Nolan v Nolan (No 2)
[2004] VSCA 134
•6 August 2004
SUPREME COURT OF VICTORIA
COURT OF APPEAL
No. 7568 of 2001
| MOSCA GAI JINX MARGARET ELLERY NOLAN | Appellant |
| v. | |
| LADY MARY NOLAN (both in her personal capacity and as Executrix of the Estate of (NO. 2) | |
| Respondents |
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JUDGES: | ORMISTON, CHERNOV and EAMES, JJ.A. | |
WHERE HELD: | MELBOURNE | |
DATES OF HEARING: | 13, 14, 15, 16 and 23 October 2003 | |
DATE OF JUDGMENT: | 6 August 2004 | |
MEDIUM NEUTRAL CITATION: | [2004] VSCA 134 | |
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Costs – Appeal – Issues decided in favour of both appellant and respondents – Extensive factual question decided in favour of unsuccessful appellant – Whether cross-orders should be made – Whether single order should be made reflecting outcome and success on issues.
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| APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Mr P.N. Vickery, Q.C. Mr M.J. Corrigan | Simon Parsons & Co. |
| For the 1st and 2nd Respondents | Mr M.A. Dreyfus, Q.C. | Nathan Kuperholz |
| No appearance for 3rd, 4th and 5th Respondents |
THE COURT:
After pronouncing judgment on this appeal (reported at [2004] VSCA 109) on 10 June 2004, the Court intimated that it considered, on the materials before it and in all the circumstances, that there should be an order against the unsuccessful appellant in that it should be ordered to pay one-third of the first and second respondents’ costs and that there should be no order for payment of any of the appellant’s costs by those respondents. We therefore made provisional orders to that effect but gave each of the parties an opportunity to serve and file a summons for further consideration of the issue as to costs by 21 June 2004, but that, if neither party served and filed such a summons, then the order for costs should stand and the order in that form might thereafter be authenticated. On 21 June each of the parties filed a summons seeking more comprehensive orders in their favour, as well as for other relief which the Court will separately consider.
It will be remembered that the Court made findings in favour of the appellant on the issue most extensively argued, that is, as to the learned trial judge’s failure to hold that the appellant had made out her case as to the giving of the three paintings to her mother by Sidney Nolan, under whose will the first respondent claimed title to the paintings, but only to the extent, so far as this Court was concerned, of saying that her Honour’s errors as to these factual matters were sufficient to justify a retrial of those issues. On the other hand, on the second principal issue, that of the application of the relevant limitation period, the Court held that the appellant’s claims were statute-barred, so that in consequence her appeal was dismissed. What was said on 10 June was that in substance much of the time on the hearing of the appeal, which extended over five days, was spent in dealing with aspects of the subject of the appellant’s successful argument as to the proper approach to the proof of her claim, so that the successful respondents should be entitled to only part of their costs. It was further intimated that, although that might have justified an order in favour of the appellant for some of her costs on the issue on which she was successful, we preferred not to make cross-orders, which would add to the expense of taxation, but instead to order in favour of the first and second respondents that they should receive only one-third of their costs and that the appellant should receive no part of her costs. It goes without saying that if we had decided to make cross-orders in relation to each of the issues, then a different and more generous order would have been made with respect to the successful respondents’ costs if they, as successful parties, were to suffer an order to pay any part of the appellant’s costs.
The summons brought by the first and second respondents seeks that the appellant pay the whole of their costs of the appeal, as well as seeking a further order that she pay costs reserved by an order of this Court made 29 May 2003. On the other hand, the appellant’s summons acquiesces in the order that the appellant pay one-third of the first and second respondents’ costs of the appeal but seeks an additional order that she be paid two-thirds of her costs of the appeal. In addition, orders are sought that the Taxing Master allow certain sums by way of fees for senior and junior counsel and preparation time at stated rates.
