H, AW v K, S - [2023] SASCA 26

Supreme Court of South Australia
(Court of Appeal: Civil)
H, AW v K, S
[2023] SASCA 26
Judgment of the Court of Appeal
(The Honourable President Livesey, the Honourable Justice Doyle and the Honourable Justice Bleby)
16 March 2023
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - OFFERS OF COMPROMISE, PAYMENTS INTO COURT AND SETTLEMENTS - PAYMENT INTO COURT - ACCEPTANCE
APPEAL AND NEW TRIAL - PROCEDURE - SOUTH AUSTRALIA - POWERS OF COURT - COSTS
ESTOPPEL - ESTOPPEL BY JUDGMENT - RES JUDICATA OR CAUSE OF ACTION ESTOPPEL - PARTICULAR CASES
In 2014, the appellant met the respondent and the two commenced a relationship. Over the course of the relationship, the appellant transferred large sums of money into the respondent’s bank account, allowing her to rent a house for herself and her son, cut back on the hours she worked, pay for her son’s school fees, and live a more luxurious lifestyle than she would be able to afford on her own earnings. The relationship broke down between October 2018 and January 2019.
The appellant brought proceedings seeking a declaration that the respondent held $87,000 on trust for him, and delivery up of a Mercedes Benz motor vehicle. The respondent denied the claim, arguing that the money was provided to her by way of financial support, and that the car was a gift.
The respondent brought a cross claim in which she sought a declaration that the two of them had been in a de facto relationship.
On 11 November 2020, the respondent filed an offer in the Supreme Court proceedings to “settle the entire matter (all claims between the parties)”. In relation to costs, the offer provided that the offeror (the respondent) would submit to any order the Court may make in the exercise of its discretion. The appellant did not file a formal response to the offer.
At trial, the judge dismissed the claim, finding that the money and motor vehicle were gifts and not subject to a claim in restitution. However, the judge also dismissed the claim for declaratory relief in the cross claim.
Following the delivery of judgment, each party sought orders for costs in their favour. The judge found that costs should follow the event. Although both the claim and cross claim had been unsuccessful, her Honour found that the cross claim did not significantly add to the costs incurred on the claim and so should not result in any reduction to the respondent’s entitlement to costs.
The judge held that these costs should be paid on an indemnity basis pursuant to r 132.10(2) of the Uniform Civil Rules 2020 (SA), on the basis that the appellant had obtained a judgment that was less favourable to them than the offer.
The appellant appeals on the ground that the judge erred in holding that the judgment dismissing the respondent’s cross claim provided no benefit or advantage to the appellant over a judgment based upon the offer to consent to an order dismissing that cross claim. The appellant argued that the latter would not have prevented the respondent from pursuing her Family Court claim for relief predicated upon the existence of a de facto relationship, whereas the former had that effect.
Held (per the court), dismissing the appeal:
1.it is undesirable that the Court attempt to reach a definitive resolution of the issues raised by the appellant for the purposes of resolving a costs dispute;
2.even if there was some potential advantage to the appellant from the judgment obtained, there was nevertheless a proper basis to order indemnity costs against the appellant.

Family Law Act 1975 (Cth) ss 4AA, 90RD, 90RE, 90SB, 90SE, 90SM; Jurisdiction of Courts (Cross-vesting) Act 1987 (SA) s 5(1); Supreme Court Act 1935 (SA) s 31; Uniform Civil Rules 2020 (SA) rr 132.4, 132.7, 132.8, 132.9, 132.10, referred to.
A Hudson Pty Ltd v Legal & General Life of Australia Ltd (1985) 1 NSWLR 701; Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (No 2) [2001] FCA 1861; Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194; Badge Constructions Pty Ltd v Penbury Coast Pty Ltd [1999] SASC 6 ; Blair v Curran (1939) 62 CLR 464; Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502; Clayton v Bant (2020) 272 CLR 1; Coles v Wood [1981] 1 NSWLR 723; Craigcare Group Pty Ltd v Superkite Pty Ltd [2014] NSWSC 467; Ekes v Commonwealth Bank of Australia (2014) 313 ALR 665; Energy Global Logistics Pty Ltd v Zigga Zagga (Australia) Pty Ltd [2021] NSWSC 348; Formosa v Eminent Forms Pty Ltd [2005] SASC 35; H Lundbeck A/S v Sandoz Pty Ltd (2022) 96 ALJR 208; H, AW v K, S [2021] SASC 128; H, AW v K, S (No 2) [2022] SASC 49; Kowalski v Stanley & Partners [2014] SASC 198; Mandeville v Better Lending Pty Ltd [2021] SASCA 28; McDonald v State of South Australia [2011] FCA 297; Medway Oil & Storage Co Ltd v Continental Contractors Ltd [1929] AC 8; Mensink v Registrar of the Federal Court of Australia (2022) 402 ALR 279; Mohamed v State of Victoria [2007] VSC 538; Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84; Port of Melbourne Authority v Anshun (1981) 147 CLR 589; Potts v Frost (No 2) [2012] TASSC 32; Rasch Nominees Pty Ltd v Bartholomaeus [2012] SASC 70; Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Quin (1997) 186 CLR 622; Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198; Rogers v Legal Services Commission of South Australia (1995) 64 SASR 572; State Bank of New South Wales Ltd v Stenhouse (1997) Aust Torts Rep 81-423; Stateland Developments Pty Ltd v Princi [2007] NSWSC 709; UBS AG v Tyne (2018) 265 CLR 77; Walton v Gardiner (1993) 177 CLR 378; Webuildem Pty Ltd v Arab Bank of Australia Ltd (2013) 300 ALR 99; Zavarco plc v Nasir [2022] Ch 105; Zetta Jet Pte Ltd v The Ship Dragon Pearl (No 2) (2018) 265 FCR 290, considered.

H, AW v K, S
[2023] SASCA 26
Court of Appeal – Civil: Livesey P, Doyle and Bleby JJA

THE COURT: The appellant brought proceedings against the respondent claiming that money and a motor vehicle he had given to the respondent were his. The respondent cross claimed seeking a declaration that they had been in a de facto relationship.
The primary judge dismissed both the claim and cross claim.[1] The respondent had filed an offer in which she offered to consent to a judgment that she pay a sum of money in respect of the claim, and that her cross claim for a declaration be dismissed. On the basis that the judgment obtained by the respondent was less favourable to the appellant than the judgment that would have followed acceptance of the respondent’s filed offer, the judge ordered that the appellant pay the respondent’s costs of the claim and cross claim on a standard basis until 14 days after the date of the offer, and thereafter on an indemnity basis.[2]
[1] H, AW v K, S [2021] SASC 128 (primary reasons).
[2] H, AW v K, S (No 2) [2022] SASC 49 (costs reasons).
The appellant was granted leave to appeal on grounds which in essence allege that the judge erred in failing to hold that the appellant achieved a benefit or advantage from the judgment on the cross claim following a contested trial that would not have been available in the event of a consent judgment based upon the filed offer. On the appellant’s argument, the latter would not have prevented the respondent from pursuing her Family Court claim for relief predicated upon the existence of a de facto relationship, whereas the former had that effect.
For the reasons which follow, it is undesirable that this Court attempt to provide a definitive answer to the difficult propositions of law, and mixed fact and law, inherent in the appellant’s argument on appeal for the purposes of resolving a costs dispute. However, even if it may be accepted that there was some potential benefit or advantage to the appellant from the judgment obtained, as opposed to a consent judgment, the appeal should be dismissed on the basis that the costs order made was nevertheless the appropriate order.
