Naidu v Boladuadua [2011] FJHC 188; HBC189.2007L (24 March 2011)

IN THE HIGH COURT OF FIJI
AT LAUTOKA
CIVIL JURISDICTION

Civil Action No: HBC 189 of 2007L

BETWEEN:

KRISHNA SAMI NAIDU
Plaintiff

AND:

AMITAI BOLADUADUA
1st Defendant

AND:

NATIVE LAND TRUST BOARD
2nd Defendant

FINAL JUDGMENT

Judgment of: Inoke J.

Counsel Appearing: Ms M Lord for the Plaintiff.
Mr K Vuataki for the 1st Defendant.
Ms I Fifita for the 2nd Defendant.

Solicitors: Iqbal Khan & Assocs for the Plaintiff.
Vuataki Law for the 1st Defendant.
In-house solicitors for the 2nd Defendant.

Date of Hearing: 31 August, 5 and 15 October 2010
Date of Judgment: 24 March 2011

INTRODUCTION

[1] The Plaintiff and the First Defendant entered into an agreement in which the Plaintiff was to buy the First Defendant’s native land. The proposed sale and purchase did not take place and the Plaintiff now sues the First Defendant for an injunction to restrain the First Defendant from selling the land to anyone else and an order that the land be transferred to him. The Second Defendant has been joined because it is the statutory trustee of the land in question and is being sought to be similarly restrained.

[2] This is the judgment after trial on 31 August and oral submissions on 5 and 15 October 2010.

CASE HISTORY

[3] The Statement of Claim and Writ of Summons was first filed in the Suva High Court on 22 February 2007 as HBC 66 of 2007S. Accompanying it was an ex-parte motion and an affidavit in support seeking interim orders restraining the First Defendant (“Amitai”) and the Native Land Trust Board (“NLTB”) from selling or otherwise disposing the land to someone else. Coventry J heard the application on 23 February 2007 and granted the orders sought. The restraint was to remain in force until the substantive action is resolved. The First Defendant acknowledged service of the proceedings on 1 March 2007 and filed his Defence on 5 April 2007. The Second Defendant filed its Defence on 3 April 2007. No Reply has been filed. On 5 April 2007 the First Defendant filed an application for this matter to be transferred to this Court and the action be struck out. The solicitors for the First Defendant could not locate the solicitors for the Plaintiff to serve the Court documents because the latter had moved office so they filed an ex-parte application for substituted service. On 8 June 2007 counsel for the Plaintiff did not appear and Coventry J ordered that this matter be transferred to this Court. On 26 June 2007, solicitors for the Plaintiff filed an application in this Court for the matter to be transferred back to Suva. The application came before Phillips J in this Court who was informed that counsel for the Plaintiff had suffered a heart attack and, at the request of counsel then appearing, gave directions for service of proceedings. On 13 July 2007, Phillips J dismissed the Plaintiff’s applications and gave directions for the filing of the Summons for Directions. The Plaintiff changed solicitors on 20 August 2007 to his current solicitors who filed the Summons for Directions on 13 September 2007. Three Court appearances later the Order on the Summons was given on 10 October 2007. The action lay dormant until 18 March 2008 before the Plaintiff’s solicitors filed a Notice requiring a Pre-Trial Conference under O 34, r 2 of the High Court Rules 1988 (HCR). The Minutes of the PTC was finally filed on 31 October 2008. Again the action went dead until this Registry issued a notice under O 25, r 9 HCR to the Plaintiff to attend on 18 December 2008 to show cause why his action should not be struck out for want of prosecution and abuse of process. That would have fallen in the Court vacation and may explain why the matter did not get called again in Court until 11 March 2009 before Master Udit. The matter was then adjourned to 16 April 2009. As these Courts became closed on 10 April 2009, the matter did not come back to Court until 21 September 2009 before Master Tuilevuka. Four appearances later before the Master the matter eventually came before me on 10 December 2009 on which date I set it down for hearing on 27 August 2010. The hearing could not proceed on 27 August 2010 because the Court clerks had to attend a workshop in Suva so I adjourned the hearing to 30 and 31 August 2010.

