Fathers v Cook
[2006] WASC 129 (S)
FATHERS -v- COOK [2006] WASC 129 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2006] WASC 129 (S) | |
| Case No: | CIV:1418/2003 | 15-17, 19 NOVEMBER 2004, 31 JANUARY 2008 | |
| Coram: | SIMMONDS J | 30/06/06 | |
| 1/09/08 | |||
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Costs for the plaintiff | ||
| B | |||
| PDF Version |
| Parties: | IRENE MARY ALICE FATHERS RONALD COOK |
Catchwords: | Liability for costs Whether plaintiff was the successful party and should recover her costs |
Legislation: | Rules of the Supreme Court 1971 (WA), O 66 r 1 |
Case References: | Fathers v Cook [2006] WASC 129 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
DECISION : 1 SEPTEMBER 2008 FILE NO/S : CIV 1418 of 2003 BETWEEN : IRENE MARY ALICE FATHERS
- Plaintiff
AND
RONALD COOK
Respondent
Catchwords:
Liability for costs - Whether plaintiff was the successful party and should recover her costs
Legislation:
Rules of the Supreme Court 1971 (WA), O 66 r 1
Result:
Costs for the plaintiff
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Category: B
Representation:
Counsel:
Plaintiff : Mr H O Moser
Respondent : Mr C P Stokes
Solicitors:
Plaintiff : Christopher J Cook
Respondent : Chris Stokes & Associates
Case(s) referred to in judgment(s):
Fathers v Cook [2006] WASC 129
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- SIMMONDS J:
Introduction
1 This is the determination of the question of costs following the filing of written submissions by the parties. I presided at the trial. Judgment after trial was dated and entered 31 January 2008 at a hearing at which I ordered the parties have 21 days from that date to file and serve written submissions as to the order to be made as to the costs of the action.
2 Submissions by the plaintiff, were filed on 28 February 2008. The submissions for the defendant were filed, I was told on 31 January 2008, although no record of them could be found on the file. A copy of submissions for the defendant dated 31 January 2008 was produced to the court by facsimile on 10 July 2008.
3 The parties indicated at that time they were content to have the matter dealt with on the papers.
4 The submissions for the plaintiff were that, as she had been successful, at least on an analysis of the overall judgment in the case, costs should be awarded to her, in accordance with Rules of the Supreme Court 1971 (WA) O 66 r 1.
5 The submissions for the defendant were that, as that analysis showed a mixed result, each party should bear their own costs.
6 For the reasons that follow, I have determined on an analysis of the overall judgment in the case that I should make the order sought by the plaintiff.
The action and the result
7 The action was one involving competing claims for relief in respect of amounts the parties paid and the assets they acquired in the course of a de facto relationship which had come to an end. The competing claims are set out in my judgment, Fathers v Cook [2006] WASC 129 [104] - [106]:
There were two principal claims made by the plaintiff. One was for 'specific performance' of a 'Loan Agreement' alleged to have been made between the parties. The plaintiff also made a claim for an order that the respondent perform his obligations under a 'Property Purchase Agreement' alleged to have been made by the parties in respect of the acquisition of the Koonwarra Close property. Further, or in the alternative, declarations of resulting trust, estoppel and unjust enrichment are sought, in respect of the
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- subject matters of the specifically enumerated obligations referred to as arising under the property purchase agreement. The plaintiff also claims such consequential orders as may be necessary to give effect to all of the orders made under all of these claims. This consequential relief is specified to include any necessary order for sale of the Koonwarra Close property, and an order for distribution of its proceeds in accordance with the scheme for distribution in the statement of claim. The plaintiff also claims damages for conversion by the respondent of the lounge suite acquired by the plaintiff in August 2000, and further claims occupation rent in relation to the plaintiff's interest in the Koonwarra Close property after the plaintiff moved out. The plaintiff further claims orders for proper accounts, enquiries and directions, as well as interest on such sums as may be payable by the respondent to the plaintiff from the date of the termination of their de facto relationship to the date of judgment at the rate of 8 per cent, and such other orders as the court deems appropriate, as well as costs.
