Potts v Dennis Jones & Co Pty Ltd [1995] FCA 713

CATCHWORDS

PRACTICE AND PROCEDURE - costs - parties to cross claim for indemnity agreeing that it be dismissed following settlement of head claim - both cross claimant and cross respondents had been respondents to head claim - applicant had discontinued against cross respondents prior to commencement of hearing of head claim, and after that commencement settled with remaining respondents including cross claimant - determination of costs issues on cross claim at parties' request in situation in which cross respondents did not participate in substantive hearing down to time when head claim settled - "abandonment" by cross respondents of participation in principal proceedings on first day of hearing with result that cross claimant, in its role as a respondent, compelled to settle with applicant - cross respondents' non-participation in principal proceedings allegedly due to a misunderstanding of effect of non- participation - alleged failure to appreciate that effect would be that affidavit evidence in opposition to applicant's affidavit evidence would not become evidence before the Court - litigant in person - whether costs on cross claim should "follow the event" of its dismissal or whether special order appropriate.

Trade Practices Commission v Nicholas Enterprises Pty Ltd (1979) 28 ALR 201 (FCA/Fisher J).

Ritter v Godfrey [1920] 2 KB 47.

Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 (Hill J).

Australian Securities Commission v Lee, unreported, FCA/Branson J, 19 July 1995.

LESTER NEIL POTTS v DENNIS JONES & CO PTY LIMITED & ORS (No 3)

No NG 882 of 1992

Lindgren J

Sydney

8 September 1995

IN THE FEDERAL COURT OF AUSTRALIA)

NEW SOUTH WALES DISTRICT REGISTRY) No NG 882 of 1992

GENERAL DIVISION )

BETWEEN:

LESTER NEIL POTTS

Applicant

AND:

DENNIS JONES & CO PTY LIMITED

First Respondent

DENNIS JONES

Second Respondent

RAY SMITH

Third Respondent

NATIONAL MUTUAL PROPERTY SERVICES (AUSTRALIA) PTY LTD

Fourth Respondent

CITIBANK SAVINGS LTD

Fifth Respondent

PERMANENT TRUSTEE COMPANY LTD

Sixth Respondent

LANCE KELLY FINANCIAL MANAGEMENT PTY LTD

Seventh Respondent

CITIBANK SAVINGS LTD

Cross Claimant

DENNIS JONES & CO PTY LTD

First Cross Respondent

DENNIS JONES

Second Cross Respondent

RAY SMITH

Third Cross Respondent

CORAM: Lindgren J

PLACE: Sydney

DATE: 8 September 1995

MINUTE OF ORDERS

THE COURT ORDERS:

1. THAT the fifth respondent's cross claim brought by amended cross claim filed on 29 March 1994 be dismissed as against the first and second cross respondents.

NOTE: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA)

NEW SOUTH WALES DISTRICT REGISTRY) No NG 882 of 1992

GENERAL DIVISION )

BETWEEN:

LESTER NEIL POTTS

Applicant

AND:

DENNIS JONES & CO PTY LIMITED

First Respondent

DENNIS JONES

Second Respondent

RAY SMITH

Third Respondent

NATIONAL MUTUAL PROPERTY SERVICES (AUSTRALIA) PTY LTD

Fourth Respondent

CITIBANK SAVINGS LTD

Fifth Respondent

PERMANENT TRUSTEE COMPANY LTD

Sixth Respondent

LANCE KELLY FINANCIAL MANAGEMENT PTY LTD

Seventh Respondent

CITIBANK SAVINGS LTD

Cross Claimant

DENNIS JONES & CO PTY LTD

First Cross Respondent

DENNIS JONES

Second Cross Respondent

RAY SMITH

Third Cross Respondent

CORAM: Lindgren J

PLACE: Sydney

DATE: 8 September 1995

REASONS FOR JUDGMENT (No 3)

(on costs of cross claim)

NATURE OF PROCEEDINGS:

I have delivered judgments on 4 July and 14 July 1995 in these proceedings. My associated Reasons for Judgment were numbered 1 and 2 respectively. As noted in them, the cross claim by the fifth respondent ("Citibank") against two of the three cross respondents to it, namely the first cross respondent, Dennis Jones & Co Pty Ltd ("DJC") and the second cross respondent, Dennis Jones ("Mr Jones"), to whom I shall refer collectively as "the Jones interests", remains outstanding. The parties are agreed that the cross claim should be dismissed and that I should so order, but they are not agreed as to what order for costs should be made. The Jones interests say that costs should follow the event, that is to say, that Citibank should be ordered to pay their costs of the cross claim upon its being dismissed. Citibank submits that the case is not an ordinary one and calls for an extraordinary order. It seeks an order that the Jones interests be ordered to pay, not merely Citibank's costs of the cross claim, but Citibank's costs of the proceedings as a whole.

