Paino v Paino - Costs

[2006] NSWSC 886

CITATION:	Paino v Paino - Costs [2006] NSWSC 886
HEARING DATE(S):	07/06/05, 08/06/05, 09/06/05, 10/06/05, 15/06/05, 16/06/05, 17/06/05, 21/06/05, 22/06/05, 23/06/05, 24/06/05, 28/06/05, 29/06/05, 01/07/05, 05/07/05, 06/07/05, 12/07/05, 29/07/05, 13/12/05, 14/12/05 Judgment: 05/04/06 Submissions on costs: 09/05/06, 10/05/06, 07/06/06, 22/06/06, 21/07/06
JUDGMENT DATE :	5 September 2006
JURISDICTION:	Equity Division
JUDGMENT OF:	Barrett J
DECISION:	Short minutes to be brought in
CATCHWORDS:	PROCEDURE - costs - Property (Relationships) Act proceedings - where circumstances such as to make award in favour of plaintiff woman virtually inevitable - whether any concept or "success" applicable - choice between matrimonial causes analogy and partnership analogy in approaching costs - reasons why matrimonial causes analogy to be preferred in this case - whether offers of compromise unreasonably rejected - aspects of plaintiff's conduct in conduct of case warranting some costs adjustments against her
LEGISLATION CITED:	Property (Relationships) Act 1984
CASES CITED:	Calderbank v Calderbank [1976] Fam 93 Kardos v Sarbutt (No 2) [2006] NSWCA 206 Paino v Paino [2006] NSWSC 218 Parker v Parker (1992) 16 Fam LR 458
PARTIES:	Angela Paino - Plaintiff Salvatore Paino - Defendant
FILE NUMBER(S):	SC 5612/01
COUNSEL:	Mr I.G. Harrison SC/ Mrs M.T. Bridger - Plaintiff Mr P. Hallen SC/Mr J.J. Millar - Defendant
SOLICITORS:	Kells The Lawyers - Plaintiff Meyer Pigdon - Defendant

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

TUESDAY, 5 SEPTEMBER 2006

5612/01 ANGELA PAINO v SALVATORE PAINO - COSTS

JUDGMENT

1 In a judgment delivered on 5 April 2006 in these proceedings under the Property (Relationships) Act 1984 (Paino v Paino [2006] NSWSC 218), I stated the conclusion that the defendant should be ordered to pay the plaintiff a sum of $2,046,575.90, but with an adjustment, by way of deduction on account of payments by the defendant to the plaintiff after June 2005 by way of weekly maintenance payments, provision of a motor vehicle and the meeting of motor vehicle expenses. The adjustment aspect was referred to at paragraph [212] of the judgment.

2 Directions were made for the filing of submissions on costs and the other matters directed towards distillation of orders disposing of the proceedings. Submissions were filed, with the last of them (which concerned an agreement of the parties regarding costs of a subpoena) received on 21 July 2006.

3 The matter with which I must now deal is that of costs. The plaintiff says that the defendant should pay her costs. That order, the plaintiff says, is warranted by the basic proposition that costs should follow the event. The defendant says that the plaintiff should pay his costs. It is the defendant’s contention that such an order is warranted by various aspects of the plaintiff’s conduct in and about the proceedings. Extensive submissions were made in support of the respective contentions.

4 Since those submissions were prepared, the Court of Appeal has provided valuable (and, of course, authoritative) guidance in relation to costs in proceedings of this kind. I refer to the decision in Kardos v Sarbutt (No 2) [2006] NSWCA 206 (27 July 2006), where the principal judgment (in which the two other members of the court concurred) is that of Brereton J. As his Honour observed, all the provisions of the Civil Procedure Act 2005 and the rules of court with respect to costs apply to proceedings under the Property (Relationships) Act. But the nature of such cases means that special factors bear upon the exercise of the discretion concerning costs. Brereton J identified four such factors in the following part of his judgment:

