Swick Nominees Pty Ltd T/As Swick Drilling Australia v Norncott Pty Ltd [No 3]
[2013] WASC 173 (S)
•14 OCTOBER 2013
SWICK NOMINEES PTY LTD T/As SWICK DRILLING AUSTRALIA -v- NORNCOTT PTY LTD [No 3] [2013] WASC 173 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2013] WASC 173 (S) | |
| Case No: | CIV:1252/2000 | ON THE PAPERS | |
| Coram: | ALLANSON J | 14/10/13 | |
| 14 | Judgment Part: | 1 of 1 | |
| Result: | Special costs orders refused Costs orders made | ||
| B | |||
| PDF Version |
| Parties: | SWICK NOMINEES PTY LTD T/As SWICK DRILLING AUSTRALIA NORNCOTT PTY LTD DRESSER INDUSTRIES LEROI INTERNATIONAL INC |
Catchwords: | Costs Indemnity Costs Special costs order Legal Profession Act 2008 (WA) s 280 Costs against a non-party Turns on own facts |
Legislation: | Legal Practice Act 2003 (WA), s 215 Legal Profession Act 2008 (WA), s 280 Rules of the Supreme Court 1971 (WA), O 24A Supreme Court Act 1935 (WA), s 37 |
Case References: | Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175 Bob Jane Corporation Pty Ltd v Barrot FT Pty Ltd (No 2) [2012] SASC 89 Collins v Westralian Sands Ltd (1993) 9 WAR 56 Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (No 4) [2012] FCAFC 50 EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2008] WASC 275 (S) Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1 FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340 Frigger v Lean [2012] WASCA 66 Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435 Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S) Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178 Pasdonnay Pty Ltd v SDS Corporation Ltd [2005] WASCA 9 (S) Queensland v J L Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146 Rushton (Qld) Pty Ltd v Rushton (NSW) Pty Ltd [2004] QSC 47 Swick Nominees Pty Ltd v Norncott Pty Ltd [2008] WASC 24 Verdell Pty Ltd v F & G Nominees Pty Ltd [2002] WASC 58 (S2) Yara Australia Pty Ltd v Oswal [2012] WASCA 264 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
NORNCOTT PTY LTD
First Defendant
DRESSER INDUSTRIES
Second Defendant
LEROI INTERNATIONAL INC
Third Defendant
Catchwords:
Costs - Indemnity Costs - Special costs order - Legal Profession Act 2008 (WA) s 280 - Costs against a non-party - Turns on own facts
Legislation:
Legal Practice Act 2003 (WA), s 215
Legal Profession Act 2008 (WA), s 280
Rules of the Supreme Court 1971 (WA), O 24A
Supreme Court Act 1935 (WA), s 37
Result:
Special costs orders refused
Costs orders made
Category: B
Representation:
Counsel:
Plaintiff : No appearance
First Defendant : No appearance
Second Defendant : No appearance
Third Defendant : No appearance
Solicitors:
Plaintiff : Eastwood Sweeney Law
First Defendant : No appearance
Second Defendant : No appearance
Third Defendant : Minter Ellison
Case(s) referred to in judgment(s):
Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175
Bob Jane Corporation Pty Ltd v Barrot FT Pty Ltd (No 2) [2012] SASC 89
Collins v Westralian Sands Ltd (1993) 9 WAR 56
Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (No 4) [2012] FCAFC 50
EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2008] WASC 275 (S)
Ford Motor Company of Australia Ltd v Lo Presti [2009] WASCA 115; (2009) 41 WAR 1
FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340
Frigger v Lean [2012] WASCA 66
Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435
Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq) [2007] WASC 254 (S)
Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178
Pasdonnay Pty Ltd v SDS Corporation Ltd [2005] WASCA 9 (S)
Queensland v J L Holdings Pty Ltd [1997] HCA 1; (1997) 189 CLR 146
Rushton (Qld) Pty Ltd v Rushton (NSW) Pty Ltd [2004] QSC 47
Swick Nominees Pty Ltd v Norncott Pty Ltd [2008] WASC 24
Verdell Pty Ltd v F & G Nominees Pty Ltd [2002] WASC 58 (S2)
Yara Australia Pty Ltd v Oswal [2012] WASCA 264
1 ALLANSON J: On 9 May 2013 I gave judgment in this matter. In effect I found that, on the facts that had been established, the first defendant Norncott Pty Ltd would be liable to the plaintiff for damages. I did not enter judgment as Norncott was not then registered as a company. I entered judgment for the third defendant, LeRoi International Inc, dismissing the plaintiff's claim against it.