THE SUBSTANTIVE PROCEEDINGS

The substantive proceedings were part heard before me over the period 7-10 November 1994 when they were settled save as to Citibank's cross claim against the Jones interests.

The latest form of that cross claim is "an amended cross claim of the fifth respondent" filed on 29 March 1994, but I will
refer to it simply as "Citibank's cross claim". On 10 November 1994, Citibank's cross claim was stood over to a date to be fixed and the parties to it were given leave to apply to have it listed for directions. Pursuant to that leave, it was listed.

The hearing of Citibank's cross claim against the Jones interests, that is to say, of the evidence sought to be relied upon in relation to the costs issues arising from that cross claim, took place on 29 August 1995 (it had been fixed for hearing on 31 July 1995 but due to the illness of Mr Jones, that hearing date was vacated).

The following account of the background facts is taken from my Reasons for Judgment (No 1) and is based on the pleading by the applicant ("Mr Potts") in his fourth amended statement of claim filed on 7 November 1994 (there have been no findings of fact):

"Jones was a director and the principal executive officer of DJC. The third respondent ('Smith') was an employee of DJC. Potts was induced by DJC, through its agents Jones and Smith, to enter into an alleged tax saving arrangement ('the Arrangement'). This involved his obtaining a line of credit from Citibank to acquire units in an unlisted property trust ('the Trust') managed by the fourth respondent ('NMPS') or a company associated with it, and the borrowing of further money from NMPS for the acquisition of further units in the Trust. Potts was to mortgage his house to Citibank as security and to mortgage the units to the sixth respondent ('Permanent') which was the trustee of the Trust, as security for the further advance.

Central to Potts' claim were misrepresentations by
DJC through its agents Jones and Smith. These were that as a result of the Arrangement Potts would get a refund of his income tax each year; that he would lose money on the first three years, break even on the fourth year and then proceed to make money; that at the end of ten years there would be a profit of approximately $140,000 plus the increase in value in the units; that there was no chance of his losing his house; that there was no chance of anything going wrong because the units could not decrease and could only increase in value; that the Arrangement was the best thing that Potts could do; and that this would be seen to be so once the rent cheques from the Trust came in.

The Arrangement disappointed Potts' expectations. By his application filed on 1 December 1992 he sought to be extricated from it. In particular, he sought to be relieved from the house mortgage to Citibank and the unit mortgage to Permanent. He applied for various orders under the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (NSW) as well as damages. (An amended application was filed on 8 January 1993 but the amendments made by it are not material for present purposes.)

Potts pleaded numerous 'causes of action' and statutory bases for relief. These referred to various sections of the Acts already mentioned, the Contracts Review Act 1980 (NSW), and to unconscionable dealing and negligent misrepresentation and advice.

Much of the pleading was directed to establishing a basis for a holding that NMPS, Citibank, Permanent and the seventh respondent ('LKFM') were answerable for the conduct of DJC through Jones and Smith. It was pleaded that DJC, through Jones and Smith, acted in various respects as agent for NMPS, LKFM, Citibank and Permanent. DJC's alleged agency for Citibank was said to arise, not only directly, but also from the fact that LKFM was itself an agent of Citibank and, to Citibank's knowledge, engaged DJC to assist it in the promotion and marketing of Citibank's financial products.

There were numerous cross claims by which various respondents sought to make other respondents liable to them in respect of any liability which the cross claimants might be held to have to Potts. One of these was Citibank's cross claim."

(Apart from referring to "Mr Potts" and "Mr Jones", I will use
the above forms of abbreviation in these Reasons for Judgment).

RELEVANT HISTORY OF THE LITIGATION

Introduction

The following relevant history of the litigation is extracted from my Reasons for Judgment (No 1):

"Apparently on 29 June 1993 a settlement was reached between Potts and NMPS and Permanent. On 19 November 1993, pursuant to leave, Potts filed a notice of discontinuance of the proceedings as against DJC, Jones and Smith.