THE STATEMENT OF CLAIM

[4] The Statement of Claim has been poorly drafted so I will paraphrase. Mr Naidu states that he and Amitai entered into an “agreement and arrangement” for the purchase of native land in Sabeto in Nadi. The land is described in Instrument of Tenancy number 6701, known as Tovatova (C/N 911) Lot 1, situated in the Province of Ba in the District of Sabeto, containing a total area of 2.2258 hectares. On 18 January 2007, he and Amitai signed a Transfer, facilitated by an NLTB officer, which was lodged for stamping on the next day. On 30 January 2007, his solicitors wrote to the NLTB to find out what had happened to the transaction. The NLTB replied on 7 February 2007 that the Transfer was being put on hold because Amitai had told the NLTB to stop the transaction. His solicitors wrote to the NLTB on 8 February 2007 expressing their concern and disappointment with the First Defendant’s action as not being forthright in his dealings with him. He was still interested in purchasing the land but had heard that Amitai was selling the land to someone else in breach of their agreement. He sues for an injunction restraining both Defendants from disposing, selling or transferring the land to any other person, and order that the Transfer be effected and executed, an order that the land be transferred to him, special damages of $500, general and exemplary damages and costs.

THE FIRST DEFENDANT’S DEFENCE

[5] In his Defence, Amitai says that the land is held by him as the administrator of the previous owners, his mother and father, now deceased. He had a verbal agreement with Krishna Naidu, the Plaintiff, in which Krishna Naidu promised to buy his farm land for $130,000. The purchase price was to be paid by Krishna Naidu giving him a new van worth $80,000 or more and the balance to be paid in installments of $10,000 each commencing from 31 July 2007 with the final payment on 31 July 2009. The new van was to be delivered to Amitai on him signing the Transfer. The agreement was entered into without the consent of the NLTB. He admits signing the Transfer of the land on 18 January 2007 but says that Krishna Naidu did not deliver the new van afterwards as promised. Instead, Krishna Naidu tried to give him a rusty old van that was being held in the repossession yard of the Fiji Development Bank in Suva which he refused to accept. This was a breach of their agreement and because of that he refused to sign the consent form and cancelled the transaction. He terminated the transaction because of Krishna Naidu’s breach and entered into a contract to sell to a third party on 5 February 2007 for which the third party has already paid $25,663.50 to the NLTB. Further, the agreement between him and Krishna Naidu was verbal and not consented to by the NLTB and is therefore null and void.

THE DEFENCE OF THE SECOND DEFENDANT

[6] The NLTB is the administrator of all native land including the land in question for the benefit of landowners as provided for in the Native Land Trust Act [Cap 134]. It did receive instructions from Amitai and Krishna Naidu to prepare, stamp and register a Transfer of the subject land. On 18 January 2007, it received an application for consent and did give consent for the transfer of the said land from Amitai to Krishna Naidu for $10,000. On 19 January 2007 it facilitated the stamping of the Transfer but was told by Amitai to withhold registration of the Transfer until further instructions. It later received an undated letter from the Amitai to withhold registration because of non-payment of the full consideration. The NLTB did inform the Plaintiff by letter dated 8 February 2007 that it was not in a position to proceed with the transfer in light of the instructions from Amitai. Further, the NLTB was owed fees and costs for the transfer and stamp duty.

THE ADMITTED FACTS

[7] The agreed facts as appear from the PTC Minutes were that Amitai held the land as trustee for his deceased parents. The Plaintiff and the First Defendant entered into negotiations for the Plaintiff to buy the land. The First Defendant later withdrew from the negotiations. The First Defendant instead surrendered the lease to the Second Defendant who cancelled it and offered a new lease over the land to a third party, who has accepted it.

THE EVIDENCE AT THE TRIAL
THE PLAINTIFF’S EVIDENCE
PW1

[8] The Plaintiff, Krishna Sami Naidu, gave evidence first. He is a business man from Labasa. He knows of the land held by Amitai. The title is Instrument of Tenancy No 6701. He entered into an agreement with him to buy the land. Amitai got the land through transmission by death. The transmission[1] was done by the NLTB solicitors. Amitai was to transfer the land to him for $10,000. They did the transfer at the NLTB office. The transfer was done on 18 January 2007. He paid Amitai $10,000. The transfer document[2] was lodged with the NLTB. Marawai Law was his solicitor. Mr Marawai witnessed Amitai receiving the $10,000 from him. The Application for consent to assign was prepared by the NLTB legal department. The NLTB legal department prepared his documents. His signature was not witnessed after he signed. The transaction was approved by Inia, an officer employed by the NLTB. He did not know of any agreement between Amitai and anyone else for the sale of the land. He was not told by Amitai. All he knew was that Amitai did not complete the transfer. He denied agreeing to transfer a van for the land. He only agreed to pay $10,000.

