O'Neil v Williams (costs)

[2007] NSWSC 51

CITATION:	O'Neill v Williams & anor (costs) [2007] NSWSC 51
HEARING DATE(S):	Written submissions
JUDGMENT DATE :	12 February 2007
JURISDICTION:	Equity Division
JUDGMENT OF:	Brereton J
DECISION:	Plaintiff to pay defendants’ costs of applications to bring matter to trial. Save insofar as any other costs order makes provision, defendants otherwise to pay plaintiff’s costs of proceedings. Costs orders set off.
CATCHWORDS:	COSTS – where plaintiff succeeds in obtaining equitable relief on lesser scale than originally claimed but not pressed at trial – where solicitor certified original claim – where costs increased by plaintiff’s failure diligently to prosecute proceedings due to ill-health and frailty
LEGISLATION CITED:	Civil Procedure Act 2005 (NSW), s 99 Legal Profession Act 1987 (NSW), s 198L Uniform Civil Procedure Rules 2005 (NSW), r 42.1
CASES CITED:	Beoco Limited v Alfa Laval Co Limited [1995] QB 137 Berbett Pty Ltd v Hansa [1976] VR 385 Donald Campbell & Co Ltd v Pollak [1927] AC 732 Jones v Curling (1884) 13 QBD 262, 272 (Bowen LJ) Laguillo v Haden Engineering Pty Ltd [1978] 1 NSWLR 306 Milne v Attorney-General (Tas) (1956) 95 CLR 460 O’Neill v Williams [2006] NSWSC 707 Stebercraft Pty Ltd v Sutton “The Sea Pride” (NSWSC, Carruthers J, 31 March 1994, unreported) Waterman v Gerling [2005] NSWSC 1111 Wentworth v Wentworth (NSWCA, Priestley and Clarke JJA and Grove AJA, 21 February 1996, unreported, BC9600213) Wentworth v Wentworth (NSWSC, Young J, 12 December 1994, unreported, BC9403409)
PARTIES:	Patricia Ann O'Neill (plaintiff) Graham Williams (first defendant) Aleta Williams (second defendant)
FILE NUMBER(S):	SC 3654/03
COUNSEL:	P O'Neill (in person) (plaintiff) J Pappas (defendants)
SOLICITORS:	Meyer Vandenberg (defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRERETON J

Monday 12 February 2007

3654/03 Patricia O’Neill v Graham Williams & anor

JUDGMENT

1 HIS HONOUR: On 30 June 2006, I declared that the plaintiff Patricia O’Neill was entitled to continue to reside in the premises 25 Bilkurra Street, Queanbeyan while ever she paid or was willing to continue to pay the council and water rates and kept the premises insured and in good repair, and upon condition that she reimburse to the defendants any amounts paid by them in respect of rates, insurance or maintenance in the interim and permits an annual inspection by an agent appointed by the defendants; and restraining the defendants from interfering with that right of residence [O’Neill v Williams [2006] NSWSC 707]. The defendants wished to argue the question of costs, and I directed that they lodge with my associate and serve on the plaintiff by 14 July 2006 a written submission setting out the costs orders which they sought and the arguments in support; that the plaintiff by 21 July lodge and serve a written submission setting out the costs orders she sought, any supporting arguments and any response to the defendants submissions; and that by 28 July the defendants lodge and serve any written submission in reply.

2 The defendants, in compliance with those directions, lodged and served their submissions on costs on 14 July 2006. The plaintiffs have provided no submissions as to costs. Ample time has now passed for them to do so, and I must therefore decide this question without the benefit of their submissions.

3 The starting point is that a successful plaintiff is entitled to its costs and that it is for the unsuccessful defendants to establish that there is good cause for departing from that rule [(NSW) Uniform Civil Procedure Rules 2005, r 42.1; Jones v Curling (1884) 13 QBD 262, 272 (Bowen LJ); Donald Campbell & Co Ltd v Pollak [1927] AC 732; Milne v Attorney-General (Tas) (1956) 95 CLR 460, 477; Berbett Pty Ltd v Hansa [1976] VR 385; Laguillo v HadenEngineering Pty Ltd [1978] 1 NSWLR 306; Waterman v Gerling [2005] NSWSC 1111 [10]].

