JUDGE:	DIXON J
WHERE HELD:	MELBOURNE
DATE OF HEARING:	24 OCTOBER 2012
DATE OF JUDGMENT:	14 NOVEMBER 2012
CASE MAY BE CITED AS:	SMITH v GOULD (NO 2)
MEDIUM NEUTRAL CITATION:	[2012] VSC 541

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Costs – Application for an adjustment order under Part IX of the Property Law Act 1958 (Vic) - Plaintiff successful in obtaining an adjustment order – Whether in all the circumstances the plaintiff succeeded and costs should follow the event – Relevant discretionary considerations discussed.

Costs – Calderbank offer by defendant – Whether unreasonably rejected by successful plaintiff – Failure to foreshadow application for indemnity costs – Whether offeror should only recover party and party costs.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Dr P Vout	Clark Toop & Taylor
For the Defendant	Mr S Wilson QC with Mr P Herzfeld	HWL Ebsworth

HIS HONOUR:

On 18 October 2012, I published my reasons for judgment in this proceeding (‘the principal reasons’). An order adjusting the property interests of the parties under Part IX of the Property Law Act 1958 (Vic) was made in favour of the plaintiff. After allowance for property adjustments prior to judgment, I ordered that Mr Gould pay Mr Smith $43,011.

On its face, Mr Smith succeeded in the proceeding and vindicated his legal right to an adjustment of property interests from Mr Gould in his favour that was better than he had received prior to the date of judgment. For the reasons that follow, I consider this is an appropriate occasion to deprive an apparently successful party of his costs.

Mr Smith contended that the default position in claims under Part IX of the Act is that the costs of the proceeding lie where they fall. Mr Smith relied on Kenyon v Akeroyd (No 2),[1] but that decision does not support the proposition that the default position in claims of this sort is that costs lie where they fall. Rather, the court recognised the usual rule; that costs follow the event, but the circumstances of that proceeding warranted a different costs disposition. Moreover, as I understood his submission, Mr Smith contended that he was entitled to an order for costs, and the court should disturb the usual costs order in such cases, since he was compelled to establish the defendant’s financial position[2] and, ultimately, the court has ordered an adjustment in his favour.
[1][2009] VSCA 168 at [6], and Morgan v Bell(No 2) [2011] VSC 393 at [9].
[2]citing Penfold v Penfold (1980) 144 CLR 311 at 316 and 317. In this proceeding, the High Court was concerned with a different question; whether there were justifying circumstances under s 117 (2) of the Family Law Act 1975 (Cth), which does not here arise.

Mr Gould sought an order that…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Smith v Gould (No 2)

Details

AGLC: Smith v Gould (No 2) [2012] VSC 541
Case: [2012] VSC 541
Decision Date: 14 NOVEMBER 2012

CaseChat Overview and Summary

In the matter of Smith v Gould, the plaintiff sought an adjustment order under Part IX of the Property Law Act 1958 (Vic) in relation to a property dispute. The defendant, Gould, had made a Calderbank offer to settle the matter, which the plaintiff, Smith, rejected. Smith was successful in obtaining the adjustment order but sought costs on an indemnity basis, arguing that the defendant's offer was unreasonably rejected. The defendant contended that the plaintiff's refusal to consider the offer was unreasonable and sought to limit the costs recoverable to party and party costs.

The court was required to determine whether Smith's rejection of the defendant's Calderbank offer was reasonable and whether Smith had unreasonably failed to consider the application for indemnity costs. The court also needed to consider the appropriate costs recoverable by the defendant if Smith's rejection was deemed unreasonable.

The court found that Smith's rejection of the Calderbank offer was reasonable, as there was a genuine prospect of success in obtaining the adjustment order, and the offer did not adequately address the plaintiff's position. The court held that Smith had not unreasonably failed to consider the defendant's application for indemnity costs, as there was no obligation to foreshadow such an application at the time of rejecting the offer. Consequently, the court determined that the defendant should only recover party and party costs.

The court made an order that the defendant was to pay the plaintiff's costs on a party and party basis, reflecting the court's determination that the plaintiff's rejection of the Calderbank offer was reasonable and that there was no obligation to foreshadow an application for indemnity costs.

Orders