Hasleby v DRAGICEVICH
[2002] WASC 159 (S)
•20 JUNE 2002
HASLEBY -v- DRAGICEVICH & ANOR [2002] WASC 159 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASC 159 (S) | |
| Case No: | CIV:1936/1999 | 16-18 JANUARY, 20 JUNE & 18 JULY 2002 | |
| Coram: | PARKER J | 20/06/02 | |
| 31/07/02 | |||
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Orders made | ||
| B | |||
| PDF Version |
| Parties: | MARILYN ANNE HASLEBY KATE NEVES DRAGICEVICH REGISTRAR OF TITLES |
Catchwords: | Practice and procedure Costs Turns on own facts |
Legislation: | Nil |
Case References: | Dobb v Hacket (1993) 10 WAR 532 Duvall v Godfrey Virtue & Co (a firm) [2001] WASCA 163 Hendrie v Rusli [2000] WASCA 420 Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
DECISION : 31 JULY 2002 FILE NO/S : CIV 1936 of 1999 BETWEEN : MARILYN ANNE HASLEBY
- Plaintiff
AND
KATE NEVES DRAGICEVICH
First Defendant
REGISTRAR OF TITLES
Second Defendant
Catchwords:
Practice and procedure - Costs - Turns on own facts
Legislation:
Nil
(Page 2)
Result:
Orders made
Category: B
Representation:
Counsel:
Plaintiff : Mr A C Thorpe
First Defendant : Mr A O Karstaedt
Second Defendant : No appearance
Solicitors:
Plaintiff : A C Thorpe
First Defendant : Karp Steedman Ross-Adjie
Second Defendant : No appearance
Case(s) referred to in judgment(s):
Dobb v Hacket (1993) 10 WAR 532
Duvall v Godfrey Virtue & Co (a firm) [2001] WASCA 163
Hendrie v Rusli [2000] WASCA 420
Case(s) also cited:
Nil
(Page 3)
1 PARKER J: This is a supplementary decision dealing with issues of costs and the final orders to be made in consequence of the reserved decision delivered in this matter on 20 June 2002.
Amendment to plaintiff's prayer for relief
2 The plaintiff now seeks to amend her prayer for relief in the statement of claim, following the reserved decision, to seek a declaration that she has a continuing caveatable interest in the property.
3 There are two significant problems. First, the lateness of the application as to which the only real justification would appear to be, in truth, that in view of the reasons for decision this might strengthen the plaintiff's position with regard to enforcing the payment of the moneys due under the judgment and securing costs. That does not appear to be a sound basis for an amendment of this nature at this stage.
4 Secondly, and more fundamentally, even were the amendment to be allowed I do not see that the relief claimed could be granted. The parties entered into a partnership agreement. The plaintiff advanced moneys for the purposes of the partnership and inter alia with those moneys the partnership purchased land. While the land was purchased in the name of the first defendant it was in truth a purchase by the partnership. As a consequence the plaintiff had an equitable interest in the property and this interest was capable of supporting a caveat. That partnership was dissolved by mutual agreement, however, on or about 20 January 1999, when the first defendant purchased the plaintiff's interest in the partnership including the plaintiff's interest in the property.
5 Thereafter the plaintiff had no equitable interest in the property. The fact that the $26,600 advanced by the plaintiff to the partnership, and which was used in the purchase the property, has yet to be repaid pursuant to the January 1999 agreement, does not give the plaintiff a continuing equitable interest in the property. As found in the principal reasons, it was a term of the agreed dissolution that the first defendant should acquire the plaintiff's equitable interest in the property at the time of that agreement which was on or about 20 January 1999, it being a term of the agreement that at a later time the first defendant would pay to the plaintiff the sum of $26,600.
6 For these reasons I will not grant the plaintiff's application to amend its prayer for relief.
(Page 4)
Counterclaim
7 The plaintiff contends that the first defendant's counterclaim was either withdrawn, or has failed entirely, and should be dismissed. It is the submission for the first defendant that while it materially amended the counterclaim, in particular by the deletion of par 21 and par 22 and the consequential prayers 2, 3, 4 and 5 from the relief, nevertheless there remained par 20, which by reference repeated par 1 to par 17 of the defence, and prayer 1 of the relief.
