Stokes v McCourt (Costs)

[2014] NSWSC 63

Supreme Court

New South Wales

Medium Neutral Citation:

Stokes v McCourt (Costs) [2014] NSWSC 63

Hearing dates:

04/02/2014, 05/02/2014 and 06/02/2014

Decision date:

06 February 2014

Jurisdiction:

Equity Division

Before:

McDougall J

Decision:

On plaintiff's motion: no order as to costs up to conclusion of first day of hearing. Tutor to pay plaintiff's and defendant's costs thereafter on the indemnity basis. Certain costs to set off. Reserve costs of defendant's motion.

Catchwords:

PROCEDURE - costs - recovery of costs - whether tutor may be a "party" for the purposes of making costs orders - whether costs orders may be made between tutor and person under legal incapacity

PROCEDURE - costs - departing from the general rule - order for costs on indemnity basis - whether order for indemnity costs appropriate where proceedings drawn out unnecessarily

PROCEDURE - costs - set-off - whether costs order against tutor can be set off against costs order in favour of tutor made when tutor was conducting litigation on person under legal incapacity's behalf

Legislation Cited:

Civil Procedure Act 2005 (NSW)
Uniform Civil Procedure Rules (NSW) 2005

Cases Cited:

Stokes (by a tutor) v McCourt [2013] NSWSC 1014
Yakmor v Hamdoush (No 2) (2009) 76 NSWLR 148

Category:

Costs

Parties:

Vanessa Therese Marge Veronica Stokes (Plaintiff)
Matthew Robert Ernest McCourt (Defendant)
Vanessa Therese Marge Veronica Stokes by her tutor Paul Kenneth Stokes

Representation:

Counsel:
A Cotter-Moroz (Plaintiff)
J Bunning (Defendant)
J Dupree (Plaintiff's Tutor)
Solicitors:
Trenches, McKenzie Cox Solicitors (Plaintiff)
Wiltshire Lawyers (Defendant)
Somerville Laundry Lomax (Plaintiff's Tutor)

File Number(s):

2010/148874

Judgment (ex tempore - revised 6 feburary 2014) - On costs; see transcript p 165

1. HIS HONOUR: When the present hearing commenced three days ago, on 4 February 2014, I noted that there were two notices of motion. One was filed by the plaintiff in her personal capacity seeking the removal of her father as tutor in the proceedings. The other was filed by the defendant, seeking a stay of certain orders made for valuation of property.

1. I dealt with the plaintiff's notice of motion yesterday. I will not repeat any of the history or other matters set out. It is sufficient to note that I concluded that, after what seemed to me to be excessively drawn out and adversarial argumentation, I made an order for removal of the tutor.

1. In relation to the defendant's notice of motion, the Court has been informed that the parties have agreed on what is to be done. Accordingly, there is no need to do anything other than make the orders sought by consent (on the assumption that they appear to be proper). I will do that after dealing with the question of costs.

1. The defendant's notice of motion for a stay sought specifically (prayer 5) "that the issue of costs be reserved". Mr Bunning of counsel, for the defendant, said that his client did not seek any other order in respect of that notice of motion.

1. The plaintiff and the defendant each sought an order that the tutor pay their costs of the plaintiff's notice of motion for his removal. They sought, further, that those costs be assessed on the indemnity basis. Many irrelevant matters, and a few of some relevance, were put forward in relation to the latter aspect of the applications.

1. In circumstances where the hearing has taken already what in my view is an absurd length of time for resolution of the particular disputes that were put before the Court, and where I have indicated in the course of argument my view on many of the submissions that were put, I do not propose to give lengthy reasons on the costs applications.

1. The starting point is that although as a matter of strictness a tutor may not be a "party", he or she is nonetheless to be regarded as a party for the purpose of making costs orders. That follows (although in the context of costs between plaintiff and defendant, not between tutor and person under incapacity) from the decision of the Court of Appeal in Yakmor v Hamdoush (No 2) (2009) 76 NSWLR 148. See, in particular, Giles JA (with whom Ipp and Tobias JJA agreed) at [44], [45].

1. In any event, even if a tutor were not to be regarded as a "party" for the purposes of making costs orders (or if the decision in Yakmor is properly to be distinguished for the reason that I alluded to parenthetically in the previous paragraph), there is no doubt, and it was properly accepted for the tutor, that the Court's powers under s 98(1) of the Civil Procedure Act 2005 (NSW) would extend to authorise it, if it thought fit to do so, to make the orders sought.

1. The question is one of very considerable difficulty. As I recorded yesterday, the tutor was appointed either effectively by consent, or perhaps more accurately without opposition. There were very good reasons indeed why the tutor was appointed. No-one says otherwise. The application was put not on the basis that the tutor should never have been appointed but, rather, on the basis that the condition of legal incapacity which justified the appointment no longer existed.

1. In that regard, the evidence satisfies me that at least up until the first day of the hearing, there were serious questions as to whether the plaintiff did still suffer under the relevant legal incapacity. The evidence originally relied upon in support of the application was brief to the point of being almost entirely unhelpful. That was rectified only a week or two before the hearing, when the plaintiff procured reports from Professor Petchkovsky, those reports being in substance in response to the report procured for the tutor from Dr Nielssen.

1. Although I came to the view yesterday that I saw problems in Dr Nielssen's analysis, and preferred the analysis of Professor Petchkovsky, it could not be said, and I don't think anyone has submitted, that the report of Dr Nielssen did anything other than raise real issues that needed to be considered by the Court.

1. To my mind, the application would have been very difficult were there no effective contradictor. The Court would have been put in the position of hearing effectively from one side only. Certainly, the defendant would not have contradicted the application. He in fact supported it.

