Simone Starr-Diamond v Talus Diamond (No 2)

[2012] NSWSC 1650

Supreme Court

New South Wales

Medium Neutral Citation:	Simone Starr-Diamond v Talus Diamond (No 2) [2012] NSWSC 1650
Hearing dates:	20 July 2012
Decision date:	20 July 2012
Jurisdiction:	Equity Division
Before:	Slattery J
Decision:	Order the parties do all such things and execute all such documents as are necessary to give effect to the sale of the two Tasmanian properties commonly owned by the parties by the mechanism provided for in these orders.
Catchwords:	PROCEDURE - costs - whether costs should follow the event - unsuccessful plaintiff seeks indemnity costs against successful defendant - plaintiff alleges defendant admitted the existence of a de facto relationship only just before trial - whether non admission occasioned increase in plaintiff's legal costs. HELD: defendant's late admission of de facto relationship did not significantly increase the plaintiff's costs - costs should follow the event - plaintiff ordered to pay the defendant's costs on the ordinary basis
Legislation Cited:	Civil Procedure Act 2005; Jurisdiction of Courts (Cross Vesting) Act 1987; Property Relationships Act 1984;
Cases Cited:	Simone Starr-Diamond v Talus Diamond [2012] NSWSC 675
Category:	Costs
Parties:	Plaintiff: Simone Starr-Diamond Defendant: Talus Diamond
Representation:	Counsel: Defendant: F. Sinclair Solicitors: Plaintiff: Defendant: S. Hodges
File Number(s):	2008/278342

JUDGMENT

1. This is my second judgment in these proceedings. My principal judgment in the matter was given on 19 June 2012: Simone Starr-Diamond v Talus Diamond [2012] NSWSC 675. This judgment deals with the form of final orders and costs issues. Persons, matters and things are referred to in this judgment in the same way as they are in my principal judgment. The two judgments should be read together.

Civil Procedure Act 2005, s 89

1. But there is one short preliminary question arising out of my principal judgment. I indicated at [34] that it maybe necessary for formal directions still to be made under Civil Procedure Act 2005, s 89 in respect of these proceedings. I left open the question as to whether such directions might be made with final orders. However, it is clear from [35] in the principal judgment that the only evidence from the previous trial before Smart AJ which was tendered before me was the evidence of Mrs Roberts. This evidence ultimately was read without objection in the way described in [35]. All other material was read afresh in these proceedings. It is therefore not necessary for the Court to make any directions under Civil Procedure Act, s 89(2), allowing all or part of the evidence in the previous trial to be taken as evidence in this trial or allowing further cross-examination. So nothing else now needs to be done in relation to such an order.

1. I now proceed to the questions of the form of the orders and costs.

The Form of Orders

1. The form of final orders has been the subject of argument by both sides. Firstly, there is a question of a stay upon the orders. The plaintiff has indicated that she wishes to lodge an appeal against the Court's principal judgment. The orders that the Court now proposes to make do involve disposition of the parties' property. To preserve the plaintiff's rights pending appeal, the appropriate course is to grant a short stay for a period to allow the plaintiff to approach the Court of Appeal, if she is so minded, to extend the stay. I will grant such a stay until 5.00pm on Monday 6 August 2012.

1. The other question is the form of the orders. There is at least one respect in which the proposed form of the orders is, in my view, deficient. That has emerged from the substance of the debate this morning. The draft orders, referred to in my judgment, but elaborated further in the draft propounded by the defendant today, place partial bans upon the plaintiff communicating with a proposed selling agent. The words in these draft orders are that the parties "Refrain from unnecessarily contacting the selling agent," it that such an order is quite uncertain.

1. The word "unnecessarily" is open to much interpretation. It may mean not contact beyond dealing with the narrow question of vacating the premises or the question of setting a reserve price, but there are many other things associated with the sale of the property that some person may regard as part of "necessary" contact with an agent, but another one may not. There is very strong disagreement from the plaintiff with this order.

1. I am concerned that unless some clear constrained form of communication between a person in charge of selling this property and the agent is put in place banning all unnecessary communication from both sides, that the agent who is eventually appointed to sell these properties will be placed in a very difficult position.

1. This has caused me to suggest to the parties in argument that perhaps the best course might be to appoint trustees for sale in respect of these properties and to give them the exclusive right to communicate with the selling agent. But there are some practical problems with this that I have considered in chambers. These are mentioned below. Nevertheless I would make orders prohibiting both parties from communicating directly with the agent. The parties can only communicate with the appointed trustees for sale, who will be in charge of all communications with the agent.