[9] In cross examination by Mr Vuataki, counsel for the First Defendant, Mr Naidu said that one day on his way to Lautoka he went and saw Amitai and asked him if he was willing to sell his land. A week later they met in a hotel and he said to Amitai to come to Suva and bring his property documents. He knew that the land came under the Nadi area. He denied having met Seka from the Nadi NLTB office. He was not aware at the time that the lease had already been surrendered. He never checked with the Nadi office. He went to Suva and was told that the land did not belong to Amitai. A transmission by death had to be done. He knew a Qoli who was an NLTB officer in Labasa. But he denied that he went to Suva instead of Nadi because Qoli, his friend, was then in the Suva office. Mr Naidu met Amitai outside the NLTB office in Suva. He took Amitai to the legal department. They saw Torika who told them Amitai was not the proper owner. They talked about the price being $10,000. He did not know that the land was worth $130,000. He denied that he agreed to buy the land for $130,000 and a brand new van. There was a four bedroom house built on the land. The area had commercial and light industrial developments. He agreed that the land was worth more than $10,000. He said his friend Qoli only saw them when the transmission by death and the application for consent to transfer were being done. He denied that it was Qoli that was directing Torika as to what was to be done. The $10,000 was paid when they signed the Transfer on 18 January 2007. When asked why the Transfer was worded: “to be paid” which meant that it was to be paid in the future, Naidu answered: “I did not prepare the document”. It was put to him and he denied that Qoli said to put $10,000 to avoid stamp duty but the real price was $130,000. He also denied that he said to Amitai to come back later and he would give Amitai the van. He denied having met Amitai again in Suva in 2007 in the office of the solicitor Mr Marawai. He also denied that he took Amitai to the Fiji Development Bank car lot and showed Amitai a rusty van with two punctured front tyres and told Amitai that he would fix the van for him. He denied that the agreement was for him to pay $130,000 for the land by giving Amitai a new van worth $80,000 and $40,000 for the house. It was also put and he denied that he never paid the $10,000 because it was only put in the Transfer for stamp duty purposes.

[10] In cross examination by Ms Fifita, counsel for the NLTB, Mr Naidu denied that Qoli was directing the transaction. He only dealt with (Alanieta) Vakatale (NLTB solicitor) and Torika (NLTB clerk). The application[3] for consent to transfer was approved by “Inia Q Tavatuilagi” (Qoli). He denied that the transmission by death was signed in Lautoka rather than in Suva. I observed Mr Naidu to be rather hesitant and evasive in answering counsel’s questions.

THE FIRST DEFENDANT’S EVIDENCE
D1W1

[11] Amitai Boladuadua gave evidence. He is a farmer. The land was his parents’ who are now dead. He resides on the land in a four bedroom house with his family. He knew the Plaintiff, Naidu. He was at home on 15 January 2007 when Naidu came with an NLTB officer, Sekaniana (Seka). Seka told him to talk to Naidu about entering into a deal with the land. He talked to Naidu because Seka was an NLTB officer. He told Naidu that he wanted $130,000 to be paid by a new minibus van and cash balance. There was nothing in writing. Naidu agreed. Naidu told him to come to Suva to settle the agreement. He went there on 18 January 2007. Naidu was waiting for him outside the NLTB Suva office. He took him to the legal department and was told to wait in a room. Naidu then called Inia Qoli who came and met him. He had never met Qoli before. Qoli called Torika, whom he had never met before, and told Torika to write what he was to say. Amitai said he told Qoli that he had already made a deal with Naidu. Qoli asked how much and he told him $130,000 – minibus to be given first and the balance by instalments of $10,000 each. Qoli showed him a document[4] (the application for consent to transfer) and told him to sign it. He did not know who wrote the names in the document. Qoli and Naidu explained to him that he should not put in a large sum because Naidu would have to pay big money for stamp duty to government. If the amount was $10,000 then stamp duty would be small. He signed the document. He also signed the Transfer. The documents were not witnessed at the time because only he, Naidu, Qoli and Torika were present in the room. He did not know of Vakatale who witnessed his signature (on the Transfer). He did not sign the Transfer in front of her. He was not paid $10,000 at all before or after signing the Transfer on 18 January 2007. The documents were not explained to him.

