Atwell v Atwell (No 2)

[2003] TASSC 10

[2003] TASSC 10

CITATION:            Atwell v Atwell (No 2) [2003] TASSC 10

PARTIES:  ATWELL, Sally Anne
  v
  ATWELL, Betty Merle

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  584/2000
DELIVERED ON:  19 March 2003
DELIVERED AT:  Hobart
HEARING DATES:  20 February 2003
JUDGMENT OF:  Slicer J

CATCHWORDS:

Procedure - Costs - Departing from the general rule - Nature of proceeding - Other cases - Failure in portion of a case - Neither party fully successful.

Hayle Holdings Pty Ltd v Australia Technology Group Ltd (No 2) [2000] FCA 1699, applied.
Aust Dig Procedure [599]

REPRESENTATION:

Counsel:
           Plaintiff:  C M Schokman
           Defendant:  D J Gunson SC and A I Gaggin
Solicitors:
           Plaintiff:  Piggott Wood & Baker
           Defendant:  Murdoch Clarke

Judgment Number:  [2003] TASSC 10
Number of Paragraphs:  16

Serial No 10/2003
File No 584/2000

SALLY ANNE ATWELL v BETTY MERLE ATWELL (NO 2)

REASONS FOR JUDGMENT  SLICER J

19 March 2003

1. The parties seek different cost orders which each contends reflect the outcome and reasons for judgment (Atwell v Atwell [2002] TASSC 119) in action 584/2000. The history of the matter and the findings of fact are stated in those reasons for judgment.

1. The proceedings disclosed an unfortunate history within an extended family unit and of the harm caused to both parties by the son of the defendant and the former husband of the plaintiff.  The proceedings, though originally commenced in the Family Court of Australia, required determination in this Court following the decision of the High Court in Re Wakim; ex parte McNally (1999) 198 CLR 511.

1. The plaintiff claimed as equitable relief:

(1)a declaration that family property occupied by her and her children was held by the defendant in trust.

In the alternative:

(2)a declaration of entitlement of interest or the existence of a charge over the property to the extent of that interest;

(3)equitable compensation.

1. The defendant denied the existence of a trust or any entitlement.  In addition, she claimed to have advanced a sum in excess of $100,000 to the plaintiff and her then husband and permitted the plaintiff to live "rent free" in the property since 1991 at an average rental value of some $200 per week.

1. The issues raised in the pleadings and during the course of the hearing can be identified as:

(1)whether the husband of the defendant held the property on trust for the plaintiff and her husband;

(2)whether following her husband's death, the defendant held, or acknowledged that she held, the property upon trust for the plaintiff and her husband;

(3)whether a trust was created by the conduct of the parties;

(4)whether the plaintiff had an equitable interest in the property by means of contribution; and

(5)whether the plaintiff by means of contribution had a right to equitable compensation.

1. The plaintiff was unsuccessful on issues 1 - 4 and was awarded equitable compensation in the sum of $57,480.  The defendant did not succeed in her claim that the sum of $100,000 constituted an advance to the plaintiff in that the moneys obtained by her son was in furtherance of business interests and in no way related to the plaintiff.

1. In the reasons for judgment, the Court stated, at par68:

"The award neither meets the needs of the plaintiff and her children, nor the entitlement of the defendant."

1. The Court accepted the general account given by the plaintiff and the defendant with one exception.  In the reasons for judgment, at par19, the Court stated:

"Much of the evidence is consistent and the differences reflect recollection, reconstruction and interpretation, rather than mendacity.  It was suggested that motive afforded a basis for distinguishing between the credibility of various witnesses and their accounts.  That aid to assessment will not be employed.  All significant witnesses have an interest in these proceedings and the outcome will cause harm to the unsuccessful party.  There remain discrete areas of conflict where the accounts cannot be reconciled and these reasons for judgment will attempt to resolve those differences as confined issues and, apart from one witness, not attempt to rely on wider findings of integrity or accuracy.  Much has occurred in the period 1989 until 2001 which would shape the respective perspectives of the parties and their significant witnesses."

1. The Court accepts that the differing interests of the parties were difficult to reconcile and that the course of the hearing provided little opportunity for compromise.  That recognition reflects the difficulty of a court in achieving the desired ends of equity "as between those equally disadvantaged by the conduct of another", and of the parties in bringing this matter to a court for determination.

1. It is in this context that the parties advanced competing propositions concerning the appropriate order for costs.  Each was correct to so do and the Court would prefer to accept each party's position.