On 14 October 1994 DJC and Jones filed a 'notice of removal as solicitor' pursuant to Order 45 r 6 (b) determining the authority of Mr Le Compte, now of Le Compte Davey, solicitors, to act as their solicitor in the proceedings.

When the proceedings were called on before me for hearing on 7 November 1994, no legal representative appeared for DJC or Jones, but Mr Jones appeared in person. In view of the fact that what then happened and its consequences may assume some significance in the determination of the costs issue, I will not deal with this matter in detail. It suffices to say that DJC and Jones took no part in the hearing and an affidavit by Mr Jones which had been filed on 15 June 1994 ('Jones' affidavit') was not read.

The hearing proceeded in substance as a dispute between what I may refer to as 'the National Mutual interests' and Citibank. In the light of Potts' settlement with the National Mutual interests, his prosecution of the proceedings was, in substance, for their benefit."

The events during the hearing of the substantive proceedings on 7-10 November 1994

The circumstances in which Mr Jones and DJC did not participate in the hearing before me in the period 7-10 November 1994 have been the subject of submissions. A copy of pages 3-6 and 20-21 of the transcript of proceedings on 7 November are annexure "A" to these Reasons. The transcript calls for no comment at this stage, but a reading of it is necessary in order that the significance of the following paragraph can be appreciated.

For the purpose of the hearing on costs, Mr Jones swore an affidavit dated 24 February 1995. He there states that Messrs Le Compte Davey who had been acting as solicitors for himself and DJC, ceased to do so on 14 October 1994 because he and DJC could not afford to retain legal representation for the hearing which was to commence on 7 November 1994 and was expected to run for at least two weeks. His affidavit deals with the events recorded in the transcript as follows:

"3 On 7 November 1994 I attended Court on the first day of the hearing of these proceedings. Prior to attending Court I had discussed the proceedings and my part in them with my former Solicitors. It was my intention that my participation in the proceedings should be restricted to relying on my Affidavit and the other Court documents filed by my former Solicitors and being available to be questioned about my Affidavit.

4 Following an initial discussion in Court with His Honour Mr Justice Lindgren I was a little confused as to what I needed to do as regards my further participation in the proceedings.
My confusion arose, in part, from the fact that I was recovering from an ear operation and was hard of hearing and that I was nervous. At the suggestion of His Honour I again spoke with [Mr Davey]

5 I went back into Court and again spoke with His Honour Mr Justice Lindgren. It was always my understanding that the Court would take into consideration my Affidavit and the other documents filed on my behalf and that I was to be available to answer questions about my Affidavit if required. To this end arrangements were made with the Solicitors for one of the other parties for me to be in telephone contact.

6 I have today received advice about the meaning of the conversation between myself and His Honour Mr Justice Lindgren recorded at page 20 and 21 of the Transcript and in particular the technical legal effect of His Honour's question at 20.16 of the Transcript 'And it is your intention, I understand not to seek to lead any evidence in the proceedings?'. Prior to receipt of this advice my understanding was as set out in paragraph 5 hereof.

If I had been aware that answering 'yes' to His Honour's question would or may have meant that my affidavit would not be taken into consideration by the Court, I would have answered His Honour's question in the negative."

Alison Joy Deitz, solicitor of Holmes and Bevan, the solicitors for Citibank, has given affidavit evidence that on 10 November 1994 she telephoned Mr Jones and said that she was the solicitor for Citibank, that the parties had reached an agreement to settle the proceedings, and that Citibank proposed discontinuing its cross claim against him and DJC on the basis that each party pay its own cost. She asked him whether he agreed. He said that he did. She said that she was with the other parties at the time and would let them know of his agreement.

Her evidence is that a little later in the day she telephoned Mr Jones who said that he had been thinking about the matter and spoken to Mr Davey, the solicitor who had previously represented him and DJC in the proceeding, and wanted Citibank to pay their costs. She protested that this was "outrageous" in that had it not been for Mr Jones' conduct the proceedings would never have eventuated. At his suggestion she telephoned Mr Davey who said that if Citibank discontinued, costs should follow the event. She replied that Citibank took the view that Mr Jones was responsible for what had occurred. Mr Davey said that his costs would be at least $5,000. Ms Deitz said:

"I will see if I can obtain instructions, however, there is a Court Room full of people and we are trying to resolve this matter without incurring further unnecessary costs."

