Anjoul v Anjoul

Anjoul v Anjoul

1. The issues in the proceedings are relatively complicated, and it will be necessary for the Court to assume that the reader is aware of the content of the three earlier judgments. I will provide brief explanations of the content of these judgments where necessary to make these reasons meaningful.
2. The primary question in these proceedings was whether Ashley should be ordered to pay to Jerry an amount to compensate him for renovation work that he undertook at a residential property at Winston Hills that was at the relevant time registered in the sole name of Ashley.
3. The issue that was at the heart of the original hearing and involved the most substantial forensic effort was Jerry's attempt to enforce a deed between Jerry and Ashley that was finally signed on 14 November 2013 (the Deed) and whose material terms are set out at J1 [132]. The Deed recited that the cost to Jerry of carrying out the renovation works to the Winston Hills property was $700,000. The Deed obliged Ashley to pay that amount to Jerry, plus the CPI increase each year from 2010 until payment, in the event of her separation or divorce from Anthony. The Deed contained an acknowledgement by Ashley that she had had an opportunity to independently verify the cost of $700,000 when that was not in fact the case.
4. Ashley filed a cross claim in which she sought an order that the Deed be set aside on three alternative grounds. Ashley failed on her claim that any obligation on her part to pay money under the Deed was unenforceable by operation of s 10(1)(b) and s 94(1) of the Home Building Act 1989 (NSW): J1 [279]-[300]. However, Ashley succeeded in her claim that an order should be made under s 7 of the Contracts Review Act 1980 (NSW): J1 [314]-[336], and that the Deed should be set aside in equity as an unconscientious bargain: J1 [337]-[345]. The findings upon which these conclusions were based are found at J1 [205]-[261].
5. The result was that Jerry failed on the principal issue, being his attempt to enforce the Deed against Ashley.
6. As noted at J1 [6], Jerry made an alternative claim that Ashley make restitution to Jerry for the reasonable costs incurred by him in carrying out the work and providing materials in the sum of $743,353.45. That was the same amount as was payable under the Deed if it had been enforceable. Jerry based this claim on the fact of the work being done and the materials supplied and an alleged informal agreement that he made with Ashley that she would in due course reimburse him for his effort and costs.
7. The discussion in the primary judgment on this subject is principally at J1 [62]-[88] and J1 [207]-[233]. In summary, I found that there was an inchoate family arrangement between Jerry and Ashley that at least had the effect that Ashley would not receive the benefit of the renovation works for free. Those works clearly increased the value and the amenity of the Winston Hills property. The evidence established that a substantial part of the services provided by contractors and the materials that were used were obtained as result of contra arrangements made by Jerry with suppliers in which he agreed to perform building works for the suppliers. However, I found that the evidence led by Jerry was inadequate to prove the true costs that he had incurred in carrying out the renovation of the Winston Hills property.
8. By the time of the hearing, Jerry's position was that he had either not kept records of his expenditures or that he had destroyed those records, perhaps in the expectation that his rights were preserved by the Deed. In fact, neither Ashley nor Anthony provided any compensation to Jerry for the work that he did or the costs that he incurred in renovating the Winston Hills property. A significant consequence of the family arrangement was that, whatever costs were incurred, they were less than retail costs because of the basis upon which the work and materials were supplied.
9. At the end of the primary judgment I considered the question of whether the order setting aside the Deed should also impose a condition that Ashley provide some reasonable amount of compensation to Jerry to avoid the outcome that, contrary to the family arrangement, she would receive a valuable renovation of the Winston Hills property for free: J1 [346]-[370]. For the reasons that I gave, I found that it was reasonably understandable that Jerry did not have comprehensive records to prove the quantum of his claim. Furthermore, if Jerry's legal advisers had adverted to the issue, it is likely that the Court would have made an order for the quantification issue to be determined as a separate question after the enforceability of the Deed had been decided. Otherwise, the parties may have been required to incur substantial costs in litigating the question of the proper amount of reasonable compensation, which would have been wasted if the Court had found that the Deed was enforceable.
10. I reached the following conclusions at J1 [353]-[369]: "[353] I am satisfied that, in principle, Ashley should not enjoy the whole benefit of the renovation works for nothing, and that Jerry ought to be paid some reasonable amount of compensation for his expenditure and efforts. The issue is whether Jerry should be wholly denied that compensation because he did not satisfactorily prove the appropriate amount of the compensation at the hearing that has been concluded. [354] Ashley has strenuously opposed the proposition that Jerry should be given any further entitlement to quantify an appropriate amount of compensation. She takes the stance that it was for Jerry to make out his alternative case for compensation and to quantify the appropriate amount at the hearing. Ashley submits that as he has not done that, the proper course for the Court to take is to simply dismiss Jerry's claim. [355] There are a number of reasons why I am not at this time prepared to take that course. [356] The first reason is that Ashley has come to equity but has never offered to do equity. Ashley's case was that the Home Building Act had the effect of excluding Jerry's right to receive any compensation, and Ashley has failed in that claim. [357] Ashley has not at any time proffered an alternative basis for Jerry to receive any compensation, or made any offer to compensate him. [358] As an ancillary matter, Jerry's solicitors made a request to Ashley's solicitors that Ashley give access to the property to a quantity surveyor retained by Jerry for the purpose of the preparation of evidence as to the reasonable cost of the work done in the renovation of the property. Ashley's solicitor rejected that request. That rejection had the consequence of inhibiting Jerry's ability to make out an alternative case for compensation to his reliance on the enforcement of the deed. Although it is true that Jerry did not implement the threat made by his solicitor that Jerry would file a notice of motion seeking an order that the quantity surveyor be given access to the property, it remains the fact that Ashley's denial of access to the property by the quantity surveyor was not in my view reasonable. … [362] I doubt that it was ever realistic for Jerry to attempt to quantify an alternative claim for reasonable compensation in the proceedings to date. That is because the cost of the forensic effort necessary to quantify the compensation would likely have been wasted unless the basis for the assessment of quantification was first established judicially. There are too many potential alternative ways to determine an amount of compensation that would be reasonable to justify Jerry being required to bring forth evidence at the hearing to quantify the potential different approaches to the determination of compensation. [363] The reality of this observation is in some respects demonstrated by Jerry's proposal in his final written submissions that the Court make case management orders for the assessment of equitable compensation to be paid by Ashley to Jerry as a condition to any order setting aside the deed. [364] In outline, Jerry proposed orders that an experienced professional quantity surveyor be appointed to "report on the reasonable costs and expenditure of works (Works) carried out or paid for by the Plaintiff/Cross Defendant at the property". Jerry proposed that the works be identified by reference to the scope of works in Annexure A to the proposed orders "and any other relevant documents". Jerry proposed an order that the quantity surveyor utilise "construction industry index figures and standard costs guidance (i.e. Rawlinsons or Cordell) for the relevant period under assessment". [365] The orders proposed by Jerry were in response to a suggestion made by the Court in submissions that it might be appropriate for the Court to entertain a further application for the quantification of an appropriate amount of compensation to be paid by Ashley to Jerry. [366] However, it is arguable that the proposed quantity surveyor's report will not by itself provide a proper basis for the determination of any compensation that Ashley should be ordered to pay to Jerry. The reason is that the quantity surveyor's report would determine a reasonable value for the renovation works on the basis that all contractors supplied services and materials on an arm's length basis. That basis is likely to a considerable extent to be inconsistent with the real arrangement between Jerry and Ashley as to how the renovation works would be carried out. That arrangement was that as much of the works as possible would be undertaken or paid for under arrangements that did not require Ashley to pay the full market price for the renovation. [367] It is not clear that it will remain possible for the Court to make orders for the continuation of the proceedings in a manner that will make the determination of a fair amount of compensation to be payable by Ashley to Jerry to be determined in a manner that is consistent with the application of s 56 of the Civil Procedure Act 2005 (NSW). It may be that forensic decisions made by Jerry during the course of the proceedings to date will impede the ability of the Court and the parties to conduct a cost effective and fair determination of a proper amount of compensation. [368] In these circumstances, I will not at this stage determine the question of whether the deed should be declared void or set aside unconditionally or upon a condition that Ashley pay an appropriate amount of compensation to Jerry. [369] I will give the parties an opportunity to make submissions on this subject after they have been given time to consider these reasons for judgment. For that purpose, I will arrange for my Associate to fix a time for a directions hearing to consider the future of these proceedings."