The respondent denies that the loan agreement or property purchase agreement was made. The respondent pleads that from the commencement of the de facto relationship the parties formed a 'common intention' that they would 'pool' their respective financial resources and income, although it was made clear in the proceedings this did not include the plaintiff's superannuation from the United Kingdom. Pursuant to the common intention pleaded the parties would contribute the resources and income pooled to their upkeep and maintenance and the upkeep, maintenance and improvement of assets. The parties would also contribute 'other direct and indirect financial and non-financial resources' to the acquisition, maintenance and improvement of assets. The parties would hold any property and assets acquired by them in the course of the de facto relationship in equal shares. The defence further pleads it was pursuant to the common intention that moneys were paid which the plaintiff says form part of the advances under the Loan Agreement. The respondent further pleads that pursuant to the common intention the plaintiff applied the net proceeds of sale of her residence to the acquisition of the Koonwarra Close property, and that pursuant to the common intention the respondent applied the net proceeds of the sale of his residence in the particular ways listed in the defence, and that the lounge suite was also acquired pursuant to the common intention. The respondent denies that the plaintiff was ousted from the Koonwarra Close property and thus that the respondent is liable for occupation rent.
The defence also contains a counterclaim for a declaration that the parties are joint legal and beneficial owners of the Koonwarra Close property, that it be sold and that the net proceeds should be divided equally between the parties or in such other proportions as the court orders. Alternatively, there is a counterclaim for an accounting of the parties' respective contributions to the de facto relationship, a declaration that parties hold the net proceeds of sale of the Koonwarra Close property and any other assets of the de facto relationship in trust for themselves in proportion to their
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- respective contributions, and an order that such net proceeds be paid to the parties in accordance with their respective contributions. The defence also claims such further and other relief as the court may award and the respondent's costs of the action to be taxed and paid out of the plaintiff's share of the net proceeds of the Koonwarra Close property.
8 The Koonawarra Close property represented by far the most substantial asset or amount involved in the proceedings.
9 The result sufficiently appears for my purposes from Fathers [164] and [167] - [173], [178] - [184]:
I have found that the plaintiff has made out her claims as follows:
• to have lent $16,819.00 to the respondent, which became payable to her at the end of the de facto relationship;
• that the respondent is liable to discharge the mortgage on the Koonwarra Close property and to pay the plaintiff $15,322.11, so as to equalise their contributions to the acquisition of the Koonwarra Close property;
• that the respondent is not liable to the plaintiff for occupation rent in respect of his conduct in obtaining a Misconduct Restraining Order which had the effect of keeping the plaintiff out of the Koonwarra Close property; and
• the respondent is liable in damages for conversion of the lounge suite purchased by the plaintiff in August 2000, damages which on the evidence before me are $800.00.
.…
The plaintiff's prayer for relief includes that in the event the Koonwarra Close property has not been sold (as appears to be the case) the property be sold pursuant to Property Law Act 1969 (WA), s 126 and the proceeds divided as the prayer requests.
The respondent does not oppose the sale of the Koonwarra Close property and indeed his counterclaim also seeks an order for sale. There is no doubt the plaintiff, as the holder of a 50 per cent share in the property, is entitled to a sale, absent a good reason appearing to the court not to order one. No good reason so to do is apparent to me, or pressed on me. The matters that need to be addressed then go to the application of the proceeds.
The application of the proceeds requested by the plaintiff's prayer for relief was explained to me in terms that in effect the plaintiff should receive one-half of the proceeds of sale, presumably after deducting the sale costs, and the equalising payment from the respondent's share of the proceeds,
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- apparently plus the interest on that amount. The respondent's share of the proceeds should also bear the costs of the discharge of the mortgage. The plaintiff's prayer for relief appears to me to go further than this, however, in also allowing for the payment from the respondent's share of the proceeds of sale of the amount of the principal under the loan agreement plus interest as I have indicated. It does not seem to me that it would be appropriate to burden the respondent's claim to a share in the proceeds in this way: it is not suggested that performance of the loan agreement was part of the equalisation of the respondent's contribution to the acquisition of the Koonwarra Close property, nor does the liability arising under it in my view impeach the respondent's claim to his proper share of the proceeds (Meagher, R P, Heydon D and Leeming, M, Equity Doctrines and Remedies 4th ed Sydney, LexisNexis Butterworths 2002 at [37-045], on equitable set off).