She later (still on 10 November) telephoned Mr Davey and said,

"My client has reluctantly instructed me to offer $5,000 for your costs on the basis that this matter settles today."

Mr Davey did not telephone her prior to the settlement between Citibank and the other parties to the proceedings taking place on the same day.

Still later on 10 November 1994 Holmes and Bevan wrote to Mr
Jones offering to discontinue the cross claim on condition that each party bear its own costs of the cross claim. The letter advised that if this offer was not accepted, Citibank would pursue the cross claim and seek damages and costs. The letter continued:

"In this regard, we note that the applicant's case was closed prior to the completion of his evidence and he was cross examined. We will be relying on the whole of the evidence in the proceedings thus far against you and your company. Our client's offer remains open for seven (7) days from the date of this letter after which we reserve the right to withdraw it."

Events subsequent to the hearing on 7-10 November 1994

On 8 December 1994 Le Compte Davey wrote to Holmes and Bevan a letter which included the following:

"We are instructed that our clients are prepared to consent to you client discontinuing its cross-claim against them on the condition that your client pays our clients' costs assessed at $5,000.00."

Holmes and Bevan replied on 22 December 1994 rejecting that offer and advising that Citibank was prepared to have its cross claim dismissed on the basis that each party pay its own costs. Holmes and Bevan requested a response within 21 days and advised that if the offer was not accepted, Citibank proposed to have the matter set down for hearing on the question of costs, and Holmes and Bevan reserved the right to tender the letter at the hearing.

OUTLINE OF PARTIES' SUBMISSIONS

Outline of Citibank's Submissions

Citibank accepts that the jurisdiction to award costs against a wholly successful party is one which should be exercised "only in the most exceptional circumstances": Trade Practices Commission v Nicholas Enterprises Pty Ltd (1979) 28 ALR 201 (FCA/Fisher J) at 208. Citibank refers to a statement by Atkin LJ in Ritter v Godfrey [1920] 2 KB 47 at 60 in which his Lordship identified three situations in which a wholly successful defendant could properly be denied his costs namely:

"that the defendant has -

(1)brought about the litigation; or

(2)has done something connected with the institution or conduct of the suit calculated to occasion unnecessary litigation or expense; or

(3)has done some wrongful act in the course of the transaction of which the plaintiff complains."

Citibank submits that the present case falls within all of categories (1), (2) and (3). It submits that so far as (2) is concerned, the Jones interests' defence put in issue the substance of the misrepresentations which Mr Potts alleged had been made by Mr Jones and by Mr Smith as an employee of DJC. By the conduct of the Jones interests in not appearing as a party at the hearing and not reading an affidavit of Mr Jones filed on 15 June 1994, Citibank suddenly and unexpectedly found itself at the beginning of the hearing on 7 November 1994 in the position of not being able to contest Mr Potts' allegations as to the making of the representations.

Citibank submits that the course taken by the Jones interests was a course calculated to increase unnecessarily the costs of all the other parties to the proceedings, and in particular the costs of Citibank, in that they foreshadowed a major dispute of fact which did not eventuate. Citibank submits that:

"[i]n particular, the parties could not in an informed way negotiate the settlement of the proceedings until the stance adopted by the Jones' interests became clear."

Citibank says that the case was settled reasonably promptly after the Jones interests abandoned the dispute as to what passed between Mr Potts and Mr Jones. It says that the proceedings probably would have been finalised far earlier and far more cheaply if the Jones interests had manifested this attitude in a timely way.

Citibank points to evidence read on behalf of Mr Potts on the hearing, in particular paras 7 to 9 of Mr Potts' affidavit sworn 30 July 1993, which, in the event, the Jones interests did not seek to contradict, and submits that those facts show not mere negligence but "gross dishonesty" by Mr Jones. In particular, Citibank refers to the affidavit evidence of Mr
Potts that Mr Jones told him, inter alia, that:

(a) "There is no risk. There is no chance of anything going wrong because it's not like shares. I guarantee it."

(b) " ... these are units. They can't go down in value. They can only go up in value ...".

(d) " ... there is no chance [of losing the property mortgaged in favour of Citibank]. It won't happen ... I can't afford to do the wrong thing ... Do you think I'd risk my reputation ..."

(e) " ... after 10 years you'll have a profit, roughly of $140,000 plus capital growth on your unlisted property trust."

