Young v Lalic

[2006] NSWSC 379

CITATION:	Young v Lalic [2006] NSWSC 379 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	06/04/2006
JUDGMENT DATE :	6 April 2006
JURISDICTION:	Equity Division
JUDGMENT OF:	Brereton J
EX TEMPORE JUDGMENT DATE:	04/06/2006
DECISION:	I am, therefore, not persuaded that a costs order different from that which I pronounced in the judgment of 9 February 2006 should be made, and I decline to vary that order.
CATCHWORDS:	COSTS - where successful party did not ultimately press its claim on one of several bases pleaded - no clear and distinct substantial severable issue - counsel and parties should not be discouraged by risk of adverse costs order from making responsible judgment not to press every basis of claim pleaded
LEGISLATION CITED:	Contracts Review Act 1980 (NSW)
CASES CITED:	Beoco Limited v Alpha Laval Co Limited (1995) QB 137, 154 Cretazzo v Lombardi (1975) 13 SASR 4 Hughes v Western Australian Cricket Association (1986) ATPR 40-748 Mobile Innovations Limited v Vodaphone Pacific Limited [2002] NSWSC 423 NRMA Limited v Morgan (1999) NSWSC 768 Trade Practices Commission v Nicholas Enterprises Pty Limited (No 3) (1979) 28 ALR 201 Waterman v Gerling Insurance Company Pty Limited (2005) NSWSC 1111 Waters v P C Henderson (Australia) Pty Limited, (NSWCA 6 July 1994, unreported)
PARTIES:	Tracey Michelle Young (Plaintiff) Darinka Lalic (First Defendant) Michael Lalic (Second Defendant)
FILE NUMBER(S):	SC 3411/04
COUNSEL:	M K Rollinson (Plaintiff) J-J T Loofs (First Defendant) B C Kasep (Second Defendant)
SOLICITORS:	St James Legal Practice (Plaintiff) Brenton Banfield (First Defendant) Frontier Law Group (Second Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BRERETON J

Thursday 6 April 2006

3411/04 Tracey Michelle Young v Darinka Lalic & 1 Or

JUDGMENT (Ex Empore – On Application to Vary Costs Order)

1 HIS HONOUR: On 9 February 2006 I delivered a judgment, with which these reasons should be read, and made orders declaring that the land the subject of these proceedings was charged with payment to the plaintiff of the sum of $63,866, giving judgment that the defendants pay the plaintiff that sum, granting liberty to apply for further orders to give effect to the charge, dismissing a cross-claim brought by the first defendant against the second defendant, and ordering that the defendants pay the plaintiff's costs.

2 The plaintiff had alleged that there was a contract between herself, Mr Lalic and Mrs Lalic that bound Mrs Lalic to convey the Minto land to Mr Lalic and Ms Young; alternatively, that Mrs Lalic held the Minto land on trust for the benefit of Mr Lalic and Ms Young; and alternatively that Mrs Lalic was estopped from denying that Ms Young had an equitable interest in the Minto land. Ultimately, Mr Rollinson, who appeared for Ms Young, put her case chiefly on the basis of equitable estoppel, and submitted that the appropriate remedy was a charge for her expenditure; it was a case to that effect that was ultimately accepted, and a remedy to that effect which was ultimately given.

3 The principal basis of my decision was that whatever version of the facts was accepted, the $50,000 which had been deposited in Mrs Lalic's bank account, even if without her knowledge, remained beneficially the property of Ms Young, and it would be unconscionable for Mrs Lalic to retain it for her own benefit. Alternatively, I accepted an argument to the effect of the equitable estoppel which was advanced on behalf of the Ms Young. Mr Rollinson did not, in submissions, press the case which had been pleaded to the extent that it had been claimed that there was a contract or equitable obligation which entitled Ms Young to a half interest in the Minto land.

4 It is against that background that Mr Loofs for Mrs Lalic submits that the costs order which I made should be modified, to the intent that there be excepted from the defendants' obligation to pay the plaintiff's costs those costs thrown away by the abandonment of the claim for a transfer of a half interest in the land, which he submits the plaintiff should pay.

