Magera v McIntosh

[2005] NSWSC 447

Reported Decision: (2005) DFC 95-319

New South Wales

Supreme Court

CITATION:	Magera v McIntosh [2005] NSWSC 447
HEARING DATE(S):	4 May 2005
JUDGMENT DATE :	4 May 2005
JURISDICTION:	Equity
JUDGMENT OF:	Campbell J
DECISION:	Each party to bear own costs

CATCHWORDS:	FAMILY LAW AND CHILD WELFARE - DE FACTO RELATIONSHIPS - claims for adjustment of interests under Property (Relationships) Act 1984 - defendant denies existence of relationship but abandons that denial at trial - offer of compromise made by defendant part way through preparations of case, for an amount more than plaintiff ultimately receives at trial - amount plaintiff receives at trial less than jurisdictional limit of Local Court
LEGISLATION CITED:	Property (Relationships) Act 1984 Supreme Court Rules 1970
CASES CITED:	Magera v McIntosh [2005] NSWSC 314
PARTIES:	Andrew Magera - Plaintiff Miriam McIntosh - Defendant
FILE NUMBER(S):	SC 1827/04
COUNSEL:	A Blank - Plaintiff J Wilson SC - Defendant
SOLICITORS:	Milford, Haseldine & Williams - Plaintiff Warren McKeon Dickson - Defendant

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EQUITY LIST

CAMPBELL J

WEDNESDAY 4 MAY 2005

1827/04 ANDREW MAGERA v MIRIAM McINTOSH

JUDGMENT – Ex Tempore

1 HIS HONOUR: This is an application for costs concerning a decision I gave on 13 April 2005: Magera v McIntosh [2005] NSWSC 314. The proceedings were ones under the Property (Relationships) Act 1984. The plaintiff was a man in a heterosexual relationship with the defendant which had endured for 23 years. He ultimately received an order that $20,000 be paid to him.

2 The case had a striking feature, in that the defendant completely denied, in her defence and her affidavit evidence, the existence of the relationship, and asserted that the plaintiff was nothing but a boarder, albeit a boarder with whom she sometimes shared a bedroom. That claim was not persisted in at the hearing, and the defendant did not give any oral evidence. Large parts of her affidavit were not read. The denial of the existence of the relationship was, in my view, completely untenable.

3 The proceedings were begun on 9 March of 2004. By 6 July 2004 pleadings had closed. There were various offers made between the parties in the course of the proceedings. On 6 July 2004 the defendant made a Calderbank offer to the plaintiff in the sum of $30,000, inclusive of costs. The plaintiff's solicitors promptly rejected that offer, on 15 July 2004, pointing out that the plaintiff's statement of claim claimed 60 percent of the value of the defendant's real estate.

4 On 11 January 2005 an offer of compromise under Part 22 of the Rules was made by the defendant, for a sum of $50,000 plus costs. There was a counter offer to that, by the plaintiff, on 3 February 2005, in the sum of $125,000 plus costs.

5 Any consideration of how costs should be borne concerning the proceedings must take into account the provisions of Part 52A rule 34 of the Supreme Court Rules 1970. The amount which the plaintiff has recovered is less than the jurisdictional limit of the lLcal Court at the time of commencement of these proceedings (namely $60,000). Thus, under Part 52A rule 34(c) the plaintiff is not entitled to payment of his costs of the proceedings unless the Court otherwise orders.

6 The decision on costs must also be informed by Part 52A rule 22(6) of the Rules, which provides:

“Where an offer is made by a defendant and not accepted by the plaintiff, and the plaintiff obtains an order or judgment on the claim to which the offer relates not more favourable to him than the terms of the offer, then, unless the Court otherwise orders, the plaintiff shall, subject to rule 33, be entitled to an order against the defendant for the plaintiff's costs in respect of the claim up to and including the day the offer was made, assessed on a party and party basis, and the defendant shall be entitled to an order against the plaintiff for the defendant's costs in respect of the claim thereafter assessed on a party and party basis.”

7 The case is one which had been set down for three days. The parties, at the time it was set down, thought it may finish in two, but did not have a great deal of confidence about that. As things eventuated, the hearing was completed in one day.

8 The defendant seeks an order for costs from 6 July 2004. She invites me to conclude that it would be unlikely that by that time any more than $10,000 would have been incurred in recoverable costs and hence that the offer was one that the plaintiff did not do better than. She submits that the $30,000 offer was a genuine attempt to compromise, and that the decision which was eventually given shows that it was fairly close to the mark.

9 Alternatively, the defendant submits that she should be entitled to costs pursuant to Part 52A rule 22(6) from 11 January 2005. Further, she submits that the plaintiff's failure to accept her offer of 11 January 2005 was unreasonable. In consequence, she submits that the plaintiff should pay indemnity costs from that date.

10 The plaintiff, for his part, submits that I should not attach any significance to the offer of 6 July 2004, because of the difficulty of knowing the amount of costs which had been incurred at that date. If the defendant is to obtain any costs benefit from the offer of 6 July 2004, she bears the onus of showing that the defendant did not do better than that offer. In my view she has not discharged that onus.

11 The plaintiff accepts that the defendant should be entitled to party/party costs from 11 January 2005, but that those costs should exclude the costs of putting the relationship in issue, should exclude the costs of two counsel, should exclude any costs which might have been payable in connection with the two unutilised days of the hearing, and should not include the costs incurred in a notice of motion which the defendant put on seeking expedition. The notice of motion was one which was successful, owing to the age and state of health of the defendant, but it was one which was supported, quite properly, by the plaintiff. It seems to me that the costs of that motion for expedition should appropriately be dealt with as costs in the cause.

12 The real difficulty which I face in exercising the discretion concerning costs in this matter is one of the complexity of the factors which ought properly be taken into account. The denial of the relationship, which was, as I have said, quite unjustifiable, is something which had consequences all the way through the preparation of the case. The scope of evidence advanced, and the estimate of hearing time, were both significantly influenced by that matter. It was unreasonable behaviour of an extremely high order on the defendant's part to deny the relationship. If the case were to have the costs decided on an issue by issue basis, I would order the defendant to pay the costs of putting the relationship in issue, and on an indemnity basis. To that extent, I would “otherwise order” under Part 52A, rule 34.

13 In all the circumstances, however, I do not think that it is appropriate to engage in the minute calculation which would be involved in trying to segregate out the costs of particular issues, when the costs of the relationship issue were so thoroughly intermingled with the costs of contesting all other issues. Weight must be given to the policy contained in Part 52A rule 34, and to the policy contained in Part 52A rule 22, so far as issues other than the existence of the relationship are concerned. In my view, the appropriate way of balancing all those factors is to order that each party bear their own costs of the proceedings. I so order.

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