Ryan v Dries (on Costs)

[2002] NSWCA 112

NEW SOUTH WALES COURT OF APPEAL

CITATION:      Ryan v. Dries (On Costs) [2002]  NSWCA 112

FILE NUMBER(S):
40261/01

HEARING DATE(S):               13 November 2001

JUDGMENT DATE: 26/04/2002

PARTIES:
Gregory James Ryan - appellant
Joanne Maree Dries - respondent

JUDGMENT OF:       Sheller JA Giles JA Hodgson JA   

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S):          ED2754/99

LOWER COURT JUDICIAL OFFICER:     Master McLaughlin

COUNSEL:
P. Connor for appellant
D.L. Warren for respondent

SOLICITORS:
Bayside Solicitors, Ramsgate for appellant
Cassidy Gibson Howlin, Cronulla for respondent

CATCHWORDS:
APPEAL - COSTS - Appellant successful on point not adequately raised at first instance or in the original Notice of Appeal - Whether entitled to costs of appeal.  D.

LEGISLATION CITED:

DECISION:
Order that the respondent pay the appellant's costs of the appeal incurred since 9th August 2001, excluding costs incurred since 6th February 2002, and that the respondent have a suitors' fund certificate if otherwise entitled.

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES
COURT OF APPEAL

CA40261/01
ED 2754/99

SHELLER JA
GILES JA
HODGSON JA

Friday 26th April 2002

RYAN  V.  DRIES
Judgment (On costs)

1. SHELLER JA:     I was a party to the order made on 6 February 2002 that the parties have the opportunity to put written submissions on costs.  With the benefit of those submissions and on further reflection, I am, with respect, unable to agree with the order proposed by Hodgson JA with the agreement of Giles JA.

2. Ordinarily, costs follow the event and a successful appellant is entitled to an order for costs “except where it appears to the Court that some other order should be made as to the whole or any part of the costs”, Pt 52A.11 of the Supreme Court Rules. 

3. In this case, the appellant was successful.  In order to achieve that result he incurred the costs of filing fees and the disbursements associated with the settling of the appeal books.  In broad terms, these costs were not wasted.  Accepting as I do, that it was not until the notice of appeal was filed on 9 August 2001 that appropriate relief was sought founding the ground upon which the appellant was ultimately successful, there is nothing to suggest that the respondent suffered any additional expense as a result of this late filing or that if this ground had been part of the original notice of appeal the costs would have been any less. 

4. One thing the Court has no power to do, certainly in the circumstances of an appeal such as the present, is to punish a party for what might be regarded as a failure properly to consider how the appeal should be presented.  Here the respondent was put on notice of the matter.  Unfortunately, not uncommonly, notices of appeal are amended when the appeal comes on for hearing.  Even in these cases, if the appeal is ultimately successful, not to compensate the appellant for the costs of filing the appeal books has the appearance of punishing the appellant for late amendment. 

5. In Waters v P C Henderson (Australia) Pty Limited (Court of Appeal, 6 July 1994, unreported), Mahoney JA at page 5 in his judgment, adopted the following principle stated in the notes to the Rules:

   Where the proceedings involve multiple issues the application of the rule that costs follow the event may involve hardship where a party succeeds on some issues and yet fails on others.  Particularly is this so where, for example, a defendant succeeds on issues that occupied the bulk of the time taken by the proceedings.  Nevertheless unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those in which it failed.

6. In the present case, the proposed order does not seek to differentiate between issues but seeks to deny to an appellant part of the costs that would inevitably have been incurred in bringing the appeal.  One illustration of the problem may be seen in passages from Reid, Hewitt and Co v Joseph [1918] AC 717, quoted by Ryan J in Colburt v Beard (1992) 2 Qd R 67 at 74 as follows:

   In Reid, Hewitt & Co v Joseph at 723, Lord Finlay LC after referring to the history of the law as to costs said, at 724:

   The expression ‘costs shall follow the event’ had a definite meaning and imported that the costs of the several issues went to the party who succeeded upon them respectively, while the general costs went to him who on the whole succeeded in the action.  I cannot doubt that this is the sense in which the expression was used in O. LV.’ [This is in the same terms as Queensland O.91 rr. 1 and 3].

   At 728, he referred to the judgment of Thesiger LJ in Myers v Defries (1880) 5 Ex.D 180, which he adopted and quoted from it this passage:

   The ‘event’ of an action is complex, and the word, as used in the proviso to O. LV, may be read distributively;  it must be so read as regards distinct causes of action according to the view of the Exchequer Division, and, in my opinion, the general costs of the cause follow the judgment, but the costs of the particular issues must be respectively taxed in favour of the party who has succeeded on them.

   His Lordship concluded an extensive survey of the authorities with the statement (at 733) that:

   The authorities are all one way.  They all decide that the words ‘the costs shall follow the event’ mean that the costs are to be distributed according to the results of the several issues, while the party who is successful on the whole gets the general costs.

