Cooper v Mulcahy; Mulcahy v Cooper (No 2)

[2013] NSWCA 216

Court of Appeal

New South Wales

Case Title:	Cooper v Mulcahy; Mulcahy v Cooper (No 2)
Medium Neutral Citation:	[2013] NSWCA 216
Hearing Date(s):	On the papers
Decision Date:	18 July 2013
Before:	Basten JA at [1]; Meagher JA at [2]; Hoeben JA at [3];
Decision:	(1) Refuse leave to appeal against the decision of Macready AsJ of 29 May 2012 as to costs. (2) The applicant (Ms Mulcahy) is to pay the costs of the respondent (Mr Cooper) of the leave application. (3) Set aside the order of Macready AsJ that the plaintiff (Mr Cooper) pay 90 percent of the defendant's (Ms Mulcahy's) costs of her cross-claim on the ordinary basis. (4) In lieu thereof, the plaintiff (Mr Cooper) is to pay 20 percent of the defendant's (Ms Mulcahy's) costs of her cross-claim on the ordinary basis.
Catchwords:	COSTS - at trial appellant succeeded in claim under Property (Relationships) Act 1984 (NSW) and respondent succeeded in cross-claim for assault - appellant succeeded in having assault damages significantly reduced - respondent unsuccessful in cross-appeal - application by respondent for leave to appeal against costs order by primary judge - leave refused - respondent to pay appellant's costs of property (relationships) claim - appellant to pay 20 percent of respondent's cross-claim for assault.
Legislation Cited:	Civil Procedure Act 2005 Property (Relationships) Act 1984 (NSW)
Cases Cited:	Advance Resource Services Pty Ltd trading as Progress Couriers and Taxi Trucks v Charlton [2008] SASC 118 Baker v Towle [2008] NSWCA 73; 39 Fam LR 323; 67 ACSR 367 Cooper v Mulcahy [2012] NSWSC 373 Cooper v Mulcahy; Mulcahy v Cooper [2013] NSWCA 160 Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) and Anor v Lane Industries Pty Ltd & Ors[1993] 26 IPR 261 Hughes v Western Australian Cricket Association (Inc) (1986) 8 ATPR 40-748 In the marriage of Kennon [1997] 22 Fam LR 1 NRMA Ltd and Ors v Morgan & Ors (No 3) [1999] NSWSC 768 Waters v PC Henderson (Australia) Pty Ltd [1994] NSWCA 338; 254 ALR 328
Category:	Principal judgment
Parties:	Robert Brian Cooper - Appellant Barbara Alicja Mulcahy - Respondent Barbara Alicja Mulcahy - Appellant Robert Brian Cooper - Respondent
Representation
- Counsel:	Counsel: Mr J Maconachie QC/Mr J Priestley - Appellant Mr BMJ Toomey QC/Mr SJ Maybury - Respondent Mr BMJ Toomey QC/Mr SJ Maybury - Appellant Mr J Maconachie QC/Mr J Priestley - Respondent
- Solicitors:	Solicitors: Fishburn Watson O'Brien - Appellant AR Connolly & Company - Respondent AR Connolly & Company - Appellant Fishburn Watson O'Brien - Respondent
File Number(s):	2012/161598 2012/198526
Decision Under Appeal
- Before:	Associate Justice Macready
- Date of Decision:	27 April 2012
- Citation:	Cooper v Mulcahy [2012] NSWSC 373
- Court File Number(s):	2008/280481

JUDGMENT

1. BASTEN JA: I agree with Hoeben JA.

2. MEAGHER JA: The orders proposed by Hoeben JA should be made for the reasons that his Honour gives.

3. HOEBEN JA: The principal judgment in this proceeding was delivered on 14 June 2013: Cooper v Mulcahy; Mulcahy v Cooper [2013] NSWCA 160. The orders made at that time disposed of the substantive issues between the parties. Two matters were left unresolved; both related to the costs of the trial. On 4 May 2012 the trial judge made the following orders with respect to costs:

   "(1) The defendant pay the plaintiff's costs of the claim for property adjustment on the ordinary basis.
   (2) The plaintiff pay 90% of the defendant's costs of the defendant's cross-claim on the ordinary basis."

4. Mr Cooper (the plaintiff at trial) improved his financial position under the Property (Relationships) Act 1984 (NSW) ("the Act") as a result of the appeal. As he obtained an order for costs in respect of the claim for an adjustment of interests in property, the outcome of his appeal provides no basis to interfere with that order. On the other hand, Ms Mulcahy having failed to defend the judgment she obtained on her cross-claim cannot sustain the order that Mr Cooper pay 90% of her costs of the cross-claim.