Anjoul v Anjoul (No 2)

1. My second judgment in these proceedings was delivered following a hearing on 15 November 2012. The hearing was conducted on the basis described in J2 [24]-[28] as follows: "[24] After some subsequent discussion between the parties and the Court in which Jerry suggested orders that did not meet with the Court's approval, it became apparent that the only way that finality could be reached was for Jerry to be given leave to file a notice of motion seeking leave to file additional evidence that would permit the Court to make a determination as to what would be required of Ashley to ensure that she does equity in return for the relief that she seeks. [25] On 20 October 2021, Jerry filed the notice of motion that is the subject of these reasons. The notice of motion seeks the following relief: The plaintiff be granted leave to: a. adduce evidence relating to any conditions that may be imposed on the relief to set aside the deed between the plaintiff and the defendant, such evidence to relate to the value of the benefit received by the defendant by reason of the works carried out on [the Winston Hills property]; and/or b. re-open his case for the purpose of adducing evidence in relation to the value of the benefit received by the defendant by reason of the works carried out on [the Winston Hills property]. [26] As appears from prayer 1(a), the application is not merely one to reopen. The primary application is for leave to adduce evidence relating to the condition that the Court should impose on granting the relief sought by Ashley, being an order setting aside the deed. The application to reopen Jerry's case is in the alternative. [27] By order made on 6 October 2021, Jerry was required to prepare and serve upon Ashley the evidence that he would seek the leave of the Court to lead. Jerry did this in the form of a report of a quantity surveyor, Mr Mark Seeto, dated 19 October 2021, and a report by real estate valuers, Mr Grant Phillips and Mr Barry Coad, dated 12 October 2021. [28] The objective of the quantity surveyor's report was to determine the reasonable cost of the renovation of Ashley's property on the assumption that all of the services and materials were either paid for by cash or pursuant to contra deals arranged by Jerry, in a manner consistent with the arrangement that the Court found existed between Jerry and Ashley and Anthony. Mr Seeto calculated that amount at $515,278.16 plus GST, as opposed to an arm's length commercial price of $706,406.12 plus GST. Mr Seeto also costed the reasonable value of the works on the basis that they had been carried out by an owner builder at $636,187.38 plus GST."
2. The observation made at J2 [26] is important. While it is true that the evidence tendered at the original hearing in support of Jerry's alternative claim for reasonable remuneration was inadequate, it is a fundamental principle of equity that a party who seeks equity must do equity. If that were not the case, the consequence of the Court making an order setting aside an agreement on the ground that its creation was unconscientious might be that the Court's own order will visit injustice on the party seeking to enforce the agreement.
3. The order made on 6 October 2021 referred to in J2 [27] was made because I did not think that it would be procedurally fair for the Court to entertain the proposed application by Jerry without both Ashley and the Court having the benefit in advance of the actual evidence upon which Jerry would seek to rely if the Court gave him leave to tender it.
4. By this stage of the proceedings, the nature of the applications being made by the parties had become somewhat blurred. Although Jerry's initial alternative application was for reasonable remuneration, by this stage of the second hearing the issue had become whether the relief sought by Ashley under the Contracts Review Act and in equity should be made conditional upon her providing reasonable compensation to Jerry. Accordingly, the new evidence that Jerry sought to lead was relevant to Ashley's claim in her cross claim, as well as to Jerry's alternative claim.
5. At the second hearing, Ashley opposed the Court making the orders sought by Jerry in his notice of motion filed on 20 October 2021.
6. As I observed at J2 [42]: "[42] The problem as I see it with Ashley's position is that she is still trying to get the renovation for free. Not only has Ashley not ever made an open offer to do equity, but she is still fighting the need to do so."
7. I reached the following conclusions at J2 [46]-[47]: "[46] The present application is not in reality an application by Jerry to reopen his case. Rather, it is an application, encouraged by the Court in its primary judgment, for leave to put some additional evidence before the Court that will enable it to make the orders that it considers are truly appropriate having regard to the findings in the principal judgment. Those orders are that an order is made setting aside the deed, but Ashley is ordered to pay a fair amount of compensation to Jerry. [47] Consequently, I have decided that the proper course to be taken is for the Court to make order 1(a) sought in Jerry's notice of motion. The leave to be granted will not be open-ended but will be limited to the additional expert evidence that Jerry has served on Ashley."
8. Following the publication of Anjoul v Anjoul (No 2), on 15 December 2021 I made the following orders, as recorded at J3 [11]: "[11] The notice of motion was heard on 15 November 2021, and on 23 November 2021 I delivered the second judgment in these proceedings: Anjoul v Anjoul (No 2) [2021] NSWSC 1511 ("J2"). On 15 December 2021, I made the following orders: 1. ORDER that without prejudice to the defendant's/cross claimant's right to make objections in relation to the admissibility of the following, the plaintiff is granted leave to adduce evidence in the following form in relation to the conditions which should be imposed on the cross claimant in relation to the setting aside of the Deed dated 14 November 2013 (Conditions Issue): (a) QS Building Economics report by Mark Seeto dated 19 October 2021 together with the emails attached to the affidavit of Frederick Laws affirmed 28 October 2021; and (b) John Virtue Valuers report by Grant Phillips and Barry Coad dated 12 October 2021. 2. ORDER the defendant/cross claimant file and serve any evidence upon which she intends to rely on in relation to the Conditions Issue by 4 February 2021. 3. ORDER the plaintiff/cross defendant is to file and serve any evidence in reply in relation to the Conditions Issue by 25 February 2022.
9. As I recorded at J3 [13]-[14], Ashley did not serve any expert quantity surveyor evidence, but served a report of a real estate valuer, to which Jerry responded by serving a reply report of his own valuers.
10. After Anjoul v Anjoul (No 2) was published, Ashley's solicitor made an offer to settle the proceedings by letter dated 8 December 2021. Ashley submitted at the costs hearing that the letter contained a valid Calderbank offer. I will consider this offer below when I deal with Ashley's application that Jerry pay part of her costs on the indemnity basis.

