Following an earlier decision granting relief from forfeiture in a loan dispute, the court addressed competing claims for costs between the parties.
The successful applicant sought partial indemnity costs of the application and requested that the award be set off against the loan repayment amount.
The respondent claimed full indemnity costs pursuant to a contractual debenture provision for enforcement expenses.
The court held that although contractual provisions for costs are generally respected, judicial discretion remains and may be exercised where the successful party has engaged in inequitable conduct.
Finding the respondent’s conduct unreasonable and inequitable, the court awarded the applicant partial indemnity costs and refused to enforce the respondent’s contractual entitlement to costs.