8 A review of the transcript indicates that the first defendant did not abandon altogether the counterclaim but amended it in the matter just outlined so that there remained par 20 and the first prayer for relief.
9 The next issue is whether the first defendant has succeeded, at least in part, in respect of her counterclaim. The first defendant's primary case was that whatever had been the terms and nature of the initial arrangement or agreement between the parties, on 28 October 1999, which was a day or two before the purchase of the property, the parties mutually agreed to abandon their venture. The sum of $26,600 which had to that time been advanced by the plaintiff was to stand as a loan by the plaintiff to the first defendant to be repaid when she was in a position to do so, in particular, if not earlier, on the sale of a property she had in Mount Lawley. As a consequence of this agreement it was the primary case of the first defendant that, if there had originally been a partnership, it was dissolved and its objects abandoned before the property in question was purchased by the first defendant. Hence, the plaintiff never acquired any equitable or other interest in the property. There were a number of further or alternative pleas including reliance on an alleged breach of the Fair Trading Act, a claim of estoppel and a plea that the original agreement was not enforceable by reason of s 34(1)(a) of the Property Law Act 1969.
10 The prayers for relief 1(a) to (e) followed this line of defence in the order of the pleas in the defence and sought relief appropriate to these various positions. While prayer 1(a) sought a declaration that the original agreement ceased to be of any force or effect on or about 28 October 1998, prayer 1(c) also sought a declaration that the plaintiff "has no interest in the Property". Each of these was consistent with the primary case for the first defendant. It is the submission for the plaintiff that they were and should be understood in this light, and only in this light.
11 There was, however, a further or alternative allegation by the first defendant in par 10 of its defence, which was incorporated by par 20 into
(Page 5)
- the counterclaim, that if the plaintiff had an interest in the property, in or about January 1999 the parties agreed inter alia that:
"10.1 To the extent that she had not already done so, the plaintiff would surrender or relinquish or not assert any alleged interest, equitable or otherwise, in the Property."
The first defendant submits that this is substantially what has now been found in the reserved decision, notwithstanding differences in detail, and that a declaration pursuant to prayer 1(c) that the plaintiff has no interest in the property is now appropriate.
12 I have some sympathy for the submission of the plaintiff that the prayer for relief suggested, in the context of the whole pleading of the first defendant, that the prayer for a declaration that the plaintiff has no interest in the property related to it primary case. Nevertheless, as a matter of strict pleading, the prayer was never directly related to any one or more of the various bases on which the first defendant pursued its counterclaim and there was never any attempt by the plaintiff to have the first defendant be more precise in its pleading in this respect. As a consequence, in my view, it is the position that the prayer 1(c) for a declaration may be related as well to the further and alternative allegation in par 10 as to the primary case for the first defendant. That being so, in my view, it is the position that the first defendant has succeeded in this one limited respect in its counterclaim.
13 It is the case, nevertheless, that the issues alive on the counterclaim, even after the amendment to delete par 21 and par 22 and prayers 2, 3, 4 and 5, were quite substantial and wide ranging and gave rise to a number of issues of factual and legal interest and some difficulty. The first defendant was soundly defeated on her primary case and all of the alternative bases for counterclaim, except for that alleged in par 10.1. While the first defendant's success on this basis is material to the ultimate outcome of the proceedings it cannot be said in my view, as was submitted by the first defendant, that she had been "substantially successful on the counterclaim as amended". Of course, as has been indicated, the counterclaim as amended raised essentially the same factual issues as the defence itself. To that extent there is substantial overlap in the costs incurred. Nevertheless, in my view, it would not be appropriate to accede to the first defendant's submission that she should have the whole of her costs of the counterclaim, apart from those costs thrown away by the plaintiff by reason of the abandonment of par 21 and par 22. Even after the amendment to delete par 21 and par 22, the first defendant failed on the substantial majority of the issues raised by the counterclaim.
