M, Da v P, N (No2) - [2008] SADC 180

District Court of South Australia
(Civil)
M, DA v P, N (NO2)
[2008] SADC 180
Judgment of His Honour Judge Beazley (ex tempore)
23 December 2008
FAMILY LAW AND CHILD WELFARE - DE FACTO RELATIONSHIPS
Costs - property adjustment proceedings pursuant to ss 10 and 11 of the De Facto Relationships Act (1996) - no principle that each party ought bear its own costs - plaintiff obtains judgment which exceeds the filed offer of the defendant - filed offer not "adequate" - nothing in conduct of the plaintiff to alter position that cost follow the event - plaintiff seeks order certifying the costs as fit for senior counsel but not for two counsel - order that certified for senior counsel but not for two counsel - defendant must pay the plaintiff's costs on a party/party basis to be agreed or taxed.
Interest - plaintiff's claim effectively for a monetary sum - both parties conducted the trial on basis that a monetary sum was payable to plaintiff - defendant has had the benefit of the use of the money since trial - plaintiff entitled to interest at 6.5% p.a. from date of trial to date of judgment.
De Facto Relationships Act 1996 ss 10, 11; District Court Act 1991 s 30 referred to; District Court Rules (1987) Rule 101.02(1), referred to.
Kardos v Sarbutt (No2) (2006) NSWCA 206; Ewins v BHP Billiton Ltd (No2) [2005] SASC 164; ASIC v West (2008) 100 SASR 496, not followed.
Hogg v Roberts (2003) 87 SASR 248 at 255; Dunstan v Rickwood (No2) (2007) NSWCA 266, considered.

M, DA v P, N (NO2)
[2008] SADC 180
Ex Tempore
23 December 2008
Introduction

On 15 December 2008 I delivered reasons in which I intimated that I would make formal orders that:
1.     The defendant pay to the plaintiff the lump sum of $650,000.
2.That the defendant cause the company Minoan Investments Pty Ltd to transfer:
2.1    to the plaintiff the unencumbered legal title to the Honda motor vehicle presently in her possession.
2.2    to a superannuation fund to be nominated by the plaintiff the sum of $6,270 standing to the credit of the plaintiff in the Minoan Investments Superannuation Fund.
I then adjourned the matter until today to enable the parties to consider those reasons, the form of the proposed orders, and any issues as to costs and interest.
The form of order
Minutes of order were prepared by the plaintiff’s solicitors. They set out a process by which the “family home” at Le Fevre Terrace North Adelaide could be sold, thereby freeing up sufficient funds to pay the lump sum I have awarded to the plaintiff. I was informed that the plaintiff had lodged caveats over the respective freeholds held in the defendant’s name, and in the name of companies controlled by him. As it transpires the parties did not have the opportunity of discussing the draft form of orders. I was informed by counsel for the defendant, Mr Heywood-Smith QC that the defendant may elect not to proceed forthwith to sell the house property because of the fluctuating market. If the defendant decides to borrow funds in the interim, to pay out the plaintiff, it will be necessary for the respective caveats to be withdrawn. Mr Livesey QC on behalf of the plaintiff acknowledged that all his client required was payment of the judgment sum, and that save for one issue it did not matter to her whether the family home was sold. That issue was that if the property was not sold, then the plaintiff ought to receive some credit for the cost of sale referred to in my reasons for judgment published on 15 December 2008. In my opinion no credit ought be allowed. The intimation from the defendant is simply an election not to sell in the present financial climate. It does alter my finding that it is probable that the “family home” will have to be sold in due course, to enable the plaintiff to be paid a substantial lump sum.
I indicated to the parties that rather than adjourn the proceedings to await a further draft of the minutes of order, it was in their respective interest to complete their submissions on the questions of interest and costs, and for formal orders to be made giving effect to my Reasons delivered on 15 December 2008. This would enable the parties to consider their alternatives as to the means by which payment may be made by the defendant to the plaintiff. Leave would then be given to the parties to apply on short notice if difficulties did arise as to the withdrawal of any caveat.
The respective counsel then addressed the questions of costs and interest.
The plaintiff sought orders for interest and costs.
Interest
In this case the plaintiff seeks interest on the lump sum of $650,000 calculated from 8 November 2004, namely the date of the commencement of the subject proceedings. The defendant submits that no order for interest ought be made because of the nature of the relief sought under s 10 of the De Facto Relationships Act 1996. The defendant’s submission was that such claims are not in essence monetary claims but claims for adjustment of property, and that such adjustment only occurs as at judgment. In the alternative, he submitted that interest ought run only from the date of trial.