4 The matters on which the defendants rely for contending not only that the plaintiff should be deprived of costs, but should be ordered to pay the defendants’ costs, fall under two heads: first, the circumstance that the plaintiff succeeded only to a significantly lesser extent than was claimed in the initiating process; and secondly, the plaintiff’s conduct of the proceedings prior to the final hearing, and in particular her non-compliance with directions and non-readiness for hearing on earlier occasions.

5 A departure from the ordinary rule may be appropriate where a successful party has propounded a substantially exaggerated claim and succeeds only to a limited extent, and the exaggeration has resulted in the incurring of additional costs [cf Stebercraft Pty Ltd v Sutton “The Sea Pride” (NSWSC, Carruthers J, 31 March 1994, unreported), where a party’s unrelenting refusal to abandon certain claims on which it ultimately failed resulted in a dramatic prolonging of the hearing time and the magnitude of the party’s claim and vigour with which it was pursued precluded any possibility of compromise]. But, as I endeavoured to explain in Waterman v Gerling, the principle in Beoco Limited v Alfa Laval Co Limited [1995] QB 137 - that where a plaintiff makes a late amendment which substantially alters the case the defendant has to meet and without which the action would have failed, the defendant is entitled to the costs of the action down to the date of the amendment - has emerged in the context that though the late amendment has resulted in some slight measure of success for the plaintiff, ultimately the true victor having regard to the case as a whole has been the defendant [Waterman v Gerling, [17]].

6 In this case, the summons as filed (and pre-litigation correspondence) asserted that Mrs O’Neill was beneficially entitled to the Bilkurra Street property, and claimed its transfer to her. However, Mrs O’Neill’s son Mr Norman O’Neill, who appeared as her McKenzie Friend at the trial, opened the case on the basis that her claim was limited to an equitable right of residence for life (although understandably enough he did not use those words). Mrs O’Neill’s evidence eschewed any claim to a proprietorial interest. And ultimately, Mrs O’Neill succeeded only to the extent of establishing that she was entitled to a lifetime right of residence in the property, as distinct from any beneficial proprietorial interest.

7 But while that is certainly a lesser interest than that claimed in the summons, the plaintiff’s success was not trivial, but substantial. Moreover, the claim for an equitable lifetime right of residence which ultimately succeeded was one which fell within and was embraced by the larger claim for a beneficial proprietorial interest. It was not a completely different claim that depended upon different facts or legal principles, but one which applying the same principles to the same facts justified a lesser remedy in equity. Accordingly, this is not a case in which the plaintiff gained slight success, attributable only to matters raised in a late amendment [cf Beoco, [154]; Waterman v Gerling [11], [17]].

8 Where a successful party ultimately does not press its claim on every basis pleaded, but there is no clear and distinct substantial severable issue, counsel and parties should not be discouraged by the risk of an adverse costs order from making a responsible judgment not to press every basis of the claim originally pleaded [Young v Lalic [2006] NSWSC 379, [10], in which where the plaintiff had abandoned a claim to be entitled in equity to a transfer of a half interest in land she ultimately pressed the case and succeeded only to the extent of obtaining an equitable charge]. In a passage which is equally applicable to the present case I said [at [7]]:

Although the claim for a transfer of land represented the plaintiff's claim at its highest, and although the plaintiff succeeded to a significantly lesser extent than that, this is not a case in which it can possibly be said that the defendants were the true victor, with the plaintiff only salvaging a modicum of success from a late amendment [cf Beoco Limited v Alpha Laval Co Limited [1995] QB 137, 154 and the cases there cited; see also Waterman v Gerling Insurance Company Pty Limited [2005] NSWSC 1111].

9 It does not appear that there was any evidence adduced by either party on the claim as originally framed which was not relevant to the claim as ultimately put, the necessity for which would have been avoided had the claim been limited in the first place. There was no concession of a right of residence, and so far as the evidence reveals no offer; the plaintiff was put to proof. In those circumstances, that the plaintiff succeeded only to a significantly lesser extent than that originally articulated does not justify a departure from the usual costs order.

10 On the question of liability for costs, the circumstance that the plaintiff was ultimately not legally represented is not relevant. However, the amount of costs the plaintiff would ultimately be entitled to recover on assessment, while including the proper costs of her solicitors while she had solicitors retained, would ordinarily be limited to out of pocket expenses while she was unrepresented [Cachia v Hanes (1994) 179 CLR 403].

