Cannon v Cannon [2007] NSWSC 40

New South Wales Supreme Court

CITATION : Cannon v Cannon [2007] NSWSC 40

HEARING DATE(S) : 02/02/07

JUDGMENT DATE : 6 February 2007

JURISDICTION : Equity Division

JUDGMENT OF : Barrett J

DECISION : No order as to costs

CATCHWORDS : PROCEDURE - costs - where no determination on the merits - no matter of principle

Edwards Madigan Torzillo Briggs Pty Ltd v Stack [2003] NSWCA 302 CASES CITED : Fordyce v Fordham [2006] NSWCA 274 Foukkare v Angreb Pty Ltd [2006] NSWCA 335 Newcastle Wallsend Coal Co Pty Ltd v Industrial Relations Commission of NSW [2006] NSWCA 129

PARTIES : Barry George Cannon - Plaintiff Raymond Owen Cannon - Defendant

FILE NUMBER(S) : SC 6807/04

COUNSEL : Mr I.D. Faulkner SC - Plaintiff Mr B.M. Antcliffe - Defendant

SOLICITORS : Warren McKeon Dickson - Plaintiff Callachor & Helby - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

BARRETT J

TUESDAY, 6 FEBRUARY 2007

6807/04 BARRY GEORGE CANNON v RAYMOND OWEN CANNON JUDGMENT ON COSTS 1 Orders disposing of the substantive claims in these proceedings were made by consent on 28 November 2006. The orders were, in essence, that the defendant grant and execute the lease sought by the plaintiff; that a caveat lodged by the plaintiff continue in force to protect the plaintiff's interest as lessee; and that the plaintiff do everything necessary to cause a parcel of land known as "Tergene" to be transferred to the defendant. The first two orders were made upon the plaintiff's summons and statement of claim. The third order was made upon the defendant's amended cross-claim. 2 While the parties were eventually able to agree on these substantive outcomes, they were not able to agree on the matter of costs. The plaintiff says that the defendant should pay the plaintiff's costs of the claim and that the costs of the defendant (cross-claimant) incurred solely on the amended cross-claim should be paid by the plaintiff (cross-defendant) in the fixed sum of $200 plus GST. The defendant's position is that the parties should bear their own costs of both the claim and the cross-claim and that there should accordingly be no order as to costs. 3 The plaintiff's principal contentions are that he obtained, upon his claim, the relief he sought and that, on the amended cross-claim, he consented to the grant of the alternative relief sought by the amendment as soon as the amendment was effected. 4 The notion that costs should follow the "event" – embraced by the plaintiff in the first of these contentions – is, in the circumstances, too simplistic. There has been no "event", in the sense of a decision by the court between competing contentions of the parties. There has been no hearing on the merits, with the result that regard must be had to approaches most recently discussed by the Court of Appeal in Foukkare v Angreb Pty Ltd [2006] NSWCA 335 (28 November 2006), Fordyce v Fordham [2006] NSWCA 274 (27 October 2006) and Newcastle Wallsend Coal Co Pty Ltd v Industrial Relations Commission of NSW [2006] NSWCA 129 (30 May 2006). I quote paragraphs [66] to [68] of the judgment of Beazley JA in the Foukkare case: "66 In Australian Securities Commission v Aust-Home Investments Limited (1993) 44 FCR 194 Hill J summarised the principles that have emerged from the case law as to how the Court should approach the exercise of discretion in respect of costs when there has been no hearing on the merits. He said (at 201): '(1) Where neither party desires to proceed with litigation the Court should be ready to facilitate the conclusion of the proceedings by making a cost order … (2) It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a Court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial … This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue. (3) In determining the question of costs it would be appropriate, however, for the Court to determine whether the applicant acted reasonably in commencing the proceedings and whether the respondent acted reasonably in defending them … (4) In a particular case it might be appropriate for the Court in its discretion to consider the conduct of a respondent prior to the commencement of the proceedings where such conduct may have precipitated the litigation … (5) Where the proceedings terminate after interlocutory relief has been granted, the Court may take into account the fact that interlocutory relief has been granted …' 67 The same question was considered in Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; ex parte Lai Qin (1997) 186 CLR 622. McHugh J said at 624 –625: 'In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd [1971] QWN 13, the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent Council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans.' (Footnotes omitted)