Craft v Clements [2016] NSWSC 1374

Supreme Court New South Wales

Medium Neutral Citation: Craft v Clements [2016] NSWSC 1374 Hearing dates: 26 September 2016 Date of orders: 26 September 2016 Decision date: 26 September 2016 Jurisdiction: Equity Before: McDougall J Decision: Grant plaintiff leave to discontinue. Plaintiff to pay defendant's costs on ordinary basis. Catchwords: COSTS – indemnity costs – where plaintiff seeks and is granted leave to discontinue – where resolution of indemnity costs application would require resolution of the underlying issues – no question of principle Legislation Cited: Cross-Vesting Act 1987 (NSW) Cross-Vesting Act 1987 (Cth) De Facto Financial Matters and Other Measures) Act 2008 (Cth) Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) Property (Relationships) Act 1984 (NSW) Cases Cited: Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin (1997) 186 CLR 622 Category: Costs Parties: Sharelle Margaret Craft (Plaintiff) Ian Edward Clements (Defendant) Representation: Counsel: A J McInerney SC / A Givney (Plaintiff) I R Coleman SC / R M O'Brien (Defendant)

Solicitors: Castagnet Lawyers (Plaintiff) Slater & Gordon Lawyers (Defendant) File Number(s): 2015/301829

Judgment - Application seeking order for indemnity costs 1. HIS HONOUR: The plaintiff commenced proceedings in this Court seeking to set aside orders that were made on 28 November 2006 pursuant to s 20 of the Property (Relationships) Act 1984 (NSW). The application invoked s 41 of that Act. The defendant filed a defence. 2. Thereafter, the plaintiff commenced a proceeding in the Family Court of Australia. She alleged that there had been a de facto relationship between her and the defendant that in total aggregated more than two years and that subsisted after 1 March 2009. Thus, the plaintiff invoked, for the purposes of that proceeding, the powers of the Family Court pursuant to the Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (Cth). 3. The plaintiff wished to have her claim brought in this Court, for relief under s 41 of the Property (Relationships) Act, cross-vested to the Family Court. Her notice of motion in that behalf was listed for hearing before me today. For reasons that were advanced in written submissions and that had begun to be developed in oral submissions, the defendant opposed that course. 4. Before the defendant's submissions were complete, and thus before I had formed a concluded view, the plaintiff sought leave to discontinue (UCPR r 12.1). She accepted that she must pay the defendant's costs (r 42.19). 5. The defendant accepts that there is little, if anything, that he can say in opposition to the application for leave to discontinue. He does, however, submit that the costs should be ordered to be assessed on the indemnity basis. Mr Coleman of Senior Counsel, who appeared with Mr O'Brien of counsel for the defendant, submitted (I think correctly) that if the costs were ordered to be assessed on the ordinary basis only, his client would be left with a substantial financial liability. He submitted that although the plaintiff's conduct, in commencing proceedings in the two Courts, could not be characterised as abuse of process, it was "close to it". In those circumstances, Mr Coleman submitted there was an adequate justification for ordering costs to be assessed on the indemnity basis. 6. The starting point seems to me to be that, as the written submissions show, the legal issues involved are extremely complex. Whether (as Mr Coleman submitted) this Court had jurisdiction not only in respect of the s 41 application (undoubtedly it did and does) but also in respect of the matters the subject of the plaintiff's application to the Family Court (as, Mr Coleman submitted, it did, by virtue of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (Cth) is a very difficult question. Whether the Family Court had accrued jurisdiction (undoubtedly, in principle, it does) to hear the s 41 application is a very difficult question. Thus, whether the statutory requirements of s 5(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW) could be satisfied, by demonstrating that the Family Court was the more appropriate forum for the determination of all the disputes, was and remains a very difficult question. 7. In the circumstances, Mr Coleman's application for indemnity costs effectively asks this Court to proceed on one of two bases. The first basis is that simply to commence proceedings in two different Courts of it itself so close to abuse of process, that it would justify the making of the order. The other is that, properly advised, the plaintiff must have known that she could seek and obtain all the relief she was after in one Court or the other, and thus did not need to commence the two sets of proceedings to which I have referred. 8. First of all those two propositions are closely related, perhaps to the point of being two sides of the one coin. More fundamentally, however, each proposition really seems to me, on analysis, to assume that the position for which Mr Coleman argued (indeed, was in the course of arguing when the application to discontinue was made) must be correct. To decide the matter on that basis effectively involves the Court making a decision on the merits of the matter. That is not a course that is one often taken, and the reasons why that is so were explained by McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex Parte Lai Qin (1997) 186 CLR 622 at 624 – 625. 9. I do accept that to make the costs order without extending it to costs on the indemnity basis will leave the defendant with a financial burden. However, without moving to the merits of the particular application, I do not accept that the foundational requirement of exceptional circumstances, or relevant misconduct, has been established. Nor do I propose to resolve the merits of the dispute for the purpose of resolving the costs issue. 10. For those reasons I make the following orders: 1. Grant the plaintiff leave to discontinue. 2. Direct that the notice of discontinuance be filed and served within 14 days. 3. Order the plaintiff to pay the defendant's costs of the discontinued proceedings. 4. Direct that the material provided to the Court for the hearing of the application be handed out.