“[26] The first is the quantum of the adjustive order. Particularly where only a small adjustive order is made, which would have been within the jurisdiction of the Local Court, a successful plaintiff will prima facie not be entitled to costs [ SCR Pt 52A, r 34; UCPR r 42.30], and even if the Court otherwise orders, the costs order may still be ‘capped’, so that the costs are not disproportionate to the result. There are many reasons why the Court might ‘otherwise order’. The amount of an adjustment ultimately ordered may not bear any relationship to the extent of the pool of property in issue in the case; a large pool of property, which involves complex valuation issues, may nonetheless ultimately produce only a small adjustment. Insofar as the rules of court are intended to promote selection of the appropriate forum, the wide ambit of the range of judicial discretion in this field means that such a rule should be applied with caution, except in the most obvious cases. …

[27] The second consideration is the analogy with matrimonial proceedings, in which the starting point is that each party bear his and her own costs. In this respect, the Law Reform Commission Report (NSWLRC 36 (1983)), ‘De Facto Relationships’, which presaged the introduction of the predecessor of the Property (Relationships) Act 1984, although containing extensive reference to provisions of the Family Law Act , by way of comparison and contrast with the proposed jurisdiction to adjust financial relations between de facto partners, has no specific discussion of costs. There appears to have been no consideration as to whether the approach of Family Law Act , s 117 should be adopted. In respect of the enforcement of orders, the Law Reform Commission Report envisaged that the rules of court relating to the enforcement of its ordinary judgments and orders would cover the enforcement of judgments given or orders made pursuant to the adjustive property jurisdiction; it may be inferred that the question of costs in such proceedings was likewise not seen as requiring special consideration, but would fall in the court’s general discretion as to costs.

[28] However, the costs of adjusting property interests consequent upon the failure of a domestic relationship are an incident of the failure of a joint relationship, usually without attributable fault. In this sense, there is an analogy with partnership disputes. In partnership proceedings, it was once the rule that no costs would be given up to the decree directing the account, a position that was not departed from except in cases of gross misconduct [ Hawkins v Parsons (1862) 8 Jur (NS) 452; Parsons v Hayward (1862) 4 De GF&J 474]. The prevailing rule nowadays is that the costs of both parties of an action for dissolution are paid out of the partnership assets, unless there is some good reason to the contrary [ Hamer v Giles (1879) 11 Ch D 942], except where the action is one which in substance is to try some disputed right, in which case the unsuccessful party will be ordered to pay the costs [ Hamer v Giles ; Warner v Smith (1863) 9 Jur (NS) 169]. The costs of taking accounts, although disputed, are usually defrayed out of the partnership assets [ Butcher v Pooler (1883) 24 Ch D 273; Newton v Taylor (1827) 19 Eq 14]. Similarly, in proceedings under Conveyancing Act , s 66G, for the appointment of trustees of sale of jointly held land, the costs are usually paid out of the proceeds, the rationale being that the costs of such an application are an incident of joint ownership.

[29] In this type of litigation, it is artificial to resolve liability for costs according to the accident of who is plaintiff and who is defendant, so as to leave a plaintiff free to litigate confident that he will receive costs however unreasonable his claim, unless the defendant betters her offer. There is no reason why the defendant should bear the risk of costs to the exclusion of the plaintiff where neither makes a realistic offer. …

[33] The third consideration is whether any party has been wholly or substantially (in the sense already described) successful (in obtaining the order sought), or has ‘bettered’ an offer of compromise.

[34] A fourth consideration is the conduct of the parties in the proceedings, and in particular whether one has been disproportionately responsible for the incurring of costs through the manner in which he or she has conducted the proceedings.
[35] The second and third considerations support the view that, except where one party has been wholly or substantially successful, or has ‘bettered’ its offer of compromise, the starting position should be that each party should bear its own costs. ...”

5 The first of these factors is not relevant here, at least to the extent that it is seen as pertinent to cases where only a small adjustive order is made. The award in this case is substantial – although the considerations of proportionality apply to all proceedings.

6 The second factor is the analogies to be drawn with, first, matrimonial proceedings and, second, partnership proceedings. In the one case, the starting point is that each party should bear his or her own costs. In the other, the general approach is that the pool of partnership property should be resorted to for costs of the dissolution proceedings.