[12] Naidu asked him to come back to Suva on 26 January 2007 which he did and met him again outside the NLTB office. He took him to Naidu’s lawyer, Mr Marawai and they talked about the purchase price for the land. He told Mr Marawai that Naidu would give him a van and the balance by $10,000 instalments until December 2009. Mr Marawai told him to put down $10,000 because of the “cost”. He did not know what was meant by “cost”. After signing, Naidu took him to the FDB car park and showed him a seven seater van. All the tyres were punctured and the van was rusty. Naidu told him that he would take the van for maintenance then he would come back to him. He did not want the van. So when he came back home he asked his wife to write a letter to the NLTB to stop the sale to Naidu. He wanted it stopped because he did not agree with what Naidu had done. First, the van was bad and second he did not like the $10,000 price. He did not like selling for $130,000 and writing down $10,000. His wife wrote the letter[5] and he signed it. The letter was written in Fijian. The letter was undated but it was stamped received by the NLTB on 2 February 2007. The translation into English is Exhibit D4A. It reads:

Dear Sir,

With respect, I request if you could withhold Transfer of my lease to KRISHNA SAMI NAIDU of Vulovi, Labasa. This is due to the fact that our discussions in respect of the same are not clear at this present time:

(a) Purchase price $80,000, whilst $10,000 was written as being consideration for Stamp Duty purposes.

(b) Provision of 1 van (I am yet to be provided with this).

The purpose therefore of this letter is to seek your intervention as General Manager (NLTB Suva) to withhold transfer of my leased land ...

[13] He went to Mohammed Sadiq & Sons after he came back from Suva. He realised that Naidu had tricked him. He entered into a sales and purchase agreement with the company on 5 February 2007[6]. The purchase price is $120,000 of which $6,450 has already been paid, $20,000 to be paid when the Director of Town and Country Planning gives his consent to rezoning of the land and the balance of $93,550 to be paid on settlement. Settlement was to take place 10 days after surrender of the existing Instrument of Tenancy and the issue of the development lease. He negotiated with the buyer to leave his house on the land. The land is to be subdivided with his land on his own block. The proposed scheme plan[7] shows it. He does not want to sell to Naidu because Naidu wants him and his family to move out of the land. It was a gift from his parents. He signed a surrender of the lease with NLTB in Nadi. He wants the sale with Sadiq & Sons to proceed.

[14] In cross examination by Ms Fifita, Amitai confirmed that he was approached by Naidu and the NLTB officer Seka. He surrendered the lease before he met Naidu. The transmission by death was singed in Lautoka before the solicitor Koila Kabu.

[15] In cross examination by Ms Lord, counsel for the Plaintiff, Amitai said the reason he did not tell Naidu and the NLTB officer that the lease had already been surrendered was the NLTB officer was there so he thought he could enter into an agreement with Naidu. He had already told the NLTB officers in Suva that he had surrendered the lease. The application for the development lease was made before the transmission by death. He was not educated so he signed the documents when they were given to him to sign. He trusted the NLTB officers.

[16] In re-examination, he said he met the General Manager, Benuci, and the representatives of the mataqali who signed the documents to start the development of the land by Sadiq & Sons.