11 It was submitted on behalf of the defendants that an order should be made under (NSW) Civil Procedure Act 2005, s 99, against the plaintiff’s former solicitors Snedden Hall & Gallop, who certified the summons under (NSW) Legal Profession Act 1987, s 198L. Strictly speaking, the certificate was unnecessary because the claim was not “a claim for damages” within s 198L(2). However, it was submitted for the defendants that costs were incurred improperly or without reasonable cause, because the plaintiff’s then solicitors so fundamentally misapprehended the facts and law as to commence the proceedings on a basis that could not succeed.

12 Snedden Hall & Gallop have not been heard on this application and have not been given notice of it. An order could not be made against that firm without their having been given notice [Civil Procedure Act 2005, s 99(2)]. I am not persuaded that this is a case in which Snedden Hall & Gallop should be called upon to show cause why such an order should not be made. Even if they misapprehended the facts and law, it is not apparent that substantial additional costs will be visited on the defendants as a result. That the claim initially brought was for a larger equity than was ultimately successfully pressed does not in my opinion justify the exercise of the exceptional jurisdiction to require solicitors to show cause why a costs order should not be made against them.

13 As I recorded in the substantive judgment (at [35]), the proceedings had an unhappy history of delay, due to Mrs O’Neill’s claims of ill health and inability to obtain legal representation. The matter was first listed for final hearing on 22 February 2005; Barrett J made pre-trial directions (in the absence of any appearance on behalf of the plaintiff) on 9 December 2004. On 22 February 2005, Burchett AJ granted an adjournment, on Mrs O’Neill’s application on grounds of ill-health, and ordered that she pay any costs thrown away by reason of the adjournment. My costs order is not intended to affect that order. By motion filed on 6 June 2005, the defendants moved to have the matter relisted; the plaintiff did not appear and Burchett J directed that the matter be placed in the November callover and reserved costs. At the callover, in the absence of any appearance for the plaintiff, it was fixed for hearing on 23 and 24 March 2006 before Barrett J. The plaintiff did not appear at the pre-trial directions hearing on 15 February 2006. Pursuant to leave then granted by Barrett J, on 20 February the Defendants filed a motion for dismissal of the proceedings which brought the matter before me as duty judge on 3 March 2006, when, in the light of medical evidence forwarded to the Court on behalf on the Plaintiff I vacated the hearing then appointed for 23 and 24 March 2006 and fixed the proceedings for hearing in Queanbeyan, to accommodate the plaintiff’s health, frailty and circumstances. I reserved the costs of and incidental to the defendant’s application.

14 Having observed the plaintiff during the trial, I accept that there were considerable obstacles, medical and psychological, to her attending in Sydney to conduct the case. But as the matter unfolded, I think the defendants were reasonably entitled to doubt, question and test the plaintiff’s claims in those respects. The plaintiff was not pro-active in progressing the matter. The defendants’ endeavours to progress the matter were entirely reasonable, and the plaintiff did little if anything to co-operate in getting the matter to trial. I am unpersuaded that the defendants should have to bear the costs of their reasonable endeavours to bring the matter to trial necessitated by the plaintiff’s inaction. In my view, the plaintiff should pay the defendants’ costs of and incidental to (1) the defendants’ motion filed on 6 June 2005; (2) the appearance before Barrett J on 15 February 2006; and (3) the defendants’ motion filed on 20 February 2006.

15 There is a discretion to allow the set-off of costs orders made in the same proceedings [Wentworth v Wentworth (NSWCA, Priestley and Clarke JJA and Grove AJA, 21 February 1996, BC9600213; Wentworth v Wentworth (NSWSC, Young J, 12 December 1994, BC9403409]. I will stay execution on each costs order until the net amount payable has been ascertained or further order, reserving liberty to apply for removal of the stay if either party unduly delays or is unco-operative in the costs assessment process.

16 Accordingly, my orders are:

1. Order that the plaintiff pay the defendants’ costs of and incidental to (1) the defendants’ motion filed on 6 June 2005; (2) the appearance before Barrett J on 15 February 2006; and (3) the defendants’ motion filed on 20 February 2006.

2. Order that save insofar as any other costs order makes provision, the defendants otherwise pay the plaintiff’s costs of the proceedings.

3. Order that the costs to which the plaintiff is entitled under order 2, and those to which the defendants are entitled under order 1 and under any other costs order made in these proceedings, be set off, and that execution on each such order be stayed until the net amount payable by one party to the other has been ascertained or further order.

4. Reserve liberty to apply for removal of the stay contained in order 3 on 7 day’s notice.

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