, I order that:
(a) the plaintiff pay 40% of the defendant’s costs of the proceeding between them, including reserved costs, on an indemnity basis and the plaintiff pay the balance of the costs on a standard basis, such costs to be taxed in default of agreement; and
(b) the plaintiff pay the defendant’s costs of the third party claim, such costs to be taxed on a standard basis in default of agreement.
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