2 The action was for damages under various causes of action for losses suffered by the plaintiff arising from its purchase of a piece of mining equipment, a LeRoi TS24 air compressor, which was defective. Norncott was sued as the supplier, and the third defendant as the designer and manufacturer, of the TS24.
3 The third defendant now seeks special orders as to the costs of the action. The issue of costs is complicated by the unusual history of these proceedings. It also appears that the costs which the third defendant has incurred, or at least the amounts billed to the third defendant by its solicitors up to 9 May 2013, far exceed the amount of any judgment that the plaintiff would obtain against the first defendant on the findings I made. Those costs may exceed the damages that the plaintiff would have recovered had it been wholly successful in its claim. The issue of costs in these circumstances takes on significance for both plaintiff and defendant which may be disproportionate to the value of the subject matter of the trial.
4 It is particularly disproportionate where the evidence in the trial was so limited. The volume of documents was comparatively small. There were only three witnesses as to the facts. Apart from accounting evidence led through one witness, the expert evidence was brief and not in any sense complex. Indeed, the absence of expert evidence was the major factor in my finding on liability.
5 The third defendant pleaded an essentially negative case, consisting of little more than a denial of liability, and called only one witness.
The history of the proceedings
6 The action began in March 2000. In October 2000 the writ was amended and the statement of claim filed. There were practical complications for the plaintiff because the second defendant (Dresser Industries Inc) and third defendant were corporations resident in the United States of America.
7 Ultimately, service must have been effected on someone, as a firm of solicitors (Minter Ellison) entered appearances for each of the second and third defendants on 30 August 2001. Later, although only in 2008, the third defendant filed evidence to the effect that, although Minter Ellison had been on record as acting for the second defendant for about six years, it is unlikely that the firm had ever been instructed to act on behalf of the second defendant. It is not necessary to here discuss how this situation occurred.
8 The first defendant filed its defence in January 2002, and the second and third defendants filed a joint defence in March 2002. The defence of the second and third defendants:
1. admitted that the second defendant, or the third defendant, or both of them, designed, manufactured and supplied the 'manufactured compressor' (in the principal judgment, I discuss the relevance of the defined term 'manufactured compressor' where the TS24 first installed was replaced after an initial failure);
2. admitted the first defendant distributed the manufactured compressor;
3. said that reasonable care was taken in the design and manufacture of the manufactured compressor.
9 The positive case pleaded by the second and third defendants was limited. They pleaded that the manufactured compressor was designed and manufactured for normal use at a particular air pressure, using specified oils, and with regular replacement of oil filters. Otherwise, the defence either did not admit, or denied, the allegations in the statement of claim.
10 On 24 October 2003 the action was entered for trial for the first time. The trial did not proceed on that entry for trial. What happened is described by the Master in his reasons in Swick Nominees Pty Ltd v Norncott Pty Ltd[2008] WASC 24 [2] - [5]. In summary, after entry, the plaintiff applied to amend the statement of claim. Owen J ordered the matter be removed from the trial list and sent back for case management by a registrar. The matter progressed, if that word is appropriate, and the parties completed various interlocutory processes. In particular, expert evidence was served on behalf of the plaintiff in 2004.
11 In March 2006, a registrar made orders for the parties to submit the dispute to mediation.
12 On 21 February 2007, a registrar managing the case ordered the plaintiff to achieve entry for trial by 5 April 2007. That did not occur, and the registrar required the plaintiff to show cause why the matter should not be put on the inactive cases list.