(Page 6)
- The primary case of the first defendant was materially different from that on which there was ultimate success and this, together with the other further and alternative counterclaims, substantially extended the issues relevant to the counterclaim and the work which it involved. In my view, and subject to matters which follow, it would have been appropriate for the first defendant to have no more than half of its costs of the counterclaim, other than the costs relating to par 21 and par 22; the plaintiff being entitled to all her costs thrown away by reason of the deletion of par 21 and par 22 of the counterclaim.
Section 138 Proceedings - Interim interlocutory injunction
14 At an early stage after the issue of the writ the plaintiff and the first defendant engaged in interlocutory proceedings concerning a caveat which had been lodged by the plaintiff on the property. These proceedings were initiated pursuant to s 138 of the Transfer of Land Act. The plaintiff had supported her caveat and pursued these interlocutory proceedings on the basis that she then had an equitable interest in the property. The effective outcome of the proceedings was the grant of an interlocutory injunction precluding the first defendant from taking further steps to lift the caveat pending the determination of the dispute between the parties in the action. I will refer to these proceedings as the "s 138 application". The plaintiff now seeks a further order for the continuation of this caveat until such time as her judgment and costs are satisfied. She does so on the basis that she has a continuing equitable interest in the property by virtue of the $26,600 she contributed towards the acquisition of the property by the first defendant. The first defendant, however, seeks the discharge of the injunction and an order for the plaintiff to remove the caveat from the Certificate of Title of the property forthwith.
15 For reasons given earlier with respect to the application to amend the plaintiff's prayer for relief it is the position, consequent on the findings made in the reserved decision, that by agreement on or about 20 January 1999 the plaintiff agreed to the dissolution of the partnership and the acquisition by the first defendant of the plaintiff's interests in the partnership assets, including the property. This dissolution and acquisition were to be immediately effective notwithstanding that there remained an obligation on the first defendant at a later date to pay $26,600 to the plaintiff. The plaintiff's case that the dissolution and acquisition were only to take effect on payment of that $26,600, plus interest and capital appreciation, failed.
(Page 7)
16 In these circumstances, I am unable to discern any basis on which, after the date of the agreement in January 1999 the plaintiff had any continuing equitable interest in the property such as would support the caveat. The consequence is that by virtue of the findings at trial it has proved to be the case that there was no caveatable interest which validly supported the caveat lodged by the plaintiff on the property. For these reasons the injunction must be discharged and the caveat must be lifted. The sum of $26,600 plus interest, subject to deductions of amounts since paid, remains in the nature of a debt due by the first defendant to the plaintiff which debt is now to be the subject of judgment in this proceeding.
Calderbank offers of compromise
17 It is now disclosed on affidavit that there were six informal offers of compromise made between 13 June 2001 and 11 January 2002. The first defendant made five of these offers. The plaintiff made one on 8 January 2002, which was the fourth of the six offers in time order. For the purposes of costs the first defendant now relies on the second offer which was made on 12 July 2001 and the plaintiff relies on her offer made on 8 January 2002. Each contend that, with limited exceptions, by virtue of these respective offers they should have their costs of the action and the counterclaim.
18 Order 24 makes provision for formal offers of compromise. The six offers in this case were outside the scope of O 24 and in this sense were informal. It is settled, nevertheless, that an offer of this kind may properly be weighed in the exercise of discretion as to costs. As was indicated in Dobb v Hacket (1993) 10 WAR 532 at 541, it is appropriate to preserve in the minds of litigants the conscious consideration that they may be at risk as to costs if they refuse reasonable offers of settlement. In the exercise of discretion an unreasonable refusal of an offer of compromise may deprive a successful litigant of costs, in whole or part, or may result in no order as to costs being made, or an order for the successful litigant to bear his or her own costs and to pay the costs of the unsuccessful party; Hendrie v Rusli [2000] WASCA 420 at [11], Duvall v Godfrey Virtue & Co (a firm) [2001] WASCA 163 at [7]. Unlike an offer of compromise pursuant to O 24, an informal offer to compromise is merely a factor relevant to the exercise of discretion as to costs. There is no prescribed or foregone consequence or effect.
