C v S

[2004] QDC 577

[2004] QDC 577

DISTRICT COURT

CIVIL JURISDICTION

JUDGE RACKEMANN  

No 270 of 2002

C	Plaintiff/Claimant
and
S	Defendant/Respondent

BRISBANE

..DATE 27/04/2004

ORDER

HIS HONOUR:  This is an application for costs by the plaintiff/claimant with respect to the proceedings.

The primary basis for the application is the non acceptance of the terms of offers made under the Rules at earlier points of the proceedings.

The offers made under the Rules were an offer made on the 18th October 2002 for the defendant to pay the plaintiff the sum of $120,000 inclusive of claim, costs and interest, within 14 days and for the parties otherwise to retain their property and a further offer expressed to be without prejudice save as to costs which was made on the 18th September 2003 for $150,000.

The defendant makes some reference to proposals that he made although it would appear that they were not expressed to be offers made under the Rules, but in any event they were offers that were, of course, no greater than that which had been offered on the part of the plaintiff.

In proceedings generally, the primary position as to costs is that they follow the event unless the Court considers that another order is more appropriate, see Rule 689.

Ordinarily, those costs are not an indemnity basis.  However Rule 360 provides that if the plaintiff makes an offer to settle that is not accepted by the defendant and the plaintiff obtains a judgment no less favourable than the offer to settle and the Court is satisfied that the plaintiff was at all material times willing and able to carry out what was proposed in the offer, then the Court must order the defendant to pay the plaintiff's costs calculated on an indemnity basis unless the defendant shows another order for costs is appropriate in the circumstances.

Accordingly in most proceedings the successful plaintiff who has made an offer under the Rules will be favoured with an order for costs on an indemnity basis rather than on the basis that they would ordinarily get by reason of costs in the event.

The costs regime for matters under Part 19 of the Property Law Act, however, is different in this respect, that pursuant to Section 341, the primary position is that a party to a proceeding bears the party's own costs. One can well understand the reason for there being a difference of position with respect to such matters.

An application for an adjustment of property interests under the Act is an exercise of discretion having regard to a specific matter set forth in the Act.  It is not a case of a calculation of damages as one is familiar with in other types of litigation.

Pursuant to Section 341, however, the Court may make an order for costs if it is satisfied that there are circumstances justifying it making an order. Subsection 4 goes on to set out a number of matters which the Court must consider in determining whether there are circumstances justifying an order. One of those circumstances is whether an offer to settle has been made pursuant to the Rules. However that is only one of the matters to which the Court must have regard in considering an application for costs in the context of Section 341 of the Property Law Act.

Other matters to be considered include the conduct of the parties in the proceedings and whether a party has been wholly unsuccessful in the proceedings, as well as any fact or circumstance the Court considers the justice of the case requires to be taken into account.

In this case, the defendant/respondent was not legally represented and had chosen to conduct his own case.  Making allowance for his lack of legal qualification, his conduct during the proceedings could not fairly be the subject of significant adverse comment.  His conduct, including his conduct during the trial, appeared to me to be respectful and cooperative and efficient.

In terms of success in the proceedings, the claim as it came to be formulated by way of amendment on the first day of the case sought a 40 per cent division of assets in favour of the plaintiff/claimant.  The defendant, whilst not conceding that any adjustment should be made, was inclined to suggest that any assessment of contribution should be in the order of 10 to 15 per cent. 
Ultimately, as I indicated in my reasons, I settled on a figure which represented a 25 per cent division in favour of the plaintiff.  Clearly, neither the applicant nor respondent could be said to have been wholly successful or wholly unsuccessful in the proceedings.

Whilst I have had regard to the offers made under the Rules, there is some difficulty in my assessing whether, at the time they were made, they were no less favourable than the judgment, and if so, what the relativities were.  That is because of the particular circumstances surrounding these proceedings. 

The majority of the property in terms of value comprise real property.  It was common ground that that property had been the subject of an increase in value during the much publicised property boom of late, but no evidence was put before me as to the extent of that increase or when it occurred.  It would appear however to have been substantial if one has regard to the fact that the plaintiff's claim was brought in the District Court for an amount of $200,000 but by the time the matter got to trial, an amendment was made to the claim so that it sought such greater amount as would be reflective of a 40 per cent division of assets, having regard to the value of the assets at the time of trial was very much in excess of $200,000 and in fact exceeded $400,000.

It is difficult to know then, what division of assets was reflected in the offers that were made at the time that they were made and therefore difficult to assess how favourable or otherwise the offers were compared with the 25 per cent division that was ultimately the basis on my reasons.

Even if the judgment was no less favourable to the plaintiff than the offers for settlement however in this case, I would exercise my discretion against ordering costs, having regard to all the circumstances of the case, including the matters to which I have made specific reference in these reasons, being the conduct of the parties to the proceedings, the result in which neither side could claim to be successful in terms of what they were claiming for and having regard to the primary position under the legislation, which is that each party should bear their own costs in relation to proceedings of this nature and further having regard to the changing quantum of the claimant's claim up to the day of trial and the shifts in the values of property, the fact of which is fairly evident, although the extent of which is not established on the material before me.

Accordingly I dismiss the application for costs.

Yes?

MR BARNES:  The only other matter, your Honour, is the wording of that paragraph.

...

HIS HONOUR:  This is what I had in mind, a form of order something like this.

"Upon the plaintiff by her counsel acknowledging receipt today from the defendant of a bank cheque for $120,000 and upon the defendant undertaking to the Court that until the balance of the judgment amount is paid, that he will not dispose of or encumber his real property except for the purpose of obtaining the means for payment thereof, it is ordered that" and then in accordance with paragraphs 3, 4 - as amended in paragraph (c) by deletion of the word "purchaser" and insertion of the word "auctioneer."

And then down to what was paragraph 11, and then a new paragraph at the end simply saying that each party have liberty to apply on giving not less than three days' notice in writing to the other.

...

HIS HONOUR:  We should also record the fact that the caveat has been withdrawn.  So I will put a new one:

"And upon the plaintiff by her counsel informing the Court that caveat number 707490890 has been withdrawn."

Upon those three undertakings, then I order in terms of paragraphs 3 to 11 of Mr S's draft, save that paragraph 4(c) the word "purchaser" is replaced with the word "auctioneer."

And I make the further order that each party have liberty to apply upon giving not less than three days' written notice to the other.

That should now dispose of the matter.

...

-----