Crellin v Robertson [2005] ACTSC 36 (29 April 2005)

Last Updated: 11 May 2005

JACQUELINE NORMA CRELLIN v JENNIFER MAREE ROBERTSON [2005] ACTSC 36 (29 April 2005)

FAMILY LAW - domestic relationship - costs following property application.

Domestic Relationships Act 1994 (ACT), s 15

Supreme Court Rules (1937) (ACT), O 65 r 7A

Calderbank v Calderbank [1975] 3 WLR 586.

Quirk v Bawden (1992) 111 FLR 115

No SC 34 of 2001

Judge: Crispin J

Supreme Court of the ACT

Date: 29 April 2005

IN THE SUPREME COURT OF THE )

) No SC 34 of 2001

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: JACQUELINE NORMA CRELLIN

Plaintiff

AND: JENNIFER MAREE ROBERTSON

Defendant

ORDER

Judge: Crispin J

Date: 29 April 2005

Place: Canberra

THE COURT ORDERS THAT:

1. the defendant pay the plaintiff's costs of the action incurred prior to 13 August 2001;

2. the plaintiff pay the defendant's costs of the action incurred thereafter;

3. in each case, costs be assessed on a party-party basis.

1. On 22 September 2004 I gave judgment for the plaintiff in the sum of $17,750 on a claim under s 15 of the Domestic Relationships Act 1994 (ACT). I gave leave to the parties to file written submissions on the question of costs. It now appears that submissions on behalf of the defendant were lodged on 13 October 2004 and submissions on behalf of the plaintiff were lodged on 12 November 2004. For reasons that remain unclear, neither of the submissions were referred to me and I remained unaware of them until the solicitors for one of the parties contacted the Registry earlier this week to see when judgment might be expected.

2. The submissions filed on behalf of the defendant acknowledge the general principle that costs should follow the event but suggest that, even if that rule were to be followed, the costs recoverable should be calculated in accordance with the provision of O 65 r 7A of the Supreme Court Rules (1937) (ACT) which relate to costs in cases in which a plaintiff recovers less than $40,000 and could have commenced proceedings in the Magistrates Court. The defendant maintains, however, that even this approach would be quite inappropriate. She made a number of offers of settlement involving lump sums, increasing progressively from $20,000 on 19 July 2001 to $30,000 on 3 June 2003, together with periodic payments of $100 per week for the maintenance of a child of the relationship, with such maintenance payments to be indexed by reference to movements in the consumer price index. The offers were expressly made "without prejudice except as to costs" and it is appropriate to take them into account in the manner discussed in Calderbank v Calderbank [1975] 3 WLR 586.

3. The defendant's offers were rejected and various counter offers were made involving the payment of substantially larger sums of money. On this basis the defendant not only resists an order for costs but submits that the plaintiff should be ordered to pay her costs and that they should be assessed on an indemnity basis from 19 July 2001.

4. On the other hand, it is submitted on behalf of the plaintiff that costs should follow the event. She maintains that she had been unable to accept any of the offers made by the defendant because they had included what is described as the "significant but extraneous" issue of maintenance for the child of the relationship. She argues that it would have been both inappropriate and contrary to public policy for child maintenance to have been "locked in" whilst he was still quite young with future adjustments dependent solely upon inflation. Furthermore, an amended defence pleading that the plaintiff was estopped from asserting that there had been a final distribution of property was not filed until 13 February 2004, though a draft copy was made available in December 2003.

5. These competing contentions must be considered in the context of the issues that arose on the hearing of the claim. The parties had separated in early 1999, after a lesbian relationship that had subsisted since 1986, and agreed to split their assets equally. After offsetting allowances for various items which each chose to retain, they obtained market appraisals of a house owned by the defendant and agreed that a net amount of $112,500 should be split equally between them. This agreement was put into effect by the defendant retaining the house but paying the plaintiff the sum of $56,250. I found that this was intended to be a final agreement as to the division of property between them and did not accept the plaintiff's evidence that she had entered into it on an understanding that it was to be only a partial or interim agreement. On the other hand, I accepted that the parties appeared to have overlooked the fact that contributions had been made towards the defendant's superannuation throughout the period of the relationship that were substantially greater than any amounts contributed to the plaintiff's superannuation. In these circumstances I concluded that it would be just and equitable to make an order that would have the effect of adjusting the agreement in a manner that would have been appropriate had the parties adverted to the issue of superannuation at the time. I concluded that, had they done so, a 60:40 division would have been appropriate. Consequently, I found that the plaintiff was entitled to receive a further 10 per cent of the sum of $112,500, that is $11,250, together with interest of $6,500, calculated by reference to the period between the initial payment pursuant to the agreement and the time of the trial.

6. It may be noted that the issue which led to the matter being litigated was not attributable to any fault on the part of the defendant or plaintiff, but rather to the fact that neither party adverted to a particular consideration which the plaintiff later realised had been relevant. Whilst it was obviously necessary for the matter to be addressed in some manner, the offer that the defendant made on 19 July 2001 demonstrates that it could have been resolved on terms that were relatively generous to the plaintiff without proceeding to trial. I am unable to accept that the rejection of this offer was attributable to concern about maintenance payments being fixed subject only to indexation. The assertion was unsupported by any evidence and the letter of 13 August 2001 rejecting the offer failed to mention any such concern. Indeed, in a subsequent letter dated 18 September 2001 she made but conveyed a counter offer to accept a lump sum of $50,000 and similarly indexed maintenance payments of $55.00 per week. In a very real sense the cost of the ensuing litigation was attributable to her failure to accept what was a very reasonable offer.

7. There was nothing about the subsequent conduct of the defendant to warrant a conclusion that it would be just and equitable to require her to pay the plaintiff's costs or even bear her own. I preferred her evidence to that of the plaintiff in relation to the crucial issues as to the nature of the agreement between them and, whilst it is true that the defence was amended in February 2004, it has not been shown that the delay caused any prejudice to the plaintiff or, for that matter, that the amendment provoked a more conciliatory approach.

8. The plaintiff would, no doubt, have required some time to discuss the offer of 19 July 2001 with her solicitors. However, I think it is appropriate to order her to pay the defendant's costs from 13 August 2001 when it was rejected. There is no obvious reason to depart from the normal principle in relation to those costs incurred prior to that date.

9. I am not satisfied that the costs should be calculated on an indemnity basis. The general principles from which such an order will be made were discussed by the full Court of the Federal Court of Australia in Quirk v Bawden (1992) 111 FLR 115. As Higgins J (as he then was) said at 122, in the end, the matter is one for the discretion of the trial judge. It must at least appear that the party against whom the order is sought has failed to act reasonably in declining to accept the relevant offer of compromise. However, much depends upon the circumstances. In the present case I am satisfied that justice will be done by ordering the defendant to pay the plaintiff's costs prior to 13 August 2001 and ordering the plaintiff to pay the defendant's costs on a party-party basis from that date.

I certify that the preceding nine (9) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Crispin.

Associate:

Date: 29 April 2005

Counsel for the plaintiff: Mr G Brzostowski

Solicitor for the plaintiff: Mazengarb Barralet Solicitors

Counsel for the defendant: Mr J Millar

Solicitor for the defendant: Farrar Gesini & Dunn

Date judgment reserved: 12 November 2004

Date of judgment: 29 April 2005