John Philpott

The plaintiffs moved under Rule 21.01(1)(b) to strike portions of a counterclaim alleging defamation arising from a draft statement of claim and covering letter sent by their former solicitor to the defendant’s employer before litigation commenced, arguing the communications were protected by absolute privilege.

The court held that the pleadings did not support a finding that the communications were made to achieve the objects of the litigation and therefore absolute privilege did not apply at the pleadings stage.

However, the court accepted that defending the counterclaim would likely require disclosure of solicitor‑client communications and could prejudice the plaintiffs in the main action.

The court therefore refused to strike the counterclaim but ordered it severed from the main action and directed that it proceed, if pursued, as a separate claim.

Following a successful civil trial involving breaches of fiduciary duty and breach of trust relating to trust property, the court determined the appropriate costs award.

The successful party sought substantial indemnity costs based on the defendants’ conduct throughout the litigation, including dishonesty, destruction or concealment of key financial records, and failure to comply with interlocutory cost orders.

The court applied the principles of fairness, reasonableness, and proportionality and considered offers to settle and litigation conduct.

Finding the defendants’ behaviour reprehensible and a clear breach of fiduciary obligations, the court awarded substantial indemnity costs.

Liability for costs was apportioned so that two defendants were jointly and severally responsible for four‑fifths of the award, with the remaining defendant responsible for one‑fifth.