In accordance with the directions given at the time judgment was handed down written submissions were filed by each of the parties and in addition submissions in reply have been filed on both sides. The respondents’ detailed submissions are described in each case as an “outline” but it is clear that the Court directed that the issue of costs be argued, as is common, by way of written submissions. The Court did not suggest that there ought to be further oral submissions made and it is not proposed to hear further oral submissions in the absence of any request or of any matter which requires further enquiry by the Court.
After considering with care all the matters raised in the written submissions we are not persuaded that the Court ought to make any different order for costs than the one originally proposed, namely that the appellant should pay only one-third of the first and second respondents’ costs and that the appellant should not otherwise receive any of its costs from the respondents. The order ought to reflect the inclusion of reserved costs but the issue as to counsel’s fees does not have to be considered further so far as the appellant’s costs are concerned.
As we have said, the order proposed is in a form intended to obviate the necessity of taxing two bills of costs, one on each side, so that it gives a somewhat less generous reimbursement of costs in favour of the successful parties, the first and second respondents, in order to reflect the fact that those parties are not called upon to pay any of the appellant’s costs. What figure is chosen in the circumstances is usually a difficult exercise upon which minds may well differ. In this case it is intended to reflect not only the degree and significance of the success of the arguments put on each side but also to reflect the fact that the first and second respondents were ultimately successful and that the appellant failed. In a proceeding taking only five days before a court frequently it is said that costs should follow the event and that courts should not be obliged to have regard to the niceties of argument and the degree of success which each party has had. On the other hand, as in the present case, it is not difficult sometimes to distinguish the issues upon which the parties have had success so that, consistently with Order 63.04 of the Rules, the Court would have been entitled to make orders in relation to the two principal questions in a way which reflected the success of the different parties on those questions. It is, however, an oversimplification to say that the appellant had complete success on the first question as to proof of her claim. Undoubtedly, but for the limitation issue, the Court would have directed a retrial but, not only is it by no means clear what the outcome of such a retrial would have been, but in addition the arguments upon which the appellant succeeded formed only part of a series of very long and convoluted submissions many of which were abandoned either at the beginning or in the course of the hearing of the appeal. That is almost invariably the case, which is one reason why courts are reluctant to make cross-orders as to issues upon which parties are successful. But in the present case there were many pages of outlines of submissions to which it was ultimately unnecessary to take the Court. Whether, if the appellant had been successful, the Court would have reduced the order made in her favour by reason of the abandonment of so many lines of argument, it is hard to say, for in that case it would have been the appellant who could have said that she was ultimately successful. Here the respondents are entitled to make that claim although it may be said that some of their arguments put in support of the limitation issue did not ultimately succeed, but it is inappropriate to require the Court to go through all the issues in order to work out precisely how much and to what extent that success should be reflected in a costs order. Not uncommonly, whether one looks at the papers prepared for an appeal, the frequently over-extensive appeal books, the diffuse outlines and the time taken both out of and, more particularly, in court on matters of general detail which may fairly be said to relate neither to one issue nor the other but to a general understanding of the whole of the case, some of which ultimately turn out to be of no consequence at all, attribution of particular costs to success is not entirely practicable. As is frequently stated[1], the Court has ample power to make a single order for costs fixing an appropriate proportion of one party’s costs, obviating cross-orders, but ultimately reflecting that one party has been successful and the other has failed to persuade the Court of the ultimate merits of its case. It is sufficient to say that, if the Court were to have made cross-orders, then clearly it would have made a more substantial order in favour of the successful respondents, but that the proportion of costs it would have ordered in favour of the unsuccessful appellant, reflecting the costs of the issue upon which she was successful, would, in all the circumstances of this case, not have been as extensive as the volume of materials and the time taken in argument on the non-limitations issues might have suggested. Many of those issues, especially in the form originally raised, did not have to be and were not decided in favour of the appellant.[2]
[1]See the discussion in, e.g., Williams, Supreme Court Practice, para.63.04.5.
