Hutchinson v Ellis

Case [2010] SASCFC 71

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

HUTCHINSON v ELLIS

[2010] SASCFC 71

Judgment of The Honourable Chief Justice Doyle, The Honourable Justice Gray and The Honourable Justice White

9 December 2010

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH DISCRETION OF COURT BELOW - PARTICULAR CASES - OTHER MATTERS - COSTS

Appeal against a costs order made in the District Court in proceedings under the Domestic Partners Property Act 1996 (SA) - in an action in the District Court both the plaintiff and defendant sought a division of assets - following the Judge's principal decision, an order was made for costs - where part of costs order included an order that the defendant pay the plaintiff's costs incurred from a particular time and date (referrable to an offer made by the plaintiff to settle the action) on a party/party basis - plaintiff complained on appeal that the Judge should have ordered the defendant to pay costs of the action prior to the time and date of the plaintiff's offer of settlement on a party/party basis, and subsequent to that time and date on an indemnity or solicitor/client basis.

Held: (Doyle CJ and Gray J): Appeal dismissed - a decision regarding costs will only be interfered with if the appellate court is satisfied that there is an identifiable error or if the exercise of the discretion has been so unreasonable or unjust as to require the appellate court to substitute its own discretion - the trial was one in which both parties sought and obtained a division of property, it was not a simple money claim - both parties were criticised by the Judge for their conduct during the litigation - the orders made by the Judge were open to him - no error of principle identified. 

(White J, in dissent):  the Judge's cost discretion miscarried - on re-assessment, would make an order that the defendant pay 70 per cent of the plaintiff's costs of the action on a party/party basis.

De Facto Relationships Act 1996 (SA); Domestic Partners Property Act 1996 (SA); District Court Act 1991 (SA) s 42(1); District Court Civil Rules 2006 r 187 and r 263(1); Civil Procedure Act 2005 (NSW) s 98(1); Uniform Civil Procedure Rules 2005 (NSW) cl 42.1; Family Law Act 1975 (Cth) s 117, referred to.
H, RT v E, CK (No 2) [2009] SADC 96; H, RT v E, CK [2009] SADC 76; House v The King (1936) 55 CLR 499; Norwest Refrigeration Services Pty Ltd v Baine Dawes (WA) Pty Ltd (1984) 157 CLR 149; Southern Resources Ltd v Residues Treatment & Trading Co Ltd (1990) 56 SASR 455; Forlyle Pty Ltd v Tiver (2007) 252 LSJS 387; Donald Campbell & Co Ltd v Pollak [1972] AC 732; Latoudis v Casey (1990) 170 CLR 534; Oshlack v Richmond River Council (1998) 193 CLR 72; Dunstan v Rickwood (No 2) [2007] NSWCA 266; Baker v Towle [2008] NSWCA…

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Hutchinson v Ellis [2010] SASCFC 71
Case
[2010] SASCFC 71
Decision Date

CaseChat Overview and Summary

The appeal concerned a costs order made by the District Court in proceedings under the *Domestic Partners Property Act 1996* (SA). The plaintiff appealed against the order, arguing that the trial judge should have awarded him a greater proportion of his costs, and on a solicitor/client basis for part of the proceedings, rather than the party/party basis ordered by the judge from a specific date. The dispute arose after a 12-day trial where both parties sought a division of assets, and the judge made orders dividing their property.

The central legal issue before the appellate court was whether the trial judge had erred in the exercise of his discretion regarding the costs order. Specifically, the plaintiff contended that the judge failed to give full effect to the finding that the plaintiff was the successful party and had been "forced" to bring the proceedings. The plaintiff argued for an award of all his costs, or at least a greater proportion than awarded, and for some costs to be on a solicitor/client basis.

Doyle CJ and Gray J, dismissing the appeal, held that an appellate court will only interfere with a costs order if there is an identifiable error or if the discretion has been exercised so unreasonably or unjustly as to require substitution. They noted that the trial involved a division of property, not a simple money claim, and that both parties had been criticised by the judge for their conduct during the litigation. The majority found that the judge's orders were open to him, no error of principle was identified, and the exercise of discretion was not so unreasonable or unjust as to warrant appellate intervention. White J, in dissent, considered the judge's discretion had miscarried and would have ordered the defendant to pay 70 per cent of the plaintiff's costs on a party/party basis.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