5. Ms Mulcahy instituted separate proceedings by way of an application for leave to appeal against the order that she pay the whole of Mr Cooper's application for adjustment of property rights. As she did not otherwise challenge the orders at trial with respect to the claim under the Act, that application must now be addressed in its terms.

6. Although Mr Cooper submitted that a global order should be made with respect to the costs of the trial, that is not appropriate. The claim under the Act was distinct from the claims for damages with respect to the assaults, which formed the subject matter of Ms Mulcahy's cross-claim. In order to make a global costs order, this Court would need an appreciation, which it does not have, of the extent to which both preparatory work and the hearing were devoted to one subject, rather than the other. The trial judge made separate orders with respect to the claim and cross-claim: that course should be followed.

Costs of claim under the Act

1. In reaching his decision, as to the costs of Mr Cooper's claim under the Act, his Honour had regard to s98(1) of the Civil Procedure Act 2005. That section relevantly provides:

   "98 Courts powers as to costs

   (1) Subject to rules of court and to this or any other Act:

   (a) costs are in the discretion of the court, and

   (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and

   (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis."

2. The primary judge also had regard to rule 42.1 of the Uniform Civil Procedure Rules 2005. That rule relevantly provides:

   "42.1 General rule that costs follow the event

   Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs."

3. Having analysed the authorities, his Honour concluded (correctly in my opinion) that the issue of costs should be resolved by reference to the "event" in respect of which a party should become liable for costs. A determination of what constituted the "event" required an evaluation of the outcome of the proceedings, the positions adopted by the parties during negotiations and their relative success in the matter (Baker v Towle [2008] NSWCA 73; 39 Fam LR 323; 67 ACSR 367, at [22]-[ 25] (Beazley JA) and [82]-[83] (Basten JA)).

4. When analysing the positions of the parties, the primary judge noted that although each had sought 100% of the assets, shortly before the hearing Mr Cooper proposed an outcome which was similar to that which was ultimately found by the Court. Ms Mulcahy had consistently sought a division of 85 percent of the asset pool for herself. His Honour concluded that in the proceedings under the Act, Mr Cooper by the time of the hearing had adopted a stance which was virtually the same as the final result whereas Ms Mulcahy's stance was not anywhere near that result.

5. His Honour also took into account what he described as the "inefficient conduct of the defendant's (Ms Mulcahy's) case and wastage of costs". In that regard, his Honour had regard to late disclosures as to the existence of property and bank accounts, the late filing of affidavits including a lengthy one by Ms Mulcahy (157 pages), the failure to comply with the Court timetable and the late filing of evidence, ie, medical reports.

6. In relation to those issues the primary judge said:

   "The late service of affidavits caused substantial pressure on the plaintiff and his advisors. The failure to properly disclose her true financial information until ordered to do so was a significant failure which wasted time and effort in the trial. The case was listed for an eight day hearing and that expanded into a sixteen day hearing over a number of adjournments. As is apparent, there was a substantial change in her case after the offer of 29 June 2011. ..."

7. Taking into account those matters and the stance adopted by Mr Cooper at trial to the claim under the Act, the primary judge determined that Mr Cooper should have his costs of that part of the trial.

8. As already indicated, Mr Cooper improved his position in relation to the claim under the Act in that the "add-back" of $300,000 by him to the pool of assets, was reduced to $100,000. This had the effect of improving his position from that which had been achieved at the trial by $120,000.

9. In this Court Ms Mulcahy repeated the submissions made to the primary judge and noted that Mr Cooper had opposed every aspect of the assault claims, which were relevant to the claim under the Act because of her reliance on the principle in In the marriage of Kennon [1997] 22 Fam LR 1.

10. The question of the assaults is best dealt with when the costs of Ms Mulcahy's cross-claim are considered. In any event, her claim based on In the marriage of Kennon failed.

11. The matters identified by the primary judge were properly taken into account by him. The fact that Mr Cooper bettered his position in relation to the claim under the Act in the appeal provides further support for the conclusion arrived at by the primary judge. I agree with that conclusion. The application for leave to appeal against that order should be dismissed.

    Costs of cross-claim

12. In relation to Ms Mulcahy's cross-claim, the primary judge ordered Mr Cooper to pay 90 percent of her costs. He did this because Mr Cooper had made no concessions in relation to the assaults which he had found to have occurred and in relation to which he had awarded substantial damages. The only reason the primary judge did not award full costs of the cross-claim in favour of Ms Mulcahy was because of her conduct of the case and the wastage of costs. Because Ms Mulcahy failed to defend the judgment which she obtained on her cross-claim, the costs of her cross-claim need to be re-assessed.

