Richardson v Hough [1999] NSWSC 448

New South Wales Supreme Court CITATION : Richardson v Hough [1999] NSWSC 448 CURRENT JURISDICTION : Equity FILE NUMBER(S) : 1028/95 HEARING DATE(S) : 23/04/1999 JUDGMENT DATE : 12 May 1999

PARTIES : Anthony Charles Richardson (P) Elaine Margaret Maria Hough (D) JUDGMENT OF : Santow J

COUNSEL : M J Stevens (P) J Millar (D) SOLICITORS : John R Quinn & Co (P) Kearns & Garside (D) CATCHWORDS : COSTS — Offer of Compromise — Onus to demonstrate satisfaction of Pt 52A r22(6) — Offer construed as inclusive of costs where silent as to costs. Supreme Court Act s76 ACTS CITED : Supreme Court Rules Pt 22 r1A Pt 52A r21 r22 Associated Confectionery (Aust) Ltd v Mineral & Chemical Traders Pty Ltd (1991) 25 NSWLR 349 McLean v Commonwealth of Australia (NSWSC CASES CITED : Sperling J 22 August 1996 unreported) DECISION : Ordered that no order as to costs be made.

- 3 - IN THE SUPREME COURT OF NEW SOUTH WALES IN EQUITY

SANTOW J

No. 1028/95 ANTHONY CHARLES RICHARDSON Plaintiff ELAINE MARGARET MARIA HOUGH Defendant

JUDGMENT 12 May 1999

1 The only remaining matter is the appropriate orders to be made in relation to costs, following orders on the remaining issues made by Windeyer J on 13 November 1998. 2 At the conclusion of my judgment of 7 September 1998 I indicated that my present inclination "is to make no order as to costs" though giving leave to the parties to address me on costs if they wished. That has now occurred and the Defendant in particular has submitted that by virtue of the correspondence in DCX1 cost orders should be made, either under or as if in accordance with Pt 22 in conjunction with Pt 52A r21 of the Supreme Court Rules. The correspondence contains what is described as an "offer of compromise" first made by the Defendant on 11 October 1995 and expressed in these terms: "1. That the defendant pay to the plaintiff the sum of FIFTY THOUSAND DOLLARS ($50,000.00) in full satisfaction of the plaintiff's claim. 2. That this offer remains open for a period of twenty-eight (28) days from the date it is served upon the plaintiff." 3 On 17 January 1996 an identical offer was made save that $60,000 was substituted for $50,000. In the events that happened neither offer was accepted. The Defendant then points to the fact that what the Plaintiff derived from the Court's order, namely 42/87ths of the proceeds of sale of the Dapto property ($73,258.14 with interest), amounted to the sum of $35,366.14 and that this self-evidently is substantially less than the $50,000 offered. 4 The Defendant contends that the offer of compromise though silent as to costs and not expressed as required by Pt 22 r1A, as "prepared in accordance with this Division" must impliedly be understood as an offer that costs be dealt with, as they would have been dealt with, pursuant to Pt 52A r22(1). That is to say, in conformity with that rule, the Defendant was impliedly offering that costs would be paid by the Defendant on a party and party basis up to and including the day the offer was accepted and thereafter the Plaintiff would pay the costs. 5 The Defendant relies upon the decision in McLean v Commonwealth of Australia (NSWSC, Sperling J, 22 August 1996, unreported) as authority for the proposition that minor irregularities should not prevent the offer of compromise satisfying Pt 22. In that case, there was a mistaken reference to the Defendant when the Plaintiff was meant, and a reference to "plus costs". The latter expression was read in conformity with "the everyday language of the legal profession" as meaning "plus costs to the date of settlement on a party and party basis". 6 But significantly, in McLean (supra) the offer of compromise was actually expressed to be in accordance with Div. 1 of Pt 22 of the Supreme Court Rules. In the present case, no such expression can be called in aid to justify importing an intention for Pt 52A r22(1) to override the reference to "full satisfaction of the Plaintiff's claim", when the latter clearly included a claim for costs. 7 In my view the present offer of compromise as the Plaintiff contended could only be understood as the kind of offer which was "inclusive of costs" and thus incapable of being made pursuant to Pt 22; see McLean and Associated Confectionery (Aust) Ltd v Mineral & Chemical Traders Pty Ltd (1991) 25 NSWLR 349. Clearly enough, the Plaintiff, in its original claim, was seeking costs. Equally clearly the Defendant was offering a lump sum in full satisfaction of all of the Plaintiff's claim which necessarily includes costs. That is fatal to the offer being one which conforms to Pt 22 and it likewise follows that Pt 52A r22(6) could not apply automatically. However, the Defendant contends that as a matter of my discretion under s76 of the Supreme Court Act I should still treat the offer of compromise as in sufficient conformity with the underlying purposes of those rules as to exercise my discretion as if the rules applied. 8 It is however not in my view appropriate to do so for a further reason. The onus must lie on the Defendant as the party relying upon an offer of compromise to demonstrate that the conditions in Pt 52A r22(6) for an award of post-settlement costs to the Defendant are satisfied, that is to say, that the amount obtained by way of order or judgment on the claim is not more favourable to the Defendant than the terms of the compromise offer. Here, however, the claim also includes the return of various items of equipment of which, in my judgment of 7 September 1998 at 27, I said: "The various items of personalty to which the Plaintiff attributes substantial value and some of which has apparently been removed, whilst in part at least described as junk by the Defendant, may have indeed have some scrap value to the extent it can be now found and salvaged. Given that the Defendant attributes no real value to this property, it would not be inappropriate for the Plaintiff to have all of it as can now be found available to be taken away by him as his property, for what it might fetch. That indeed should be an element of any property adjustment." It follows, in my judgment, that the Defendant's contentions must fail. 9 Thus while I gave no quantified value for that personal property, I certainly contemplated that this properly may indeed have some scrap value. Thus it simply has not been established by the Defendant, on whom the onus rests, that the value of that personal property, when added to the amount ordered of $35,366.14, must fall below the $60,000 offered. 10 I do not however see any reason for departing from my earlier inclination to make no order as to costs and instead take up the Plaintiff's invitation and award him the costs. Both parties had some measure of success. It would be wrong to attempt a precise apportionment. Accordingly, I formally order that no order as to costs be made. **********