13 In May 2007, the solicitors for the parties were discussing the position of the second defendant. A letter of 25 May 2007, from the plaintiff's solicitor to Minter Ellison, shows that the issue being discussed was whether the second defendant had sold its business to the third defendant before the events relevant to the action. In the same letter, the plaintiff refers to the first defendant terminating the retainer of its solicitors.
14 On 22 August 2007, the registrar ordered the matter be placed on the inactive cases list. It was at this hearing that Minter Ellison advised the court that they did not, and never had, acted for the second defendant. In December 2007, the plaintiff applied to remove the case from the list. The master heard that application on 5 February 2008, and ordered that the case be removed from the list. It was in the course of this application that evidence was filed to the effect that Minter Ellison had no instructions to act for the second defendant.
15 Also in about August 2007, the solicitors who were then acting for the first defendant ceased to be on the record. The first defendant was not represented from that time.
16 There was then a period of some, although limited, progress. The parties filed and exchanged witness statements for the non-expert witnesses in 2009. The court record then shows no activity between September 2009 and September 2010, when the plaintiff again attempted to file an entry for trial. The case was then in the inactive causes list again. On 15 June 2011, on the plaintiff's application (which was not opposed), I ordered that it be removed from the list, and later made further orders requiring the plaintiff to give security for costs and to enter the matter for trial within specified times.
17 The matter was entered for trial on 20 December 2011. It was heard over nine days between 19 November and 17 December 2012. Judgment was on 9 May 2013.
The costs orders sought
18 The third defendant seeks the following orders:
1. The plaintiff pay the third defendant's costs of the action to be taxed for the period up to and including 26 June 2003 (alternatively, 1 June 2004).
2. The plaintiff pay the third defendant's costs of the action on an indemnity basis from 27 June 2003 (alternatively, 2 June 2004).
3. In the alternative to order 2 above, the plaintiff pay the third defendant's costs of the action from 26 June 2003 (alternatively, 2 June 2004) on a solicitor and own client basis with such costs being assessed without regard to any limit imposed by the applicable scale of costs.
19 The third defendant seeks incidental orders that it be entitled to the costs of obtaining transcript, and that it be entitled to so much of the money paid into court as security for costs as is required to meet any costs order in its favour. Those orders are not opposed.
20 The third defendant also applies for an order against Randall Lloyd Swick, a former director of the plaintiff and 50% shareholder, that he pay the costs personally.
21 In seeking the orders for indemnity costs, the third defendant relies on two matters.
22 First, by letter dated 26 June 2003, Minter Ellison, as solicitors for the second and third defendants, and the solicitor then acting for the first defendant made a joint offer to compromise the action for a settlement sum of $220,000 and $20,000 in respect of costs 'in full and final settlement of all matters between the parties arising from or connected with the Action'. The parties were to enter into a deed of settlement and release, and the action was to be dismissed with no order as to costs. The offer was to remain open for 14 days from the date of the letter. The letter was expressed to be a Calderbank letter.
23 A further offer to settle was made by an offer to compromise pursuant to O 24A of the Rules of the Supreme Court 1971 (WA) dated 11 July 2003. The offer was again on behalf of all three defendants and offered to compromise the proceedings for the amount of $220,000 plus the costs of the action.
24 Neither offer was accepted.
25 Second, the third defendant says 2 June 2004 is significant as it is the date upon which the plaintiff completed its expert evidence. The third defendant says that from then the plaintiff ought to have been aware, and was on notice, that its expert evidence was inadequate, and was in part inadmissible, and that it failed to address relevant matters that would have to be proved in an action of this type.
Indemnity costs where the plaintiff refuses an offer
26 The principles to be applied on this question were set out in detail by Buss JA in Ford Motor Company of Australia Ltd v Lo Presti[2009] WASCA 115; (2009) 41 WAR 1 [16] - [32]; see also Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435 [23], [25].The critical question is whether the plaintiff's rejection of the offer was unreasonable in all the circumstances. The third defendant, as the party seeking the award of indemnity costs, has the onus of satisfying the court that the plaintiff was unreasonable in rejecting the offer. The question is to be determined in the circumstances as they were at the time the offer was made, and without the benefit of hindsight. This will always involve matters of judgment and impression.
