Sioutos v Sioutos

[2020] NSWSC 1081

Supreme Court

New South Wales

Medium Neutral Citation:

Sioutos v Sioutos [2020] NSWSC 1081

Hearing dates:

On the papers

Date of orders:

17 August 2020

Decision date:

17 August 2020

Jurisdiction:

Equity

Before:

Darke J

Decision:

No order as to costs, to the intent that each party bear its own costs of the proceedings.

Catchwords:

COSTS – proceedings between co-owners of property – proceedings arise in a matrimonial context – no matrimonial proceedings on foot when proceedings commenced – defendant commences proceedings in Family Court – defendant seeks dismissal, stay or transfer of proceedings – accepted by parties that it would be appropriate to transfer proceedings to Family Court – whether plaintiff should be ordered to pay the defendant’s costs – where defendant incurred costs unnecessarily – whether appropriate that each party bear its own costs

Legislation Cited:

Conveyancing Act 1919 (NSW), s 66G

Family Law Act 1975 (Cth)

Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth), s 5

Category:

Costs

Parties:

Kathryn Leigh Sioutos (Plaintiff)
John Sioutos (Defendant)

Representation:

Solicitors:
Brander Smith McKnight (Plaintiff)
Angelkov & Co Solicitors and Attorneys (Defendant)

File Number(s):

2020/97659

Publication restriction:

None

Judgment

1. These proceedings were commenced on 30 March 2020 by the plaintiff, Kathryn Sioutos, against the defendant, John Sioutos. The plaintiff claimed relief pursuant to s 66G of the Conveyancing Act 1919 (NSW) in respect of a property in Kirrawee that is co-owned by the parties. It is evident from the affidavit in support of the Summons that the dispute in relation to the property arises in the context of a matrimonial dispute between the parties, and in circumstances where the property had been acquired with financial assistance provided by means of a loan from the plaintiff’s parents. At the time of commencement of the proceedings there were no other proceedings on foot concerning the matrimonial dispute or the loan from the plaintiff’s parents.

2. The Summons was returnable on 21 April 2020 before the Registrar. The proceedings had been placed in the General List rather than the Real Property List. On that occasion directions were made for the service of evidence, and the matter was adjourned for directions in the Real Property List on 12 June 2020. On 10 June 2020, the matter was adjourned by consent to 26 June 2020 so as to enable the parties “to undertake settlement discussions and/or come to an agreement on appropriate case management orders”.

3. On 16 June 2020 the defendant commenced proceedings against the plaintiff in the Family Court of Australia.

4. There was no appearance by either party in relation to the directions hearing on 26 June 2020. That is to say, neither party responded to the notice from the Court concerning the arrangements for that directions hearing which was envisaged to take place on the papers or, if necessary, by telephone. In those circumstances, the matter was adjourned to 7 August 2020.

5. On 18 June 2020 the defendant filed, without leave (and thus contrary to the Real Property List Practice Note), a Notice of Motion seeking a dismissal of the proceedings, a stay of the proceedings pending the determination of the Family Court proceedings, or an order for the transfer of the proceedings to that court pursuant to the Cross-Vesting legislation. On 19 June 2020 the Court granted leave for the filing of the motion.

6. Also on 18 June 2020, the defendant filed a Cross-Claim by way of Cross-Summons. The interim and final relief claimed included various orders under the Family Law Act 1975 (Cth). It should be noted that the Cross-Summons was filed out of time and not pursuant to any grant of leave. A lengthy and detailed affidavit was filed by the defendant on 18 June 2020, in support it seems of both the Notice of Motion and the Cross-Summons.

7. On 8 July 2020 the plaintiff filed a Response in the Family Court proceedings. Curiously, the interim relief she claimed included orders to effectively stay the proceedings in this Court other than to take steps to either discontinue them, seek their dismissal or adjournment, or seek an order for their transfer. The plaintiff also sought interim orders for the sale of the property.

8. In these circumstances, I expressed the view at the directions hearing on 7 August 2020 that it appeared to be in the interests of justice that the proceedings be transferred to the Family Court. The representatives of each party essentially expressed agreement to that course, and in particular to the Court making an order for transfer under the Cross-Vesting legislation. The parties remained in dispute however concerning the question of costs. Upon being informed that the Family Court proceedings were next before that court on 21 August 2020, the Court indicated that it would make a transfer order prior to that date, after dealing with the question of costs on the papers. In accordance with directions made on that occasion, the parties provided written submissions on 14 August 2020, supported by various documents in the nature of communications between the solicitors acting in the matter. The Court has read and considered those submissions and supporting documents.

9. In short, the position of the plaintiff is that there be no order as to the costs of the proceedings, and the position of the defendant is that the plaintiff should be ordered to pay his costs of the proceedings.