Background
The appellant is a dual Australian American citizen, who travels extensively for his work. In May 2014, he visited a European car dealership in Adelaide where he met the respondent, an employee of that dealership. They engaged in a series of text messages and telephone calls, and a relationship developed between them. Over the period of their relationship, the appellant transferred large sums of money into the respondent’s bank account, allowing her to rent a house for herself and her son, cut back on the hours of her work, pay for her son’s school fees, and live a more luxurious lifestyle than she had been able to afford on her own earnings. As the appellant continued to travel widely, and spent only a limited amount of time in Adelaide, much of the parties’ relationship was conducted through text messages and telephone calls.
The relationship broke down between about October 2018 and January 2019.
The appellant’s claim
On 7 February 2019, the appellant brought an urgent application in this Court, seeking a freezing order over the respondent’s bank accounts. He sought a declaration that the respondent held the sum of $87,000 on trust for him, and delivery up of a Mercedes Benz motor vehicle, furniture and jewellery, all of which were in her possession. In the alternative, he sought restitution of the sum of $87,000, and damages for conversion or detinue of the other items mentioned.
In his statement of claim, the appellant pleaded that he and the respondent had made an arrangement in 2014 whereby he would make payments to her, with which she would lease a house where she and her son would reside, and where he could stay when he visited Adelaide and store some belongings. He would also purchase a motor vehicle which would be kept at the house, and which the respondent would be able to use when the appellant was not in Adelaide. He further pleaded that, in December 2018, he and the respondent mutually agreed to terminate the arrangement, at which time it was agreed between them that the respondent would vacate the house by 1 February 2019, and return to him the balance of funds in her bank account, the car, and the furniture in the premises. He pleaded that the respondent had retained the money, the car and the furniture, and had not vacated the premises.
At trial, the appellant did not press his claims in respect of the furniture and jewellery. He confined his claim to the money and the motor vehicle. It was agreed that the respondent had vacated the premises shortly after the court proceedings were commenced.
In respect of his claim of a trust over the $87,000, the appellant argued that the money he advanced to the respondent was the subject of a Quistclose trust, as it had been advanced to her for a specific purpose, and so remained beneficially his.
The appellant argued that the primary question underlying each of his causes of action was one of intention, in respect of both the money and the motor vehicle. On his case, he did not ever intend that the money or the motor vehicle be a gift to the respondent.
In her defence of this claim, the respondent pleaded that she and the appellant met in May 2014, and commenced an intimate relationship in about August 2014. She pleaded that the appellant established a place of residence in Adelaide with her and her son, and maintained that joint residence until the breakdown of their relationship in January 2019. During their relationship, the appellant represented to the respondent that he would meet all of the costs associated with renting a house on their behalf, which house would be rented in her name alone. He further represented that he would support her financially and, to this end, did so by making substantial deposits into her bank account at various times throughout their relationship.
In relation to the motor vehicle, the respondent pleaded that it was a gift to her, made by the appellant on Valentine’s Day in 2017.
The respondent further pleaded that the appellant was estopped from seeking repayment of any of the money, given the representations that he had made to her that he would support her financially. She pleaded that she had relied on the representations made to her, and would suffer detriment if the appellant were permitted to resile from them.
The Family Court proceedings
On 6 March 2019, the respondent instituted urgent proceedings in the Family Court of Australia, seeking interim and final relief.
The final relief sought by the respondent included orders: (i) pursuant to s 90RD(1) of the Family Law Act 1975 (Cth) for a declaration that a de facto relationship existed between the parties between July 2014 and January 2019; (ii) a division of the parties’ property pursuant to s 90SM of the Family Law Act; and (iii) the payment of a lump sum and spousal maintenance pursuant to s 90SE of the Family Law Act.
Sections 90RD, 90SE and 90SM of the Family Law Act are contained within Part VIIIAB of that Act, which is entitled “Financial Matters relating to de facto relationships”. A “de facto relationship” is defined in s 4AA of the Family Law Act. It is not necessary to refer to the detail of that definition. It is enough to note that it requires consideration of whether, having regard to all of the circumstances of their relationship, the parties were in a relationship as a couple living together on a genuine domestic basis. The definition includes, in s 4AA(2), a non-exhaustive list of the circumstances or indicia to which the court may have regard in undertaking this evaluative judgment.
Sections 90SM and 90SE provide that, “after the breakdown of a de facto relationship”, the Court may make orders for either the maintenance of one of the parties (s 90SE), or altering the interests of the parties in their property (s 90SM).
In order to obtain an order under ss 90SE or 90SM, it is necessary to establish that there was a “de facto relationship” withing the meaning of the Family Law Act, that the “length of relationship” requirements of s 90SB have been met, and that the relationship has “broken down”.
There is no prerequisite under either ss 90SE or 90SM that the Court make any formal declaration as to the existence of the de facto relationship. However, s 90RD provides that, where an application is made under ss 90SE or 90SM, the Court may also “for the purposes of the proceedings” declare that a de facto relationship existed, or never existed, between the parties. Under s 90RE, a declaration under s 90RD takes effect as a judgment of the Court.
In his response to the respondent’s claim, the appellant sought dismissal of the proceedings for want of jurisdiction. He did not, as is sometimes done, seek a positive declaration pursuant to s 90RD that there was never a de facto relationship.
Cross-vesting application
The respondent made an application in the Supreme Court to transfer the proceedings in that Court to the Family Court. At that stage, she had not made any cross claim in the Supreme Court for relief that depended upon a finding of a de facto relationship (see below); indeed, she had not yet filed her defence in the Supreme Court proceedings.
By judgment dated 3 May 2019,[3] Parker J dismissed the application, declining to exercise the discretion conferred by s 5(1) of the Jurisdiction of Courts (Cross-vesting) Act 1987 (SA) to transfer the proceedings from the Supreme Court to the Family Court. The essence of his Honour’s reasoning was that the Family Court’s jurisdiction to resolve the disputes between the parties depended upon a finding that they had been in a de facto relationship, yet this was a matter of contest between them. If the matter were transferred to the Family Court, but it were to be determined that the parties were not in a de facto relationship, then it would be necessary to transfer the matter back to the Supreme Court to resolve the matters raised in those proceedings. In those circumstances, Parker J was not satisfied that it would be in the interests of justice that the proceedings be transferred to the Family Court.[4]
[3] H, AW v K, S [2019] SASC 67.
[4] H, AW v K, S [2019] SASC 67 at [44]-[45] (Parker J).
The respondent’s cross claim
Following the dismissal of her application for transfer, the respondent filed her defence to the appellant’s Supreme Court claim (summarised above), and a cross claim.[5]
[5] Referred to when filed as a counterclaim, but which became a cross claim upon the commencement of the Uniform Civil Rules 2020 (SA).
In her cross claim, the respondent sought declarations that overlapped to some extent with the relief she had sought in the Family Court proceedings. She sought declarations: (i) that she and the appellant were in a de facto relationship with one another within the meaning of s 4AA of the Family Law Act; (ii) pursuant to s 90RD(1) of the Family Law Act, that she and the appellant were in a de facto relationship between mid-2014 and January 2019; and (iii) that she was the sole owner of the motor vehicle in law and in equity. Given that s 90RD contemplates a declaration being made in proceedings seeking relief such as that which is available under ss 90SE or 90SM, there was an issue whether the Supreme Court could have made a declaration under s 90RD. However, it would seem that the other declarations were sought pursuant to this Court’s general power to make declarations of right under s 31 of the Supreme Court Act 1935 (SA).
The offer
On 11 November 2020, the respondent filed an offer (the Offer) in the Supreme Court proceedings. The Offer was marked to indicate it was an offer to “settle the entire matter (all claims between the parties)”.[6] It was expressed to be a “judgment offer”. The terms of the Offer were that the offeror (the respondent) offered to consent to judgment:
[6]     As opposed to ticking the box in the prescribed form to indicate that the offer was one to settle only, for example, the claim or cross claim, or indeed to settle part only of the claim or cross claim.