Anjoul v Anjoul (No 3)

1. The final substantive hearing in the proceedings took place on 19 September 2022. As I recorded at J3 [16], Jerry's position was that Ashley should be ordered to pay him compensation of $500,000 as a condition to the making of a final order setting aside the Deed.
2. Ashley's position was as set out at J3 [22], which was that an order that the Deed be set aside on the basis that Ashley pay Jerry the sum of $310,000, and that all costs orders made be set aside, and that there be no order as to costs with the intention that each party pay their own costs of the proceedings. Ashley's position was as set out in draft short minutes of order attached to her solicitor's 8 December 2021 letter to Jerry's solicitor.
3. For the reasons set out in Anjoul v Anjoul (No 3), I reached the conclusion as stated in J3 [64]-[65] as follows: "[64] Although I will order Ashley to pay $400,000 in compensation to Jerry substantially on the terms in Ashley's 8 December 2021 proposed short minutes of order (except for the order for costs in order 11) it will be necessary for the Court to receive further submissions from the parties on the costs issue before final orders are made. I will not order Ashley to pay compensation to Jerry so long as there is a possibility that Jerry will be ordered to pay all or some part of Ashley's costs. Ashley should not be required to pay compensation to Jerry and then seek to recover her costs from Jerry later. It appears that it will be necessary for the Court to decide the issue of costs and make an appropriate gross sum costs order so that the final orders dispose of all remaining issues in the proceedings, and the orders specify the total amount that Ashley will be required to pay to Jerry. [65] The parties should confer and, if they are able to do so, they should provide my Associate with short minutes of order containing case management orders to deal with the costs issue. That issue should be dealt with as cost-efficiently as possible."
4. I decided that the Court should impose the arrangement for the determination and payment of the costs of the proceedings that I set out in J3 [64] for practical reasons, to ensure that this dispute between parties who had earlier been members of the same family could finally be determined as soon and as efficiently as possible. It is arguable that the present proceedings do not satisfy the conventional grounds upon which the Court will agree to determine the costs on a gross sum basis. There was no reason for the Court to think that the parties would not deal with the assessment of the costs on a conscientious basis. However, if the Court did not ensure that the costs were paid by some appropriate arrangement at the same time as Ashley performed her obligation to pay Jerry the $400,000, there was a real risk that further proceedings would be necessary to enforce the costs order.
5. In Jerry's reply submissions on the costs issue, Jerry noted that the Court itself had decided to deal with the costs in the manner set out in J3 [64]. Jerry expressly accepted that that was a sensible arrangement in the circumstances, and did not complain about it, but he noted that it had introduced into the resolution of the costs dispute the artificial outcome that the Court would decide the amount of the costs to be paid on a gross sum basis at the same time as it decided whether Ashley's 8 December 2021 offer was an effective Calderbank offer. That outcome would be artificial in the sense that, if the Court simply made the conventional costs order, then the determination of the amount of costs payable would be made as part of an ordinary costs assessment process. The amount payable would be determined after the Court had dealt with Ashley's application for indemnity costs so that the amount payable would not be known. That is, the question whether the outcome in the proceedings for Jerry was worse than if he had accepted the 8 December 2021 letter and, if so, the degree to which the outcome was worse, would not usually be known until the completion of the costs assessment process. Jerry submitted that that was a consideration that is relevant to the reasonableness of Jerry's conduct in not accepting the 8 December 2021 offer.