1. Thus, the tutor seems to me to have played an important role. In circumstances where there were, as I have said, real concerns as to the plaintiff's mental condition, it was important that the Court hear from someone who could put the other side of the question. The tutor did that, through tendering Dr Nielssen's report, making Dr Nielssen available for cross-examination, and (through counsel) undertaking cross-examination of Professor Petchkovsky.

1. If the matter had gone no further - that is to say, if the application had been pursued with reasonable despatch and in a way that focused on the substantive issue of legal incapacity - it could be said that the tutor had performed an important function, and should not be punished in costs for having done so. However, an application that could and in my view should have been resolved easily within one day was dragged out - this is now the third day - in my view substantially because of the adversarial and inappropriate way that it was conducted on behalf of the tutor.

1. It follows that the considerations relevant to the first day ceased to exist once that day ended without the issue of incapacity having been resolved.

1. In those circumstances, dealing with the plaintiff's notice of motion, I think that the appropriate order is that each party should bear their own costs up until and including the end of 4 February 2014 but that, thereafter, the tutor should pay costs.

1. As between the tutor and the plaintiff, the tutor should pay costs because, the application having been drawn out so unnecessarily, the plaintiff was put to additional expense to vindicate her position, and because the ultimate outcome, in terms of UCPR r 42.1, was in her favour.

1. As between the tutor and the defendant, the position is a little less clear. However, I take into account a number of considerations. One is that the defendant was, properly, named as a party affected by the plaintiff's notice of motion. Another is that the defendant had to sit through the full time taken for the motions. Yet another is that when the matters were before Hallen J on 15 October 2013, and His Honour ordered that both notices of motion be referred to the Registrar for allocation of a hearing date, His Honour warned the tutor expressly (and, it appears, not for the first time) "that the costs associated with the present issues, are costs that he may be liable to bear, personally, depending upon the result of [the plaintiff's] Notice of Motion". See [27(d)] of his Honour's reasons for judgment given on 15 October 2013.

1. In those circumstances, it seems to me, the tutor pressed his opposition to the plaintiff's notice of motion at his own risk as to costs, in circumstances where it was clear that the defendant would be represented.

1. For the reasons I have indicated, I do not think it appropriate to make any order for costs for what might be regarded as reasonably helping the Court to come to a conclusion by drawing relevant material to the Court's attention and by relevant (and limited) cross-examination of the experts. But in my view, the way in which the application was conducted for the tutor went well beyond that.

1. As a result, the defendant has been put to the expense of three days in court rather than one, waiting for his notice of motion to be dealt with, in circumstances where it is self-evident (and the defendant's notice of motion in any event makes it clear) that resolution of the defendant's notice of motion necessarily had to await resolution of the plaintiff's notice of motion.

1. The stay of the orders that the defendant's notice of motion seeks had to be agitated once the plaintiff's notice of motion had been dealt with because the stay ordered by Hallen J on 15 October 2013 ([27(b)] of his Honour's reasons) extended only up until the determination of the plaintiff's notice of motion.

1. In those circumstances, I conclude that the defendant should have his costs for the second and third days.

1. That leads to the question of indemnity costs. A vast amount of material was referred to in the course of submissions. The relevance of most of it is not apparent. I do not propose to waste time by referring to it. The simple point seems to me to be that the very same reasons that justify making costs orders in respect of the second and third days likewise justify making the order that those costs be assessed on the indemnity basis and that they be assessed and payable forthwith.

1. In those circumstances, I make the following costs orders:

1. On the plaintiff's notice of motion dated 26 September 2013, make no order as to costs up until and including 4 February 2014.

2. On that notice of motion, order the tutor to pay the costs of the plaintiff and the defendant incurred after 4 February 2014 in respect of that notice of motion.

3. Order that those costs be assessed on the indemnity basis.

4. Order that costs be assessed and paid forthwith.

5. On the defendant's notice of motion dated 2 October 2013, reserve costs.

1. I order that the exhibits on the application be handed out save that in the case of exhibits 2 and 3, being documents produced under subpoena, they will be returned to the person producing them.

1. I direct that the exhibits tendered at the interlocutory hearing on 17 May 2013 or thereafter be handed out.

1. I direct that the two volumes of the tutor's court book be uplifted by the tutor's legal representatives.

[Counsel addressed.]

1. The tutor seeks an order that the costs payable by him pursuant to the orders I have just pronounced are to be set off (as between him and the defendant) against costs that Lindsay J ordered the defendant to pay, effectively for the benefit of the tutor, in his reasons for judgment of 31 July 2013 ([2013] NSWSC 1014).

1. Mr Bunning opposes that, on the basis that those costs were incurred in the proceedings and that the present costs effectively flow from the tutor's personal conduct.

1. It might be thought, from the fact that Lindsay J ordered the costs to be paid on the indemnity basis and be enforced forthwith, that His Honour perceived conduct issues on the part of the defendant underlying those orders. That becomes apparent when one considers his Honour's reasons at, in particular, [161].

1. While the tutor was conducting the litigation for the plaintiff, he had a personal liability for any adverse costs orders that might be made, and also, as a matter of necessity, a liability to pay costs incurred on the plaintiff's behalf while acting as tutor. Common justice seems to me to require that the right that he has against the defendant should be set off against the obligation that he owes to the defendant under the costs orders of Lindsay J and of me.

1. Accordingly, I order that the costs payable by the tutor to the defendant pursuant to the orders I have just pronounced be set off against the costs payable by the defendant for the benefit of the plaintiff and the tutor under the orders of Lindsay J made on 31 July 2013.

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Decision last updated: 14 February 2014