1.   That with respect to the claim:-
a.There be Judgment for the plaintiff in the sum of $21,769, inclusive of interest;
b.That the said sum be paid by the defendant to the plaintiff;
c.That the claim be otherwise dismissed.
2.   That with respect to the counterclaim:-
a.A declaration that the defendant is the owner of [the Mercedes Benz motor vehicle];
b.That the counterclaim be otherwise dismissed.
In relation to costs, the Offer provided that the offeror (the respondent) would submit to any order the Court may make in the exercise of its discretion. The Offer was expressed to expire if and when withdrawn, and in any event, unless the Court otherwise ordered, seven clear calendar days before the first day of trial.
As explained later, it is not in dispute that the Offer was a formal offer within the meaning of r 132.4 of the Uniform Civil Rules, and a relevant offer as defined in r 132.10(1). Acceptance of the Offer would have permitted the Court to enter judgment in accordance with its terms pursuant to rr 132.8 or 132.9.
The appellant did not file a formal response to the Offer pursuant to r 132.7, however nothing turns on this for the purposes of this appeal. There is no complaint about the Offer complying with the Rules.
Adjournment of the Family Court proceedings
The Family Court proceedings were adjourned from time to time pending the outcome of the Supreme Court proceedings.
On 30 March 2021, the Family Court proceedings were adjourned to August 2021, noting the imminent trial of the Supreme Court proceedings.
The trial of the Supreme Court proceedings

The trial of the Supreme Court proceedings commenced on 21 April 2021.
The trial proceeded over some nine days. At trial, the ownership of the money and the motor vehicle were the issues in dispute between the parties on the appellant’s claim. The main issue in contention on the cross claim was the existence of a de facto relationship.
On 11 November 2021, the primary judge handed down her judgment. Her Honour made orders dismissing the claim and cross claim.
In relation to the claim, the judge determined that the money and the motor vehicle that the appellant gave to the respondent were gifts, and not subject to a claim in restitution.[7] Her Honour also held, however, that the respondent’s defence on the basis of estoppel had not been made out. Nor was there any merit in any positive claim the respondent had sought to mount in that respect through her cross claim.[8]
[7] Primary reasons at [292].
[8] Primary reasons at [293].
In dismissing the cross-claim, the judge held that the parties were not in a de facto relationship.[9] In so concluding, her Honour made findings as to each of the indicia of a de facto relationship under s 4AA(2) of the Family Law Act,[10] before stating:[11]
On the basis of all of the factors set out above, I consider that the parties’ relationship was not that of a couple living together on a genuine domestic basis. The evidence does not demonstrate “the merger of two individual lives into life as a couple”. Rather, it demonstrates two individuals living their separate lives and coming together seven or eight times each year for some shared time. In my view, it is the time that was shared, rather than their lives.
The parties were not in a de facto relationship.
[9] Primary reasons at [293].
[10] Primary reasons at [129]-[192].
[11] Primary reasons at [193]-[194].
The primary judge’s costs reasons
Following the delivery of judgment, each party sought orders for costs in their favour. On 18 May 2022, the primary judge delivered her costs reasons. Her Honour ordered that the respondent was entitled to her costs in respect of the claim and cross claim on the standard basis from 7 February 2019 to 25 November 2020; and, from 25 November 2020,[12] on an indemnity basis.
[12] Being 14 days after the date of the Offer.
The judge commenced her costs reasons by observing that she had found neither party to be an impressive witness.[13]
[13] Costs reasons at [5]-[8].
In relation to the appellant, she referred to her findings that he was evasive and unhelpful; that his evidence contained inconsistencies, which had caused her to doubt the truth of much of his evidence; that he had lied to the respondent on a number of occasions; and that he had deliberately sought to mislead the Court at the commencement of the proceedings. In particular, the judge referred to her finding:[14]
I conclude that the applicant’s evidence was unreliable in many respects, and that he deliberately downplayed many aspects of the relationship to assist his claim. In other respects, his answers were evasive and calculated to obfuscate.
[14] Primary reasons at [14].
In relation to the respondent’s evidence, the judge referred to her finding that she had also told lies on oath, including in her evidence to the effect that she studied at university during their relationship, and as to the appellant’s proposal of marriage to her. In particular, the judge referred to her finding:[15]
I had considerable concerns about the respondent’s evidence. In my view, she lied on oath on a number of occasions, and this has led me to view her evidence with caution.
[15] Primary reasons at [15].
Starting point that costs follow the event in the context of unsuccessful claim and cross claim
Against that background, the primary judge noted the ordinary starting point that costs follow the event, the effect of which would be to entitle the respondent to an order that the appellant pay her costs of the claim, and to entitle the appellant to an order that the respondent pay his costs of the cross claim. However, in applying that starting point in circumstances where both a claim and cross claim had been unsuccessful, her Honour accepted that this meant that the appellant would only be entitled to an order for costs to the extent that, as a matter of substance, the issues raised on the cross claim resulted in additional costs.[16]
[16] Costs reasons at [42]-[43], applying the approach indicated by Medway Oil & Storage Co Ltd v Continental Contractors Ltd [1929] AC 88, as applied in this jurisdiction in Badge Constructions Pty Ltd v Penbury Coast Pty Ltd [1999] SASC 6 at [10] (Debelle J) and Formosa v Eminent Forms Pty Ltd [2005] SASC 35 at [17]-[19] (Bleby J).
Cross claim did not add significantly to the matters in issue
With that approach in mind, the primary judge turned to consider the issues that arose on the claim and the cross claim, with a view to determining whether the cross claim had given rise to any additional costs. Her Honour commenced by detailing the breadth of the issues raised on the appellant’s claim:[17]
The issues raised by the applicant on the claim were broad and wide ranging. They covered questions relating to gifts, special purpose trusts, unjust enrichment, and restitutionary relief. The respondent’s defence covered issues such as estoppel, unconscionable conduct and the law of gift.
In determining whether the motor vehicle and the money were gifts, I was required to undertake a wholesale examination of the relationship between the parties. Because of the elements which the respondent was required to prove to establish that they were gifts, I was required to analyse the words that the parties used in their text message correspondence, and to undertake a careful review of their interactions with each other. I was required to do this for the entirety of their relationship, because of the ongoing transfers of money through the relationship, as well as the fact that he gave her not one but two motor vehicles over its course. In the course of my consideration, I took into account text messages and other correspondence throughout the entirety of their relationship, as well as their oral and affidavit evidence.
In determining whether a Quistclose trust had been created, I was required to examine in detail the words that the parties used in communicating with each other. The text messages between the parties, and other correspondence that the applicant wrote to the respondent were the key to determining whether the applicant made out this claim.
[17] Costs reasons at [45]-[47].
The judge then explained her conclusion that the cross claim did not significantly add to the costs incurred on the claim, and so should not, in her view, result in any reduction in the costs to which the respondent was entitled:[18]
The respondent’s cross claim for a declaration in respect of the motor vehicle overlapped entirely with the applicant’s claim for its return. It raised no issues that were not raised in the claim.
The respondent’s cross claim that the parties were in a de facto relationship clearly raised issues that were broader than those raised in the claim. I do not, however, consider that it significantly increased the length of the trial or required the consideration of significantly more evidence than the issues raised in the claim.
The history of the parties’ relationship was relevant to the applicants’ claims; it was not adduced merely for the purpose of determining whether they were in a de facto relationship. It was necessary to review all aspects of their relationship to determine whether any of the applicant’s claims were made out; whether the money given over a relatively lengthy period of time and the car were gifts was entirely dependent on the context in which they were given to the respondent. This context was only determined by a close examination of the parties’ relationship, including their communications with each other from its commencement through to its demise. I consider that Mr O and Mr R provided little, if any, relevant evidence; their evidence, however, occupied a very small period of time and did not add extensively to the length of the trial. Nor did the evidence of IK and DFM.