Citibank submits that in the light of such representations, there cannot be any real doubt that the Jones interests would have been held liable to Mr Potts, subject only to Potts' establishing that he relied upon the representations. Citibank submits that if it had been held vicariously liable, it would have been entitled against the Jones interests to full indemnity. This last submission was not in issue.

Outline of submissions of the Jones interests

The Jones interests observe that no allegation (let alone finding) of fraud has been made against Mr Jones, that Mr Jones appeared as a litigant in person after 14 October 1994, that no judgment has been given or findings made in relation to the matters in dispute, and that Citibank's cross claim against the Jones interests is to be dismissed.

The Jones interests submit that a proper view of what happened at the beginning of the hearing on Monday 7 November 1994, as revealed by a reading of the transcript, is that:

(a) Mr Jones, not wishing to attend every day of what promised to be a lengthy hearing, nonetheless wanted the Court to have regard to his affidavit and expected to be and was happy to be questioned on his affidavit;

(b) Mr Jones failed to comprehend the technical legal effect of my question, "and it is your intention, I understand, not to seek to lead any evidence in the proceedings?"; and

The Jones interests submit that the appropriate orders on costs are as follows:

(a) Citibank pay the costs of the Jones interests of the cross claim between 8 December 1993 (Citibank's cross claim was actually filed on 3 December 1993) and 14 October 1994 (the date of the filing by the Jones interests of the notice of removal of solicitor) on a party/party basis;

(b) Citibank pay the out of pocket costs and expenses of Mr Jones reasonably incurred in respect of the conduct of the litigation between 14 October 1994 and 10 November 1994 (the last day of the hearing, on and from which date Mr Jones apparently again retained Mr Davey as his solicitor).

(c) Citibank pay the costs of the Jones interests from 10 November 1994 to 8 December 1994 on a party/party basis and pay the costs of the Jones interests after 8 December 1994 on an indemnity basis (having regard to Citibank's rejection of the Jones interests' offer of compromise dated 8 December 1994).

REASONING:

It is the desire of both Citibank and the Jones interests that the cross claim be dismissed without the devotion of further time and money to an exploration of its merits. It is also their desire that without further hearing of the cross claim, the Court determine the question of the costs of the cross claim. The Court will facilitate the achievement of the parties' desire: Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 (Hill J) at 201; Australian Securities Commission v Lee, unreported, FCA/Branson J, 19 July 1995.

On the hearing of the costs issue, counsel for Citibank cross examined Mr Jones as to his understanding of the events of 7 November 1994 and their effect. At page 6, lines 1-15 of the transcript for 7 November 1994, there is clear evidence that Mr Jones understood that if he did not participate in the hearing, and in particular did not read his affidavit, it was possible that there would be an adverse finding against him without his affidavit having been taken into account. It was his concern over that possibility which led to his taking legal advice. Upon his return to the Court later in the morning, after having had the benefit of legal advice, he said that he had decided to take no further part in the proceedings, and in particular, not to seek to lead any evidence in the proceedings, notwithstanding his awareness of the cross claims made against him. In the light of the earlier discussion, this is strong evidence that Mr Jones had an adequate understanding at that stage of the effect of the non-participation by him and his company in the proceedings any further.

It is what followed that may be said to have given rise to some confusion in his thinking. What followed was a discussion of how Mr Jones' decision to absent himself from the Court for the remainder of the hearing was to be accommodated to the fact that subpoenas had been issued at the instance of other parties to Mr Jones for his attendance. It may be that as a result of the arrangement made that he would be contacted by the solicitors for subpoenaing parties if and when he was required to attend to give evidence, Mr Jones gained the impression that he would definitely be called by one of them to give evidence in which event his version of the conversations with Mr Potts would be heard.

One thing is clear: as between Citibank and the Jones interests, the Jones interests and not Citibank are responsible for what occurred on Monday 7 November 1994. Through no fault of its own, Citibank suddenly found itself in a position in which the Jones interests were no longer actively participating in the proceedings and apparently had no intention of reading Mr Jones' affidavit. Mr Jones' conduct reasonably led Citibank to believe that Mr Jones had decided that he and his company would play no further part in the proceedings unless and until a party which had subpoenaed him to attend court to give evidence required him to do so.