27 In the present case, there are particular complications.
28 First, the offers were made about eight years before the claim came to trial. It is more difficult to assess the circumstances at that time. I have considered the pleadings (since amended), and the orders made. There is no other material before me about the position at that time.
29 Second, the offers were made on behalf of all defendants. As set out above, the offer on behalf of the second defendant was made without instructions, although none of the parties was then aware of that fact. I also take into account, however, that the claim against the second defendant and the third defendant was that one or the other, or both of them, designed and manufactured the LeRoi TS24. That is, there was no independent claim against the second defendant that could have resulted in an additional or increased award of damages.
30 Third, because the offer to compromise was made on behalf of all defendants, the findings which the court ultimately made about the weakness of the plaintiff's case against the third defendant are not relevant. The history of repeated failures of the TS24 over the 18 months after its purchase founded a strong case that the compressor was not reasonably fit for the purpose for which it was required, and not of merchantable quality. It would have been apparent to all parties in 2003 that the plaintiff had a strong case that the first defendant was liable for breach of conditions implied under the Sale of Goods Act 1895 (WA). When the plaintiff rejected the joint offer, it was reasonable for the plaintiff to expect to succeed against the first defendant at least.
31 Fourth, the third defendant says that the offers were made in June and July 2003, and the matter was entered for trial in October 2003. Accordingly, it submits that the plaintiff was in a position to assess the merits of the offers. I am not satisfied I can reach that conclusion. The matter was removed from the trial cases list and returned to case management after the plaintiff applied to amend the statement of claim. A substituted schedule of loss and damage was filed on 3 November 2004.
32 I also have regard to the reason why the plaintiff failed in establishing all of the damages it claimed. The plaintiff pleaded particulars of loss and damage far greater than the amounts I would have allowed. This was, in part, an issue of proof. I found that the plaintiff would have recovered the difference between the value of the compressor unit had it been fit for purpose, and its actual value at the time the plaintiff stopped using it, but made no allowance for this amount in the judgment because I was not satisfied with the evidence adduced. At the time the offers were rejected, the evidence on quantum had not been filed. The third defendant has not demonstrated that, in June 2003, the plaintiff could not, quite reasonably, have expected to establish this aspect of its claim. Similarly, the plaintiff pleaded amounts for equipment hire, some of which it did not sufficiently prove. That is, in 2012, the court did not accept the evidence then adduced. That does not establish that the plaintiff behaved unreasonably in 2003 in maintaining those claims.
33 Finally, the risks of litigation were not so great that the plaintiff, acting reasonably, needed to discount its claim to allow for them. The plaintiff's case for breach of contract was strong.
34 Accordingly, I am not satisfied that the third defendant has shown the plaintiff acted unreasonably in not accepting the offer or offers in 2003.
Indemnity costs for unreasonable conduct
35 The third defendant seeks indemnity costs from 2 June 2004 on a different basis. It relies on the principles summarised by Murphy JA in Yara Australia Pty Ltd v Oswal [2012] WASCA 264 [33]. In particular, an order for indemnity costs may be awarded as a mark of the court's disapproval of improper or unreasonable conduct of litigation where a party persists in what should, on proper consideration, be seen to be a hopeless case.
36 In this regard, the third defendant says that it gave the plaintiff notice about the deficiencies in its case in negligence, and relies upon the findings made at trial.
37 The parties have put before me some of the correspondence between them in 2004, in which they argued the adequacy of the evidence. That discussion seems to have continued (or been restarted) at the end of 2005. I am not satisfied that the conduct of the plaintiff in continuing the action after 2 June 2004 (the only time relied upon by the third defendant) was unreasonable. There are several matters which lead me to this result.
38 First, the third defendant refers to a series of findings in the judgment. Perhaps the most relevant of these findings (at par 133 to 135) related to the failure of the plaintiff to adduce expert evidence on the design and manufacture of the compressor. But the distinction between a case that fails, and one so hopeless that it ought not to have been pursued, should be maintained. The plaintiff established that the TS24 (those operated by the plaintiff and others) had failed repeatedly and was unfit for its purpose. This caused the plaintiff loss. The third defendant, as it belatedly conceded, was under a duty of care not to cause economic loss to the plaintiff. While I was not satisfied that I should infer negligence without expert evidence, that does not mean a case relying on that inference should have been seen to be a hopeless case.