It is true that each party was questioned extensively about the nature of their relationship. As I have already said, however, I consider that the applicant’s claims required a close investigation of the nature of the relationship between the parties; thus, I decline to conclude that the respondent’s cross claim added significantly to the length of the trial, or led to the consideration of issues that would not have been considered otherwise.
Because of the broad issues raised by the applicant’s claim, I do not consider that there should be any reduction in the costs to which the respondent is entitled because of the failure of the cross claim. The cross claim in respect of the motor vehicle was defensive to the applicant’s claim. The cross claim in respect of the existence of a de facto relationship did not lead to a greater examination of the parties’ relationship than that required by the claim.
[18] Costs reasons at [48]-[52].
The judge next considered whether the respondent was entitled to recover her costs on an indemnity basis, based upon an application of rules of court relating to the costs consequences of filed offers.
Rules governing filed offers
As mentioned, it was accepted that the Offer filed by the respondent was a “formal offer” for the purposes of r 132.4 of the Uniform Civil Rules, and a “relevant offer” for the purposes of r 132.10(1).
As to the former, a “formal offer” is a filed document in the prescribed form which contains an offer to resolve a proceeding or part of a proceeding. It must be served on all other parties as soon as practicable after being filed, and must contain a term dealing with the costs of the action. Otherwise, r 132.4 is not very prescriptive as to the terms that a formal offer must contain. A formal offer may be either a judgment offer or a contract offer; the respondent’s Offer was a judgment offer.
As to the latter, a “relevant offer” is a formal offer that contains certain specific features prescribed by r 132.10(1). Not all formal offers are relevant offers; but a relevant offer must be a formal offer. A relevant offer, in the form of a judgment offer, must:
(a)be filed and served at least 21 days before the commencement of the trial;
(b)remain open for acceptance for at least 14 days after service;
(c)relate to the entirety of the action;
(d)involve a genuine compromise; and
(e)make an offer in respect of costs on one of two specified bases, one of those being that the parties will submit to any order that the Court may make in the exercise of its discretion.
The primary judge held[19] that the respondent’s Offer was both a formal offer, and a relevant offer, in that it was filed in the prescribed form; it offered to settle the entirety of the claim and cross-claim; it offered to submit to any order made by the Court in its discretion on the question of costs; it was filed and served well prior to 21 days before the commencement of trial; and it remained open for acceptance for well in excess of 14 days.
[19] Costs reasons at [56].
As the judge then explained, having determined that the respondent’s Offer was a formal and relevant offer, it became relevant to consider the costs consequences of the Offer under r 132.10. The terms of the relevant sub-rules 132.10(2) and (3) are as follows:
(2)     When—
(a)     a relevant offer is made by an applicant in an action;
(b)     the offer is not accepted by a respondent; and
(c)     the applicant obtains judgment that is no less favourable to the applicant than the terms of the offer,
then—
(d)     the costs incurred in respect of the action up to 14 days after service of the formal offer are unaffected by the making of the formal offer; and
(e)     subject to the overriding discretion of the Court, the applicant is entitled to an order against the respondent for the applicant’s costs of the action to which the relevant offer relates thereafter on an indemnity basis.
(3)     When—
(a)     a relevant offer is made by a respondent in an action;
(b)     the offer is not accepted by an applicant; and
(c)     either—
(i)    the respondent obtains judgment dismissing the action; or
(ii)the applicant obtains judgment that is less favourable to the applicant than the terms of the offer,
then—
(d)     the costs incurred in respect of the action up to 14 days after service of the formal offer are unaffected by the making of the formal offer; and
(e)     subject to the overriding discretion of the Court, the respondent is entitled to an order against the applicant for the respondent’s costs of the action to which the relevant offer relates thereafter on an indemnity basis.
It can be seen that, while expressed in equivalent terms, r 132.10(2) addresses offers filed by an applicant, and r 132.10(3) addresses offers filed by a respondent. In the case of the former, the trigger for a right to indemnity costs (subject to an exercise of the Court’s overriding discretion) is that the applicant obtains judgment that is “no less favourable to the applicant” than the terms of the offer. In the case of the latter, the equivalent trigger is that the applicant obtains judgment that is “less favourable” to the applicant.
On one view, both rr 132.10(2) and (3) were relevant here. Whilst the Offer was made by the respondent, she made that Offer both in her capacity as the respondent to the appellant’s claim, but also as the moving party, or applicant, in respect of her cross claim. As such, it might have been argued that r 132(10)(3) was relevant so far as the claim was concerned, and r 132.10(2) was relevant so far as the cross claim was concerned.
The primary judge, however, confined her attention to r 132.10(3). Her reason for doing so is not entirely clear. She might justifiably have done so on the basis that, because she had concluded that the costs of the cross claim did not add significantly to the costs of the claim, there was no need to separately address any entitlement to indemnity costs in respect of the costs of the cross claim. But as the judge later addressed whether the judgment obtained on the cross claim was less favourable to the appellant, we do not think this was her Honour’s reason for confining her attention to r 132.20(3). Rather, we think her Honour’s reason for confining her attention to r 132.10(3) was an approach that involved construing reference to “an action” in the relevant sub-rules as covering both the claim and cross claim; in effect treating the one offer as addressing the overall action.
In any event, the precise reason for, and indeed correctness of, her Honour’s approach did not affect the parties’ approach to this appeal. Both approached the appeal on the basis that it was to be accepted that the relevant issue was whether the judgment obtained was less favourable to the appellant, and that, in order to succeed on appeal, it was necessary for the appellant to establish that the judgment obtained on the cross claim provided the appellant with some benefit or advantage so as to avoid the conclusion that the (overall) judgment was less favourable to the appellant.
The judgment was less favourable to the appellant than the offer
The primary judge commenced her consideration of whether the judgment was less favourable to the appellant by addressing the claim. Her Honour said that there could be no doubt that, in respect of the claim, the formal offer was more favourable to the appellant than the judgment.[20] Had the appellant accepted the formal offer, he would have received a judgment in his favour on the claim, and a payment of $21,769. The judgment in fact entered dismissed his claim. As the judge observed, on this basis, the appellant was prima facie liable to pay the respondent’s costs in respect of the claim, on the standard basis until 25 November 2020, and thereafter, on an indemnity basis.
[20] Costs reasons at [60].
The judge then addressed what she described as the more difficult issue of comparing the Offer and judgment on the cross claim.[21]
[21] Costs reasons at [61]ff.
Her Honour began by dealing with the aspects of the cross claim based upon allegations of equitable estoppel and unconscionable conduct, in respect of which the respondent sought relief in the form of (i) a declaration that she owned the motor vehicle, (ii) equitable relief in respect of outstanding rent and other expenses, and (iii) damages. Focussing upon the issue that arose in respect of the motor vehicle on the cross claim, the judge held that the cross claim for this relief was “neither here nor there” given its overlap with the issues on the claim itself.[22] In substance the respondent had succeeded on those issues, albeit in the context in which they arose in the claim.
[22] Costs reasons at [63].
The more important issue, her Honour reasoned, was the significance of the dismissal of the cross claim for a declaration that the parties were in a de facto relationship. As her Honour framed the issue, the question was whether a judgment by consent (that is, based upon acceptance of the Offer) dismissing the respondent’s claim for a declaration of a de facto relationship would have had the same effect as a judgment dismissing that claim after a contested trial. The appellant argued that the latter was of benefit or advantage to him in that, by succeeding after a contested trial, he obtained a judgment that had the effect of barring the respondent from continuing with her Family Court proceedings. On the appellant’s argument, a judgment by consent based upon acceptance of the Offer would not have had that effect.