However, in respect of the sale the respondent has as alternative relief sought an accounting of the parties' respective contributions to their de facto relationship, and a declaration that the net proceeds of the sale of the Koonwarra Close property and any other assets of the relationship be held in trust for themselves in proportion to their respective contributions. I return below to the matter of other assets of the relationship.
As to the net proceeds of the Koonwarra Close property, after allowance for the respondent's equalisation obligations as I have referred to them, which appear to me to be appropriately so allowed for, it also seems to me that the respondent has sufficiently called for the application of the equitable principles which provide for the possibility of an allowance to be made out of the proceeds of the sale under s 126 in respect of improvements and repairs which are capable of enhancing the value of the property. There is also the possibility under those principles, in this case, of an allowance proportionate to the other co-owner's (the plaintiff's) beneficial interest in the property for outgoings for the preservation of the property, such as payments of rates, taxes, insurance premiums, and other items, such as grounds and maintenance expenditures. (While this allowance may in suitable cases extend to mortgage repayments, that would not be appropriate in this case, for the reasons I gave earlier.) The possibility of allowances of both sorts being so made in proceedings such as these was recognised in Silvester v Sands [2004] WASC 266 per Heenan J at [139 - 141].
However, in respect of an allowance for expenditure capable of enhancing the value of the property, it must be shown that the expenditures in question did have that effect; and the allowance is for the lesser of the expenditure or the enhancement: Silvester (supra) at [140] and Meagher et al (supra) at [25-065]. I have already found that the plaintiff agreed to a number if not all of the expenditures. However, it does not appear to me that this changes the basis upon which an allowance may be claimed, as I do not consider this agreement extended to paying her share of the expenditures or the increased value they produced. However, there is no allowance where there was an intention the improvements were to be part
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- of the improver's contributions to the property to be shared as the property was shared: Noack v Noack [1959] VR 137 at 142 - 143 per Dean J, quoted with approval by Kennedy J in Guthrie v Millar [sic Millar v Guthrie, unreported; FCt SCt of WA; Library No 970552B; 28 October 1997] at 7. I have already found there was no linkage between any improvements and the respondent's interest in the property, which rests on equality of contributions. On that basis I consider that there was no disqualifying intention in this case.
Further, in respect of allowances both for increases in the value of the property and the other expenditures I referred to, the person claiming the allowance is chargeable with an occupation rent in respect of the period in which the claimant enjoyed sole possession of the premises: Silvester(supra) at [141]. That period in this case runs from 31 July 2002 (the date at which I found the respondent entered possession of the property) to the date on which the assessment is to be made or the date possession ceased, whichever is the earlier.
…
There is no evidence before me of the market rent the Koonwarra Close property could have commanded over the period in question. It seems to me unlikely that the total of the renovations and other expenditure amounts, plus labour costs (some of which are disputed by the plaintiff, as work done by others than the respondent) or $16,679.56 will exceed the market rent for the period till the end of November 2004. On that basis, it seems unlikely that on an accounting for the expenditures in fact made from the respondent's schedules and the allowable labour costs, as well as the expenditure since, and occupation rent, there will be any allowance to the respondent. However, as I have said, the respondent has called for an accounting and it seems to me to be established that enquiries and accounts should be ordered where the parties, or it seems one of them, have called for such enquiries and accounts, and there is a basis for them: Re Pavlou (a bankrupt) [1993] 1 WLR 1046 per Millett J at 1049 1050; Re Gorman (a bankrupt)[1990] 1 WLR 616 at 626 per Vinelott J, Mervyn Davies J agreeing; and Silvester (supra) at [141].
In accordance with those authorities, inquiries should be made to determine what expenditures the respondent made, and what labour he contributed, producing what if any increases in value of the Koonwarra Close property, and what other expenditures he made to preserve the property, as well as the market rent for the property over the period the respondent has been in sole occupation of the property, and the accounts using the results.
So far as other assets of the de facto relationship are concerned I understand this to refer to assets acquired during the course of the relationship used for the benefit of both parties. The only ones that the evidence revealed in any way were the lounge suite and the campervan, to whose acquisition I have already referred.