39 Second, the third defendant relies on the case being hopeless, and evidently so, from June 2004. Even if the evidence that the plaintiff then relied upon was inadequate, the plaintiff may have been able to supplement its case and introduce additional evidence. Following Aon Risk Services Australia Limited v Australian National University [2009] HCA 27;(2009) 239 CLR 175, an application to rely on additional evidence may not have succeeded. But in 2004, the plaintiff could reasonably have expected to be permitted to amend its case, or file additional evidence, under the principles set out in Queensland v J L Holdings Pty Ltd[1997] HCA 1; (1997) 189 CLR 146.
40 Third, the plaintiff's persistence in its case against the first defendant is puzzling. I have no way of knowing whether there is some benefit in a judgment against a company that has only been reregistered for the purposes of the trial. But this does not affect whether it was reasonable to continue against the third defendant. The inclusion of the first defendant did not affect the evidence led at trial. The additional time in submissions relating to the first defendant was not significant.
41 Fourth, the third defendant refers to the nine years that elapsed from 2004 until the matter finally went to trial. It could, however, have entered the matter for trial itself, or applied to have the action struck out.
42 Taking all of these matters into account, I am not satisfied that the third defendant has shown the conduct of the litigation by the plaintiff was so unreasonable that the court should mark its disapproval by an order for indemnity costs.
Special costs order
43 As an alternative, the third defendant applies for a special costs order that costs be assessed without regard to any limit imposed by the applicable scale of costs. Such an order may be made under s 280 of the Legal Profession Act 2008 (WA) where the court is of the opinion that the amount of costs allowable in respect of a matter under a costs determination is inadequate because of the unusual difficulty, complexity or importance of the matter: see also Legal Practice Act 2003 (WA), s 215.
44 The first question is whether the conditions for the making of a special costs order are satisfied. The judgment to be made by the court is, at this stage, 'preliminary and provisional': Collins v Westralian Sands Ltd (1993) 9 WAR 56, 64, 68; Pasdonnay Pty Ltd v SDS Corporation Ltd [2005] WASCA 9 (S). The party seeking the order needs to show that it should not be precluded from advancing to the taxing officer a fairly arguable case that its bill should tax at an amount greater than the limit in the determination: Heartlink Ltd v Jones as Liquidator of HL Diagnostics Pty Ltd (in liq)[2007] WASC 254 (S) [25]. The questions raised by the section are to be addressed as matters of impression rather than detailed evaluation: EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd [2008] WASC 275 (S) [7]. The court may be able to make the required judgment from its own observations and knowledge of the matter without requiring further evidence: Frigger v Lean [2012] WASCA 66 [82]; Verdell Pty Ltd v F & G Nominees Pty Ltd[2002] WASC 58 (S2) [14] - [15].
45 The case was unusual in its history. But it has not been shown to be unusually difficult, complex or important. The matters pleaded were straightforward. The third defendant pleaded a very limited case. There were only three witnesses to the facts, few of which were in dispute. The third defendant called one non-expert witness. The plaintiff called limited and not particularly technical expert evidence, the third defendant called none. No complex issues of law were litigated. Although the plaintiff spent some time in submissions on whether the third defendant was under a duty of care to not cause purely economic loss, the third defendant belatedly conceded that it was.
46 Because the matter was in the lists for so long, there were many interlocutory applications. In at least some of these, costs orders were made at the time. More generally, the length of the matter does not, in itself, bring the matter within s 280.
47 The third defendant refers to the fact that some of the work was done when the relevant costs determination provided a lower amount than the current determination. I cannot see the relevance of that submission. The work was done then, and presumably charged to the client then.
Costs against a non-party
48 The third defendant seeks costs against Randall Swick personally. The court has power under s 37 of the Supreme Court Act 1935 (WA) to make an order for costs against a person who is not a party to the action.