The judge addressed this contended difference between a contested judgment dismissing the respondent’s claim for declaratory relief, and a consent judgment dismissing the respondent’s claim for declaratory relief, by reference to each of three preclusionary doctrines: res judicata, issue estoppel and abuse of process.
Dealing with res judicata, the judge referred to decisions supporting the operation of that principle in respect of judgments by consent: Chamberlain v Deputy Commissioner of Taxation,[23] Webuildem Pty Ltd v Arab Bank of Australia Ltd,[24] Kowalski v Stanley & Partners[25] and Rogers v Legal Services Commission of South Australia.[26] Her Honour distinguished the decisions in Coles v Wood[27] and Rasch Nominees Pty Ltd v Bartholomaeus.[28]
[23] Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 508, 510-511 (Deane, Toohey and Gaudron JJ).
[24] Webuildem Pty Ltd v Arab Bank of Australia Ltd (2013) 300 ALR 99 at [61]-[63] (Foster J).
[25] Kowalski v Stanley & Partners [2014] SASC 198 at [12]-[15] (Judge Dart).
[26] Rogers v Legal Services Commission of South Australia (1995) 64 SASR 572 at 595 (Lander J).
[27] Coles v Wood [1981] 1 NSWLR 723 at 724 (Moffitt P).
[28] Rasch Nominees Pty Ltd v Bartholomaeus [2012] SASC 70 at [251]-[252] (Kourakis J).
The judge concluded that the authorities supported the conclusion that a consent judgment dismissing the respondent’s claim would have given rise to res judicata and hence operated as a bar to the respondent pursuing her Family Court claim.[29] Her Honour later put the point in terms that, upon acceptance of the Offer, the respondent’s cause of action or claim for a declaration under s 90RD(1) of the Family Law Act would have merged so that it no longer had any existence independent from the judgment based on the Offer.[30] As such, a consent judgment would have been just as beneficial or advantageous to the appellant as the judgment he in fact obtained in precluding the respondent from pursuing her Family Court proceedings.
[29] Costs reasons at [66], [70].
[30] Costs reasons at [73].

The judge reasoned that, having reached this conclusion, there was no need for her to consider whether an issue estoppel would also have arisen had the appellant accepted the Offer. However, her Honour dealt with the matter for the sake of completeness. After referring to some of the authorities addressing the operation of the principles of issue estoppel,[31] her Honour expressed the view that acceptance of the Offer consenting to the dismissal of the respondent’s cross claim would have given rise to a conclusion that the parties were not in a de facto relationship. By consenting to the dismissal of her cross claim, the respondent effectively abandoned any claim based on her contention that the parties were in a de facto relationship, and would be estopped in the future from pursuing this claim in the Family Court.[32] The issue which the respondent would be estopped from contesting would be whether a de facto relationship existed between the parties.[33]
[31] Blair v Curran (1939) 62 CLR 464 at 531-532 (Dixon J); Ekes v Commonwealth Bank of Australia (2014) 313 ALR 665 at [110]-[117] (Bathurst CJ, Beazley P and Emmett JA agreeing) (to the effect that a consent judgment can found an estoppel).
[32] Costs reasons [76].
[33] Costs reasons at [81].
The judge did not accept that any problem arose by reason of an inability to identify the issues conclusively determined by the consent judgment.[34] Her Honour explained:[35]
… This is because, while s 4AA of the Family Law Act sets out a number of criteria to be taken into consideration when determining whether or not a de facto relationship exists, none of these criteria is an essential requirement; indeed, s 4AA(3) specifically provides:
No particular finding in relation to any circumstances is to be regarded as necessary in deciding whether the persons have a de facto relationship.
The existence of a de facto relationship is not a multi-element cause of action, such as negligence or breach of contract, where all of the necessary elements must be proven. Thus, if the claim was in negligence, it could be dismissed because no duty of care was established or because causation was not established or there was no loss. A consent judgment dismissing the claim would not establish which element was not proven; thus an issue estoppel in relation to the existence of a duty of care, for example, would not arise. When a claim in negligence is dismissed without consideration of the merits of the claim, it cannot be ascertained which elements were not established.
The existence of a de facto relationship is a state of fact, the existence of which does not depend on the proof of any specific element or criteria. Thus dismissal of the claim of the existence of a de facto relationship would give rise to an issue estoppel in respect of its existence.
[34] Costs reasons at [82], distinguishing Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (No 2) [2001] FCA 1861 at [1148]-[1154] (Goldberg J).
[35] Costs reasons at [82]-[84].
The judge concluded her consideration of the preclusionary doctrines by addressing the suggestion that it would have involved an abuse of process had the respondent sought to pursue her proceedings in the Family Court, despite the appellant having obtained a judgment based on her Offer. The judge reasoned that it would offend the principles of finality and fairness to allow the respondent to pursue her action in the Family Court after consenting to the dismissal of her claim for a declaration that the parties were in a de facto relationship in the Supreme Court.[36]
[36] Costs reasons at [85].
Based on the above analysis, the judge concluded that “the formal offer was more favourable to the [appellant] than the judgment he received.”[37] As we understand it, her Honour was of this view because, so far as the claim was concerned, the Offer was more favourable; and, so far as the cross claim was concerned, she did not accept that the judgment after a contested trial provided the appellant with any benefit or advantage over a consent judgment following acceptance of the Offer.
[37] Costs reasons at [86].
It followed, on the judge’s reasoning, that the respondent was entitled to her costs on an indemnity basis from 14 days after service of her formal offer on the appellant.[38] This was subject only to the court exercising its discretion to disturb this result pursuant to the discretion conferred by the introductory words to r 132.10(3)(e) (“subject to the overriding discretion of the Court”).
[38] Costs reasons at [86].
No reason to exercise overriding discretion
The primary judge did not consider that the respondent’s costs entitlement should be reduced as a result of any discretionary factor.[39] Her Honour reasoned that, while the respondent had been untruthful in a number of respects, the appellant had also been untruthful, unhelpful and evasive in his evidence. Further, while the respondent had sought to tender all of the text messages between the parties, this took up very little time. In particular, her Honour rejected the appellant’s submission that this approach had increased his preparation time and costs. She reasoned that the text messages were clearly discoverable, and both parties referred to a substantial number of them in the prosecution of their cases. Finally, while the respondent’s affidavit of evidence in chief contained inadmissible material, this also took up very little time at trial.
[39] Costs reasons at [87]-[88].
The judge concluded her reasoning in this context by observing that there were some other considerations that supported the respondent’s costs entitlement, namely the appellant’s unreasonable and disproportionate approach to settlement and the proceedings more generally:[40]
I note that the respondent submitted that the applicant should suffer a costs penalty for his failure to make any attempt to resolve the matter prior to trial, including refusing to make any offer at mediation and failing to respond in any way to the formal offer. It is, in my view, most regrettable that the applicant made no attempt to resolve this matter without a trial. Such an attitude shows a disdain for UCR 3.1(1) and the objects of its predecessor Supreme Court Civil Rules 2006, set out in Rule 3.
It also demonstrates a lack of proportionality between the costs associated with the trial of the claim and the cross claim, and the value of the claim and the cross claims themselves. Nonetheless, I do not consider that a further cost penalty is warranted. The applicant’s failure to obtain a result not less favourable than the formal offer has led to an award of indemnity costs in favour of the respondent from fourteen days after its service.
[40] Costs reasons at [89]-[90].
Conclusion
The primary judge concluded, and ordered, that the respondent was entitled to her costs in respect of the claim and the cross claim on the standard basis from 7 February 2019 to 25 November 2020; and that from 25 November 2020, the respondent was entitled to her costs on an indemnity basis.
