Taddeo v Taddeo (No. 2) - [2010] SADC 84

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Application)
TADDEO v TADDEO (NO. 2)
[2010] SADC 84
Judgment of His Honour Judge Nicholson
28 June 2010
PROCEDURE - COSTS
District Court Act 1991; District Court Civil Rules 2006; Domestic Partners Property Act 1996, referred to.
Taddeo v Taddeo [2010] SADC 61; M, DA v P,N (No. 2) [2008] SADC 180; Kardos v Sarbutt (No. 2) (2006) NSWCA 206; Dunstan v Rickwood (No. 2) (2007) NSWCA 266, considered.

TADDEO v TADDEO (NO. 2)
[2010] SADC 84

In the principal judgment in these proceedings[1] I ordered, inter alia, that the defendant is to pay the plaintiff a lump sum of $40,000. The proceedings concerned a claim by the plaintiff to an entitlement to 50% of the Lomman Avenue property, or its value, being the property in which the plaintiff and the defendant had lived together for 24 years or so until on or about 15 October 2007. The plaintiff’s claim was based upon either an equitable interest by way of a constructive trust, or in the alternative, an appropriate division of joint property pursuant to ss 9 and 10 of the Domestic Partners Property Act 1996.
[1] Taddeo v Taddeo [2010] SADC 61.
The plaintiff failed in her attempt to establish an equitable interest. She did demonstrate an entitlement, in accordance with the provisions of the Domestic Partners Property Act, to an order in her favour for an adjustment of the joint property. However, she failed to demonstrate an entitlement to anything like that which she claimed and, as I have indicated, obtained an order for a lump sum payment of only $40,000.
The plaintiff has sought an order that the defendant pay her costs of the proceedings on a party and party basis. This order is opposed by the defendant who has submitted that either no order as to costs should be made, that is, each party should bear their own costs or, if any other order were to be made, there should be a costs order in favour of the defendant for some or all of the costs incurred.
Proceedings in equity for relief based on a constructive trust and proceedings for division of property pursuant to the Domestic Partners Property Act fall within the civil jurisdiction of this Court. As far as the Domestic Partners Property Act is concerned, there is no statutory provision dealing with the issue of costs. In these circumstances, ss 42(1) of the District Court Act 1991 applies. Subject to ss 42(2) and the Rules of Court, costs in any proceedings in the civil division are to be in the discretion of the Court.
District Court Rule 6R 263(1) provides that, as a general rule, costs follow the event. A number of exceptions (which apply subject to the power of the Court to rule to the contrary) are set out in 6R 263(2). One such exception is set out in paragraph (h):
in an action founded on a claim for damages or any other monetary sum (other
than a motor accident claim or a claim for defamation) general costs of action
are not to be awarded in favour of the successful plaintiff unless the amount
awarded exceeds $15 000.
It may be that the plaintiff’s claim in the present proceedings is not properly categorised as falling within paragraph (h). However, if it were to fall within paragraph (h) the exception there set out would not apply because the plaintiff has obtained an award in excess of $15,000. There is no other exception in 6R 263 which might apply. However, the general discretion provided for by ss 42(1) of the District Court Act is also subject to the provisions of ss 42(2) which provides:
If—
(a)an action for the recovery of damages or any other monetary sum is brought in the Court; and
(b)the action might have been brought in the Magistrates Court; and
(c)the plaintiff recovers less than an amount fixed by the rules for the purposes of this paragraph,
no order for costs will be made in favour of the plaintiff unless the Court is of the
opinion that it is just in the circumstances of the case that the plaintiff should recover
the whole or part of the costs of action.
Given that this is not a case where the plaintiff has recovered less than an amount fixed by the Rules, in particular 6R 263(2), and is not a matter that would fall within the jurisdiction of the Magistrates Court,[2] there still would appear to be no fetter upon the Court’s general discretion with respect to costs.
[2] The Magistrates Court has jurisdiction over applications that relate to property valued at $80,000 or less, s 3 of the Act.
I agree with his Honour Judge Beazley in M, DA v P,N (No.2)[3] that in cases concerning the De Facto Partners Property Act (now the Domestic Partners Property Act) there is no rule or principle that, given the nature of the relief sought in such matters, namely the adjustment of property rights between two domestic partners, the starting point should be that each party bears their own costs of action. To the extent that such a rule or principle was propounded with respect to analogous legislation in New South Wales in Kardos v Sarbutt (No. 2),[4] any such rule or principle was rejected in a subsequent court of appeal decision in Dunstan v Rickwood (No. 2).[5] Nevertheless, in my view a number of the considerations relied upon by the New South Wales Court of Appeal in Kardos remain relevant to the discretion as to the proper costs order, if any, to be made where the litigation primarily concerns an adjustment of joint property of domestic partners. These potential considerations include:
(i)the quantum of any order for adjustment as made;
(ii)an analogy with matrimonial proceedings in which the starting point (by legislation) is that each party bears his or her own costs;