D1W2

[17] The second witness for the First Defendant was Joveci Bainivalu. He was a former employee of the NLTB. He left NLTB on 16 March 2007 after 23 years. He was based in the Nadi office as an estate officer in 2006. He was responsible for leases in the Nadi area. He was familiar with Amitai’s lot. It had been earmarked for development purposes; anything apart from sugar cane farming or agricultural purposes such as commercial and industrial. The lot here is about 6 acres. The do their own valuations. At the time in 2006, the value of this lot was about $20,000 per acre. Sale at $10,000 would be at great undervalue. The NLTB was approached towards the end of 2006 by Amitai and Mohammed Sadiq of Mohammed Sadiq & Sons Ltd for Sadiq to buy the lease from Amitai. He advised them to get the probate papers and transmission by death done before negotiations could start. He instructed Meli Benuci to prepare the development lease subject to surrender of the current lease. A letter of offer[8] was prepared, dated 11 December 2006, on the General Manager’s instructions and sent to Mohammed Sadiq & Sons Ltd for development of the land as commercial land. He prepared the surrender documents on instructions pending registration of the transmission by death. The surrender document was signed by Amitai and witnessed by Benuci, Manager South West. The lease document was held in the NLTB legal department. The transmission by death was witnessed by Koila Kabu who was the NLTB solicitor in Lautoka. The consent[9] to transfer the lease was stamped approved by Inia (Qoli) who was an NLTB officer in Suva. He did not know that Inia had approved the transfer. The normal procedure for Sabeto land as the one in this case was for consent to be given by the office in the region which was Nadi in this case. The witness to the Transfer[10] was Alanieta Vakatale who was the manager legal stationed in the Suva office of the NLTB.

[18] When the approval for development was given the file was in the Nadi office. He knew Sekaia Nabou (Seka). Seka was an estate assistant. He was looking after the Sabeto area but not industrial development leases; only agricultural leases. The NLTB letter (of offer of development) of 11 December 2006[11] asked for Mohammed Sadiq & Sons Ltd to pay $25,663.50 as fees. That sum was paid to NLTB and receipted on 12 February 2007[12]. The next step is the issue of the Development lease but that has been stopped because of this case.

[19] In cross examination by Ms Fifita, he said he was not aware that the surrender had been registered. The Development lease was not registered because they were awaiting the registration of the Transmission by Death to be sent back from Suva. Then this Court action followed and everything stopped.

[20] When cross examined by Ms Lord, he knew of the surrender of the lease because he prepared the documents in early January 2007; but not the Transfer because it was done in Suva. The offer of a lease was subject to surrender of the Instrument of Tenancy and Amitai was given time to do the Transmission by Death; it was dated 11 December 2006 for the lease to start on 1 January 2007. It was not done in time.

D1W3

[21] The third witness for the First Defendant as Mohammed Sahid. He was a cane farmer and business man. He is the managing director of Mohammed Sadiq & Sons Limited. He knew Amitai’s parents and Amitai since he was a boy. They entered into a land deal with the assistance of the NLTB to purchase Amitai’s land. The Sale and Purchase Agreement[13] was signed by him and his brother under seal of the company. The purchase price is $120,000. He paid for all the expenses for the Letters of Administration issued to Amitai. Amitai approached him and they went and saw Bainivalu at NLTB. Amitai signed the surrender in front of Manager Benuci and him. He could not recall whether the landowner’s representatives were there or not. The offer to him was made on 11 December 2006[14]. The company had paid $25,663.50 as required under the offer. The Scheme Plan[15] has been lodged with the Nadi Town council. Approval has been held up because of this case. The Plan showed the block on which Amitai’s house is on as part of the subdivision. The company is ready to do the development. It would cost about $700,000 to raise the land and seal it. He had never seen the Plaintiff Naidu before; the first time was in Court.

[22] In cross examination by Ms Lord, he said after signing the agreement it was later explained to him that the Transmission by Death was required so he paid for all the expenses to have it done. He was not aware of the dealings between Amitai and Naidu.

THE SECOND DEFENDANT’S EVIDENCE
D2W1

[23] Asaeli Moce gave evidence for the NLTB. He has been an estate officer for the Sabeto area for two and a half years covering all types of leases. Instrument of Tenancy 6701 is one of their files. Joveci looked after this file at the time. The consent to transfer remained valid for 3 months and the transfer must be done within that time otherwise a new application has to be lodged. NLTB policy was that consent had to be approved in Nadi. The approval by Inia Qio in Suva was not in accordance with the policy. Inia’s employment has been terminated. He also knew Sekaia whose employment has also been terminated by the NLTB. He confirmed that the documents for the Development lease with the company were in their files but there were no records in their land files of dealings with Naidu.

[24] When cross examined by Mr Vuataki, he said the land filed contained the surrender signed by Amitai and witnessed by Benuci. All processing has been put on hold because of this Court case.