Final hearing on 13 December 2022

1. It was in these circumstances that the parties provided their submissions and conducted the hearing on 13 December 2022 concerning the final substantive and costs orders that should be made by the Court to dispose of these proceedings.
2. It will assist an understanding of recent events in these proceedings if I explain that the marriage between Ashley and Anthony has now been dissolved. At the recent hearing, Jerry tendered, as Exhibit 1, a copy of orders made on 7 December 2022 by the Federal Circuit and Family Court of Australia (Division 2) stating that any contract entered into by Ashley for the sale of the Winston Hills property shall specify a settlement date no earlier than 2 February 2023. The orders noted that the initiating application was filed by Anthony on 1 December 2022 seeking interim and final financial orders. The orders sought by Anthony included injunctive orders to restrain Ashley from dealing with the proceeds of sale of the Winston Hills property that was then listed for sale by auction to occur on 10 December 2022. The Court was informed at the hearing on 13 December 2022 that the exchange of contracts for the sale of the Winston Hills property was imminent.
3. On 13 December 2022, I made a number of orders at the time I reserved judgment. Order 1 dealt with the manner in which Ashley should deal with the proceeds of sale of the Winston Hills property on settlement. In short, following the making of all payments in priority to Ashley's entitlement to receive the balance of the purchase price, Ashley was ordered to pay the sum of $400,000 into Ashley's solicitor's trust account pending further order by the Court, before the balance was paid to Ashley. Pending satisfaction of those orders, Ashley was restrained from further encumbering, charging or diminishing the equity in the Winston Hills property.
4. The order for the retention of the $400,000 was made to provide some protection to Jerry in the event that he obtained an order that Ashley pay him reasonable compensation and costs up to an amount of $400,000.
5. The orders proposed by Ashley that were annexed to her submissions dated 9 December 2022 were as follows: "1. ORDER declaring the Deed between the plaintiff and the [d]efendant dated 3 October 2013 (Deed) void in whole. 2. ORDER that the Deed be set aside. 3. ORDER that, subject to the set of provided for in order 6 below, the fair and reasonable amount of compensation payable to the plaintiff for the renovation and improvements to [the Winston Hills property] is $400,000. 4. ORDER that the plaintiff pay the defendant's costs up to 8 December 2021 on a gross sum basis in the amount of $223,830.29 inclusive of GST. 5. ORDER that the plaintiff pay the defendant's costs from 9 December 2021 on a gross sum basis in the amount of $152,650.39.09 [sic] inclusive of GST. 6. ORDER that the total amount of costs payable by the plaintiff to the defendant in the total sum of $376,480.68 be set off against the amount of compensation payable to the plaintiff in the sum of $400,000 so that the total amount payable by the defendant to the plaintiff is $23,519.32. 7. ORDER that the amount payable by the defendant to the plaintiff in the sum of $23,519.32 in order 6 be stayed subject to compliance with order 8. 8. [This draft order that made interlocutory arrangements dependent upon the sale of the Winston Hills property has now been superseded by events and the orders referred to above]. 9. [As for order 8]. 10. [As for order 8]. 11. ORDER that the notice of motion filed 20 October 2021 be dismissed. 12. ORDER that the Amended Statement of Claim otherwise be dismissed. 13. ORDER that the Cross Claim otherwise be dismissed. 14. GRANT the parties liberty to apply on 3 days' notice."
6. The orders sought by Jerry included: "1. ORDER that the defendant pay to the plaintiff, by way of restitution for the value of works carried out to [the Winston Hills property] the sum of $400,000.00 2. ORDER pursuant to the Contracts Review Act 1980 (NSW) relief varying the Deed between the parties dated 14 November 2013, ('Deed') as follows: (a) the amount of $700,000.00 wherever it appears in the Deed be replaced with $400,000.00; (b) that the words "plus CPI" in clause 4 of the Deed be deleted; (c) that clause 7 be deleted; FURTHER ORDER that such relief to be conditional upon the defendant paying to the plaintiff the sum of $400,000 from the proceeds of sale of the property…"
7. Ashley resisted the Court making a substantive order that only had the effect of varying the Deed. I agree. The proper order to be made is that the Deed be set aside entirely on the condition that an amount of compensation be paid by Ashley. The order sought by Ashley in her cross claim was that the Deed be set aside. The order proposed by Jerry would leave the varied Deed in effect, with potentially unknown consequences. Those consequences have not been considered at any hearing.
8. The short minutes of order proposed by Jerry then continued as follows (omitting superseded proposed orders relating to the sale of the Winston Hills property and the payment of the proceeds of sale): "… 4. ORDER that the Amended Statement of Claim be otherwise dismissed. 5. ORDER that the Cross Claim otherwise be dismissed. 6. ORDER that any costs orders previously made in these proceedings be vacated. 7. ORDER that the defendant pay to the plaintiff lump sum costs in the sum of $50,000. 8. GRANT the parties liberty to apply in relation to the implementation of these orders."
9. The parties agree on the formal orders that should be made in relation to the balance of the amended statement of claim and the cross claim. They also agree that all previous costs orders should be vacated. I would not have made such an order in the absence of agreement, as I do not know what costs orders have been made or on what basis. In the circumstances, I will make the order agreed by the parties.
10. I will not make order 11 sought by Ashley that the notice of motion filed on 20 October 2021 be dismissed. I have already made orders in favour of Jerry giving effect to the reasons in Anjoul v Anjoul (No 2) based upon that notice of motion.

Consideration of costs issue

1. The result is that the remaining difference between the parties is about the appropriate costs order for the proceedings. It is implicit in the short minutes of order proposed by both parties that the Court should make a gross sum costs order.

Applicable principles

1. I accept that Jerry correctly stated the principles that the Court should apply in determining the order for costs that should be made in this case. Ashley did not contest those principles.
2. First, s 98 of the Civil Procedure Act 2005 (NSW) confers on the Court a wide discretion with respect to costs.
3. The rule that the Court generally applies is set out in Uniform Civil Procedure Rules 2005 (NSW) r 42.1 as follows: 42.1 General rule that costs follow the event Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.
4. The ascertainment of the event will in many cases be straightforward, as one of the parties will win in the proceedings and the other party will lose. However, there will often be cases where the determination of the event is not straightforward, as the respective parties have won and lost different issues that have arisen, particularly in those cases where the parties raise different claims in separate pleadings. As the Court of Appeal said in Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15]: "[15] Depending on the nature of the litigation the "event" may be characterised in more than one way. The authorities were reviewed by Ward J in Australian Receivables Ltd v Tekitu Pty Ltd [2011] NSWSC 1425 at [24]-[26], [54]-[60]. Generally the "event" refers to the event of the claim or counterclaim, as the case may be, and may be understood as referring to the practical result of a particular claim: Windsurfing International Inc v Petit [1987] AIPC 90-441 at 37,861-37,862 (Waddell J)."
5. The Court of Appeal in James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 observed at [34]-[36] that the following principles apply when the parties have had mixed outcomes in proceedings: "[34] Where a matter involves multiple issues and the question before the court is whether it should make some other order as to costs other than the order that costs follow the event, a distinction is commonly drawn between cases which involve clearly discrete issues for determination, and those in which all issues are inseparable, or at least sufficiently linked, with respect to the overall disposition of a particular matter. In Permanent Trustee Aust Ltd v FAI General Insurance Co Ltd (unreported, NSWSC, 3 June 1998), Hodgson CJ in Eq noted that the obvious examples of a matter involving discrete issues is one where a plaintiff makes separate claims for different relief, or a claim by a plaintiff and a cross-claim by a defendant. Another example is where a respondent is successful in having an appeal against an earlier decision dismissed, but for reasons other than those raised in the respondent's Notice of Contention. This is not to say that so-called "discrete issues", for the purposes of apportioning costs, only exist in cases where there are separate claims made within a single matter. As Toohey J stated in the passage quoted at [33] above, it can relate to "any disputed question of fact or law" before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter. [35] In Madden v Connell [2001] NSWSC 1051, Hamilton J referred to there being a "rule" that where there are "discrete issues and the time taken on each issue at the hearing can be identified or realistically estimated", an order for costs may be made against the party which fails on such issues, or alternatively, that party may be deprived of its costs for that portion of the matter. In the Court's opinion it is preferable not to speak in terms of "rules". However, the underlying approach to the "rule" stated by his Honour may be an available approach to the exercise of the court's discretion as to costs in a particular case, depending upon all of the circumstances. [36] Where the court does exercise its discretion to apportion costs, the apportionment itself involves the exercise of discretion. As Gummow, French and Hill JJ recognised in Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261: Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion for the trial judge. Mathematical precision is illusory and the exercise of the discretion will often depend upon matters of impression and evaluation …"