7 The third matter goes in part to reasonableness of conduct, according to accepted and uncontroversial principles to the effect that a party who has received but rejected an offer of compromise and then pressed on to an adjudicated conclusion less favourable to him or her than that compromise should, as to costs, be put in a position akin to that which would have prevailed if there had been acceptance of the rejected offer shown by the outcome to have been reasonable. Calderbank v Calderbank [1976] Fam 93 was itself a case involving claims for division of matrimonial property. Considerations of the kind referred to in this part of the Court of Appeal judgment arise in this case.

8 The other part of the third criterion is concerned with whether one party has been wholly or substantially “successful”. I must say at once that I do not see that criterion as being applicable in any meaningful way here. In circumstances where there was an acknowledged relationship of significant duration within the contemplation of the Act, where substantially all assets at both inception and conclusion (whatever dates may have been found relevant) were owned by the defendant and where the plaintiff was acknowledged to have made at least domestic or homemaker contributions, it was to be expected that she would achieve some award under the Act. That an order is to be made in her favour is not, in that context, an indication of “success” in the sense to which I understand the Court of Appeal to be referring.

9 The fourth matter referred to by the Court of Appeal goes to the conduct of the proceedings themselves. There are several matters of that kind to be considered here.

10 In the present case, substantial submissions were made in relation to the aspect of the third factor referred to by the Court of Appeal which concerns rejection or non-acceptance of offers. Before referring to the several relevant offers of compromise I should outline a regime that was put into place by consent orders. The plaintiff’s statement of claim was filed on 24 December 2001. On or about 18 February 2002, orders were made by consent to the following effect:

1. The defendant was to pay the plaintiff $1,750 per week by way of maintenance, with payments starting on 21 February 2002.
2. The defendant was to pay the plaintiff by 21 February 2002 a sum of $10,000 plus a further sum of $60,000 immediately upon her leaving the Point Piper property.
3. The defendant was to make available to the plaintiff immediately the full and exclusive use of the Mercedes motor vehicle she had been driving.
4. The defendant was to maintain the vehicle, including registration, insurance and petrol.
5. The defendant was to pay to the solicitors for the plaintiff a sum of $25,000 within fourteen days on account of the plaintiff’s costs.

11 This regime was supplemented by further orders made on 6 August 2002 to the following effect:

1. The defendant was to pay the plaintiff’s solicitors a further $40,000 on account of the plaintiff’s costs.
2. The defendant was to pay the fees of accountants and real estate valuers retained by the plaintiff in specified sums totalling something of the order of $177,000.
3. The defendant was to pay 70% of the fees of the plaintiff’s senior and junior counsel for work carried out after the date of the orders.
4. The defendant was to pay 70% of the fees of the plaintiff’s solicitors for work carried out after the date of the orders.

12 In order that the various offers of compromise to which I am about to come may be appreciated in context, it is necessary to refer to the amounts that the defendant had paid in accordance with this consent regime as at certain points. For the moment, the components of the several sums may be left to one side. Payments made by the defendant up to each of the following dates are shown, as an aggregate, against the date.

17 November 2003 $ 222,083 . 90

11 August 2004 554,304 . 49
23 December 2004 713,757 . 26

23 February 2005 731,326 . 13

3 June 2005 744,576 . 13

13 I turn now to the various offers. The statement of claim was, as I have said, filed by the plaintiff on 24 December 2001. Five days earlier, on 19 December 2001, the defendant’s solicitors had written to the plaintiff’s solicitors offering the sum of $3 million, subject to vacation of the Point Piper home by the plaintiff by 21 December 2001. The letter enclosed certain materials about the defendant’s assets, being a list of shares in private companies, accounts for the year to 30 June 2000 of those companies, trust deeds of two family trusts and a draft statement of the defendant’s assets and liabilities at 30 June 2000, and said that the defendant’s solicitors were instructed that cohabitation was for less than ten years and that separation had occurred more than two years earlier. The filing of the statement of claim was the plaintiff’s response.

