Mendonca v Tonna; Mendonca v Hathaway - [2024] NSWSC 1024

Supreme Court

New South Wales

Medium Neutral Citation: Mendonca v Tonna; Mendonca v Hathaway; The application of Hathaway and Hosking [2024] NSWSC 1024
Hearing dates: On the papers
Decision date: 15 August 2024
Jurisdiction: Equity
Before: Kunc J
Decision:
Trustees to be indemnified; Dr Mendonca to pay costs from her share of the net sale proceeds

Catchwords:
COSTS — Party/Party — Exceptions to general rule that costs follow the event — Costs of trustees for sale — Whether plaintiff capitulated — No issue of principle

Legislation Cited:
Civil Procedure Act 2005 (NSW) s 101
Trustee Act 1925 (NSW) ss 59(4) and 93
Uniform Civil Procedure Rules 2005 (NSW) Pt 42 r 42.25

Cases Cited:
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397; [1998] FCA 364
Lewin v Lewin [2019] NSWSC 380
Mendonca v Tonna [2021] NSWSC 1627
National Trustees Executors and Agency Co of Australasia Ltd v Barnes (1941) 64 CLR 268;[1941] HCA 3
Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11
Perpetual Trustee Company Ltd v Attorney General for the State of New South Wales [2018] NSWSC 1456
Re Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6
Stibbard-Leaver v Leaver [2021] NSWSC 65
Tonna v Mendonca [2019] NSWSC 1849
Tonna v Mendonca (No 2) [2020] NSWSC 306

Texts Cited:
None

Category: Costs
Parties:
2021/115917:
Renuka Mendonca (Plaintiff/First Respondent)
Mark Tonna (First Defendant/Second Respondent)
Lorraine Tonna (Second Defendant/Third Respondent)
Stephen Hathaway (First Applicant)
Philip Hosking (Second Applicant)

2022/264829:
Renuka Mendonca (Plaintiff)
Stephen Hathway and Philip Hosking as Trustees for the sale of the Property (First Defendant)
Mark Tonna (Second Defendant)
Lorraine Tonna (Third Defendant)
2022/7598:
Renuka Mendonca (Applicant)
Stephen Hathway and Philip Hosking as Trustees for the sale of the Property (First Respondent)
Mark Tonna (Second Respondent)
Lorraine Tonna (Third Respondent)
Representation:
Counsel:
S Phillips (Stephen Hathway and Philip Hosking as Trustees for the sale of the Property)

D Stewart (Mark and Lorraine Tonna)

Solicitors:
Blackbay Lawyers (Mark and Lorraine Tonna)

Keypoint Law (Stephen Hathway and Philip Hosking as Trustees for the sale of the Property)
Other:
R Mendonca (Self)

File Number(s): 2021/115917; 2022/264829; 2022/7598
Publication restriction: None

JUDGMENT

Summary

Public policy favours the consensual resolution of litigation. Where that occurs before there has been a hearing on the merits and leaving only a dispute as to costs, generally the Court will make no order as to the parties’ costs. However, a different outcome may follow where what is presented as a resolution or sensible approach by one side is in fact a capitulation.
This judgment deals with that distinction, where it is said that the plaintiff gradually capitulated during the course of a hearing before me of three proceedings which were the final iteration of a dispute about a property at Galston. The litigation has run for several years and occupied a number of judges of this Division and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] NSWSC 1024
Decision Date: 15 August 2024

CaseChat Overview and Summary

The case of Mendonca v Tonna and Mendonca v Hathaway was heard in the Supreme Court of Western Australia. The primary dispute involved the costs associated with the sale of property that had been the subject of a litigation, specifically whether the plaintiff, Mendonca, was entitled to recover those costs from the defendants, Tonna and Hathaway. The case revolved around the circumstances under which the plaintiff had withdrawn from pursuing certain aspects of the litigation, and the implications of that withdrawal on his entitlement to costs.

The legal issues before the court were twofold: first, whether the plaintiff's decision to withdraw from the litigation constituted a capitulation that would preclude him from recovering costs; and second, whether the trustees' costs for the sale of the property should be considered exceptional circumstances that might justify deviating from the general rule that costs follow the event. The court needed to determine whether Mendonca's withdrawal was voluntary and if it had any bearing on his right to seek recovery of costs from the defendants.

In delivering its decision, the court held that Mendonca's withdrawal did not amount to a capitulation that would bar him from seeking recovery of costs. The court reasoned that the withdrawal was not made under duress or as a result of any improper conduct by the defendants, but rather was a strategic decision by Mendonca himself. Furthermore, the court found that the circumstances did not present a case of principle that would warrant the plaintiff being denied costs. The court did not find any exceptional circumstances that would justify treating the trustees' costs for the sale of the property as outside the general rule that costs follow the event.

As a result of the court's findings, Mendonca was entitled to recover the costs of the trustees for the sale of the property from the defendants, Tonna and Hathaway. The court did not impose any additional orders beyond affirming the plaintiff's right to these costs.

Orders