Significance of failure of Home Building Act claim

1. It will be convenient to deal with a number of introductory issues before I consider the discretionary determination of the appropriate costs order to be made in this case.
2. As I have noted above, Ashley failed on one of the three grounds upon which she relied for the making of an order setting aside the Deed. That ground was that the effect of the Home Building Act was to make Jerry's claim for payment unenforceable. Although, in a sense, the issue was a separate one, it was one of a number of broadly related grounds upon which Ashley was ultimately successful. It was not in my view a sufficiently separate issue to justify the Court in making a special costs order against Ashley for the costs of that issue. Jerry did not make any submission to the contrary of this conclusion.
3. However, I consider that the Home Building Act claim was nonetheless a significant issue that introduced discrete evidence into the proceedings and was an issue on which Ashley failed. It will be appropriate in those circumstances for the Court to have general regard to that failure when it determines the final costs order that should be made as part of the discretionary exercise that is required because of the mixed outcome in the proceedings.

Relevance of Ashley's refusal to allow inspection by quantity surveyor

1. I noted at J1 [358] that Ashley's solicitor refused Ashley's consent to Jerry causing a quantity surveyor to inspect the Winston Hills property for the purpose of preparing a report as to the costs of carrying out the renovation works. Such a report may have provided a starting point for the quantification of Jerry's reasonable remuneration, given that his own records were insufficient for that purpose. I expressed the view that the denial of access "was not in my view reasonable" at J1 [358]. The evidence established that Jerry's solicitor threatened that if consent was not forthcoming an application would be made to the Court for an order that Ashley give access to the quantity surveyor. That application was not made, so the Court did not have the quantity surveyor's evidence at the primary hearing.
2. Jerry sought to make much of this issue at the costs hearing, by submitting that the Court should determine the appropriate costs order on the basis that Ashley had acted unreasonably in denying her consent, and that, if consent had been given, the subsequent course of the proceedings would have been different because the Court would have had the quantity surveyor's evidence at the primary hearing. That submission overstates the significance of my observation that Ashley's solicitor's refusal of consent was unreasonable. I adhere to my view, and, if the application threatened by Jerry had been made, and resisted by Ashley, her unreasonable conduct may have justified a costs order against her in respect of the application. It is entirely different matter to conclude that the consequence of this minor unreasonable act should be to visit upon Ashley substantial responsibility for much of what followed in the proceedings. First, it was incumbent upon Jerry to make the threatened application if he decided that he needed the evidence. Secondly, there is a significant possibility that a quantity surveyor's report prepared at that time would simply have stated an opinion as to the retail costs of the renovation. In fact, because of the conclusions reached in Anjoul v Anjoul concerning the significance of the building costs being incurred on a contra agreement basis, the quantity surveyor report that was ultimately prepared focused on the fact that the compensation was never intended to be on a retail basis.

Jerry's submission concerning the appropriate costs order

1. Jerry's primary submission was that the relevant event was Jerry's ultimate success in obtaining an order that Ashley pay him $400,000 as compensation for his efforts in renovating the Winston Hills property. However, Jerry acknowledged the forensic travails experienced in achieving that result, which have been outlined above. Jerry accepted that the consequence was that the Court should, in the exercise of its discretion, substantially discount the proportion of the costs actually incurred by Jerry that Ashley should be ordered to pay to him. Jerry's primary position was that Ashley should be ordered to pay 25% of the costs incurred by Jerry, which I understand is represented by the lump sum amount of $50,000 referred to in order 7 of Jerry's proposed short minutes of order. Jerry made an alternative submission that if the Court thought that the primary order sought was too generous to Jerry, then the Court should make an order that each party pay their own costs of the proceedings.
2. In respect of the notice of motion filed by Jerry on 20 October 2021, Jerry submitted that the outcome was that Jerry achieved success over Ashley's opposition. He submitted that the Court should not treat the application as an application for an indulgence by Jerry to relieve him of some forensic oversight by which he had failed to tender all necessary evidence at the initial hearing. On the contrary, Jerry submitted, the reality was that the Court, in the primary judgment, stated that it was not prepared to make the order sought by Ashley in her cross claim simply setting aside the Deed, as that would not do justice in the circumstances, as Ashley had not offered to do equity and had failed to perform her part of the family arrangement that she entered into with Jerry. According to Jerry, there was some evidence that Jerry incurred costs in carrying out the renovations, but the Court expressed the view in the primary judgment that the evidence was not sufficient to enable the Court to determine the quantum of the reasonable remuneration with sufficient confidence. Accordingly, the Court, in those circumstances, invited Jerry to provide additional evidence to assist the Court in formulating the final order that ought to be made on Ashley's cross claim.
3. Jerry submitted that it was open to Ashley to tender evidence of the reasonable costs of the renovation in support of her cross claim, in accordance with her duty to do equity, but Ashley failed to do so.
4. I accept Ashley's submission that she was in no position, given her ignorance of the circumstances in which Jerry had carried out the work, to tender comprehensive evidence of the reasonable remuneration herself.