The appeal
Ground 1 in the appellant’s notice of appeal contends that the judge erred in holding that the judgment dismissing the respondent’s cross claim for a declaration of a de facto relationship provided no benefit or advantage to the appellant over a judgment based upon the Offer to consent to an order dismissing that cross claim. In the particulars provided in support of that ground, the appellant addresses each of the three preclusionary doctrines considered by her Honour:
(i)In relation to res judicata, the appellant contends that the judge erred in holding that res judicata applied to a judgment for dismissal of the appellant’s claim for declaratory relief, regardless of whether the judgment was one following a contested trial or one by consent following acceptance of the Offer. On the appellant’s argument, a claim for a declaration (whether under s 90RD(1) of the Family Law Act, or s 31 of the Supreme Court Act) was not a claim for a cause of action in the sense required for res judicata.
(ii)In relation to issue estoppel, while accepting that the judgment in fact entered gave rise to an issue estoppel, the appellant contends that the judge erred in holding that a judgment by consent following acceptance of the Offer would have given rise to an issue estoppel. On the appellant’s argument, this was so for two reasons. First, because the operation of issue estoppel required a decision “on the merits.” Secondly, because it would not have been possible to identify the issues of fact or law that were necessarily resolved as a step in reaching the determination made in a judgment by consent.
(iii)In relation to abuse of process, the appellant contends that the judge erred in holding that, if there had been a consent judgment based upon acceptance of the Offer, it would have been an abuse for the respondent to have pursued the Family Court proceedings in circumstances where no res judicata or issue estoppel arose, and where no other findings or basis were identified to support this conclusion.
Ground 2 in the appellant’s notice of appeal is merely consequential upon Ground 1. It contends that, in light of the error identified in Ground 1, the judge erred in the exercise of her discretion in making the impugned costs order. It further contends that her Honour ought, in all the circumstances of the matter, to have exercised the Court’s discretion to make an order that the respondent pay 40 per cent of the appellant’s costs of the claim and cross claim, including reserved costs, on a standard basis.
Consideration
It is undesirable, if not inappropriate, for this Court to attempt to reach any definitive resolution on a costs hearing of several of the issues raised by the appellant’s submissions.[41] They involve complex and contentious issues of law, indeed mixed fact and law, that should be determined when they squarely arise, having regard to the precise legal and factual matrix in which they arise. In particular, it is undesirable for this Court to attempt a definitive resolution, merely for the purposes of determining a costs dispute, of whether the relevant preclusionary doctrines would operate, or would have operated, were the respondent to attempt to pursue her Family Court proceedings in the face of the judgment dismissing her cross claim, or to attempt to do so in the face of the consent judgment that would have been entered following acceptance of the respondent’s Offer.
[41] Energy Global Logistics Pty Ltd v Zigga Zagga (Australia) Pty Ltd [2021] NSWSC 348 at [62], [122] (Ward CJ in Eq); Nichols v NFS Agribusiness Pty Ltd (2018) 97 NSWLR 681 at [8]-[9] (Basten JA), [31]-[32] (Payne JA, Meagher JA agreeing); Stateland Developments Pty Ltd v Princi [2007] NSWSC 709 at [3], [11] (Gzell J); Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Quin (1997) 186 CLR 622 at 625-626 (McHugh J); Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201 (Hill J).
However, before returning to the significance of this observation for the disposition of this appeal, it is nevertheless appropriate to make some limited observations about the operation of these preclusionary doctrines, essentially reflecting our view that there is at least some arguable merit in several of the contentions advanced by the appellant, and leading us to accept that it is at least arguable that the appellant derived some benefit or advantage from the judgment he in fact obtained on the cross claim for declaratory relief, relative to a consent judgment based upon acceptance of the Offer.
Res judicata
As set out in particular (i) of Ground 1, the appellant makes the point that the judge appears to have assumed that a contested judgment for declaratory relief would give rise to res judicata, with the only issue being whether a consent judgment to the same effect would likewise give rise to res judicata. By approaching the issue in this way, the judge focussed her attention upon whether a consent judgment might give rise to res judicata, and concluded that it could. The appellant’s argument, however, is that it is the declaratory nature of the judgment – regardless of whether it is a judgment by consent or following a trial – that is the obstacle to the operation of res judicata. On the appellant’s argument, it may be that declaratory judgments generally are incapable of giving rise to res judicata; alternatively, they will not do so where they relate only to the existence of a state of affairs or status (as opposed to some cause of action, or at least some right or obligation), or where the judgment involves a dismissal of the claimed declaration (as opposed to the making of a declaration, whether positive or negative in its terms).
It is true that there is some English authority that suggests that a purely declaratory judgment may not give rise to res judicata.[42] However, as was recognised in Zetta Jet Pte Ltd v The Ship Dragon Pearl (No 2),[43] it is appropriate to be cautious in applying English authority in this area, given the differing jurisprudence that has developed in relation to the operation of the preclusionary doctrines in Australia.
[42] Zavarco plc v Nasir [2022] Ch 105 at [37]-[39] (Court of Appeal); cited with (tentative) approval in Mensink v Registrar of the Federal Court of Australia (2022) 402 ALR 279 at [52] (Bromwich, Lee and Thawley JJ).
[43] Zetta Jet Pte Ltd v The Ship Dragon Pearl (No 2) (2018) 265 FCR 290 at [16]-[17] (Allsop CJ, Moshinsky and Colvin JJ).
At least in the context of a judgment declaring the existence of a fact or state of affairs, as opposed to a right, obligation or cause of action, there may well be a basis for contending that there is simply nothing to merge in the final judgment. Alternatively, res judicata may not be available for historical reasons.[44] However, even if that be the case, there is a legitimate contest between the parties as to whether what was sought by the respondent in the present case was in the former or latter category. It is arguable that, because s 90RD contemplates a right to declaratory relief of the nature sought here, this would be sufficient to enable characterisation of the claim for declaratory relief as relating to a right or cause of action. However, there is at least some room for doubt about this; and for the view that a declaration that there is a de facto relationship is a declaration as to a state of affairs or status that is merely anterior, or ancillary, to making out a right or cause of action under the provisions of Part VIIIAB of the Family Law Act (for example, under ss 90SE or 90SM).
[44] Zavarco plc v Nasir [2020] Ch 105 at [37]-[39] (Court of Appeal).
Finally, as the appellant points out, similar reasoning may apply with greater force in circumstances where there is no declaration made at all; that is, where the claim for declaratory relief is dismissed. The appellant relies in this context upon certain passages from the reasons of the New South Wales Court of Appeal in Coles v Wood.[45]
[45] Coles v Wood [1981] 1 NSWLR 723 at 724 (Moffit P) and 727 (Hutley JA); cf A Hudson Pty Ltd v Legal & General Life of Australia Ltd (1985) 1 NSWLR 701 at 710, 712 (Kirby P), 716 (Mahoney JA), 718 (Priestley JA).
The respondent did not address the operation of res judicata at any length in her submissions. She put a submission to the effect that the expression “cause of action” was a slippery one; that on one view it was simply a factual situation the existence of which entitled a person to obtain a remedy from a court against another person.[46] The implication of this submission was that the Court should not too readily conclude that what the respondent sought in her cross claim was a declaration as to a mere state of affairs or status, as opposed to a right or cause of action. She also put a submission to the effect that, even if there was a difficulty with the judge’s reliance upon res judicata, the judge might alternatively have reached the same conclusion based upon the principles governing cause of action estoppel.
[46] H Lundbeck A/S v Sandoz Pty Ltd (2022) 96 ALJR 208 at [117] (Edelman JA).
For completeness, we mention that the respondent’s counsel advanced submissions to the effect that declaratory orders are generally final and binding in their nature. However, in our view these submissions did not squarely address the central complaint made by the appellant. They did not address the reasons given for declaratory judgments not giving rise to res judicata.