[2]More often than not time taken in argument by counsel for an appellant is devoted to opening all the issues and the relevant evidence on them, as occurred here.
We turn, as a matter of courtesy, to the arguments raised, all of which have been considered but only some of which need to be referred to specifically.
The first issue raised by the first and second respondents, and vigorously contested by the appellant, is a claim that much time was spent both in preparation of the appeal and on the hearing on issues which were either abandoned or did not have to be decided. The respondents effectively say that more than half the matters originally raised ultimately did not have to be determined, thus wasting much time both of the Court and in particular of the first and second respondents inasmuch as preparation was needed on issues which in the end were not pressed. For that reason they contend primarily that their ultimate success on the appeal should be reflected in an order that costs follow the event and that there be no reduction in the proportion of costs awarded to them. To this the appellant responds that far less was abandoned than is now asserted and in any event the majority of material was still relied upon to make out her claim that the factual issues were not looked at as a whole by the trial judge. Indeed she asserts that the issue as to proof could have been averted by the respondents’ asking that the limitations issue be considered separately. Perhaps it could have been so considered, but I have the gravest doubt that any such application would have been agreed to by the appellant, so that it would have been highly unlikely that the Court would agree to a splitting of the major issues on the appeal in such a way. As to the amount of material and time spent on the various issues raised by the appellant, it is probable that the respondents have exaggerated their position somewhat, but the appellant’s contentions likewise exaggerate the strength of her case and the importance of the large number of relatively insignificant issues raised in her grounds of appeal, few of which had to be addressed, whatever view one takes of the outcome. In other words the contention of the respondents should be accepted that a significant part of the costs incurred in relation to the evidentiary issues were not costs which the respondents should bear in the circumstances of this case.
The basic contention of the first and second respondents was that they should not be denied the costs which ought to flow to them if costs were to follow the event. They say that they should be entitled to those costs in their entirety because they were wrongly vexed with complex litigation in which they succeeded both in the Trial Division and on appeal, albeit that the principal subject of the judgment at first instance was directed to questions of proof of the appellant’s case. They say that the appellant lost on the limitation issue both at the trial and on appeal, though the learned judge spent a comparatively brief part of her judgment accepting the broad thrust of the limitations defence. They assert that it is only in “exceptional or special circumstances” that the Court is justified in departing from the usual order as to costs, namely, that they follow the event. In the circumstances they were entitled to and in practical terms obliged to rely upon any reasonable objection they could properly raise against the alleged proof of the appellant’s claims. They never contended that the evidence should not be considered as a whole.
We do not accept that the power of the Court is so limited and indeed Order 63.04 of the Rules makes clear that the Court has power to make orders for costs in relation to particular questions or “parts” of proceedings. It is not necessary to canvass the relevant authorities for it is clear from them, at least as they have been understood in recent times, that a very wide discretion exists in favour of the Court as to the making of orders for costs, in particular as to the costs of issues, but it is not a power which must be exercised. The respondents’ contention, however, is an overstatement as to the circumstances in which the Court should consider making a different order from the conventional order for costs, in particular, as in the present case, for making orders as to costs of different issues argued on appeal. The well recognised “general rule” that costs follow the event is merely a commonsense generalisation conducive to the orderly disposition of judicial business, more especially so in the case of appeals. Parties should not be encouraged to think that they can vex a party, especially one who has already been successful, by an appeal on the assumption that if the appellant succeeds on one or more issues it may claim the costs of them, notwithstanding that they still fail to overturn the subject judgment. That could only encourage parties with deep purses to raise “theoretical” issues of special interest to them despite a belief that they will ultimately lose, in the hope that they may pick up the costs relating to those “theoretical” issues. A successful party should not be vexed with further litigation in an appellate jurisdiction and be required to bear or pay some of the costs unless there are circumstances which are out of the ordinary.