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- I note that the respondent appeared to argue before me that account should also be taken of all of the expenditures the parties made by way of contribution to the de facto relationship, to determine what allowance should be made to the respondent out of the proceeds of sale of the Koonwarra Close property. I do not consider that enquiries and accounts should be ordered for that purpose. As I have indicated in relation to the common intention on which the respondent relies, this is not a case of parties to a de facto relationship having pooled their assets or even their earnings for the purposes of the joint home represented by the Koonwarra Close property. There is evidence of a limited pooling, at least in the form of the Reward Plus joint account. I put aside the other joint accounts, being the mortgage account, on the basis of my findings in relation to the acquisition of the Koonwarra Close property, and the Dream Saver account, on which there were no operations by the parties other than the plaintiff's payment in and withdrawal, on the evidence before me. However, the Reward Plus account was not established until some time after the acquisition of the Koonwarra Close property. It was not directed towards the acquisition of or related to the property but rather the general purposes of their relationship, particularly living expenses, but not only those. Its operation does not appear to me to be capable of giving rise to a beneficial interest in that property, resting on the unconscionability of allowing a party to take an interest in property without qualification for the contribution to the other, in the way that the contributions of the parties in Baumgartner (supra) did. See Lloyd (supra) per Murray J at [12].
I have already indicated my finding as to the lounge suite. As to the campervan which was paid for out of the proceeds of the sale of 57 Williamson Avenue, as I have previously indicated there is evidence that the campervan was sold by the respondent, although the evidence is less clear as to the proceeds, or what has happened to them. However, the plaintiff has made no claim in respect of the campervan, and I do not need to pursue it further.
There is also evidence that the respondent made expenditures in relation to the plaintiff's property which were not contributions to the acquisition of the property. The property concerned was of two sorts. One was computer equipment to which in 2000 the respondent contributed the cost of supplementary equipment, and upgrading. There is some dispute as to the quantum of the contribution in the former case. There is also evidence of the respondent having contributed in 2000 to the cost of repairs and replacement parts for the plaintiff's car. However, I do not consider I need to pursue the matter further. It does not seem to me that the respondent should be seen to have acquired a proprietary interest in such cases: see Meagher, R P and Gummow, W M C, Jacob's Law of Trusts in Australia 6th ed, Sydney, Butterworths 1997 at [1219].
Accordingly, I do not consider any further enquiries for accounting beyond that in respect of expenditures the respondent made on the Koonwarra Close property as I have indicated should be ordered.
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My conclusion
10 In my view, the result on all of the substantial matters in issue, and one of the less substantial ones, was success for the plaintiff. In addition the plaintiff achieved a measure of success on the remaining less substantial issue.
11 Those substantial matters were liability to discharge the mortgage referred to, the equalisation payment and the amount due in respect of the loan obligations referred to. While it is true that the plaintiff did not succeed in her claim as to the way in which the proceeds of sale of the property should be applied as indicated in [170], I do not consider that in practical terms substantially qualified the success described. Nor do I consider that the order of the application of the proceeds of the sale as provided for in the judgment after trial of 31 January 2008 represented such a qualification.
12 The less substantial claim in respect of which the plaintiff succeeded was that for damages for conversion of the lounge suite. While she did not succeed directly on her claim for occupation rent, she did succeed in having an allowance made for it, of a size considered in the judgment as likely to offset the principal set of claims on which the defendant succeeded: see [173] read with [178]. I also note the eventual provision for these claims in the judgment after trial of 31 January 2008.
13 The basis for the response by the defendant to the claims of the plaintiff, of a common pooling arrangement, was not made out at trial. The defendant's success in respect of the principal set of claims for which he was successful was substantially qualified by the allowance for occupation rent referred to: see [178]. Further, those claims were in terms of trial time and the amounts at stake significantly less substantial matters that the substantial claims in respect of which the plaintiff was successful.
14 It is true that in the period immediately prior to the action the plaintiff ceased to cooperate in relation to the sale of the property. However, it seems to me that this has no direct bearing on the assessment of the result on the issues which caused the plaintiff to bring these proceedings. At no point in the proceedings was there any question but that the property would be sold. The substantial issues went to the financial adjustments arising out of the end of the de facto relationship that had led to that sale. The plaintiff's position as to the principles by which that adjustment should be guided was made out where the defendant's position was not.
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15 In my view, although the matter is not a straightforward one, the plaintiff was successful in the action, and should have her costs, to be taxed if not agreed.
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