Issue estoppel
As set out in particular (ii) of Ground 1, the appellant challenges the judge’s conclusion that a judgment by consent following acceptance of the Offer would have given rise to an issue estoppel.
The first reason proffered for this is that, even accepting that (some) consent judgments may give rise to an issue estoppel, the judgment in question must nevertheless be one that entails a judicial determination “on the merits”. Relying upon the reasons of the Full Court of the Federal Court in Zetta Jet Pte Ltd v The Ship Dragon Pearl (No 2),[47] the appellant contends that there must be a judicial determination on the merits “in the sense of being judicially assessed or evaluated by a determination that involves finding the facts and applying the law to those facts to reach a conclusion”.[48] In this respect, issue estoppel is distinguishable from res judicata, which is not necessarily reliant upon a decision on the merits in this sense.[49] Here, a consent judgment based upon acceptance of the Offer would not have entailed any determination on the merits.
[47] Zetta Jet Pte Ltd v The Ship Dragon Pearl (No 2) (2018) 265 FCR 290.
[48] Zetta Jet Pte Ltd v The Ship Dragon Pearl (No 2) (2018) 265 FCR 290 at [14], [20] (Allsop CJ, Moschinksky and Colvin JJ).
[49] Zetta Jet Pte Ltd v The Ship Dragon Pearl (No 2) (2018) 265 FCR 290 at [20], [27], [51] (Allsop CJ, Moschinksky and Colvin JJ); Clayton v Bant (2020) 272 CLR 1 at [52] (fn 83) (Gordon J).
The second reason proffered is that an issue estoppel requires that it be possible to identify the issues of fact or law that were necessarily resolved as a step in reaching the determination made in the relevant judgment. Were it otherwise, it could not be said that the relevant issue of fact or law must necessarily have been decided by the judgment, such that the relevant party would be estopped from agitating that state of fact or law in some other set of proceedings. The appellant contends that because a finding that there was a de facto relationship depends upon consideration of multiple matters, none of which is essential to the ultimate conclusion, a consent dismissal would be inscrutable, and so could not give rise to an issue estoppel.
We do not think there is likely to be any merit in the appellant’s second reason for suggesting that a consent judgment based upon acceptance of the Offer would not have given rise to an issue estoppel. Once it is appreciated that the issue to which the estoppel is said to relate is the conclusion that there was a de facto relationship, we do not think that there would be any difficulty in accepting that this issue would have been necessarily determined by a consent judgment based upon acceptance of the Offer. However, we accept that there may well be some merit in the appellant’s first reason for suggesting that a consent judgment based upon acceptance of the Offer would not have given rise to an issue estoppel.
Abuse of process
In relation to particular (iii) of Ground 1, the appellant complains that the judge did not adequately identify the basis (beyond stating that “it would offend against the principles of finality and fairness”[50]) for her conclusion that it would have been an abuse of process for the respondent to have pursued the Family Court proceedings in the event that the appellant obtained a consent judgment based upon acceptance of the Offer.
[50] Costs reasons at [85].

The appellant accepts that it may be unjustifiably vexatious and oppressive, and hence an abuse of process, to relitigate a case or issue which has been disposed of in other proceedings.[51] As for the principles that might govern the Court’s intervention on such grounds, the appellant referred to the following summary from State Bank of New South Wales Ltd v Stenhouse:[52]
… whether proceedings are, or an aspect of proceedings is, an abuse of process because a party seeks to relitigate an issue already decided depends very much on the particular circumstances. The guiding considerations are oppression and unfairness to the other party to the litigation and concern for the integrity of the system of administration of justice, and amongst the matters to which regard may be had are – (a) the importance of the issue in and to the earlier proceedings, including whether it is an evidentiary issue or an ultimate issue; (b) the opportunity available and taken to fully litigate the issue; (c) the terms and finality of the finding as to the issue; (d) the identity between the relevant issues in the two proceedings; (e) any plea of fresh evidence, including the nature and significance of the evidence and the reason why it was not part of the earlier proceedings; all part of – (f) the extent of the oppression and unfairness to the other party if the issue is relitigated and the impact of the relitigation upon the principles of finality of judicial determination and public confidence in the administration of justice; and (g) an overall balancing of justice to the alleged abuser against the matters supportive of abuse of process.
[51] Citing Walton v Gardiner (1993) 177 CLR 378 at 393-394 (Mason CJ, Deane and Dawson JJ).
[52] State Bank of New South Wales Ltd v Stenhouse (1997) Aust Torts Rep 81-423 at 64,089 (Giles CJ); applied in Rippon v Chilcotin Pty Ltd (2001) 53 NSWLR 198 at [32] (Handley JA, Mason P and Heydon JA agreeing) and McDonald v State of South Australia [2011] FCA 297 at [43] (Besanko J). See also UBS AG v Tyne (2018) 265 CLR 77 at [137]-[138] (Gordon J).
While not doubting that it would be an abuse of process for the respondent to seek to pursue her Family Court proceedings in the face of the judgment in fact obtained, the appellant argues that it is not clear that it would have been an abuse to do so in the face of a consent judgment based upon acceptance of the Offer. In support of the uncertainty that surrounds this issue, the appellant raised several matters.
The appellant submitted that this Court should reject the respondent’s contention that the Offer, by describing itself as an offer to settle “the entire matter (all claims between the parties)” somehow directly purported to resolve the Family Court proceedings. We agree with this submission. Read in the context of the relevant form, and the Uniform Civil Rules, the references to “the entire matter” and to “all claims” were to all of the matters in issue in the Supreme Court proceedings, as opposed to merely the issues in the claim or cross claim or some other aspect of those proceedings. They were not references to any proceedings in other courts, such as the Family Court proceedings. As such, we accept that the Offer did not purport to address the Family Court proceedings in any direct manner.
The appellant also emphasised that the Offer was in terms of a dismissal of the cross claim for a declaration that there was a de facto relationship, as opposed to the making of a negative declaration that there was no de facto relationship. The appellant submitted that it was open to construe the Offer as indicating that the respondent was prepared to abandon pursuit of the declaratory relief in the Supreme Court, but only so as to enable her to later litigate her claim in the Family Court. The respondent contested this construction of the intention underpinning the Offer, contending that it ought to have been apparent from the circumstances, including the terms of the Offer and the fact that the respondent was of limited financial means, that the respondent had no intention of pursuing the matter in the Family Court if the Offer were accepted; that the Offer was intended to bring the de facto relationship claim to an end once and for all. Both parties sought to draw support for their respective positions from the repeated adjournments of the Family Court proceedings. The appellant said that this was consistent with the respondent intending to continue to pursue those proceedings; that, were the position otherwise, those proceedings would have been stayed. The respondent, on the other hand, said that this was merely the position that prevailed while the Offer was not accepted; leaving open the possibility of pursuing those proceedings if the Offer were not accepted, and the claim for declaratory relief in the Supreme Court were to succeed.
It seems to us that there would have been a real risk of the respondent being found to have engaged in an abuse of process were she to attempt to pursue her Family Court proceedings in the event of a consent judgment based upon acceptance of the Offer. In our view, the terms of the Offer – which connoted an intention to bring the claim for declaratory relief to a more permanent end, as opposed to, for example, merely discontinuing that claim – would have provided a strong foundation for a finding of abuse. However, there remains force in the appellant’s submission that, given the myriad of considerations and circumstances that would be relevant to any ultimate finding of abuse of process, it is difficult to exclude as a realistic possibility that the respondent might have been permitted to continue with her Family Court proceedings.