1. These two parties will never agree upon who should be trustees for sale. I have decided therefore that in the orders I will invite either the President of the Law Societies of New South Wales or Tasmania to nominate trustees for sale. Once that nomination is made final orders of appointment can be made.

1. I have altered the final form orders in chambers to a considerable degree. This may not be suitable to both parties. Therefore I will grant liberty to apply and reserve further consideration in respect of any required changes to the orders.

1. A principal concern is the trustees for sale cannot be appointed now without them being identified. As the land is in Tasmania, some proper thought will need to be given to what powers are being exercised for the appointment of trustees: whether it is under the Jurisdiction of Courts (Cross Vesting) Act 1987 or under this Court's original in personam jurisdiction. A proper application will need to be made to deal with final orders on this issue. I have therefore provided in a Schedule the orders that would be made at the time that the trustees are appointed. In short, further thought needs to be given to the precise operation of this mechanism by the defendant's legal representatives.

Costs

1. The last part of this judgment concerns the question of costs. There were two costs issues. One, was the question of indemnity costs claimed by the defendant based upon offers of compromise and the other was the question of whether or not a special costs order should be made on account of the late admission by the defendant of the existence of a de facto relationship. The first of those issues has now gone away, because the defendant does not press indemnity costs.

1. As to the second issue, the plaintiff has put in an extensive written submission as to why she should have a special order for indemnity costs in her favour for a number of reasons. Many of those reasons are associated with alleged errors in the principal judgment, which are really matters for appeal rather than for argument on the question of costs. But I will deal with the matters that were strongly articulated today from those written submissions.

1. Firstly, it is said by the plaintiff that the whole focus of the proceedings on her part prior to the admission of the de facto relationship was trying to prove there was such a de facto relationship. There is no doubt that much of the evidence that the plaintiff adduced would have proved and, indeed, did prove the existence of a de facto relationship between the parties. But exactly the same evidence was relevant to issues that arise under Property Relationships Act 1984, s 20(1)(b). Much of the evidence about when the plaintiff and defendant were together, whether they looked after one another, whether they shared an intimate relationship or not, whether their relationship was exclusive or not, and ways that they spent their time together falls into this category. This evidence would have been relevant to proving a de facto relationship. But it was also highly relevant to the question of whether each party contributed to the welfare of the other party. It seems to me that much of the same evidence would have been read and relied upon at trial even if the admission of a de facto relationship had been made much earlier. The material is so closely interwoven that it seems to me that there is no real basis for saying that the usual order, that costs follow the event, should not follow in this case.

1. The plaintiff also says that she should have a costs order in her favour because the denial of the existence of a de facto relationship was unreasonable. Although I found against the defendant on this issue and although it was admitted fairly late, for the reasons that I have said, namely the interwoven nature of the issues proving the relationship and proving contribution in a practical sense, it seems to me that much of the same evidence would have been given anyway.

1. Another basis upon which it is said that there should be an indemnity costs order in favour of the plaintiff, is that the plaintiff says that the defendant threatened her with violence if she did not end the proceedings. If such a thing happened it would be a contempt of Court or a crime and should be dealt with separately. I am not in a position to make findings about that on an application such as this and I decline to do so. If a contempt were proved it may have other serious consequences, including costs consequences. But it is appropriate that if such a thing is a real issue it should be dealt with separately.

1. Accordingly I will make an order that the plaintiff pay the defendant's costs of the proceedings on the ordinary basis.

Orders

1. Accordingly, the Court makes the following orders and directions:-

1. Order the parties do all such things and execute all such documents as are necessary to give effect to the sale by the mechanism provided for in these orders of the following properties commonly owned by parties (a) the Ambleside Property in Tasmania; and (b) the Bakers Beach Property in Tasmania and which properties shall be collectively be described as "the Tasmanian Properties".

2. Upon the Registrar in Equity providing a copy of these reasons and these orders to the President of the Law Society of Tasmania for the time being, with a request that such President nominate two persons suitable to act as trustees for sale of the Tasmanian Properties, and upon such President providing to the Registrar in Equity and the parties, the names of two nominees to act as trustees for sale, then the parties will re-list the proceedings with an appropriate application with a view to this Court appointing those two nominees as Trustees for sale of the Tasmanian Properties and making orders in the exercise of its original jurisdiction or in the exercise of powers under the Jurisdiction of Courts (Cross Vesting) Act 1987 to sell the Tasmanian Properties generally in accordance with the draft mechanism and draft orders set out in Schedule A hereto.

