1. The last point argued in this case is whether the costs of the defendant as against the third party ought, an to any, and, if so, what extent to be paid as between solicitor and client.
2. Mr. Setalvad at the outset disclaimed any intention to ask for costs between solicitor and client. In case this judgment comes before any Judge who is unfamiliar with the Bombay practice as opposed to the practice in England, I would say that that observation has reference to what I believe to be a peculiarity in these Courts of drawing a distinction between 'costs as between solicitor and client' and 'costs between solicitor and client,' the former being mere in the nature of what in England are costs on a higher scale, and the latter being the fullest possible indemnity and which I rather gather in this Court admit of very little, if any, real taxation. I need toot dwell on that, because, as I have said, Mr. Setalvad confines his case to costs as between solicitor and client.
3. As regards the order to be made, Mr. Setalvad asks me to follow the form which was adopted by Mr. Justice Romer, as he then was, in Trafalgar Co. Limited v. Francis (1802) B. 758 which will be found in Seton, 6th Edition, Vol. III, p. 2142, Form No. 12, and similarly at p. 2072 in the 7th Edition. It will be noticed that at the bottom of that form is a note to this effect: 'A motion to vary the minutes of this order as regards solicitor and client costs given against the third party was refused'. The precise form of the order was and as to the question of indemnity, declare that the defendant is entitled to be indemnified by the said A.B., against all amounts payable by him under this judgment and let the defendant recover against the said A.B. any amounts so paid by him and his own costs of this action and of the third party proceedings to be taxed, etc., those of the action as between solicitor and client, but having regard to the fact that they are payable by the third party.'
4. It will be seen there that the defendant's costs of the action are directed to be taxed as between solicitor and client and his costs of the third party proceedings as between party and party. That form of order has been followed in Ireland by Vice-Chancellor Chatterton in Wiley v. Smith (1894) 1 I.R. 153, 1 I. L.B. 73. It will also be found that in Hartas v. Scarborough (1889) 33 S J. 661 Mr. Justice Wills made a somewhat similar order, that is to say, he gave what corresponds to the defendant here, his costs of the action as between solicitor and client. Another instance of solicitor and client costs being given is a decision of Mr. Justice Farwell in Hooper v. Bromet (1903) 89 L.T. 37 which was reversed on another point in Hooper v. Bromet (1904) 90 L.T. 234 and also in the Cheat Western Railway v. Hither (1905) 1 Ch. 316 : 74 L.J. Oh. 241 : 92 L.T. 104 : 53 W.R. 279, a decision of Mr. Justice Buckley, and in Born v. Turner (1900) 2 Ch. 211 : 69 L.J. Ch. 593 : 83 L.T. 148 : 48 W.B. 697, a decision of Mr. Justice Byrne. I do not say that all these cases are oases of the third parties, but they are cases where persons who in effect were entitled to an indemnity were given solicitor and client costs by the court.
5. Now the decision on the other side is a decision in the King's Bench Division of Mr. Justice Kennedy, as he then was, in Maxwell v. British Thompson Houston Co. (1904) 2 K.B. 342 : 73 L.J.K.B. 644. That was the case of an indemnity against proceedings for negligence and there Mr. Justice Kennedy said:
it seems to me, in the absence of authority to the contrary, that a person who is indemnifying another against the costs of an action cannot, unless there are some special circumstances, be called upon to pay them as between solicitor and client. He must pay them as between party and party, bat I do not think he is bound to pay more. 'The reporter's note, however, at the foot of the judgment refers one to the above form in Seton and adds, 'The attention of the Judge was not called to this at the time, but his Lordship has since brought it to the notice of the reporter.
6. Now, this case of Mr. Justice Kennedy is, perhaps, on the facts, rather different to the class of indemnity case one has to deal with here. But, however that may be, it is to my mind most material that the learned Judge's attention was not drawn to Lord Justice Romer's order nor to the Form in Seton, As to this, I must emphasize the fact that Seton is rather more than a mere ordinary text book in the Chanery Division in England. It is a book that is in constant use there by Judges and Counsel and also by the Registrars whose duty it is to draw up the orders of the Court. Therefore, it is likely that any error will very soon be brought to the notice of the Court. It seems to me, with great respect to Mr. Justice Kennedy, that, as far as the authorities go, the balance of authority is in favour of giving costs in a case like this, as between solicitor and client.
7. Then, if we turn and consider the matter from the point of view of discretion, I think that this balance of authority agrees with gomroon fairness. Take the present case. To my mind, it is clear that the liability on these cotton contracts as between the defendant and third party as from the 21st May was on the third party and not on the defendant, and that the third party was to find all moneys necessary for financing these transactions. Why, then, if the defendant, acting in effect under the directions of third party and in effect as his agent, incurs personal liability for the benefit of the third party, why should he be left out of pocket, because the third party omits to carry out what he had promised to do, namely, to keep the defend ant in funds. The result is that the defendant is sued and has to pay the costs of the action brought by the plaintiffs. If I said that the defendant can only recover his party and party costs of that action, it would leave him with the difference between party and party costs and solicitor and client costs, which he would have to paw to his own solicitor. In other word', the third party would gain to this extent that if he himself had been sued directly, he would have to pay his own solicitor and client costs but that as the defendant is sued, he can escape with party and party costs. What he is asking me to do in this, that because he used a cat's paw he should only pay party and party costs and be allowed to make the cat's paw, viz., the defendant, pay the difference. I do not see any fairness in that. The costs of the third party notice itself seem to me to stand on a different footing. Treating the notice as a separate suit, the costs will follow the ordinary rule that a litigant even though successful only recovers party and party costs. That, no doubt, is the reason for the distinction drawn in Seton between the costs of the original section and the costs of the third party notice.
8. The right order, in my opinion, on this question of ousts is to follow the above form in Seton, and I accordingly make my order in the term of that form.
9. As I have already said, the decree must be shown to me before it is passed and entered.