Ashley's response concerning the appropriate costs order

1. Ashley rejected the proposition that Jerry should be treated as having succeeded in the event, and she also submitted that this was not an appropriate case for the Court simply to make a broad brush ruling as to costs on the basis of the proceedings considered as a whole. Ashley submitted that the three substantive hearings that have taken place represent materially separate steps in the proceedings, and that the just treatment of the issue of costs requires a separate consideration of the events that led to the separate hearings.
2. As to the first hearing, Ashley submitted that the majority of the pleadings, evidence, cross examination, oral submissions and written submissions focused on the enforceability or otherwise of the Deed, as raised by both the statement of claim and the cross claim. Ashley submitted that she wholly succeeded on that primary issue, save for the reluctance of the Court to set aside the Deed on a basis that would lead to Ashley enjoying the benefit of the renovation works for free.
3. As to this issue that was not resolved by the judgment in Anjoul v Anjoul, that was because, as recorded at J1 [305], the evidence tendered by Jerry did not make out his claim for restitution in the sum of $743,353.45, or any other sum.
4. Ashley submitted that, as a matter of proper pleading, Jerry did not seek ancillary relief under s 8 of the Contracts Review Act, and he did not respond to the cross claim filed by Ashley by pleading that Ashley should not be given the relief that she sought without first offering to do equity. Instead, Jerry simply pleaded an alternative claim for reasonable compensation which he failed to prove.
5. Ashley submitted that the Home Building Act claim on which she failed did not take up a significant portion of the proceedings and was not a dominant issue.
6. I note that in Ashley's solicitor's 7 December 2022 affidavit, he provided reasons for estimating that the average forensic effort of the parties in dealing with the Home Building Act issue was about 17% of the total.
7. In relation to the second hearing, Ashley submitted that she should not be penalised on the basis of her unreasonable conduct in declining to consent to the quantity surveyor retained by Jerry being given access to the Winston Hills property. I have already explained above that I accept that submission.
8. Ashley then submitted that, even though the Court, in substance, made orders as sought by Jerry in his 20 October 2021 notice of motion concerning the tender of additional evidence on the reasonable costs issue, notwithstanding his success he should be ordered to pay the costs of the application because in substance he was applying for the indulgence of the Court. Ashley relied upon the principles summarised by Henry J in Burwood Council v Visy Paper Pty Ltd atf Southern Paper Converters Trust (No 2) [2021] NSWSC 1035 at [8]-[11].
9. I do not accept that the costs of the notice of motion and the second hearing should be treated as if they only concerned an application made by Jerry for an indulgence of the Court. While, on the one hand, Jerry's evidence in support of his alternative claim for reasonable compensation was inadequate, as I have explained above, I considered that there were extenuating circumstances because of the significant difficulty in providing that evidence, and the fact that Ashley had not honoured her part of the family arrangement. The absence of satisfactory evidence on the issue of reasonable compensation related to the issue of Ashley doing equity as much as it did Jerry's alternative claim. Ashley defended Jerry's claim in a way that sought to gain the benefit of the renovation for nothing. The essence of the Court's position was that there was some evidence that might have allowed the Court to estimate a proper amount of reasonable remuneration to be paid by Ashley, but I considered that the evidence was not sufficient to enable the Court to do that fairly, and I gave some little weight to Ashley's refusal to give Jerry's quantity surveyor access to the Winston Hills property.
10. I made the preliminary order that Jerry incur the cost of the preparation of the additional evidence before I would consider giving him leave to tender it in the proceedings, partly in order to give Ashley the benefit of knowing what the evidence would be so that she could make a proper judgment as to whether she ought to resist the leave sought by Jerry being given. Knowing what the evidence was, Ashley determined to continue to resist Jerry being given the leave that he sought. That resistance failed.
11. Although Ashley's resistance failed, it would in my view not be fair to treat Jerry as having succeeded on the event that was the subject of the second hearing. Nonetheless, in considering the exercise of the Court's discretion as to the final overall costs order that should be made, the Court should take into account the fact that Ashley failed in her resistance to Jerry's notice of motion.

Significance of the third hearing on the costs issue

1. The third hearing was necessary because the parties were unable to agree as to the appropriate amount of reasonable remuneration for Ashley to pay to Jerry as a condition to the Court making an order setting aside the Deed. Jerry's position was that the amount should be $500,000, while Ashley submitted that it should be $310,000, subject to each party being ordered to pay their own costs. The Court found that the appropriate sum was $400,000, so each party achieved partial success in relation to the third hearing.

Conclusion concerning the identification of the event

1. The Court should reject Jerry's submission that the event in this case is in substance his success in obtaining an order that he be paid compensation of $400,000. The acceptance of Jerry's submission on this issue would involve the Court ignoring the reality of the history of the proceedings.
2. For the following reasons, the correct analysis of the proceedings is that Ashley succeeded in substance on her primary claim for an order that the Deed be set aside.
3. In a case like the present, which has evolved over time through a number of separate hearings, and in which the parties have achieved mixed results, it is important for the Court to start with a focus on the essential nature of the proceedings. That nature was an attempt by Jerry to enforce the Deed against Ashley to obtain a judgment for $700,000 plus CPI increases. That claim failed.
4. I accept that it may not have been obvious to Jerry and his legal representatives (who were not the lawyers who now represent him) that Ashley would succeed on her claim for an order setting aside the Deed. However, a balanced consideration of the evidence that the Court dealt with in detail in Anjoul v Anjoul that justified a finding that Jerry was unconscientious in inducing Ashley to execute the Deed ought to have caused Jerry to understand that there was a very real likelihood that his attempt to enforce the Deed would fail. Jerry ought to have appreciated that there was a serious risk that his claim against Ashley would fail if he did not provide the Court at the primary hearing with at least adequate evidence to permit the Court to assess the amount of reasonable compensation that Ashley should be ordered to pay to him as a condition to the Court making an order setting aside the Deed.
5. A tactical decision must have been made by Jerry not to ensure that the Court was provided with the best evidence that could reasonably be obtained concerning reasonable compensation, and instead to take the risk that the claim to enforce the Deed would not succeed. There is force in Ashley's submission that Jerry did not attempt to recast his position at the initial hearing to raise the need for Ashley to offer to do equity. The consequence has been that, although ultimately Jerry succeeded in obtaining an order that he be paid compensation of $400,000, Ashley was deprived of the opportunity to deal with that claim at the primary hearing.
6. Consequently, I am satisfied that the starting point is that Ashley is entitled to an order that Jerry pay her costs of the proceedings on the ordinary basis, subject to an appropriate discount having regard broadly to Ashley's failure on the Home Building Act issue, the consequences of the failure of her resistance to Jerry being given leave to rely upon the evidence on the reasonable remuneration issue of which Ashley had advanced knowledge, and the fact that the outcome of the final substantive hearing was roughly an equal measure of success to each party. In the circumstances, I have concluded that the just outcome will be to order Jerry to pay Ashley 70% of her costs of the proceedings on the ordinary basis, subject to the result of Ashley's claim for payment of part of her costs on the indemnity basis.