49 The category of cases in which a costs order may properly be made against a non-party is not closed: Dunghutti Elders Council (Aboriginal Corporation) RNTBC v Registrar of Aboriginal and Torres Strait Islander Corporations (No 4) [2012] FCAFC 50 [71], [93]. In Dunghutti Elders Council the court accepted that it had power to make an order for costs against a non-party
where the non-party is connected with the unsuccessful party to the proceeding, and has caused that party to start, continue or prosecute the proceeding in circumstances where the non-party's conduct makes it just and equitable that the non-party be visited with an order for costs in favour of the successful party either in addition to such an order against the unsuccessful party or in substitution for such an order [88].
50 To determine whether such an order is just and equitable, the court must carry out an evaluative assessment of several interacting factors: FPM Constructions Pty Ltd v Council of the City of Blue Mountains [2005] NSWCA 340. Relevant factors include: where the party to the litigation is insolvent or a man of straw; where the non-party has played an active part in the conduct of the litigation; and where the non-party, or some person on whose behalf he or she is acting or by whom he or she has been appointed, has an interest in the subject of the litigation. In the category of cases identified by those factors, an order for costs should be made against the non-party if the interests of justice require that it be made: Knight v FP Special Assets Ltd [1992] HCA 28; (1992) 174 CLR 178, 192 - 193.
51 There is no question that the losses claimed were suffered by the plaintiff and it was the proper party to bring the proceedings. Mr Swick could not have brought proceedings on his own behalf.
52 What was the role of Mr Swick in the conduct of this litigation? Mr Swick was a director of the plaintiff until 2007. He was active in the conduct of the case. I do not see how the case could have been conducted otherwise: Mr Swick was a director and the general manager of the plaintiff at the time of all relevant events; he was the primary witness from the plaintiff. The only other witnesses to the facts were employees of the first defendant. I have already found that I am not satisfied the plaintiff behaved unreasonably in maintaining the proceedings.
53 A costs order may be made against a director of a corporate plaintiff. But the fact that Mr Swick was a director of the plaintiff (until 2007) is not, in itself, a sufficient reason to make an order against him or her: FPM Constructions; Rushton (Qld) Pty Ltd v Rushton (NSW) Pty Ltd[2004] QSC 47 [12] - [15]. Nor is it sufficient that, as director, he played an active part in the conduct of the litigation. Cases where an order against a director have been made are discussed by Kourakis J in Bob Jane Corporation Pty Ltd v Barrot FT Pty Ltd (No 2) [2012] SASC 89: they include where a director has used a corporate body as a shield behind which he could pursue his own interests without exposure to personal liability; and where a director transferred assets out of a corporation into other entities controlled by him for the sole purpose of evading an anticipated costs order. These are only examples. There may be many circumstances where directors engage in conduct which would make an order for costs against them just and equitable. But the third defendant has not shown anything in the circumstances of this case to satisfy me that it is just and equitable that a director of the plaintiff should be liable.
54 Mr Swick has other interests in the proceedings. He holds 50% of the shares in the plaintiff, but the derivative interest of a shareholder does not, in itself, constitute the shareholder as the 'real party' for the purposes of the discretion to award costs: FPM Constructions[207].
55 The plaintiff is a trustee company. There is no evidence about whether Mr Swick has an interest in the trust. The current directors are, however, members of his family. The plaintiff no longer carries on the drilling business, but there is no suggestion this was to avoid any liability for costs. There is no evidence about its assets. The plaintiff agreed to an order for security for costs as a condition of the case being taken from the inactive cases list in 2011, and was able to obtain $225,000 to pay into court as security. In the absence of any further evidence about the plaintiff's position, I accept that it may not be able to meet a costs order should that order substantially exceed the amount now paid into court. That is not a sufficient basis to order a non-party to meet the balance of any liability.
Conclusion
56 For these reasons I am not satisfied that any special costs order should be made. The orders will be:
1. The plaintiff pay the third defendant's costs of the action to be taxed.
2. The third defendant is entitled to the costs of obtaining transcript of any hearing conducted in this action.
3. The third defendant is entitled to so much of the money paid into court as security for costs as is required to meet any costs order in its favour.
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