[25] When cross examined by Ms Lord, he said the surrender has not been registered. He said it was the responsibility of the applicant to make sure that the document is witnessed.

CONSIDERATION OF THE EVIDENCE AND FINDINGS OF FACT

[26] Having heard and observed the witnesses in this case, I find the Plaintiff, Naidu, an unreliable witness. He was very hesitant and evasive in his answers especially in matters which were adverse to his case. On the other hand I find the First Defendant Amitai a frank and straight forward witness and prefer his evidence instead of Naidu’s in respect of their dealings and the terms of the agreement that they reached.

[27] I accept Amitai’s evidence that the agreement reached with Naidu was that Naidu would pay him $130,000 for the land by giving him a new minivan worth $80,000 and the balance to be paid by installments of $10,000. And that he signed the Transfer and Application for consent on this basis. I accept his explanation that the $10,000 consideration was put in the Transfer for stamp duty purposes on the advice of Qio and Naidu and Naidu’s lawyer. He trusted and relied totally on the advice of the NLTB officers and I think in the circumstances of this case it was quite reasonable for him to do that. I also accept Amitai’s evidence that Naidu reneged on their agreement by showing him a used van to be repaired and given to him as part of the purchase price and by not paying him a single cent.

CONSIDERATION OF THE PLAINTIFF’S CLAIM

[28] The Plaintiff’s claim is premised on a contract of sale that is enforceable. I will assume that the contract was a valid one as I do not think that I need to make such a determination for the purposes of this judgment.

[29] It is clear from the facts as I have found them that the claim must fail for two reasons: (1) total failure of consideration, and/or (2) fundamental breach of contract entitling the First Defendant to terminate the contract. They are such trite principles of law that I do not need to cite any case authority to support them.

[30] It also follows that there is no longer any basis for continuing the interim injunctions granted by Coventry J on 23 February 2007 and they should therefore be dissolved forthwith.

COSTS

[31] The First Defendant asks for indemnity costs. The Second Defendant did not specifically ask for indemnity costs but costs being discretionary I think it is open to me to decide the costs for both Defendants on the same basis.

[32] In my view, this is one of those hopeless cases that should have never been brought in the first place. The Plaintiff is an astute business man and the First Defendant is a simple cane farmer. I think the Plaintiff issued these proceedings on a speculative basis to embarrass and pressure the First Defendant to buckle and give in.

[33] In Lok v Singh [2010] FJHC 7; HBC321.2000L (20 January 2010), I set out the relevant principles for deciding indemnity costs as follows:

[18] Mr Lok asks for costs on an indemnity basis. In Khan v Carpenters Fiji Ltd [2009] FJHC 149; HBC132.2003 (23 July 2009), I adopted the principles discussed by Judge Hickey In Singh v Naupoto [2008] HBC 199/08, Costs Decision of 8 August 2008, and Rokotuiviwa v Seveci [2008] FJHC 221; HBC374.2007 (12 September 2008):

In Singh (supra)[2] His Lordship referred to the Federal Court of Australia decision in Colgate-Palmolive Company and Colgate-Palmolive Pty Limited v Cussons Pty Limited; Cussons Pty Limited v Colgate-Palmolive Company and Colgate-Palmolive Pty Limited [1993] FCA 536; (1993) 46 FCR 225 (10 November 1993), in which Sheppard J outlined the principles as follows:[3]

"It seems to me that the following principles or guidelines can be distilled out of the authorities to which I have referred:-

1. The problem arises in adversary litigation, i.e. litigation as between parties at arm's length. Different considerations apply where parties may be found to be entitled to the payment of their costs out of a fund or assets being administered by or under the control of a trustee, liquidator, receiver or person in a like position, e.g. a government agency or statutory authority.

2. The ordinary rule is that, where the Court orders the costs of one party to litigation to be paid by another party, the order is for payment of those costs on the party and party basis. In this Court the provisions of Order 62, rules 12 and 19, and the Second Schedule to the Rules will apply to the taxation. In many cases the result will be that the amount recovered by the successful party under the Order will fall short of (in many cases well short of) a complete indemnity.