19 It is necessary in view of the authorities that I should attempt to assess the offers relied on, that is the first defendant's offer of 12 July
(Page 8)
- 2001 and the plaintiff's offer of 8 January 2002 for their reasonableness. In this case the offers in question were in writing and framed in precise and clear terms. The terms nevertheless introduce complexity.
20 The first defendant's offer required the plaintiff to pay the first defendant's taxed costs of the action including the s 138 application. It required the first defendant to pay $24,000 plus interest, the plaintiff's taxed costs of the plaintiff's alternative claims from 30 April 2001, discontinue her counterclaim with no order as to costs, and to give up any claim pursuant to the plaintiff's undertaking as to damages in the s 138 application.
21 The plaintiff has succeeded in her action in the sum of $23,100 plus interest, which is, of course, less than the $24,000 plus interest which the first defendant offered. The reference to the plaintiff's alternative claims is to amendments to the relief claimed in the statement of claim, which were first introduced on or about 30 April 2001. By these the plaintiff first sought to recover the money she had advanced to the first defendant (the precise quantification was slightly different at that time). Until then the plaintiff had sought declarations that there had been a partnership which was dissolved by the plaintiff's notice at the end of June 1999 with consequential orders for the sale of the property, division of proceeds and the taking of accounts, etc. The amendment to introduce an alternative claim to recover the money advanced proved to be defective in form, which led to a striking out and a re-amendment of the statement of claim in proper form. This was effected on 19 September 2001. Nevertheless, the amendment to the plaintiff's prayer for relief on 30 April 1999 to seek the payment of the moneys advanced by the plaintiff clearly enough signalled the introduction of such a claim into the proceedings. It was in consequence of this, no doubt, that this offer was made some two and a half months later.
22 In some respects the offer is more favourable than the decision. The judgment amount, the discontinuance entirely of the counterclaim, the plaintiff to pay the costs of the alternative claim from 30 April 2001, rather than 19 September 2001, and to do so on the Supreme Court Scale rather than the Local Court Scale which would otherwise be appropriate – O 66 r 17. It also involved the abandonment by the first defendant of any claim for damages arising from the caveat. Nevertheless, the offer required that the plaintiff pay the whole of the defendant's taxed costs of the action including the s 138 application and that she should not recover any costs in respect of the counterclaim (nb costs thrown away). With respect to the contingent claim arising from the undertaking as to damages
(Page 9)
- I would note that there is nothing before me on this application which demonstrates that damages have been incurred in this respect or which might allow any quantification of prospective damages, nor is there anything that would suggest that as at the date of the offer on 12 July 2001 the plaintiff ought reasonably to have appreciated that the defendant then had suffered damage and ought to have appreciated in some way the measure of that damage. The obligation of the plaintiff to pay the defendant's taxed costs of the action and the s 138 application would be offset in part by the term that the first defendant pay the taxed costs of the plaintiff's alternative claims in the action from 30 April 2001. The counterclaim had been filed and served and indeed had been once amended on 3 April 2001. It was further amended shortly after the offer on 9 August 2001. It must be accepted that work had been undertaken by the plaintiff in respect of the counterclaim at the time of the offer. I cannot accept the first defendant's submission, therefore, that I should regard any costs incurred by the plaintiff in respect of the counterclaim at the time of the offer as minimal.
23 Given the complexity of these various factors I am left in the position that it is not possible to make any reasonably clear or satisfactory assessment of the net effect of this offer by comparison with the consequence of the outcome of the trial. It appears to me that the outcomes may not be far apart but I cannot determine that the plaintiff would have been better off under this offer than she would be under the judgment. I am not persuaded that it would be appropriate to hold that the plaintiff's refusal of this offer was unreasonable.
24 The plaintiff's informal offer of 8 January 2002 was in fact made in response to a further offer of the first defendant of the same date. It modified in some respects the first defendant's offer. The plaintiff proposed that the first defendant pay to the plaintiff $21,340 plus interest. This, of course, is less than the award which the plaintiff has now secured. The offer also proposed that the plaintiff should have her costs of the action but only from 30 April 2001 which is the date on which she first amended the prayer for relief to include a claim for payment of the money she'd advanced. This offer proposed that the defendant should be free to continue with the counterclaim and so made no provision with respect to the costs of the counterclaim. This offer also left the first defendant to meet her taxed costs of the plaintiff's primary claim from the commencement of the proceedings to 30 April.