14 On 17 November 2003, the defendant’s solicitors conveyed a second offer to the plaintiff’s solicitors. The proposal was that the defendant pay the plaintiff $3 million within four months after settlement; that there be, in the meantime, continuing compliance by the defendant with maintenance and related orders of 18 February 2002 (to which I shall return); that the plaintiff retain all moneys paid under those orders; that the plaintiff return the defendant’s motor vehicle; that the plaintiff relinquish her position within Gemini Industries and transfer her shares to the defendant; and that the defendant pay the plaintiff’s costs as agreed or assessed. The plaintiff’s solicitors responded that, because of alleged default by the defendant in making funds available to pay the plaintiff’s accountants, those accountants had not been able to advise her on “what constitutes the net pool of assets available for division in these proceedings”. In the absence of that information, it was said, the plaintiff could not consider and respond to the offer.

15 A third offer was made by the defendant to the plaintiff on 11 August 2004. It was proposed that the defendant pay the plaintiff $2.5 million within six months or on settlement of the sale of the Smithfield plantation, whichever was earlier; that, in the meantime, the defendant continue to make payment under the maintenance and related orders; that the car be transferred to the plaintiff; that the plaintiff withdraw from Gemini Industries and two other companies and transfer her shares to the defendant; that the plaintiff keep all moneys paid under the existing orders; and that the parties pay their own costs respectively.

16 An offer was made by the plaintiff on 23 December 2004. This was her first offer. By her solicitors’ letter of that date, she proposed that the defendant pay $7.5 million to her within 28 days of settlement, plus her costs up to the date of payment. There were provisos with respect to the existing orders, the car and the companies substantially the same as those in the defendant’s most recent offer.

17 The defendant’s fourth offer was made on 23 February 2005. The defendant proposed payment by him of $2.5 million within four months, with the defendant paying his own costs. The other elements were substantially as previously.

18 The plaintiff’s second offer was made on 1 June 2005. It was to the effect that the defendant pay $5.5 million; that the plaintiff return the car, relinquish her company positions and transfer her shares in Gemini Industries and that the parties bear their own costs.

19 The defendant’s fifth offer was made on 3 June 2005. In essence, he offered to pay $1 million within 28 days, $1.5 million within six months and $1,500 per week until the making of the second payment; that the plaintiff should retain everything paid under the existing orders; that the plaintiff keep the car; and that the parties pay their own costs.

20 The plaintiff’s third offer was made three days later, on 6 June 2006. She proposed the same terms as in the defendant’s fifth offer, save that the two payments should be $1.5 million and $3 million and she would return the car.

21 The defendant’s sixth offer was made on 21 June 2005. It was in substantially the same terms as the defendant’s fifth offer, save that the second payment was to be $2 million and the weekly sum was to be $2,000.

22 The defendant’s seventh and last offer was made on the tenth day of the hearing, 23 June 2005, during an adjournment. The offer was that the defendant pay the plaintiff $3 million within six weeks; that the plaintiff retain all payments made under the earlier orders; and that the parties pay their own costs.

23 The plaintiff’s fourth and final offer was made on 27 June 2005. She indicated that she would accept $1.3 million within 28 days, a further $2.8 million within six months, with $2,000 per week in the meantime; that she retain all moneys paid under the earlier orders; that the defendant have the car; that the plaintiff transfer her shares in Gemini Industries and relinquish her positions in the companies; and that the parties bear their own costs.

24 It is the contention of the defendant that each of the seven offers made by him represented, for the plaintiff, a better outcome than she obtained through the court’s decision. Furthermore, the defendant says, there was a real element of compromise in each offer and each was reasoned, precise, certain and capable of acceptance, with the envisaged consequences in relation to costs also clearly stated. In no case did the offer require total surrender by the plaintiff. In each instance, the defendant says, it was unreasonable for the plaintiff not to accept the offer.