1. The plaintiff contends that costs should follow the event.  She succeeded in obtaining a judgment, albeit for an amount or outcome less than she had sought.  Her argument is that it was necessary to lead evidence of the various events and discussions occurring over a long period of time in order to ground the claim for equitable compensation and to meet the pleading that a further sum of $100,000 had been paid or advanced during the period 1997 - 1999.  Ms Schokman, counsel for the plaintiff, relied on the principles stated by Nourse LJ, with whom the other members of the Court of Appeal agreed, in Re Elgindata Ltd (No 2) [1993] 1 All ER 232, when he stated at 237:

"The principles are these. (1) Costs are in the discretion of the court.  (2) They should follow the event, except when it appears to the court that in the circumstances of the case some other order should be made.  (3) The general rule does not cease to apply simply because the successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in the length or cost of the proceedings he may be deprived of the whole or a part of his costs.  (4) Where the successful party raises issues or makes allegations improperly or unreasonably, the court may not only deprive him of his costs but order him to pay the whole or a part of the unsuccessful party's costs.  Of these principles the first, second and fourth are expressly recognised or provided for by rr 2(4), 3(3) and 10 respectively.  The third depends on well-established practice.  Moreover, the fourth implies that a successful party who neither improperly nor unreasonably raises issues or makes allegations on which he fails ought not to be ordered to pay any part of the unsuccessful party's costs.  It was because of his disregard of that principle that the judge erred in this case."

1. In this case, the tension is between principles (3) and (4).  The plaintiff did not conduct her case improperly, but she did aver that the title deeds and memorandum of transfer were delivered by the defendant at a time and in circumstances which the Court did not accept.  The evidence of the "dealings" with the memorandum of transfer was integral to one of her central claims, namely that the defendant had either created a fresh trust or acknowledged the existence of one previously created.  The defendant was required to meet that area of claim.  Whilst it was necessary for the plaintiff to show the original dealings within the family, she did so primarily to show the creation of a trust in 1990 - 1991.  Her evidence, accepted in substance, was in the Court's judgment insufficient to warrant a finding of the creation of an express trust.  The defendant was required to meet that area of claim.

1. There might be occasions where the exercise of discretion to award costs in favour of a respondent who has lost the action but has succeeded on a number of issues, is said to be erroneous (Cretazzo v Lombardi (1975) 13 SASR 4; Robinson v Australian Association of Social Workers Ltd [2000] SASC 239) except where there has been an extravagant claim supported by fraudulent evidence (Huxley v West London Extension Railway Co (1889) 14 AC 26). In Hayle Holdings Pty Ltd v Australian Technology Group Ltd (No 2) [2000] FCA 1699, Hely J referred to the summary of the Australian position as stated by Toohey J in Hughesv Western Australian Cricket Association (Inc) (1986) 66 ALR 541, in the following terms, at 2:

"· ordinarily, costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order;

·   where a litigant has succeeded only on a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which it has failed;

·   a successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other party's costs. "Issue" in that sense, does not mean a precise issue in the technical pleading sense, but any disputed question of fact or law."

1. Mr Gunson SC, counsel for the defendant, stated the converse position, relying on authorities such as Capolingua v Phylum Pty Ltd [1991] 5 WAR 137 and Brazendale v Kenna [1961] Tas R 199. He contended that the defendant succeeded on most of the issues pleaded by the plaintiff and his primary position was that each party should pay their own costs. However, this is not a case where unreasonable conduct of both parties exacerbated the dispute and prolonged resolution (Day v Trustees of the Estate of Adams 19/1997).

1. Both positions are defensible by authority.  Neither party conducted themselves unreasonably, but rather were obliged by circumstances not of their making to advance their respective causes.  Both were successful in part, yet at the end of the day, the plaintiff succeeded in obtaining an award.  The trial was conducted over some eight days.  An offer of compromise might have been available to the defendant which met the plaintiff's partial success.  The amount available to each party from the subject matter of the action is not substantial.

1. The costs order attempts to meet the competing positions not unreasonably taken, the success of the plaintiff and the means of the parties adversely affected by the conduct of another.  Like the judgment, the costs order does not satisfactorily meet the needs or interests of either party.  Nevertheless, as a compromise, it attempts to apportion the differing principles.

Orders:

(1)That the defendant pay the plaintiff's costs of the action up to the date of trial, but excluding the fee on brief.

(2)That the defendant pay 70% of the plaintiff's costs, including fee on brief on the trial.

(3)That such costs be taxed on a party/party basis.

(4)That the defendant pay the plaintiff's costs on this application, such costs to be taxed.