It seems that Mukhtar AsJ found Bougainville Copper Ltd v RTG Mining Inc  VSC 231 fascinating and rewarding. It was an application for preliminary discovery to find out whether the applicant had a cause of action for damages for bribery and corruption by the respondent. The respondent had a ‘resounding victory’; the applicant got no discovery at all, unable to establish the threshold suspicion to warrant such an order.
His Honour dismissed the respondent’s application for indemnity costs nevertheless in reasons published as  VSC 348. The indemnity costs application was based in part on allegedly unfounded allegations of wrongdoing insinuated by the applicant. But it is one thing to make unfounded allegations in a case proper and another to insinuate them for the purposes of establishing whether there is such a case in a preliminary discovery application which is inherently fishing.
It is a beautifully written set of reasons, but I draw your attention to the costs judgment principally because it sets out crisply in one place the differences between the old party party costs and the new standard basis costs, and the old solicitor-client and indemnity costs and the new indemnity costs. If you are after authority that the new standard basis is akin to the old solicitor-client basis, this is it (though the theory will not necessarily be reflected in Costs Court practice).
And the judgment re-iterates that which is much mis-understood, namely that when you get common garden variety indemnity costs, they are still calculated by reference to Scale, not by reference to what the winner was actually billed. It is a while since this little newsletter has made that point.
One other mis-understood bit of the law of costs, to complete the picture, is the difference between taxation as between solicitor and own client and taxation as between parties on the solicitor-client basis, two different but dangerously similarly named enquiries. The new taxonomy of costs as between party and party should reduce confusion since there will be no taxations on the solicitor-client basis as between parties. But it is as well to remember that even where costs have been taxed as between party and party on Scale, and the winner’s solicitor was charging the winner on the same Scale, the results of the two enquiries will not necessarily be the same. Indeed, the same may be said, even where the costs have been taxed as between party and party on the indemnity basis. Because as between party and party, the question is what is reasonable as between the parties, whereas as between solicitor and own client, the question is what is reasonable between the solicitor and the solicitor’s own client, a test which is generally more generous to the solicitor.
The bits of Mukhtar AsJ’s reasons which I think will be of general interest to those who do not already have this stuff front of mind are as follows:
Continue reading “Party-party, solicitor-client, indemnity, special indemnity, scale costs: where are we at?”