25 The plaintiff contends that she was fully justified in declining to accept any of the defendant’s offers – indeed, that she was in no position to make any responsible and informed acceptance. Her basic proposition is that she did not, at any relevant point, have any comprehensive or reliable information about the extent and value of the defendant’s assets – it was those assets along that represented the relevant “pool of property”. She points to the following:

(a) a letter of 8 July 2002 from the plaintiff’s solicitors to the defendant’s solicitors referring to discrepancies between the defendant’s list of documents filed on 17 May 2002 and documents subsequently inspected, with reference also to other apparently missing documents;

(b) a letter of 6 February 2003 from the plaintiff’s solicitors to the defendant’s solicitors requesting particular items, including the defendant’s entitlements under certain trusts and superannuation funds, copies of any shareholders’ agreements relating to particular companies, copies of company constitutions and details of shareholdings;

(c) a letter of 24 February 2003 from the plaintiff’s solicitors to the defendant’s solicitors requesting details of certain leases, valuations of a number of properties, and further particulars about certain companies and shares in them;

(d) a follow up letter of 9 April 2003 from the plaintiff’s solicitors to the defendant’s solicitors;

(e) a letter dated 26 June 2003 from the plaintiff’s solicitors to the defendant’s solicitors seeking financial and tax information about a number of companies, together with other information;

(f) a very long list of documents sought (dated 14 August 2003);

(g) faxes and letters of 29 and 30 September 2003 from the plaintiff’s solicitors to the defendant’s solicitors seeking various information about the Griffith properties;

(h) a letter of 6 November 2003 from the plaintiff’s solicitors to the defendant’s solicitors seeking certain particulars of plant and stock at the Smithfield property;

(i) a letter of 4 February 2004 from the plaintiff’s solicitors to the defendant’s solicitors enclosing a list of questions posed by KPMG (who were acting for the plaintiff) and outlining further information required by that firm to assist them in performing work for the plaintiff;

(j) a letter dated 4 June 2004 from the plaintiff’s solicitors to the defendant’s solicitors raising queries about debts otherwise than for credit cards and guarantees said to be debts of which the plaintiff had not previously been aware; also asking for information about personal holdings in public companies, bank accounts “and the like”;

(k) a letter dated 7 July 2004 from the plaintiff’s solicitors to the defendant’s solicitors reading in part as follows:

“We repeat our previous comment that at no time has your client fully disclosed his financial position in accordance with his obligations. Your client has never provided particulars as to the balance of his personal bank accounts or investment accounts, nor has he provided a list of public company shares which he holds, including the name of the company and the number of the shares.
We reiterate, we seek the provision of this information both as at January 2001 and currently. Insofar as the bank account details provided by you in your letter is [sic] concerned, please identify those accounts from which your client is solely entitled to receive the funds and identify the amounts held on his behalf. We note that one of the accounts relates to the Gemini Hotel Griffith in which your client certainly had no interest. If there is still an existing account for that entity, on what basis does your client hold an interest in that account and what amount is held on his behalf?”;


(l) a letter of 23 July 2004 from the plaintiff’s solicitors to the defendant’s solicitors complaining that information requests had been outstanding for more than five weeks;

(m) a letter of 26 August 2004 from the plaintiff’s solicitors to the defendant’s solicitors noting that no debt of the defendant to Paino Holdings Pty Limited had previously been disclosed and asking for details;

(n) a letter of 12 October 2004 from the plaintiff’s solicitors to the defendant’s solicitors reading in part as follows:

“We note that this matter went to mediation during August 2004. Our client wishes to emphasise her desire to resolve the matter without proceeding to final trial, in light of the enormous costs that will be incurred by both parties should that be necessary, and having regard to the enormous costs that have already been incurred to date.
Our client is not, however, she instructs, in a position to place any further offer of settlement before your client for consideration until the response to requests for information and documents relevant to the loan account ledgers are to hand. Without that material being provided, our client considers she is not sufficiently informed of your client’s circumstances, such that she can make an informed decision as to what constitutes the net pool of available property at the relevant time.”;

(o) a response dated 15 October 2004 to the letter just mentioned in which the defendant’s solicitors said:

“Thank you for your letter of 12 October 2004. With respect, the purpose of that letter can only be forensic. There can be no doubt that your client is well able to make an informed decision as to what constitutes the net pool of available property at relevant times, with a sufficient degree of certainty to be enabled to resolve the point that your letter serves.”;

(p) a letter of 10 November 2004 from the plaintiff’s solicitors to the defendant’s solicitors again following up matters involving the loan account of Paino Holdings Pty Limited.