(iii)an analogy with partnership proceedings and orders for partition and sale of real property in which ordinarily costs are paid out of the joint property;
(iv)whether or not, or the extent to which, that party has been wholly or substantially successful or has bettered an offer of compromise;
(v)the conduct of the parties in the proceedings and in particular whether one has been disproportionately responsible for the incurring of costs through the manner in which the proceedings were conducted.
[3] [2008] SADC 180.
[4] (2006) NSWCA 206.
[5] (2007) NSWCA 266.
In the present proceedings, the defendant has acknowledged that ordinarily costs should follow the event. However, through her counsel, she put a number of submissions to the effect that the relative “event” here should be characterised, or perhaps re-characterised, so as to acknowledge that, in fact, the plaintiff did not succeed or only succeeded to a very modest degree. I reject the submission that the plaintiff did not succeed. In my view, she did. She obtained an award in her favour of $40,000 and her only means of doing so was to prosecute her claim in these proceedings. However, I recognise that she recovered considerably less than the amount she claimed.
I accept that this was a matter where emotion and bitterness towards each other ultimately came to dominate the parties’ relationship, notwithstanding that it was one of elderly mother and adult daughter and to dominate their respective approaches to the litigation. The plaintiff was adamant from beginning to end that she was entitled to 50% of the house at Lomman Avenue. The defendant was adamant from beginning to end that the plaintiff had no such entitlement. No formal offers were filed and the only informal offer of which the Court is aware was a “Calderbank” letter sent by the plaintiff which made no suggestion of compromise.
Initially, the plaintiff pleaded in equity only. However, prior to trial the plaintiff amended her pleadings to include a claim under the Domestic Partners Property Act by way of alternative. The applicability of this legislation was vigorously contested by the defendant on the grounds first, that it could not apply to an elderly mother residing with a middle aged daughter as a matter of law, second, that if it did, it did not apply on the facts, and third, that if it did, the relationship came to an end at a time prior to the earliest date which attracted the jurisdiction of the Act. The defendant failed with these contentions.
Nevertheless, from well before the commencement of the trial it must have been apparent to both plaintiff and defendant that a possible, perhaps likely, outcome of the trial would be a monetary order following an adjustment of property interests in an amount greater than zero (for which the defendant contended) but less than the amount of 50% of the value of the residential property (for which the plaintiff contended).
Furthermore, the plaintiff failed on a number of significant issues. She failed to demonstrate on the facts an entitlement to equitable relief as sought. She failed to demonstrate that she had made any significant contribution towards the acquisition of the residential property. I accept the defendant’s submission that the defendant succeeded on most of the factual issues upon which the parties joined issue in the pleadings. I also accept that having found the Act to apply, I moved to a property adjustment on a basis that, at no time, had been contended for by the plaintiff and that I did this because the plaintiff had failed to prove that she had made contributions to the parties joint assets that would give rise to an entitlement to an order for 50% of the value of the residential premises.
In these circumstances, an order other than the “usual” order is warranted. The plaintiff is the party who on the whole has succeeded. However, she failed with respect to significant issues between the parties and maintained a claim, without any indication of being prepared to compromise, that was out of all proportion to that with which she ultimately succeeded. For these reasons, the plaintiff should have only a proportion of her costs. In my view, the justice of the case would best be served by an order that the defendant is to pay 50% of the plaintiff’s costs of the proceedings as agreed, or if not agreed, taxed, on a party and party basis.
The plaintiff argued that a distinction should be drawn between the costs of trial and the costs of preparation for trial and that if there were to be any reduction in the plaintiff’s costs, if should be confined to the costs of trial. I am not persuaded that there is any basis, on the information before me, for such a distinction. I see no reason to disturb the various interlocutory costs orders made by a master in this matter.
At the time I heard submissions from the parties with respect to costs, I also heard submissions with respect to interest payable and having regard to the intimation given by me in this respect in paragraph [144] of the principal judgment. After considering those submissions, I now propose to allow a lump sum of $6,600 in lieu of interest for the period of 15 October 2007 to the date of judgment (11 May 2010).
Orders
In addition to the orders made on 11 May 2010 as set out in paragraphs (i) – (iv) of paragraph [143] of the principal judgment, I make the following further orders:
(i)The defendant is to pay the plaintiff the amount of $6,600 by way of a lump sum in lieu of interest for the period 15 October 2007 to date of judgment (11 May 2010).
(ii)the defendant is to pay the plaintiff 50% of her costs of the proceedings, such costs, if not agreed, to be taxed on a party and party basis.