In my opinion the plaintiff is entitled to interest on the lump sum, however such interest ought be calculated from the date of the trial.
Where the claim is in effect for a monetary sum following an adjustment of property interest should run from the date of trial. The valuations of the property are fixed as at trial. The date of trial is the time at which the Court determines whether an adjustment ought be made. To this extent relief sought under section 10 of the De Facto Relationships Act differs from common law claims for a monetary sum.
Both parties approached the trial on the basis that a lump sum should be awarded. Neither party suggested that orders for transfer of the “family home” be made or any similar such order. The position would have been different had the order been in the nature of the transfer of realty or other property. The defendant acknowledged at trial that the plaintiff was entitled to a lump sum payment. See Hogg v Roberts (2003) 87 SASR 248 at 255 Evans v Marmont (1997) 42 NSWLR 70 at 74, and Love v Chidley (No2) [2005] SADC 47. Interstate caselaw based upon the construction of legislation, which differs from s 39 of the District Court Act (1991), is accordingly distinguishable.
Section 39 of the District Court Act provides:
39—Pre-judgment interest
(1) Unless good reason is shown to the contrary, the Court will, on the application of a party in whose favour a monetary judgment has been, or is to be, given include in the judgment an award of interest in accordance with this section.
(2) The interest—
(a) will be calculated at a rate fixed by the Court; and
(b) will be calculated in respect of a period fixed by the Court (which must, however, in the case of a judgment given on a liquidated claim, be the period running from when the liability to pay the amount of the claim fell due to the date of judgment unless the Court otherwise determines); and
(c) is, in accordance with the Court's determination, payable in respect of the whole or part of the amount for which judgment is given.
(3) The Court may, without proceeding to calculate interest under subsection (2), award a lump sum instead of interest.
(4) This section does not—
(a) authorise the award of interest on interest;
(b) authorise the award of interest on exemplary or punitive damages;
(c) affect damages for dishonour of a negotiable instrument;
(d) authorise the award of interest (except by consent) on a sum for which judgment is given by consent;
(e) limit or affect the operation of any other enactment or rule of law providing for the award of interest.
Not only is the award a monetary sum but as I have noted both parties at trial treated the claim as one for a monetary sum. The fact remains that the plaintiff has been kept out of her monetary entitlement. The defendant has kept that money despite his acknowledgment at trial that the sum of $500,000 was an appropriate sum to be awarded to the plaintiff.
In my opinion the plaintiff is entitled save for one other matter which was raised by counsel for the defendant, to interest at 6.5% per annum on the lump sum from 4 September 2007. This would result in an award of interest in the sum of $52,800.
The defendant tendered two affidavits which referred to the continuing payments by him of $280 per week to the plaintiff, and to other payments including school fees, a family health fund, and child maintenance. Save for that sum of $280 per week, all of those other payments relate to the care of the children and are irrelevant to the issue of interest. Neither the affidavit evidence nor that at trial identified the basis upon which that sum of $280 per week was paid. If it were a voluntary payment made by the defendant to the plaintiff by way of her personal expenditure then in my opinion the defendant would have been entitled to credit that sum of about $18,000 since trial against any interest awarded on the lump sum. There was however no explanation as to why that sum was paid or how it was calculated. In my Reasons of 15 December 2008, I referred to that sum, neutrally, as a “contribution to rental”. It may simply have been a payment by the defendant to ensure that the children had accommodation provided.
Mr Heywood-Smith properly conceded that there was no evidence to assist me further. Accordingly I will not give any credit to the defendant to set off those sums against an award of interest. Accordingly the plaintiff is entitled to interest in the lump sum of $52,800.
Costs
The plaintiff sought an order for costs. The defendant opposed the order. Mr Heywood-Smith QC referred to an offer filed by the defendant on 10 August 2006 in the sum of $600,000. On any view the plaintiff exceeded that filed offer. Mr Heywood-Smith QC submitted that the Court should conclude that the offer made by the defendant at that time was “adequate” within the meaning of that term in Rule 40.05 of the 1987 Rules of Court. He submitted that if one were notionally to add interest from the date of that offer to trial, and notionally add the sum of $280 per week to which I have previously referred to trial, then the “offer” exceeds the sum of $650,000 awarded. In any event Mr Heywood-Smith QC submitted the sum offered was “adequate”. Alternatively he submitted that given the nature of the relief sought namely the adjustment of property rights the starting point should be that each party bears its own costs of action.
