Whicker v Pettiford [2004] NSWSC 1257

New South Wales Supreme Court

CITATION : Whicker v Pettiford [2004] NSWSC 1257 HEARING DATE(S) : 9 November and 3 December 2004 JUDGMENT DATE : 22 December 2004 JURISDICTION: Equity Divsion JUDGMENT OF : Master McLaughlin at 1 DECISION : (1). I order that the Defendant pay the costs of the Plaintiff of the proceedings, such costs to be on the party and party basis up to 11am on 19 November 2003, and on the indemnity basis thereafter. (2). It is noted that the costs referred to in order 1 hereof do not include the costs of and incidental to the notice of motion filed by the Defendant on 12 June 2002 or the application in respect to such costs made by the Defendant by notice of motion filed on 17 November 2004.

CATCHWORDS : Costs. Offer of compromise. Consequences of failure by Defendant to accept. Whether Court should otherwise order. LEGISLATION CITED : Supreme Court Rules 1970 (New South Wales) PARTIES : Susan Desirée Whicker (Plaintiff) Colleen Nina Pettiford (Defendant) FILE NUMBER(S) : SC 1697 of 2002 COUNSEL : Judith Housego (Plaintiff) Lynette Judge (Defendant) SOLICITORS : Robinson & Mason (Adelaide) (Plaintiff) Sydun & Co (Defendant)