10. In summary, the plaintiff submitted that the general principle to apply in circumstances where proceedings are not determined following a hearing on the merits and it cannot be said that one party has simply capitulated, is that each party bears its own costs unless it can be seen that a party has acted unreasonably in bringing or defending the proceedings. The plaintiff submitted that her conduct in bringing the proceedings in circumstances where no Family Court proceedings had been commenced, and her parents were proposing to enforce a mortgage over the property, was reasonable. It was submitted that her conduct thereafter, in seeking advice once the Family Court proceedings had been commenced and making offers of settlement was also reasonable.

11. In summary, the defendant submitted that the proceedings seeking s 66G relief were commenced unexpectedly such that there was no opportunity to resolve the claim prior to the institution of proceedings and no opportunity to avoid the incurring of costs. The defendant submitted, somewhat repetitively, that he was left with no choice but to incur significant costs to defend the proceedings. The defendant pointed to a letter sent to the plaintiff’s solicitors on 28 April 2020 in which it was stated that the issues between the parties in relation to their property were clearly a matrimonial cause. It was foreshadowed in the letter that the defendant would be seeking a stay of the proceedings to enable the defendant to pursue proceedings in the Family Court, or alternatively would be seeking an order for transfer of the proceedings to that court. The defendant submitted that the plaintiff, instead of consenting to a stay or transfer, served her evidence on 1 May 2020, such that he had no choice but to incur the costs involved with the Cross-Summons, the Notice of Motion and the affidavit in support.

12. I note that in a letter dated 7 July 2020 the defendant’s solicitor stated that costs of more than $32,000 had been incurred in the matter to that time. It was stated in the defendant’s submissions that the costs incurred are now approximately $43,500.

13. The parties made various offers of settlement which were not accepted. For instance, the defendant made an offer on 24 June 2020 to the effect that the plaintiff consent to a dismissal of the Summons and agree to pay the defendant’s costs of the Summons and the Notice of Motion; and on 1 July 2020 the plaintiff made an offer to the effect that the proceedings be dismissed with no order as to costs. In the 7 July 2020 letter referred to above, the defendant indicated that he would be prepared to accept 75% of the costs incurred of about $32,000.

14. I accept that it was not unreasonable of the plaintiff to commence these proceedings for s 66G relief in respect of the co-owned property. Despite the clear matrimonial context in which the dispute concerning the property arose, there were no matrimonial proceedings on foot at the time of commencement. The jurisdiction of this Court was properly invoked.

15. Of course, whilst it may not have been inevitable, it must always have been likely that proceedings concerning the broader matrimonial dispute would be instituted. The letter sent by the defendant’s solicitor to the plaintiff’s solicitor on 28 April 2020 would have confirmed that such proceedings were soon to be commenced by the defendant in the Family Court. In these circumstances, it is unfortunate that the parties did not then co-operate in such a way as to ensure that the disputes between them were litigated in the most appropriate and cost-effective manner possible. That co-operation appears to have been absent.

16. Nevertheless, I am unable to accept that in the face of evidence served by the plaintiff on 1 May 2020, as required by the directions made by the Registrar, the defendant had no choice but to incur the costs involved with the Cross-Summons, the Notice of Motion and the affidavit in support. In my opinion the defendant, having commenced proceedings in the Family Court on about 15 June 2020, should have filed only a Notice of Motion seeking a stay or transfer of the proceedings in this Court, supported by a relatively simple affidavit that, by reference to the documents filed in the Family Court, showed that either a stay or transfer was appropriate. Instead of taking that straightforward and less expensive course, the defendant filed a Cross-Summons, without leave, supported by the lengthy and detailed affidavit referred to earlier. The nature of the Cross-Summons, and much of the content of the affidavit, is an example of the very kind of duplication of effort, and wasted costs, that is commonly encountered when parties to a dispute are litigating in two places. The avoidance or reduction of waste of that kind is one of the central reasons which justify the making of stay orders or transfer orders in that situation.

17. I do not think that it was, or is, reasonable of the defendant to effectively insist that the plaintiff agree to a costs order in respect of all of the defendant’s costs. Such an order would include a liability to pay substantial costs which in my view were unnecessarily incurred by the defendant. I therefore reject the defendant’s application for a comprehensive costs order in his favour.

18. I have given consideration to whether it might be appropriate for a more limited costs order to be made in favour of the defendant, such as an order limited to the costs of the filing of the Notice of Motion and an amount of costs equivalent to the costs of a relatively simple affidavit in support. However, when regard is had to the fact that the plaintiff did not actively oppose the motion and indicated on 1 July 2020 that she was prepared to have the proceedings dismissed with no order as to costs, and further that not insignificant costs would no doubt have been incurred by the parties on the present costs application where the defendant has essentially failed, I consider that the appropriate exercise of the Court’s discretion as to costs is to make no order as to costs, to the intent that each party bear its own costs of the proceedings. The Court will so order. The Court will also make the order, as indicated on 7 August 2020, transferring the proceedings to the Family Court of Australia pursuant to s 5 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth).

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Decision last updated: 17 August 2020