For completeness, we note that the respondent, through a notice of alternative contention, sought to rely upon the species of abuse of process known as Anshun estoppel.[53] She argued that the judge’s conclusion to the effect that a judgment based upon acceptance of the Offer would have precluded the respondent from pursuing her Family Court proceedings could be sustained on the basis that it would have been unreasonable for the respondent to seek to do so, and hence grounds for the operation of an Anshun estoppel, that she had chosen not to pursue that claim in the earlier Supreme Court proceedings. We do not propose to address this alternative argument. It raises similar considerations to those raised by the more general concept of abuse of process that we have already addressed (as well as some issues of its own) and, as such, turns upon complex issues of law and fact. We do not consider it appropriate to determine these matters for the purposes of a costs dispute, particularly when they have been raised for the first time on appeal.
[53] Port of Melbourne Authority v Anshun (1981) 147 CLR 589; as considered by this Court in Mandeville v Better Lending Pty Ltd (2021) 139 SASR 1 at [94]-[109] (Doyle, Livesey and Bleby JJA), holding that a default judgment, and hence, it would seem, a consent judgment, may found an Anshun estoppel.
Summary
For the reasons set out, we consider that the primary judge went too far in rejecting the appellant’s argument below that he obtained some benefit or advantage from a judgment dismissing the claim for declaratory relief following a contested trial, relative to a consent judgment to that effect following acceptance of the respondent’s Offer. We do not think the prospect of that benefit or advantage could properly be excluded for the purposes of determining the parties’ costs entitlements.
Because the judge erred in rejecting the prospect of the benefit or advantage relied upon by the appellant, we are satisfied that the judge’s exercise of her costs discretion miscarried. It thus falls for this Court to exercise that discretion afresh. However, for reasons which will become apparent, it is our view that there remains an ample basis, on the balance of her Honour’s findings and reasoning, to uphold the order that her Honour made, and hence dismiss the appeal.
Exercising the costs discretion afresh
In exercising the costs discretion afresh, it is appropriate to adopt the same starting point as the primary judge; namely, that costs follow the event, but that because the costs of the cross claim did not add significantly to the overall costs, there should be no separate order in respect of those costs. The respondent is therefore entitled to recover her costs of the action. The only issue is whether those costs should be payable on the standard basis, or on an indemnity basis.
At this point in her analysis, the judge turned to consider the operation of r 132.10(3) and, in particular, whether the judgment obtained by the respondent was “less favourable” to the appellant. In so doing, her Honour compared the judgment that was obtained, and the judgment that would have been obtained upon acceptance of the Offer, in respect of both the claim and the cross claim. However, by this point in her reasons, the judge had already addressed the cross claim by concluding that it did not add significantly to the costs of the claim, with the result that it did not require separate recognition in the costs order; the respondent was entitled to recover her costs of the action.
On one view, and it is the view we prefer, having dealt with the cross claim in this way, it was not necessary for her Honour to address the cross claim in undertaking the enquiry, for the purposes of r 132.10(3)(c)(ii), of whether the judgment was “less favourable” to the appellant. It was enough to address the claim and, so far as the claim was concerned, there was no doubt that the judgment (claim dismissed) was less favourable to the appellant than the offered outcome (payment to the appellant of $21,769). As the cross claim did not add significantly to the costs of the claim, it was not necessary to rule on the many issues raised by the appellant. On this analysis, the prima facie entitlement to indemnity costs from 25 November 2020 was triggered and, there being no reason to exercise the Court’s overriding discretion under r 132.10(3)(e), the respondent was entitled to the order made by the judge.
However, even if it was necessary to address the cross claim, with the result that the entitlement to indemnity costs from 25 November 2020 under r 132.10(3) was not triggered, we are satisfied that there was otherwise a proper basis, in the Court’s general discretion as to costs, to make the order that the judge made. In so concluding, we have had regard to several considerations.
First, as we have observed, the outcome on the claim (claim dismissed) was plainly less favourable to the appellant than the offered outcome (payment to the appellant of $21,769).
Secondly, so far as the cross claim is concerned, we would not attach much weight to the benefit or advantage claimed to have been achieved by the appellant by reason of the judgment being one following a contested trial rather than one obtained by consent following acceptance of the Offer. For the reasons set out above, the existence of any such benefit or advantage is challenged, and relies upon complex and contentious issues of law, and mixed fact and law, that are unsuitable for definitive determination for the purposes of a costs argument. It is more a case of it not being possible to exclude the existence of this benefit or advantage, than it being a matter that weighs heavily in the appellant’s favour.
Thirdly, to the extent that the risk that the respondent would seek to litigate her Family Court proceedings was a real concern to the appellant at the time he came to consider the Offer, that is a matter that could and should have been taken up with the respondent, whether by way of seeking clarification of the Offer, further negotiations or a counter offer.[54] While there is no direct evidence on the issue, it seems inherently likely to us that, had the appellant sought clarification, the respondent may well have indicated a preparedness to abandon her Family Court proceedings in the event that the appellant was otherwise prepared to resolve the matter on the basis set out in the Offer. If so, then an agreement or undertaking to this effect could no doubt have been secured. In our view, it was disproportionate and unreasonable for the appellant to choose to litigate, and hence to incur and inflict the significant time and expense associated with that litigation, simply because there was some (unexplored) prospect that the respondent might wish to go ahead and litigate the Family Court proceedings in any event. Put another way, we consider it unreasonable for the appellant to seek to rely upon the chance that the respondent may have wished to litigate the Family Court proceedings even if the Offer were accepted, without at least seeking clarification at the time of whether that was the respondent’s position and intention.
[54] Mohamed v State of Victoria [2007] VSC 538 at [37] (Harper J); Potts v Frost (No 2) [2012] TASSC 32 at [17] (Porter J); Craigcare Group Pty Ltd v Superkite Pty Ltd [2014] NSWSC 467 at [77] (Hallen J) addressing a failure to seek clarification of a purported ambiguity in an offer.
Finally, it is also relevant to have regard to the other respects in which the judge found the appellant to have acted unreasonably. There were two aspects to this.
The first related to the appellant’s conduct in the trial itself. As summarised earlier, the judge found the appellant to have been inconsistent, evasive, unhelpful and untruthful in his evidence. Whilst the judge also took a dim view of the respondent’s evidence, and her attempt to tender all of the couple’s text messages, her Honour was not persuaded that this added in any significant way to the costs of the trial, or otherwise provided a reason not to award indemnity costs in the respondent’s favour.
The second aspect of the appellant’s unreasonableness related to his approach to settlement more generally. As mentioned earlier, the judge criticised the appellant’s unreasonable and disproportionate approach to the proceedings generally:[55]
I note that the respondent submitted that the applicant should suffer a costs penalty for his failure to make any attempt to resolve the matter prior to trial, including refusing to make any offer at mediation and failing to respond in any way to the formal offer. It is, in my view, most regrettable that the applicant made no attempt to resolve this matter without a trial. Such an attitude shows a disdain for UCR 3.1(1) and the objects of its predecessor Supreme Court Civil Rules 2006, set out in Rule 3.
It also demonstrates a lack of proportionality between the costs associated with the trial of the claim and the cross claim, and the value of the claim and the cross claims themselves.
[55] Costs reasons at [89]-[90].
The judge went on to say that she did not consider that the above warranted the imposition of a further cost penalty upon the appellant. However, that was in circumstances where the judge had already held, for other reasons, that the appellant should pay indemnity costs. In circumstances where this Court is considering the costs discretion afresh, we consider that the above provides support for an order for indemnity costs.
For the reasons set out, we are persuaded that it was appropriate that the appellant pay the respondent’s costs of the action on an indemnity basis. Because the failure to accept the Offer, or to seek clarification of the Offer, is central to our reasoning in that respect, we consider it appropriate that the appellant pay the respondent’s costs on the standard basis up to 25 November 2020 (being 14 days after the Offer was filed and served), and thereafter on an indemnity basis. In other words, we are persuaded that the costs order made by the judge was the appropriate order.
Conclusion
Leave to appeal having already been granted, we dismiss the appeal.