26 The plaintiff adds that there was, at all material times, uncertainty about the value of the defendant’s land in Filicudi. Indeed, that uncertainty continues: see paragraphs [175] to [177] of the judgment of 5 April 2006. The question of the value of the Filicudi properties – or, more particularly, the admissibility of evidence the plaintiff sought to tender as to their value – became a major matter of contention in the proceedings. The defendant submits, in reply (and I accept), that the defendant disclosed everything he was required to disclose. As I said at paragraph [176] of the earlier judgment, I do not regard the defendant as having been under a duty to disclose values (a matter of opinion) as distinct from the existence of assets (a matter of fact).

27 The inability of the plaintiff to come to any reliable view about the value of the Filicudi properties, while in no way the fault of the defendant, means, in my view, that it is not possible to characterise as unreasonable her rejection (or non-acceptance) of each offer made by the defendant. Other matters of uncertainty affected any assessment of the plaintiff’s several offers and the defendant’s reactions to them. There was a progressive unfolding of the defendant’s financial position. While I do not think he was guilty of any deliberate non-disclosure, the ordinary course of events meant that the plaintiff was, at all material times, not able to make a full assessment of the value of the pool of assets.

28 In summary, I do not consider that, to the extent that the third criterion mentioned in Kardos v Sarbutt (No 2) pays attention to the “bettering” of an offer of compromise, the circumstances of this case in which there was no real way of coming to grips with the central issue of value are such that the concepts of “bettering” and of reasonable and unreasonable reactions to offers of compromise are not really meaningful.

29 It follows that the third criterion does not warrant any costs consequence.

30 I turn now to the fourth criterion mentioned in Kardos v Sarbutt (No 2), that is, matters related to the conduct of the proceedings. The defendant raises seven matters under this heading in support of his application for costs.

31 The first such matter relates to conduct in the pre-trial phase. The defendant refers to a number of notices to admit facts served on the plaintiff. The results are detailed in annexures to Mr McCauley’s affidavit (JPM28, JPM32 and JPM35). I do not need to go into detail. It is sufficient to say that all the matters in issue concerned values and that the plaintiff eventually agreed to most, even though in some cases she maintained for some time that the value was greater than that she was asked to admit. I do accept that the correspondence on this subject shows, in general, a readier willingness on the part of the defendant than the plaintiff to agree values. In the end, however, there was substantial agreement.

32 Second and in relation to the same general subject, the defendant refers to two attempts on his part to reach a position where one valuer would be retained by both parties. To this suggestion, the plaintiff replied on each occasion by saying merely that she had commissioned her own valuer and did not consider it “appropriate” for a jointly retained valuer to be instructed. I am not prepared to think that this was conduct of a kind that should be reflected in an adverse costs order.

33 Third, the defendant points to the circumstance that, because the plaintiff maintained that the relationship began in 1982, it was necessary to obtain evidence of assets and their value as at 1982. Because the court found that the relationship began in 1988, all that work was, in his submission, wasted. The plaintiff says, in response, that it was always known that there was a dispute as to the times at which the relationship began and ended, with the result that it was going to be necessary to canvass values at a number of alternative dates. I accept the submission made on the plaintiff’s behalf.

34 Fourth, the defendant points to the fact that there was no agreement on the value of the Smithfield land, that the parties both called valuers to give evidence on that matter and that the court accepted the evidence of the defendant’s valuer. This could have been avoided, in the defendant’s submission. The plaintiff’s reply (which I accept) is that there was agreement on the value of Smithfield until, effectively, the last moment when, on 8 June 2005, a sale of adjoining land caused the matter to be re-opened in such a way that each party appropriately sought a new valuation. The matter of contention in relation to the Smithfield valuation which occupied most of the court’s time concerned the sale of the adjoining property.

35 Fifth, the defendant says that the trial was prolonged by cross-examination of witnesses from whom it was sought to elicit detailed evidence on relatively minor matters concerning the plaintiff’s alleged contributions, particularly to the commercial ventures – which efforts were largely in vain because the court’s findings were substantially in line with the case put by the defendant. The plaintiff’s response is that there was a factual dispute as to all but one of the matters going to the plaintiff’s contributions (the exception related to the care she gave him during his illnesses) and that the plaintiff was confronted with a defence to almost every point on an evidentiary basis. On that basis, the plaintiff implies, extensive factual inquiry was inevitable. That is no doubt so, but I am nevertheless satisfied that the factual inquiry was, in some areas, taken to unnecessarily detailed level and that it was the plaintiff, not the defendant, who was responsible for this.