On the hearing of the costs issue before me, Mr Jones was also cross examined in relation to the representations which Mr Potts alleges he made to him. Mr Jones denied having made many of the representations of the kind alleged against him. However, certain significant matters emerged from his evidence. First, Mr Jones and members of his family had invested substantial amounts in a National Mutual property trust and he "absolutely believed" in the associated "negative gearing package" which he was promoting. His evidence includes the following"

"With this - the property trust, I was the first one to go into the property trust before I spoke to anybody - any of my client [sic] whatsoever. The records will show that I had more money involved in it, perhaps than anyone else in Australia. I borrowed very very heavily to go into something I absolutely believed in and also with the literature that I'd received from National Mutual indicating what was going to happen in the future. It was only after I'd done that, plus my family, that I spoke to any of my clients." (tr 13)

Secondly, he conceded that he would or may have said to particular clients of his to whom he was presenting the plan that "There is no risk of incurring a loss" (tr 13.25), that the scheme was "safe and backed by National Mutual" (tr 13.28-13.29), that (in effect) for the scheme "to fail National Mutual would have to go broke" (tr 13.30-13.32), that a client would "not ever have to worry about money again" (tr 13.33-14 .35), that the Property Trust would provide "a minimum return" (tr 14.7-14.10), that the investment would allow a client to pay off his home in ten years (tr 15.4-15.5), that in ten years a client would "double his money" (tr 15.22), and that a client would have "a million dollars in ten years" (tr 16.11-16.16).

Thirdly, in relation to Mr Potts, the following cross examination occurred:

"Did you tell them on that occasion that under this proposal they would break even the fourth year and then start to make money; 'The end result is that after 10 years you will have a profit roughly of $140,000 plus capital growth on your unlisted property trust'?---Excuse me - I may have said that.

And did you say: 'You will get capital growth on the units plus interest on the life insurance policies and at the end of 10 years you will come out with a nice tidy sum of $140,000 minimum'?---I could have done that.

And did you think that was right?---I thought I was being very very conservative because included in the property were the figures that National Mutual were giving us via bulletins etcetera and using that mathematical rule of 72, that was very conservative." (tr 19.33-20.7)

Fourthly, Mr Jones also said that he thought it a certainty that Mr Potts would make $140,000 if he adhered to the plan (tr 21.18-21.19) and that if any client adhered to the plan he or she would not lose money (tr 21.34-21.35).

Although Mr Jones denies making statements of a more extreme form which are alleged against him and which were put to him in cross examination, his enthusiasm for and commitment to the investment scheme coupled with such concessions as he did make cause me to accept that there is a real possibility that he made to Mr Potts some or all of the statements which Mr Potts alleges and of which he has given evidence. Neither Citibank nor the Jones interests wish the cross claim to proceed to a hearing and it is not appropriate for me to determine where the merits lie, but at least, I think that it was reasonable for Citibank to bring its cross claim against the Jones interests.

In their pleadings both Citibank and the Jones interests have denied that the Jones interests were the agents of Citibank. If this had been borne out on the hearing, Mr Potts would have failed against Citibank and Citibank would have failed on its cross claim against the Jones interests. Prima facie, the result on costs would have been that Citibank would have been ordered to pay Jones interests' costs and Mr Potts would have been ordered to indemnify Citibank in respect of its liability to pay those costs. The common pleading by Citibank and the Jones interests of absence of agency is a factor which has to be taken into account against Citibank. But it is perhaps to be expected that Citibank and the Jones interests would dispute that the Jones interests were agents for Citibank: it will never be known whether Potts would have established agency and I must not speculate in this respect.

I am persuaded by all the foregoing considerations to think that the case is an extraordinary one and that the ordinary approach of ordering that costs follow the event should be departed from, although not to the extent sought by Citibank. The appropriate result is that there be no order for costs on the cross claim to the intent that Citibank and the Jones interests bear their own respective costs.

CONCLUSION:

There will be an order that Citibank's cross claim be dismissed as against the Jones interests (it has previously been dismissed as against Smith) and there will be no order as to Citibank's or the Jones interests' costs.

I certify that this and the preceding 19 pages are a true copy of the Reasons for Judgment of the Honourable Justice Lindgren.

Associate:

Dated: 8 September 1995

Heard: 29 August 1995

Place: Sydney

Decision: 8 September 1995

Appearances: Mr S D Epstein of counsel instructed by Holmes and Bevan appeared for the cross claimant.

Mr M Hadley of counsel instructed by Le Compte Davey appeared for the first and second cross respondents.

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