3. This has been the settled practice for centuries in England. It is a practice which is entrenched in Australia. Either legislation (perhaps in the form of an amendment to rules of Court) or a decision of an intermediate court of appeal or of the High Court would be required to alter it. No doubt any consideration of whether there should be any change in the practice would require the resolution of the competing considerations mentioned by Devlin LJ in Berry v. British Transport Commission and Handley JA in Cachia v. Hanes on the one hand and by Rogers J in Qantas on the other. The relevant passages from the respective judgments have been earlier referred to.

4. In consequence of the settled practice which exists, the Court ought not usually make an order for the payment of costs on some basis other than the party and party basis. The circumstances of the case must be such as to warrant the Court in departing from the usual course. That has been the view of all judges dealing with applications for payment of costs on the indemnity or some other basis whether here or in England. The tests have been variously put. The Court of Appeal in Andrews v. Barnes (39 Ch D at 141) said the Court had a general and discretionary power to award costs as between solicitor and client "as and when the justice of the case might so require." Woodward J in Fountain Selected Meats appears to have adopted what was said by Brandon LJ (as he was) in Preston v. Preston ((1982) 1 All ER at 58) namely, there should be some special or unusual feature in the case to justify the Court in departing from the ordinary practice. Most judges dealing with the problem have resolved the particular case before them by dealing with the circumstances of that case and finding in it the presence or absence of factors which would be capable, if they existed, of warranting a departure from the usual rule. But as French J said (at 8) in Tetijo, "The categories in which the discretion may be exercised are not closed". Davies J expressed (at 6) similar views in Ragata.

5. Notwithstanding the fact that that is so, it is useful to note some of the circumstances which have been thought to warrant the exercise of the discretion. I (sic) instance the making of allegations of fraud knowing them to be false and the making of irrelevant allegations of fraud (both referred to by Woodward J in Fountain and also by Gummow J in Thors v. Weekes (1989) 92 ALR 131 at 152; evidence of particular misconduct that causes loss of time to the Court and to other parties (French J in Tetijo); the fact that the proceedings were commenced or continued for some ulterior motive (Davies J in Ragata) or in wilful disregard of known facts or clearly established law (Woodward J in Fountain and French J in J-Corp); the making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions (Davies J in Ragata); an imprudent refusal of an offer to compromise (eg Messiter v. Hutchinson (1987) 10 NSWLR 525, Maitland Hospital v. Fisher (No. 2) (1992) 27 NSWLR 721 at 724 (Court of Appeal), Crisp v. Keng (Supreme Court of New South Wales, 27 September 1993, unreported, Court of Appeal) and an award of costs on an indemnity basis against a contemnor (eg Megarry V-C in EMI Records). Other categories of cases are to be found in the reports. Yet others to arise in the future will have different features about them which may justify an order for costs on the indemnity basis. The question must always be whether the particular facts and circumstances of the case in question warrant the making of an order for payment of costs other than on a party and party basis.

6. It remains to say that the existence of particular facts and circumstances capable of warranting the making of an order for payment of costs, for instance, on the indemnity basis, does not mean that judges are necessarily obliged to exercise their discretion to make such an order. The costs are always in the discretion of the trial judge. Provided that discretion is exercised having regard to the applicable principles and the particular circumstances of the instant case its exercise will not be found to have miscarried unless it appears that the order which has been made involves a manifest error or injustice."

[34] In Lok (supra) I awarded $7,000 indemnity costs. That case was a much simpler case, it did not involve unnecessary interlocutory applications as in this case and the trial did not take as long. I think costs of $9,000 are justified. I therefore order that the Plaintiff pays to both the Defendants $9,000 each for costs.

ORDERS

[35] The Orders are therefore as follows:

1. The Plaintiff's claim is dismissed.
   
2. The Orders made by Coventry J on 23 February 2007 are dissolved forthwith.
   
3. The Plaintiff shall pay costs of $9,000 to each of the Defendants.
   

Sosefo Inoke
Judge

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^[1] Exhibit P1.
^[2] Exhibit P2.
^[3] Exhibit P3.
^[4] Exhibit P3.
^[5] Exhibit D4.
^[6] Exhibit D6.
^[7] Exhibit D9.
^[8] Exhibit D7.
^[9] Exhibit P3.
^[10] Exhibit P2.
^[11] Exhibit D7.
^[12] Exhibit D8.
^[13] Exhibit D6.
^[14] Exhibit D7.
^[15] Exhibit D9.