On the other hand on the present appeal there were circumstances out of the ordinary which justified some different order for costs which reflected the fact that in a long and complex appeal, in which it may be said that on neither principal issue was the likely outcome entirely clear, the Court was and is entitled to say that the successful respondents should bear some of the costs. That is a long way from saying, however, that the unsuccessful appellant is thereby entitled to claim a division of costs so that she will be entitled to receive, directly or indirectly, all the costs applicable to the issues upon which she says she has succeeded. At the end of the day the Court ordinarily will seek to make orders for costs which will reflect that one side or the other has been ultimately successful and should receive an award of costs which reflects that ultimate success and, in particular, the fact that the respondent has been required to respond and expend money in resisting an unsuccessful appeal. That is what the Court here in part has attempted to do.
We should add that we do not accept the respondents’ contention that they acted defensively in every sense. They were not obliged to rely upon every reasonable objection and should have used greater discretion in arguing points of principle and detail in relation to matters where the Court has said that the contentions on those general issues by the respondents should have failed. The extent of the respondents’ need to contest the facts will be considered briefly in the following paragraphs.
The alternative submission of the successful respondents is that they should have received an order in their favour considerably greater than the 331/3 percentum which the Court presently says they should receive. Here the respondents assert that the appellant radically changed the nature of the appeal on the first morning of the appeal by seeking an order for a retrial, thereby wasting much of the costs already incurred by the respondents for the purpose of answering in detail many of the submissions made in the appellant’s outline. They say that much of the time spent on considering her principal arguments as to the nature of the evidence were also necessary for the gaining of an understanding of the evidentiary basis relevant to the respondents’ limitations defence. Moreover, they say that having regard to the appellant’s failure or abandonment of certain grounds of appeal, she had effectively lost over 60 per cent of the issues considered in the Court’s judgment. Consequently, the respondents should receive at least two-thirds of their costs without paying any to the appellant.
It is sufficient to say that such a broad-brush description of the appellant’s case and the way in which it was presented oversimplifies it and fails properly to characterise what has occurred. On the other hand the appellant’s submissions in response likewise overstated the degree of success which she had on the evidentiary issues and failed to reflect the importance of an understanding of the facts as a whole which was needed by the Court for the purpose of determining the limitations issue. Moreover, although the Court has held that there was a failure generally by the learned judge to approach the evidence as a whole, many of the minor points raised on questions of evidence did not have to be resolved in favour of the appellant and were not so decided. It is not possible to make reliable mathematical calculations in relation to these matters, nor was it appropriate merely to look at the volume of materials filed or the number of pages devoted to the submissions made, in order to resolve how the Court’s discretion should be presently exercised. We would nevertheless say that the respondents’ contention that the case was so changed in the early stages of the appeal as to justify the more extensive order now sought by them again oversimplifies what occurred. The appellant’s case was in fact changed in important respects and time wasted, but a major issue was still resolved in favour of the appellant. It is sufficient to say that we are not persuaded that the respondents should receive any more than one-third of their costs, having regard to the Court’s conclusion, as already stated, that no order should be made in respect of the appellant’s costs.
The only variation we would order with respect to the award of costs in favour of the respondents is to include the reserved costs so that the first and second respondents should be entitled to one-third of their costs of and incidental to the appeal including reserved costs, such costs to be payable by the appellant.
By their contentions the appellant, on the other hand, has sought that the first and second respondents pay two-thirds of her costs of the appeal upon the assumption, which she is prepared to accept for this purpose, that those respondents are paid only one-third of their costs of the appeal.[3] She also seeks orders that counsel’s fees for preparation and trial be fixed on what might be said to be a generous basis, as set out in her summons. The principal basis for her contention is that by far the larger proportion of time spent on both the written and oral submissions made on behalf of the appellant (and the respondents) was devoted to the grounds of appeal which rested on evidentiary questions where, so it is characterised, “the resistance was, and was ultimately demonstrated to be, hopeless for the respondents”. It was said that about 75 per cent of written submissions related to those evidentiary matters and 85 per cent of the oral argument was likewise directed to them. So it was argued that success on those issues justified a departure “from the settled practice that costs follow the event” because these matters constituted “special circumstances”.