13. The findings of the primary judge in relation to the assaults have now largely been set aside. Ms Mulcahy has succeeded in respect of one assault only and the damages for that assault have been substantially reduced. Nevertheless, Ms Mulcahy has succeeded in relation to part of her claim and succeeded on the issue of whether the assaults took place, which was strenuously contested by Mr Cooper. I accept that this was an important issue in the cross-claim. However, the practical effect of the appeal in relation to her cross-claim is that Ms Mulcahy has succeeded on only a small part of that which she claimed.

14. Ms Mulcahy submitted that because of the respective financial positions of the parties, it would be unfair for her to pay a substantial portion of Mr Cooper's costs. She also submitted that her present financial position was parlous and that a substantial order for costs against her would not only take away whatever benefits she might receive under the Property (Relationships) claim but would probably bankrupt her.

15. The financial position of the parties is not a matter which can be taken into account in litigation of this kind. In that regard, the observation in Advance Resource Services Pty Ltd trading as Progress Couriers and Taxi Trucks v Charlton [2008] SASC 118 (Doyle CJ, Bleby and Layton JJ) at [155] is apposite:

    "Finally, the Court took into account the complexity and difficulty of the matter and the fact that the costs payable could have a possibly devastating effect on a person of moderate means. In the first place, there was no evidence of Mr Charlton's financial position. In the second place, impecuniosity, except perhaps in the case of some types of public interest litigation, is never a relevant consideration in the exercise of the discretion. It has nothing to do with the conduct of the litigation."

16. As rule 42.1 makes clear, the general rule is that costs follow the event. Notwithstanding that the Court has power to deprive a successful party of costs or even order a successful party to pay costs, that is a course to be taken only in unusual cases. On this issue the Court was referred to Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd [1993] FCA 259; 26 IPR 261 at [28], where Gummow, French and Hill JJ, referring to a statement by Toohey J in Hughes v Western Australian Cricket Association (Inc) (1986) 8 ATPR 40-748 at p 48,136, stated:

    "The propositions enunciated in that case are subject to the further consideration that justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case: Cretazzo v Lombardi (1975) 13 SASR 4 at 12. In Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 3) (1979) 42 FLR 213 ; 28 ALR 201, Fisher J regarded the discretion to apportion costs as one to be exercised only in the most exceptional circumstances. Nevertheless he accepted that where a considerable part of the trial is taken up in determining issues upon which a party fails, it is a proper exercise of the discretion to reduce the costs allowed to that party."

17. In Waters v PC Henderson (Australia) Pty Ltd [1994] NSWCA 338; 254 ALR 328 (Kirby P, Mahoney and Priestley JJA) Mahoney JA said:

    "Where the proceedings involve multiple issues the application of the rule that costs follow the event may involve hardship where a party succeeds on some issues and yet fails on others. Particularly is this so where, for example, a defendant succeeds on issues that occupied the bulk of the time taken by the proceedings. Nevertheless unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those in which it failed."

18. In NRMA Ltd and Ors v Morgan & Ors (No 3) [1999] NSWSC 768 Giles J said:

    "24 Principles according to which some other order may be made are fairly well established. If a party fails on some issues, the circumstances may make it reasonable that he be deprived of the costs of those issues, or even be ordered to pay the other party's costs of those issues. For this purpose, issues may be issues in a pleading sense of bases of claim, or may be disputed questions of fact or law. But it must be remembered that parties should not be dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case, and unless a particular issue or group of issues is clearly dominant or separable from the balance of the proceedings it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between the issues on which he was successful and those on which he failed. It is sufficient to refer to Cretazzo v Lombardi (1975) 13 SASR 4 at 12; Hughes v Western Australian Cricket Association (1986) ATPR 40-748 at 48,136; Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 at 271-2; and Waters v P C Henderson (Australia) Pty Ltd (NSWCA, 6 July 1997, unreported)."

19. I take those statements of principle into account. This is an unusual case. Although Ms Mulcahy did succeed in her cross-claim she did so on a limited basis given the amount of time devoted to it. Accordingly, I am of the opinion that Ms Mulcahy should recover 20 percent of her costs of the cross-claim.

20. The orders which I propose are as follows:

    (1) Refuse leave to appeal against the decision of Macready AsJ of 29 May 2012 as to costs.

    (2) The applicant (Ms Mulcahy) is to pay the costs of the respondent (Mr Cooper) of the leave application.

    (3) Set aside the order of Macready AsJ that the plaintiff (Mr Cooper) pay 90 percent of the defendant's (Ms Mulcahy's) costs of her cross-claim on the ordinary basis.

    (4) In lieu thereof, the plaintiff (Mr Cooper) is to pay 20 percent of the defendant's (Ms Mulcahy's) costs of her cross-claim on the ordinary basis.

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