As to the latter submission which is based upon the “rule” in Kardos v Sarbutt (No2) (2006) NSWCA 206, in my opinion there is no such rule or principle. In a subsequent decision in Dunstan v Rickwood (No2)(2007) NSWCA 266 the Court of Appeal in NSW determined that not only was there was no such rule or principle, but that in the ordinary course of events, costs should follow the event. As to the defendant’s submission that the offer was “adequate”, Mr Livesey QC for the plaintiff referred to the decision of Doyle CJ in Ewins v BHP Billiton Ltd (No2)[2005] SASC 164.
His Honour in that decision, detailed the rationale for Rule 40.05, and made it clear that his dicta was no more than a general guide. In that case involving general damages His Honour said at [27]:
“I would conclude that the offer is adequate only if I was satisfied that on the material available to [the defendant] the offer was sufficient and that the amount awarded to [the plaintiff] exceeded the amount of the offer by an amount that could be attributed to factors that could not reasonably have been anticipated by [the defendant] when it made its offer. I regard that as one of the ordinary risks and contingencies of litigation, not as a factor in respect of which [the defendant] was at any disadvantage in its capacity as a defendant”.
In the subject case the award did not involve any novel or difficult questions of law. The value of assets was to be fixed, by law, as at the date of trial. In my opinion it cannot be said that the offer of the defendant was “adequate” for the purpose of Rule 40.05(b) of the Rules of Court. Further, in the subject case, there was nothing in the conduct of the plaintiff to alter the prima facie rule that costs should follow the event. See DCR 101.02(1).
Accordingly I order that the defendant must pay the plaintiff’s costs on a party/party basis.
The plaintiff submitted that the Court should certify that the case was fit for senior counsel, and for two counsel.
In Asic v West (2008) 100 SASR 496, Gray J said at [220] – [221]:
“ASIC sought a certificate that the matter was fit for senior counsel. It is well established that a trial judge has power to certify for senior counsel. The test as to whether fees are to be allowed for senior counsel was laid down by the Full Court in Beasley v Marshall (No3), as being whether a reasonable litigant at the proper time for the delivery of the brief would consider it necessary or prudent to brief Queen’s Counsel for the adequate presentation of his case. King CJ, with whom Prior J agreed, considered that the following factors were relevant to the exercise of the discretion to certify for senior counsel:
The primary considerations are undoubtedly the difficulty of the case, the complexity of the issues of fact or law, and any demands which the case makes for the exercise of special professional skills. But I do no think that the Taxing Master is required to ignore what is at sake for the party in the litigation.
In my view, given the complexity of the issues arising in the within proceedings, the requirement to assess, marshal and present voluminous evidentiary material, the significant assets involved and the substantial sums of money at stake, the impact of the proceedings on the rights and liabilities of a number of people, and the public interest in the proper conduct of the proceedings, this is an appropriate case in which to certify for two counsel, including senior counsel”.
In my opinion in accordance with those principles, given the “significant assets involved and the substantial sums at stake” this is an appropriate case for the Court to certify it as fit for senior counsel. Historically, this would lead to a certification for two counsel. However this is no longer the case and senior counsel now appear as a matter of routine without junior counsel. The evidentiary material was not extensive, and in my opinion there is no proper basis to certify for two counsel.
The formal orders of the Court therefore are:
1.That the defendant pay to the plaintiff the sum of $702,800 inclusive of interest to the date of judgment, which such sum to be paid within 60 days from this date.
2.That the defendant cause Minoan Investments Pty Ltd to transfer:
2.1 Within 14 days of the date hereof to the plaintiff the unencumbered legal title in the Honda motor vehicle presently in the possession of the plaintiff.
2.2 The sum of $6,270 standing to the credit of the plaintiff in the Minoan Investments Superannuation Fund to a fund to be nominated by the plaintiff, within 14 days of that nomination being conveyed by the plaintiff to the defendant’s solicitors.
3.That the defendant pay to the plaintiff her costs of action on a party/party basis to be agreed or taxed.
4.I certify that the subject case was fit for senior counsel although not for two counsel.
5.I give leave to either party to apply on 48 hours notice to the other for any further orders including, but not limited to orders to facilitate the removal of any caveat.