36 Sixth, the defendant refers to matters concerning the preparation of valuation evidence relating to the Filicudi properties. The plaintiff proposed calling Mr Fumia to give expert evidence in July 2005. Ultimately, the plaintiff did not do so and was granted an adjournment to allow her to obtain further evidence on the matter. The decision not to call Mr Fumia followed notification by the defendant that objection would be taken to Mr Fumia’s evidence on the basis of lack of expert qualification. However, before the plaintiff decided not to call Mr Fumia, the defendant had arranged for his Italian valuer, Mr Scafidi, to be in Sydney at the time Mr Fumia was expected to give evidence. Mr Scafidi came and went without giving evidence. The plaintiff points out that the defendant had known for over a year before questioning his qualifications in June 2005 that the plaintiff would seek to rely on Mr Fumia as an expert. It is not clear, however, that the precise differences between valuers, real estate agents and other kinds of property professionals under the Italian system were known until relatively late in the piece. Ultimately, the plaintiff was unsuccessful in tendering any evidence of the value of the Filicudi land. Yet, for the purposes of the plaintiff’s foreshadowed attempt to do so in July 2005 and her actual attempt in December 2005, the defendant had to bring Mr Scafidi from Italy a second time to no avail.

37 The seventh and final point made by the defendant regarding the plaintiff’s conduct of the case is that the plaintiff instructed several firms of solicitors in succession. The plaintiff concedes that any burden of additional costs thereby occasioned should be borne by her.

38 My basic conclusions on the several considerations made relevant to the question of costs by the observations of the Court of Appeal can be briefly stated:

1. For reasons outlined, I am not satisfied that the plaintiff should be seen as having acted unreasonably in not accepting any of the offers of compromise. Likewise, the defendant did not act unreasonably in not accepting any offer of compromise.
2. There was an element of unreasonableness in the lengths to which the plaintiff went to bring out a multitude of small details of fact many of which were of no real assistance in determining questions of her alleged contributions in various areas.
3. The course taken by the plaintiff in and about the matter of valuation of the Filicudi land was, because ineffectual, productive of an unwarranted burden of expense on the defendant.
4. Any increment in costs on either side attributable to the plaintiff’s changes of solicitors must be for the plaintiff’s account.

39 Those conclusions must be given effect to in the context of one of two basic approaches. Neither of those basic approaches is the simple principle that costs should follow the event: in any case, and as I have said at paragraph [8] above, I do not regard either party as having achieved “success” in a context where, on the basic facts, it was to be expected that there would be some award in favour of the plaintiff. As was pointed out at paragraph [29] of Kardos v Sarbutt (No 2), the choice is between the matrimonial causes analogy (paragraph [27] of Kardos v Sarbutt (No 2)) and the partnership analogy (paragraph [28] of Kardos v Sarbutt (No 2)).

40 It seems to me that, in the context of a statute concerned with adjustment of interests in property, the partnership analogy is likely to be more apt where both parties bring property to the relationship. In the context of a partnership as such, each partner typically contributes capital which is deployed in the partnership business in ways which entail acquisition of partnership property (in which each partner, as a partner, has an interest) and generation of partnership profits (or losses). The relationship is essentially property-based.

41 Where, as here, one party only brings property to the partnership and the award under the Property (Relationships) Act is based overwhelmingly on domestic and homemaker contributions (with only a very minor element related to the acquisition, conservation or improvement of property), the stronger analogy is with dissolution of marriage, in that the aspect of personal separation and termination of a personal tie is predominant. The several considerations outlined at paragraph [38] above must therefore be accommodated and given effect to by way of adjustment to the principle that each party should bear his or her costs. That principle should be modified in four ways to recognise such an adjustment.

42 The first modification to the principle that each party should bear his or her costs is that the plaintiff should bear so much (if any) of the defendant’s costs (assessed on the ordinary basis) as is attributable to changes of solicitors by the plaintiff.