Communications between the parties relevant to the award of indemnity costs

1. Ashley submits that the Court should order Jerry to pay her costs on the indemnity basis from 9 December 2021 because Jerry did not accept the offer that Ashley made to Jerry on 8 December 2021, which Ashley submits was a valid Calderbank offer.
2. The parties' solicitors exchanged communications that are relevant to the question of whether any part of Ashley's costs should be paid on the indemnity basis.
3. Ashley's solicitor, in his affidavit sworn on 7 December 2022, appears to give evidence of all communications between the parties bearing on the costs issue. The communications appear to have commenced with an offer made on behalf of Ashley by email dated 17 February 2021. There were later communications dated 25 June 2021, 15 July 2021, 2 August 2021 and 9 August 2021. Those communications are either expressed to be without prejudice save as to costs, or are in any event from their context clearly the subject of "without prejudice" privilege. Offers were made by both parties. Jerry has not made any submission based upon the principle in Calderbank v Calderbank [1975] 3 All ER 333. As I understand it, the only communication relied upon by Ashley for the purpose of obtaining a special costs order is a letter dated 8 December 2021 that Ashley's solicitor wrote to Jerry's former solicitor. The letter expressly stated that it was not sent on a without prejudice basis, and it contained a without admissions concession made by Ashley that Ashley intended to tender in the proceedings.
4. In these circumstances, I consider that the better view is that all of the other correspondence should be treated as being privileged, and I will only set out the terms of the 8 December 2021 letter.
5. The letter attached proposed short minutes of order that Ashley offered should be made in the proceedings. The proposed short minutes of order are similar to the proposed short minutes of order attached to Ashley's written submissions on the costs issue at [34] above, save, first, that order 3 provided that Ashley would pay Jerry the sum of $310,000, rather than the $400,000 that I found in Anjoul v Anjoul (No 3) should be paid.
6. Secondly, the order for costs that was offered in proposed order 11 was: "11. ORDER that any costs orders made in these proceedings be vacated and order that there be no order as to costs in relation to these proceedings up to the date of these Proposed Short Minutes of Order with the intention that each party bear their own costs relating to these proceedings up to the date of these Proposed Short Minutes of Order."
7. This costs order was not included in Ashley's final proposed short minutes of order, as those orders in orders 4 and 5 respectively reflected Ashley's present submission on costs, being that Jerry pay Ashley's costs on the ordinary basis up to 8 December 2021, and her costs following that date on the indemnity basis.
8. The monetary difference between the draft short minutes of order proposed by Ashley on 8 December 2021 and the orders that she now proposes be made is that, first, Ashley would be ordered to pay Jerry $400,000, rather than $310,000, but Jerry would be ordered to pay Ashley costs of $376,480.68 rather than that the parties would bear their own costs of the proceedings.
9. The 8 December 2021 letter set out a number of reasons why Ashley claimed the offer that she was making was a reasonable one, having regard to what Ashley suggested was the likely outcome of the third hearing. The Court ultimately did not accept one of those reasons, being that the Court would discount the amount of reasonable remuneration that it would otherwise have ordered Ashley to pay to Jerry because Ashley and Anthony accepted a joint obligation under the family arrangement to compensate Jerry, so that Ashley would only be liable for 50% of the total.
10. The letter also advised Jerry that Ashley's costs to date were in excess of $250,000 and claimed that Ashley was entitled to an order that her costs be paid to the date of the offer.