7. In the present case, and with due respect, it seems to me that the proposed order denies to the appellant the general costs of the appeal.

8. In my opinion, the proper order is that the respondent pay the appellant’s costs of the appeal and have a certificate under the Suitors’ Fund Act 1951 if so entitled. I do not think we left open further argument about the costs order at trial but, in any event, I would not interfere with it.

9. GILES JA:           I agree with Hodgson JA.

10. HODGSON JA:  Order 4 made in this appeal on 6th February 2002 was as follows:

    4. Order that the respondent pay the appellant’s costs of the appeal incurred since 9th August 2001 and that she have a suitors’ fund certificate if otherwise entitled, unless within 14 days either party provides to the Court written submissions on costs, in which event the Court will determine costs on the basis of those submissions and any submissions from the other party received within a further 7 days.

11. Submissions were provided by the appellant on 14th February 2002, and by the respondent on 1st March 2002.  Despite the lateness of the respondent’s submissions, they have been taken into account. 

12. In relation to the costs of the appeal, the appellant challenged the tentative view expressed in my judgment, concurred in by Sheller and Giles JJA, that the appeal had succeeded mainly on a ground added in August 2001.  The appellant submitted that he had succeeded on a ground claiming equitable contribution, which was raised as ground 6 in the original Notice of Appeal filed on 19th April 2001. 

13. That ground was expressed as follows:

    6. The Master having found that the entirety of the NAB mortgage was repaid by the Defendant, the Master should have held, that the Defendant, having so freed the land of mortgage, and having made such payments out of his own funds, and on his own account, there being no evidence that the Defendant intended the Plaintiff to ultimately have the benefit of those payments, the Defendant was entitled to contribution from the Plaintiff for her share of the payments and or to an equitable charge to secure the making of her contribution.

14. However the only relevant order sought in that Notice of Appeal was one setting aside certain of the Master’s orders:  no order was sought to the effect that the value of the respondent’s interest, or the payment to be made to the respondent, should be reduced to take account of such entitlement to contribution. 

15. A Supplementary Notice of Appeal was filed on 4th July 2001, making no relevant change.  A “Third Supplementary Notice of Appeal” was filed on 30th July 2001, substantially repeating ground 6, and seeking orders making monetary adjustments between the parties, but only on the basis that the shares of the parties in the property were respectively six-sevenths and one-seventh, and not on the basis of any entitlement to contribution. 

16. It was only with the “Further Supplementary Notice of Appeal” filed on 9th August 2001 that orders were sought reflecting the appellant’s claimed entitlement to contribution.  That document also set out more clearly grounds relating to this entitlement to contribution.

17. Accordingly, while the tentative view previously expressed by the Court is not strictly accurate, in that prior to 9th August 2001 there was a ground of appeal relying on an entitlement to contribution, it was only with the Notice of Appeal filed 9th August 2001 that any appropriate relief was sought in reliance on that ground. 

18. It is correct, as submitted for the appellant, that the appellant at all times relied on the payment of the mortgage instalments, but the fact remains that the appellant never properly pleaded this, or raised it below as a ground for equitable accounting, and the appellant did not seek any order giving effect to equitable accounting until 9th August 2001. 

19. In my opinion, the costs of the appeal should be dealt with as proposed by order 4 made on 6th February 2002, but now excluding the qualification and excluding costs incurred since 6th February 2002. 

20. The appellant has also submitted that the costs order made by the Master should be replaced by an order that each party bear its own costs, on the ground that both parties were responsible for the confusion at first instance, and that the Master acted on the basis that the respondent had achieved a result better than her offer to accept $170,000.00, made in 1998. 

21. However, as noted in my earlier judgment, the lower recovery by the respondent resulting from the appeal is due to equitable accounting not properly sought below; and in my opinion, even given that lower recovery, the order made by the Master is appropriate.

22. I propose that order 4 made on 6th February 2002 be vacated, and that there by the following order in lieu thereof: 

    4.Order that the respondent pay the appellant’s costs of the appeal incurred since 9th August 2001, excluding costs incurred since 6th February 2002, and that she have a suitors’ fund certificate if otherwise entitled.

23. Since writing the above, I have had the benefit of reading the judgment of Sheller JA.  I agree that the effect of my proposed order is to deprive the appellant of the costs of preparing appeal books which, in broad terms, were not wasted; and also that costs orders are not to be used to punish a party for a late amendment.  However, I remain of the view that the appellant should not have all the costs of the appeal:  the Master’s error and the consequent necessity for an appeal arose partly because the appellant did not seek equitable accounting below, and I believe that the costs of the appeal for both sides were increased because the appellant did not properly seek equitable accounting on appeal until 9th August 2001.  It is true that prima facie the appellant is entitled to the general costs of the appeal, including the costs of preparing the appeal books; but for the reasons I have given I do not think the appellant should have all the costs of the appeal, and in my opinion, my proposed order is a fair and convenient mechanism for giving effect to this view.

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LAST UPDATED:               26/04/2002