Loktronic Industries Ltd v Diver

The matter concerned an application for costs by the defendants in a proceeding brought by the plaintiff, Loktronic Industries Limited, against the defendants. The proceeding was categorised as 2B at the outset and the defendants sought a re-categorisation to 3B on the basis that the proceedings were more complex than anticipated and the trial was longer and more complex than anticipated. The Court declined to re-categorise the proceeding as 3B, finding that the parties, the scope of the factual enquiry and the essential nature of the claim remained the same throughout. The Court also rejected the defendants’ applications for increased costs on the basis that the plaintiff did not act unreasonably in refusing the settlement offers and pursuing arguments that lacked merit. The Court did, however, order an uplift of 10% in costs in relation to the defendants’ costs in relation to the steps taken to obtain a release of their bank bond given as security for a stay of execution pending appeal. Finally, the Court ordered that Peter Calvert, a former director of the plaintiff, be liable for costs on the basis that he was the real party in the litigation.

The defendants applied for costs following their successful appeal against the plaintiff’s judgment. The defendants sought costs on a number of bases including that the proceedings should be re-categorised as 3B, that the plaintiff unreasonably rejected settlement offers, pursued arguments that lacked merit, and failed to plead the case as eventually relied on. The Court rejected the re-categorisation and the applications for increased costs, finding that the plaintiff did not act unreasonably in rejecting the settlement offers or pursuing arguments that lacked merit and that the failure to plead the case as eventually relied on did not result in the defendants incurring needless costs. The Court did, however, order an uplift of 10% in costs in relation to the plaintiff’s failure to plead the case as eventually relied on. The Court also found that the plaintiff’s former director, Peter Calvert, was the real party in the litigation and ordered him to pay costs jointly and severally with the plaintiff. The Court ordered that the costs be calculated on a 2B basis.