[3]In the alternative it was contended, flowing from the same arguments, that there should be an overall order that the appellant be paid one-third of her costs.
We have already said that there is no doubt that the Court has power to make orders relating to particular questions in or “parts” of a proceeding both by depriving ultimately successful parties of their costs or (additionally) by awarding unsuccessful parties some part of their costs. Moreover it was accepted that an overall order may be made reflecting these matters so as to obviate the need to tax two bills of costs. [4] In making such orders it must be remembered that parties ordered to pay some proportion only of a successful party’s costs do not receive any reimbursement for their own costs except to the extent that the reduction may be seen as a set-off against their own liability.
[4]See generally Williams, Supreme Court Practice, para.63.04.5.
As already stated, there is no reason to doubt the power to make appropriate orders reflecting success on particular issues and that has already been sought to have been achieved by the costs order provisionally announced. The question is whether the appellant’s contentions justify a more generous order in her favour or a less generous order in favour of the respondents. It is the factual premise upon which the appellant’s contentions are founded which is in part the reason for refusing to accept her submissions, as well as the absence of a justifiable basis for reflecting that success in a mathematical way. We have already said why we do not accept that so much time was spent on the issues upon which the appellant ultimately succeeded, certainly not the proportions stated on her behalf. Nor can one accept the description of the respondents’ resistance as “hopeless”. Occasionally, the hopeless resistance of argument by one party may justify a more generous order in favour of the other, successful party or in favour of a party who has won on a specific issue, but that is not the present case. No doubt a proper analysis of what occurred at trial has produced the conclusions reflected in the Court’s judgment. It is another thing to say that the answer was so obvious as to characterise that resistance as “hopeless”. More importantly it is very difficult now to assess the time required to make out those successful contentions, especially as the proposition of law was not disputed, only its application to the facts of the present case. But the truth of the matter is that there were a large number of matters raised on behalf of the appellant which were examined in considerable detail by counsel on both sides but which did not require a concluded answer. Considerable time was spent in opening a detailed factual case but that opening and explanation (whether in writing or oral) cannot be said to be relevant only or even substantially to an issue which required 75 per cent or more of the parties’ attention, for the point upon which the appellant succeeded was far more limited in scope, albeit that it required a considerable understanding of the surrounding facts. The point upon which the respondents succeeded, though identified as requiring direct argument for a shorter period (and needing less extensive written submissions), nevertheless cannot be characterised as confined solely to what was said at that stage of the argument. As already stated, although it could have been argued separately, it was not and the likelihood of that occurring in the present case was remote. We believe that the division of costs already made is sufficient to reflect to an appropriate degree the success of the parties on the relevant issues but also to reflect that at the end of the day the appellant was unsuccessful. We have already dealt with the other contentions raised on behalf of the appellant.
It is therefore unnecessary to examine the further claim by the appellant that counsel’s fees should be fixed in accordance with the basis which they charged the appellant. As no order is to be made in favour of the appellant the question strictly does not arise but we would add that it is most unusual in the Supreme Court for orders of that kind to be made and, at least in the recollection of one member of the Court extending over 20 years, orders of that kind have only been made on appeals from the County Court where for different reasons such orders are sometimes necessary.
It follows that we reject the arguments on both sides as to the need to make a different order for costs, save to the extent of including reserved costs in the final order. As this order is to be made today it is not necessary to make a further order with respect to the costs of the present argument, but, having regard to the outcome and the fact that the Court has not been persuaded to make any different order from that pronounced in favour of the appellant at the time of giving judgment, it would not be inappropriate to treat the general costs order as likewise applicable to the costs incurred in relation to today’s hearing. The order, therefore, that we pronounce is that the appellant pay one-third of the first and second-named respondents’ taxed costs of and incidental to the appeal, including reserved costs.
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