43 Second, there should be recognition that the plaintiff prolonged the proceedings by her ultimately unsuccessful attempts to adduce evidence of the value of the Filicudi properties. She should bear all of the defendant’s costs (assessed on the ordinary basis) after an adjournment was granted on 29 July 2005 to afford her an opportunity to adduce admissible evidence, something she eventually failed to do.

44 Third and to the extent that they are not covered by the second item just mentioned, the plaintiff should be responsible for sums actually outlaid by the defendant in bringing Mr Scafidi to Sydney on two occasions for the purposes of the proceedings, including Mr Scafidi’s professional fees for the period he was away from his office in Italy on the defendant’s business in connection with the proceedings.

45 Fourth and to provide a measure of compensation to the defendant for item 2 at paragraph [38] above, the plaintiff should bear an amount on account of the defendant’s costs for two typical hearing days. In order to represent a reasonable approximation of the party/party basis, this should be 60% of the actual daily fees of the defendant’s solicitors, senior counsel and junior counsel at the rates in their relevant fee disclosures, multiplied by two.

46 Subject to those four adjustments – and to two further matters of importance yet to be mentioned – each party should bear his or her own costs. I should add that I do not regard the matters giving rise to the adjustments as sufficiently egregious to warrant an order for assessment on the indemnity basis.

47 The first of the additional matters concerns payments already made by the defendant on account of the plaintiff’s costs. I have referred above to the consent regime under which the defendant made funds available towards the plaintiff’s legal expenses and the fees of accountants and valuers. The regime was one invoking interim costs orders of the kind considered in Parker v Parker (1992) 16 Fam LR 458. These items must now be brought to account in the appropriate way. The second matter still requiring attention is the part of the consent regime that saw the defendant contribute to the maintenance of the plaintiff.

48 The two matters just mentioned were the subject of the following observations in the judgment of 5 April 2006:

“[212] It may also be thought that there is a question whether there should be an adjustment for the defendant’s post-termination contributions by way of weekly maintenance payments, provision of a motor vehicle and the meeting of motor vehicle expenses plus, in the earlier post-separation phase, provision of housing and accommodation. I should record, however, that, with property valued at the date of trial, I have regarded those aspects as forming part of the defendant’s financial contributions of the s.20(1)(b) kind in striking the figure of 75% at paragraph [206] above. No such adjustment is accordingly required, at least for payments up to the date of trial (for these purposes, June 2005). Payments thereafter should, however, be brought to account (together with interest at Supreme Court rates) by way of deduction from the award of $2,046,575.90.
[213] At this stage, I exclude from what I have said in the immediately preceding paragraph sums outlaid by the defendant to assist the plaintiff with legal fees and outgoings directly related to these proceedings (including accountancy fees and valuation fees). This is because I regard these as relevant to the costs of the proceedings, being a matter on which submissions will be required.”

49 As to the second of the additional matters, it is unnecessary to say more than has been said at paragraph [212] of the earlier judgment – except to note that the several progressive figures mentioned at paragraph [12] above include the maintenance and related payments, as well as legal costs and accounting and valuation fees.

50 As to the first of the additional matters, I note that the sum attributable to costs and fees paid since 18 February 2002 is acknowledged in submissions filed by the plaintiff’s solicitors to be $463,318.48. In accordance with the basic premise that each party should bear his or her own costs, this sum of $463,318.48 should be allowed by the plaintiff to the defendant.

51 In the result therefore, the outcome on costs is that each party will be left to bear his or her own costs, subject to allowances by the plaintiff to the defendant of sums giving effect to paragraphs [42], [43], [44], [45] and [50] of these reasons.

52 The parties should bring in short minutes embodying costs orders as I have outlined, together with orders covering all other matters necessary to bring the matter to finality, including orders giving effect to my decision that the sum of $2,046,575.90 should be paid by the defendant to the plaintiff, the decision at paragraph [212] of the judgment of 5 April 2006 and the parties’ agreements concerning retention of the Mercedes car by the plaintiff and the costs of the subpoena directed to Randwick Council.

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