- 7 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

MASTER McLAUGHLIN

Wednesday, 22 December 2004

1697/02 SUSAN DESIRÉE WHICKER –v- COLLEEN NINA PETTIFORD JUDGMENT 1 MASTER: I am here dealing with the costs of the proceedings. 2 On 27 August 2004 I published my reasons for judgment in the substantive proceedings. In those reasons I expressed (at paragraph 73) my conclusion that the relief which should be granted by the Court should reflect that the contributions of the Plaintiff represented 40 percent whilst those of the Defendant represented 60 percent of the totality of the contributions by the parties of the nature described in section 20(1) of the Property (Relationships) Act 1984 (those contributions being significantly in respect to the acquisition, conservation and improvement of the View Street property). 3 I then set forth, in summary, the various alternative items of relief which were sought by each party in respect to the View Street property. 4 In my conclusion I did not consider it appropriate that the Plaintiff should receive any interest of the Defendant in the Potts Point property. In this regard I was substantially in agreement with the submission of the Defendant that that property was, in effect, quarantined by the parties during the relationship. Neither did I consider it appropriate that the Plaintiff should receive any interest in the Defendant's property at Nelly Bay, Magnetic Island, which was owned by the Defendant before the commencement of the relationship, and towards which no contributions were made by the Plaintiff. I also referred to the claim of the Defendant in respect to chattels. 5 Concerning costs, I set forth the respective claims of the parties, and observed that neither party had succeeded in obtaining, substantially, the relief which she sought against the other party. In those circumstances, I considered it appropriate that I should make no order in respect to costs, to the intent that each party would bear her own costs of the proceedings. However, since I had not heard any submissions in that regard, I considered that if either party was desirous of pursuing an application for costs she should have an opportunity to do so. 6 Accordingly, I stood the proceedings over to a date to be fixed, for the bringing in of Short Minutes and for submissions as to costs. 7 The matter was listed before me for the foregoing purposes on 9 November 2004. On that occasion I heard submissions concerning the form of the Short Minutes and I delivered an extempore oral judgment in regard thereto, and made appropriate orders. 8 I then embarked upon the hearing in respect to costs. However, the Plaintiff made application for an adjournment of that hearing, on account of the Defendant filing in Court during the course of that day's hearing a lengthy affidavit, to which Counsel for the Plaintiff considered it necessary to reply. 9 In the event, I granted that application for adjournment, which was opposed by the Defendant, and made directions concerning any additional affidavits and concerning the filing and serving by each party of written outlines of submissions as to costs. The matter came before me for further argument as to costs on 3 December 2004, at the conclusion whereof I reserved my decision on costs. In the meantime, on 2 December 2004, my order of 9 November 2004 regarding the substantive relief had been entered. 10 I have had the benefit or receiving written outlines of submissions concerning costs from Counsel for the respective parties. Those documents will be retained in the Court file. 11 It will be recalled that in my reasons for judgment of 27 August 2004 I expressed the preliminary view that, since neither party had succeeded in obtaining, substantially, the relief which she sought against the other party, I considered it appropriate that I should make no order in respect to costs, to the intent that each party would bear her own costs of the proceedings. The Defendant was content that there should be no order as to costs. 12 The Plaintiff, however, made application in respect to her costs. That application was grounded upon an offer of compromise, dated 18 November 2003, served upon the Defendant on that date, that being the first day of the hearing. 13 That offer of compromise was made in accordance with Part 22 of the Supreme Court rules. (The reference in the offer itself to "Order 22" is obviously inadvertent, and it is clear that the document intended to refer to Part 22. Neither party sought to rely upon that error.) 14 That offer of compromise was not accepted by the Defendant. The consequences of the failure of a defendant to accept an offer of compromise are set forth in Part 52A rule 22 of the Supreme Court Rules. Subrules (4) and (5) of that rule are as follows, (4) Where an offer is made by a plaintiff and not accepted by the defendant, and the plaintiff obtains an order or judgment on the claim to which the offer relates no less favourable to the plaintiff than the terms of the offer, then, unless the Court otherwise orders, the plaintiff shall, subject to rule 33, be entitled to an order against the defendant for the plaintiff's costs in respect of the claim from the day on which the offer was made, assessed on an indemnity basis in addition to his costs incurred before and on that day, assessed on a party and party basis. (5) For the purpose of subrule (4), where the offer was made on the first or a later day of the trial of the proceedings, then, unless the Court otherwise orders, the plaintiff shall be entitled to the plaintiff's costs in respect of the claim from 11am on the day following the day on which the offer was made, assessed on an indemnity basis, in addition to the plaintiff's costs incurred before that time, assessed on a party and party basis. 15 (Rule 33, relating to claims for money, has no relevance to the present proceedings.) 16 It is submitted by the Plaintiff that the result which was ultimately achieved by the Plaintiff was no less favourable than the terms of the offer of compromise. The Plaintiff submits that, in consequence of the foregoing provisions of Part 52A rule 22, she is entitled to an order for her costs, such costs being on the party and party basis up to 11am on 19 November 2003 and on the indemnity basis thereafter. 17 The Defendant, however, disputes that such entitlement is the consequence of the failure of the Defendant to accept the offer of compromise. 18 The Defendant points to the fact that the offer required the Plaintiff to make a payment to the Defendant, whilst the form of the order which was ultimately made on 9 November 2004 required the Defendant to make a payment to the Plaintiff. 19 It will, however, be appreciated that the form of the order ultimately made resulted from the desire on the part of the Defendant that she should be enabled to retain the View Street property and to continue to reside therein. 20 In considering whether the ultimate result has been no less favourable to the Plaintiff than the terms of the offer of compromise, the Court should look to the substance of that result, rather than to the form of the order by which effect was given to that result. 21 By the offer of compromise the Defendant would have received 67.4 percent of the value of the View Street property. By the order ultimately made after a contested hearing occupying three days (after which each party lodged written submissions) the Defendant received 60 percent of the value of the View Street property. 22 I am satisfied that the result was no less favourable to the Plaintiff than the terms of the offer of compromise. 23 In those circumstances, then, unless the Court otherwise orders, the effect of Part 52A rule 22(4) and (5) is, as I have already observed, that the Plaintiff should receive her costs against the Defendant, such costs being on the party and party basis up to 11am on the day following the day on which the offer was made (that is, until 11am on 19 November 2003) and on the indemnity basis thereafter. 24 The Defendant has, in support of her submission that the Court should otherwise order, relied upon the fact that the result for the Plaintiff, either in consequence of the contested hearing, or in the terms of the offer of compromise, has been far less favourable than if she had brought a claim under Division 6 of Part 4 of the Conveyancing Act 1919 (in particular, section 66G of that statute). It is submitted on behalf of the Defendant that, had the Plaintiff invoked that procedure, for the appointment of statutory trustees for sale of the property, the Plaintiff as a co-owner would have received 50 percent of the net proceeds of sale of the View Street property (instead of the 32.6 percent which she would have received under the offer of compromise or the 40 percent which she receives under the order ultimately made). 25 However, I am not at all persuaded that that would have been the result. The invocation by the Plaintiff of her statutory rights as co-owner would almost certainly have precipitated a claim by the Defendant for equitable relief (such as relief grounded upon principles relating to a resulting trust or to a constructive trust). In such circumstances, it is certainly not inevitable that the Plaintiff would, in fact, have received one half of the net proceeds of sale of the View Street property. 26 Despite the submissions of the Defendant, I am not persuaded that the Court should make an order which would alter the costs provisions set forth in subrules (4) and (5) of Part 52A rule 22. Accordingly, the consequences of the failure of the Defendant to accept the offer of compromise should have effect. 27 I note that on 3 December 2004 I stood over to a date to be fixed before myself the notice of motion filed by the Defendant on 17 November 2004. That notice of motion sought an order concerning the costs which had been reserved by Burchett AJ in respect to the notice of motion filed by the Defendant on 12 June 2002. It will be appreciated that the costs order which I shall now make herein will not affect those reserved costs or the pending application in regard thereto. 28 Accordingly, I make the following order: