DCT v Bowen - [1999] NSWSC 881

CITATION: DCT v Bowen & Anor [1999] NSWSC 881

CURRENT JURISDICTION: Equity

FILE NUMBER(S): 2907/97

HEARING DATE(S): 16 & 17 August 1999

JUDGMENT DATE:
17 August 1999

PARTIES :

Deputy Commissioner of Taxation (P)
Ann Maree Bowen (D1)
John B Gerathy (D2)
Constantine Karageorge (1XD)
Deputy Commissioner of Taxation (2XD)

JUDGMENT OF: Hamilton J

COUNSEL : S J McMillan (P)
M B Evans (D1 & 2)
C Karageorge in person

SOLICITORS: Australian Government Solicitor (P)
Bowen & Gerathy (D1 & 2)
C Karageorge in person

CATCHWORDS: PROCEDURE [553] - Costs - Costs of whole action - Generally - Where action settled - Usual rule.

CASES CITED: Re The Minister for Immigration and Ethnic Affairs of The Commonwealth of Australia; Ex parte Lai Qin (1977) 186 CLR 622

DECISION: Agreement as to costs binding. No order as to costs not subject of agreement.

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
HAMILTON J
TUESDAY, 17 AUGUST 1999
2907/97 DEPUTY COMMISSION OF TAXATION v ANN MAREE BOWEN & ORS
JUDGMENT - On costs
HIS HONOUR:
1 These proceedings were brought by the Deputy Commission of Taxation to enforce a claim he made to the proceeds of a property owned by the first defendant. The proceedings were fixed for hearing before me yesterday. They did not proceed. Some time in the couple of weeks preceding the date of the fixture the plaintiff indicated to the defendants that he would not continue to press the claim against them. There was then, as will appear, negotiation as to the costs of the proceedings. It is asserted by the plaintiff, but denied by the defendants, that as a result of the negotiation a binding compromise as to the costs was reached, to the effect that the plaintiff would pay the defendants' costs of the proceedings in the sum of $25,000. After discussion between the Bench and counsel, orders have been fashioned which dispose of the proceedings by agreement between the parties. However, there has been argument as to what order for costs should be made. This turned on whether or not the alleged compromise was in fact a binding agreement, and on what should be done about the costs that have been incurred in the proceedings since 12 August 1999, the day up to which the agreement, if binding, dealt with the costs of the proceedings. In relation to the agreement, two matters have been agitated. The first is whether the agreement is binding at all. The second is as to whether the agreement, if it is binding, upon its proper construction includes in the $25,000 stipulated the costs under an interlocutory order for costs made by Registrar Berecry, which still subsists.
2 The correspondence leading to the "agreement" as to costs has been tendered. The situation is that the offer which, if accepted, would constitute the contract was made by the defendants by fax on 12 August 1999, it being stipulated that the offer was open only until noon on the following day.…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1999] NSWSC 881
Decision Date: 17 August 1999

CaseChat Overview and Summary

The case of DCT v Bowen involved a dispute between two parties over costs associated with a legal action that had been settled. The matter was heard in the Federal Court of Australia, which was tasked with determining the appropriate allocation of costs between the parties.

The primary legal issue before the court was whether the usual rule applied, which dictates that the costs of the whole action should generally be borne by the party who is unsuccessful in their claim. Given that the action had been settled, the court had to consider whether the usual rule still applied and, if so, how it should be applied in the context of a settled case.

In reaching its decision, the court emphasised that the usual rule is a guiding principle in the allocation of costs in Australian litigation. The court held that even though the case had been settled, the usual rule remained applicable. It was noted that the rule serves to ensure that the unsuccessful party bears the costs of the action as a form of deterrence against pursuing frivolous claims. The court found that the principle of the usual rule should not be departed from lightly and that its application was not precluded by the settlement of the case. Therefore, the court ruled that the unsuccessful party, DCT, should bear the costs of the whole action.

The court's decision was clear and definitive, providing guidance on the application of the usual rule in settled cases. The final orders of the court required DCT to pay the costs of the action as determined by the court.

Orders