3. The Court notes that the property formerly owned by Dogstar Diamond Pty Ltd, the Second Cross-defendant namely the Suite 201, Macquarie Street property was sold at auction on 26 April 2012 by Michael Coleman of Harbour City Property for $260,000 following the mortgagee, Eclipse Prudent Mortgage Corporation ("Eclipse") taking possession on 20 April 2012.

4. The Court orders that after adjustments for the outstanding mortgage to Eclipse, outstanding levies due to the Owners Corporation the net proceeds of the Suite 201, Macquarie Street property are to be applied in the payment of outgoings, selling fees and disbursements as follows:

i. to discharge the loans to Kitty Winks Pty Ltd as per the Agreement dated November 2004;

ii. to repay to the cross-claimant the sum of $100,000 to be applied to her Macquarie Bank account or otherwise in respect of the line of credit which was obtained to partially fund the acquisition of the Suite 201, Macquarie Street property; and

iii. the balance, if any is to be transferred into the Second cross-defendant's bank account.

5. Upon the finalisation of the distribution of the sale of the Suite 201, Macquarie Street property an order that upon payment of all debts, taxes and other company expenses and the calling in of all debts, withdrawals and loans, any property of the Second cross-defendant is to be distributed equally to its shareholders, and the shares in the company itself will then be transferred to the defendant.

6. Order that the Defendant retain ownership of the property at Suite 207, Macquarie Street Sydney.

7. Order that the Defendant retain ownership of all the share capital in both Kitty Winks Pty Ltd and in the Sydney Foot & Ankle Clinic Pty Ltd.

8. It is noted that Lot 14, Jubilee Pocket, Queensland was sold on 18 April 2012 for $328,000 and that there were no proceeds of sale and payment of the agent's commission thereon was deferred to allow the settlement to proceed.

9. It is noted that Lot 13 Jubilee Pocket, Queensland was sold on 3 May 2012 for $305,000 and that from this sale the balance remaining of the YXO4 Mortgage, being $237,000.78, which were the monies used to purchase the Ambleside property, were paid out in full, so now Order that the remaining net proceeds be retained by the Defendant.

10. Order that all personal items and chattels including motor vehicles, clothing, art, furniture, animals, shares and superannuation monies which are in the possession of a party to these proceedings be retained by that respective party.

11. Order that if either party refuses or neglects to sign any necessary documents or instruments or to do any acts required or contemplated by these Orders with such failure continuing for 14 days, the Registrar in Equity of the Supreme Court of New South Wales is hereby appointed to execute such document or documents on behalf of the defaulting party.

12. Order that the plaintiff pay to the defendant the costs of these proceedings on the ordinary basis as agreed or assessed.

13. Stay the operation of these orders until 5.00pm on 6 August 2012.

14. Reserve for further consideration in respect of the implantation of these orders and grant liberty to apply in respect of that matter.

SCHEDULE A - PROPOSED ORDERS ON RE-LISTING FOR APPOINTMENT OF TRUSTEES FOR SALE

A. The parties shall within 28 days of the date of these orders attempt to agree upon a fair market price for the Trustees to sell each of the Tasmanian Properties and in default of such agreement, the fair market value of the Tasmanian Properties shall be determined by a licensed real estate valuer appointed by the Trustees; and such valuers' professional fees and disbursements shall be paid out of the proceeds of sale of the Tasmanian Properties.

B. To give effect to the sale of the Tasmanian Properties (a) the parties are restrained from contacting any selling agent of the Tasmanian Properties appointed by the Trustees and (b) the plaintiff shall vacate the Ambleside Property within 28 days of the date of these orders.

C. The Trustees may not, without the leave of the Court, sell either of the Tasmanian Properties for a price lower than its fair market value as determined by the valuer appointed pursuant to the mechanism in order A.

D. Upon completion of the sale of the Ambleside Property and after adjustment for outgoings, legal fees and disbursements, selling fees and commissions and other reasonable expenses relating to the sale of such property, the net proceeds of sale shall be divided equally by the parties after the reimbursement to the defendant of the sum of $120,000, such sum being in respect of the interest payments made by her to conserve the property and the sum of $87,400 being in respect of the defendant's part payment of Pioneer Mortgage YXO4 and after satisfying any costs orders made in these proceedings.

E. Upon completion of the sale of the Bakers Beach Property and after adjustment for outgoings, legal fees and disbursements, selling fees and commissions and other expenses relating to the sale of the property the net proceeds of sale shall be divided equally between the parties after satisfying any costs orders made in these proceedings.

F. Note that neither party is prohibited from bidding or negotiating for the purchase of either of the Tasmanian properties.

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Decision last updated: 29 April 2013