25 With regard to the costs of the action to 30 April 2001, however, it is the position that a number of costs orders in favour of the first defendant
(Page 10)
- on strike out and other interlocutory applications had the effect that a proportion of the total costs of the action to 30 April 2001 had already been awarded in favour of the first defendant. Further, while this offer left the first defendant free to continue with the counterclaim, as had been proposed by the first defendant in her earlier offer made on that same day, the only reason for the first defendant to need to continue with the counterclaim, which would have remained following the acceptance of this offer, would have been a desire by the first defendant to recover damages pursuant to par 21 and par 22 of the counterclaim, ie those claims which were abandoned a few days later by the first defendant. It is also to be noted that this offer did not involve the first defendant abandoning any claim she might have for damages as a consequence of the plaintiff's undertaking as to damages given in the s 138 application.
26 Although precise calculation is not possible it appears to me, on balance, to be clear that the plaintiff's informal offer of compromise dated 8 January 2002 is more favourable to the first defendant than the position resulting from the trial of the action. As best I can assess this offer it was reasonable and its refusal may properly be regarded as unreasonable in the circumstances. The offer was made, of course, within a few days before the commencement of the trial. No doubt much of the preparation had been completed for trial but acceptance of the offer would have avoided the three day trial that followed. In my view, the refusal of this offer ought properly to weigh in the exercise of discretion as to costs and that weight would tell, of course, in the plaintiff's favour. In my view, it might properly weigh against the award to the first defendant of any costs of the hearing of the action, though not the costs of the hearing of the counterclaim.
27 In the result, the effect of these many and various matters relevant to costs is complex indeed. Even more complex, time consuming and costly to both parties would be the task of preparing and taxing their respective bills of costs. A matter of particular difficulty and complexity would be the need to try to distinguish and apportion, for a number of reasons as indicated, and at more than one point in the conduct of these proceedings, costs as between the action and the counterclaim. Perhaps almost as difficult might be the need to try to distinguish and apportion between costs the subject of the existing interlocutory costs orders from any other costs claimed.
28 Having weighed these many matters and assessed as well as I can the practical and financial consequences of making detailed costs orders which reflect the many matters considered in these reasons, and out of
(Page 11)
- concern for both parties and the just resolution of all aspects of this litigation, I am persuaded as a matter of discretion that the most appropriate order is that, subject to all existing interlocutory orders for the payment of costs, each party should bear their own costs of the action including the s 138 application, and the counterclaim, and any reserved costs.
29 In the result, therefore, I would make the following orders.
1. The first defendant to do pay to the plaintiff the sum of $23,100.
2. The first defendant do pay to the plaintiff interest on the sum of $23.100 from 1 May 1999 until the date of judgment at the rate of 6 per cent per annum pursuant to s 32 of the Supreme Court Act 1935.
3. There be a declaration that the partnership between the plaintiff and the first defendant was dissolved on or about 20 January 1999.
4. There be a declaration that from on or about 20 January 1999 the plaintiff ceased to have an interest in the property situate at and known as 60 Willis Street, East Victoria Park, being more particularly described as Lot 423 on Plan 2042 and being the whole of the land in Certificate of Title Volume 1954 Folio 592 ("the property").
5. The interlocutory injunction granted on or about 23 August 1999 be and is hereby discharged.
6. Subject to all existing interlocutory orders requiring the payment of costs by either party, each party should bear her own costs of the action including the s 138 application, and the counterclaim, and any reserved costs.
7. The first defendant have liberty to enforce the undertaking as to damages provided by the plaintiff to the first defendant on 23 August 1999.
8. The plaintiff do all acts and things necessary to remove Caveat No H155435 from the Certificate of Title of the property forthwith.
9. There be liberty to apply in relation to the enforcement of these orders.
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