5 Correspondence between the parties since judgment was given has elucidated that there does not appear to be any part of the evidence adduced at the hearing which was attributable solely to the claim for a transfer of an interest in the land, but that Mrs Lalic contends that the costs of the cross-claim (which she brought to set aside the alleged contract, under the Contracts Review Act 1980 (NSW), and written submissions prepared in support of it would not have been incurred had the claim for a transfer of an interest in the land been abandoned earlier than it was. That cross-claim itself was filed in circumstances which are recorded in my judgment of 10 November 2005, following a refusal earlier that morning of leave to file a cross-claim. Thus, the cross-claim itself came on the scene at a very late stage in the course of the proceedings.

6 The starting point is that the plaintiff, Ms Young, having been successful, she is entitled to her costs, and it is for the defendants to establish a basis for departing from that rule. It is true that a successful plaintiff who has failed on certain issues may be deprived of costs on those issues, or even ordered to pay the defendant's costs of them [Hughes v Western Australian Cricket Association (1986) ATPR 40-748, 48136], but this course is one on which the Court embarks with hesitancy [Mobile Innovations Limited v Vodaphone Pacific Limited [2002] NSWSC 423,[4]; Cretazzo v Lombardi (1975) 13 SASR 4, 16; Trade Practices Commission v Nicholas Enterprises Pty Limited(No 3) (1979) 28 ALR 201; Waters v P C Henderson (Australia) Pty Limited, NSWCA 6 July 1994, unreported; NRMA Limited v Morgan (1999) NSWSC 768]. From these cases emerge consistent themes, first, that justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues which might be material to the case, but secondly that it may be appropriate to award costs of a separate issue where a clearly definable and separate issue on which the otherwise successful party failed has occupied a significant part of the trial.

7 Although the claim for a transfer of land represented the plaintiff's claim at its highest, and although the plaintiff succeeded to a significantly lesser extent than that, this is not a case in which it can possibly be said that the defendants were the true victor, with the plaintiff only salvaging a modicum of success from a late amendment [cf Beoco Limited v Alpha Laval Co Limited (1995) QB 137, 154 and the cases there cited; see also Waterman v Gerling Insurance Company Pty Limited (2005) NSWSC 1111].

8 Ultimately, the principal basis upon which I granted relief was one which, though related to that which had been pleaded, differed in some respects from it, in that it depended essentially on a trust resulting from the advance of the $50,000 unaccompanied by any intention of conveying beneficial title to it. This, in itself, illustrates that given the difficulties involved in the true legal characterisation of the unusual factual circumstances surrounding that advance, there was importance in propounding as diverse a range of legal bases for recovery as were reasonably arguable. This case was therefore, if not peculiarly, at least one in which it may fairly be said that the first theme to which I have referred above, namely that justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case, is applicable.

9 Moreover, the correspondence and the course of argument has established that while there are some aspects of the case, namely the cross-claim and the submissions on the cross-claim, which might be referrable only to the part of the plaintiff's claim which was abandoned, it cannot be said that there was a clearly definable and severable issue which "has occupied a significant part of the trial". None of the evidence related to the cross-claim alone. Moreover, to the extent that discretionary considerations arise, the circumstance that the cross-claim came as late as it did and in the circumstances in which it did weighs slightly at least in the balance against making costs incurred in respect of it the subject of a separate and special costs order.

10 Finally, I would add that the circumstance that the plaintiff's claim was not ultimately pressed at its highest, and that the contract claim was "abandoned", is not to be taken as a concession that it was unarguable. Counsel and parties should not be discouraged by the risk of an adverse costs order from making responsible judgments, as Mr Rollinson did here, not to press every ground, argument and claim once the evidence has emerged and been tested.

11 I am, therefore, not persuaded that a costs order different from that which I pronounced in the judgment of 9 February 2006 should be made, and I decline to vary that order.

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05/05/2006 - Corrected spelling of "Michelle" - Paragraph(s) Heading