WHITE J (dissent)
In my view the appeal should be dismissed. The Judge exercised his wide discretion as to costs to order the costs of part of the proceedings to the plaintiff on a party-party basis. This was a trial in which both parties sought and obtained a division of property. It was not a simple money claim. Both parties were criticised by the Judge in relation to the way in which they conducted themselves during the litigation. On the material before the Judge, he was entitled to exercise his discretion in the way that he did. No error of principle has been identified and I do not consider that the order made gives rise to any injustice, manifest or otherwise. In my view the orders made by the Judge were open to him. The plaintiff has failed to show that the Judge’s exercise of discretion was so unreasonable or unjust as to require this Court to substitute its own discretion.Conclusion I would dismiss this appeal. This is an appeal against a costs order made in the District Court in proceedings under the Domestic Partners Property Act 1996 (SA) (the DPP Act).[11][11] Formally known as the De Facto Relationships Act 1996 (SA). Following a 12 day trial in the District Court, the Judge made orders under s 10 of the DPP Act dividing between the plaintiff (the present appellant) and the defendant (the respondent to this appeal) the property of each of them and their jointly owned property.[12] The principal orders were these:1.In respect of a jointly owned property at Roxby Downs, the defendant was required to pay to the plaintiff $160,000 and the plaintiff to transfer the whole of his interest to the defendant;2.The plaintiff was required to transfer to the defendant the whole of his interest in a jointly owned motor vehicle, purchased in early 2003;3.The defendant was required to transfer to the plaintiff any interest which she held in the plaintiff’s electrical business;4.Each of the parties was declared to be the sole owner of specified property in that party’s possession at the time of the orders. Amongst other things, this meant that the plaintiff retained the ownership of a property at Hahndorf which he had acquired before the commencement of the relationship.In addition, the Judge made a number of consequential and ancillary orders to give effect to his principal orders.[12] H, RT v E, CK [2009] SADC 76. Although the proceedings in the District Court concerned all the commonly owned property and some property acquired by one or other of the parties in their own names, the central issue at trial was the question of whether the defendant should pay an amount to the plaintiff in order to obtain sole ownership of the Roxby Downs property and, if so, how much she should pay. The Judge made this plain in the following passage:[T]he parties effectively sought a division of property by the payment of a lump sum. The plaintiff made no claim for the transfer of the Roxby Downs property to him, and for her part the defendant laid no claim to his Hahndorf property. The question always was how much, if any, the defendant should have to pay in order to secure a full legal interest in Roxby Downs. The pleadings were framed in this way, the trial conducted with that outcome in mind on both sides and the final submissions were wholly consistent with that approach.[13][13] H, RT v E, CK (No 2) [2009] SADC 96 at [9].

Ratio Decidendi

Legal Principle Established

Established by:

Having given this background, the Judge then addressed the making of an appropriate costs order. He was critical of the manner of presentation of both parties’ cases and of the plaintiff’s formulation of his claim in his final submissions. The Judge said that, save for the second offer, the only appropriate order would have been that each party bear their own costs: [27]… As mentioned in the principal judgment, he sought to prove contributions to the relationship through tables provided to the defence on the first day of the trial. By trials end his counsel formulated a claim for the payment to him of some $277,000. His manner of presentation locked the defendant into responding to the schedules and consequently extended the length of the hearing. Both parties embarked upon a mode of proof contrary to the approach suggested by the authorities: Arnold v Dalton and Hogg v Roberts. [28]The defendant’s case was not without its blemishes either. Her manner of proof was non-specific. She was totally unresponsive to any offer throughout the proceedings and doggedly denied the entitlement by the plaintiff to a monetary adjustment. In his closing submission, the defendant’s counsel maintained that she should keep the Roxby Downs property and the plaintiff keep the Hahndorf property. Had things stood there, the only appropriate order was that each party bear their own costs of the proceedings.(Citations omitted)The Judge held, however, that the plaintiff’s second offer entitled him to an order for part of his costs, on a party/party basis:[29]Things stand quite differently, however, following the second offer, preceding the resumption of the trial between the 1st and 9th June 2009. A great deal of the evidence had been advanced by that stage. The plaintiff’s case was fully exposed and substantially tested under cross-examination. The defendant was in an ideal position to know exactly what the case against her was and what the risks were. The second offer was very close to the mark in terms of principal relief and apposite in point of time. Her failure to respond in any respect and to continue to resist to the bitter end, on a basis that was ultimately rejected, tells heavily against her. From this point onwards in the combined circumstances, it is clearly appropriate to give effect to the policy lying behind 6R 263. Accordingly as to the second part of the trial, the plaintiff should have his costs on a party/party basis, as and from 4pm Friday 29 May 2009.Consideration of Appeal Costs being in the discretion of the District Court under s 42 of the District Court Act 1991 (SA) and r 263 of the 2006 Rules, this Court can interfere with the Judge’s order for costs only in accordance with the principles stated in House v The King.[20][20] (1936) 55 CLR 499 at 505. The plaintiff contended on appeal that the Judge had erred by failing to award him the whole of his costs of trial, or at least a greater proportion than 50 per cent and, further, by failing to award at least some of the costs on a solicitor/client basis. His principal submission was that the Judge had failed to give full effect to his finding that it had been the plaintiff who was successful in the proceedings, and that it was the plaintiff who had been “forced” to bring the proceedings.