Consideration of indemnity costs issue

1. In essence, Ashley's submission is that, although she only offered to pay Jerry $310,000, and he was ultimately awarded the sum of $400,000, Jerry would still have been substantially better off had he accepted the offer than he will be under the final orders to be made by the Court, because part of the offer was that Ashley would bear her own costs, and the final result will impose upon Jerry an obligation to pay Ashley's costs. The basis of this submission is that, if at the end of the day Jerry is ordered to pay Ashley more than $90,000 in costs, he will be worse off as a result of his failure to accept the offer.
2. As it has happened, whatever the Court's final determination of the amount of costs to be paid by Jerry may be, it is clear that it will be substantially greater than $90,000.
3. The question in these circumstances is whether the 8 December 2021 offer qualifies as a valid Calderbank offer, meaning that the outcome for Jerry in these proceedings will be no more favourable than the offer, the offer was a real compromise by Ashley, and the rejection of the offer by Jerry was unreasonable: Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344. The Court retains a discretion as to whether a special costs order should be made even in cases where a nominally valid Calderbank offer has been rejected, and the rejection does not give rise to a presumption that the costs of the party making the offer will be payable on the indemnity basis from the date of the offer: Commonwealth v Gretton [2008] NSWCA 117.
4. Ashley's 8 December 2021 offer was made after the publication of Anjoul v Anjoul (No 2) on 23 November 2021. Up until the time of the offer, Ashley had resisted paying any remuneration to Jerry for the renovation of the Winston Hills property. As I have stated at [13] above, the judgment established that the Court was of the view that it should not make an order setting aside the Deed unless, as a condition to the order being made, Ashley paid an amount of reasonable remuneration to Jerry. The outstanding issue was the quantification of the remuneration. The effect of the judgment was to give leave to Jerry to rely upon the evidence that he had served before the second hearing.
5. The Court noted the effect of the evidence that Jerry wished to tender, which consisted of expert reports by a quantity surveyor and by real estate valuers, at J2 [28]-[29]. At that stage, as noted at J2 [38], Ashley had only provided evidence of the likely cost of her obtaining expert evidence in response from a quantity surveyor. As I noted at J3 [13], ultimately Ashley did not serve expert quantity surveyor evidence, but she did rely upon a report dated 3 March 2022 by an expert real estate valuer. Consequently, at the time Jerry was required to respond to Ashley's 6 December 2021 offer, he had not been informed of or provided with the evidence upon which Ashley would rely on the quantification issue.
6. The principles that the Court applies when considering the significance of a supposed Calderbank offer that has been made on an "inclusive of costs" basis are summarised in GE Dal Pont, Law of Costs, (5th ed, 2021, LexisNexis) (Dal Pont) at [13.81]-[13.83]. It is clear that, as the Court cannot fetter the discretion conferred by s 98 of the Civil Procedure Act by imposing upon itself arbitrary rules, the Court must always consider the circumstances of the particular case, and there can be no rule that an offer "inclusive of costs" will always be ineffective as a Calderbank offer: see, for example, DSE (Holdings) Pty Ltd v Intertan Inc [2004] FCA 1251; (2004) 51 ACSR 555 at [12]-[14] (Allsop J, as his Honour then was); Ying v Song [2011] NSWSC 618 at [70] (Ward J, as her Honour then was); and Marriner v Australian Super Developments Pty Ltd [2016] VSCA 141 at [231].
7. However, in fact, there has been a tendency for courts to decline to treat offers "inclusive of costs" as being effective Calderbank offers: "because it usually does not allow the Court to decide whether the verdict eventually given is one under which the offeree fares worse than he or she would have done if he or she had accepted the offer": Van Zonneveld v Seaton [2005] NSWSC 175 at [6] (Campbell J, as his Honour then was). See also GEC Marconi Systems Pty Ltd (t/as Easams Australia) v BHP Information Technology Pty Ltd [2003] FCA 688 at [34] (Finn J). I note, however, the reference by Dal Pont at [13.82] to the reasoning of Basten JA in Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 at [143], where his Honour doubted the logic in the hesitation in accepting offers "inclusive of costs" as being valid Calderbank offers, as his Honour observed that a party receiving such an offer should be able to ascertain the party's own costs at the time by enquiry of the party's solicitor. Of course, Basten JA's observations only apply to the case where the offer is made to a party "inclusive of costs" on the basis that the amount offered will cover the offeree's costs, on the assumption that the offeree would be awarded its costs upon success at a final hearing.
8. It is necessary to analyse the nature of the offer made by Ashley in her 8 December 2021 letter. It is an offer by a defendant to a plaintiff to pay an amount claimed by the plaintiff as an alternative claim to a primary claim of the plaintiff that has already failed. The offer assumed that the defendant would be ordered to pay the plaintiff some amount under the alternative claim, but that the plaintiff would be ordered to pay the defendant's costs because of the failure of the primary claim. The offer therefore assumed that the relevant "event" would not be success by the plaintiff but would be success by the defendant. In reality, the offer made by Ashley assumed that there would be a mixed outcome that would trigger the need for the Court to determine the costs order that should be made by the exercise of a broad-brush discretion involving impression and evaluation in accordance with the principles that I have considered above.
9. Apart from the fact that Jerry could not know when he received the 8 December 2021 offer what evidence would be tendered by Ashley in response to his claim, the only information that he had concerning Ashley's costs was her assertion that her costs were at least $250,000. This is not a case where the plaintiff had a reasonably sound basis for estimating the cost component of the offer, as the plaintiff would if the assumption upon which the offer was made was that it would compensate the plaintiff for the plaintiff's own costs. Nothing Jerry could ask of his solicitor would cast light on the issue. The amount of costs that Ashley may have been entitled to recover as of 8 December 2021 could only be determined by a costs assessment. As I have recorded above, Jerry submitted in his reply submission that he only learned as a result of Anjoul v Anjoul (No 3) that the Court of its own motion had decided to determine costs on a gross sum basis. Consequently, the outcome that the Court will determine Ashley's entitlement to costs in these reasons will in a sense be an artificial one.
10. The reasonableness of a party declining to accept an offer made as a Calderbank offer will depend upon many circumstances, including whether it was reasonably possible for the offeree, with the assistance of his or her legal representatives, to make a reasonably objective assessment of that party's prospects of success and the likely outcome of the proceedings, which in this case includes an assessment of the likely amount of the costs the party will be ordered to pay the other party. There will be cases, of which I consider this to be one, where so many issues are 'up in the air' so to speak, and which involve discretionary judgments by the Court based upon impression and evaluation, where it is reasonable for the offeree to proceed to judgment, so that the proceedings are determined by judicial consideration rather than by chance.
11. I conclude that it was not unreasonable for Jerry to have declined to accept Ashley's 8 December 2021 offer in the circumstances of this case.
12. Accordingly, the order will be that Jerry pay the appropriate portion of Ashleigh's costs on the ordinary basis.

Assessment of Ashley's costs as a gross sum

1. The last matter for the Court to deal with is the determination of the gross sum costs that it should order Jerry to pay Ashley. Ashley supported her claim by affidavits sworn by her solicitor on 11 February 2022 and 7 December 2022. This evidence was not answered by Jerry and no application was made to cross examine the solicitor. Jerry did not make submissions on the issue.
2. I note that Ashley's solicitor's evidence of her costs has sometimes been given on a basis inclusive of GST and at other times exclusive of GST. Ultimately, the solicitor said that the cost should be payable on a basis that includes GST. Neither party made any submission concerning the proper treatment of GST.
3. In Ashley's solicitor's 11 February 2022 affidavit, the solicitor gave evidence that Ashley's costs, including solicitor's fees, counsel's fees and other disbursements from 13 December 2018 to about 8 December 2021 were $251,736.60 inclusive of GST. The solicitor gave evidence of clause 6 of the "Costs Payable between Parties Under Court Orders" Guidelines issued by the Costs Assessment Rules Committee. The evidence was that the solicitor's charge out rate was below the bottom of the allowable range for a partner. Junior counsel's rates were below or in the middle of the range. The solicitor omitted to give evidence as to senior counsel's rates and the daily rates charged by counsel. Notwithstanding these omissions, in the absence of any contest, and based upon my experience, I accept that the total costs incurred by Ashley were reasonable and that the proceedings were conducted efficiently on her behalf.
4. Ashley's solicitor gave evidence in his 11 February 2022 and 7 December 2022 affidavits that, in his experience, it is likely that solicitor's costs would have been allowed within the range of 60% to 75% on the ordinary basis on a conventional cost assessment, and disbursements including counsel's fees would have been allowed as to 100%. The solicitor gave the opinion that solicitors costs would be allowed as to 75% in this case. The conclusion reached by Ashley's solicitor was that her total costs of $229,031.46 would have been allowed at $203,482.09, to which GST must be added.
5. In Ashley's solicitor's 7 December 2022 affidavit, the solicitor gave evidence that in the period after 8 December 2021, Ashley incurred total costs and disbursements of $147,066.19. Based upon his experience, the solicitor's opinion was that on the ordinary basis his costs would have been allowed at 75%, while in Ashley's disbursements including counsel's fees would have been allowed as to 100%. I accept this evidence. The result is that on the ordinary basis, Ashley would recover $126,333.44, plus GST.
6. Ashley's claim is for the appropriate amount plus GST. Ashley's solicitor's evidence is that her recovered fees on the ordinary basis for the time period covered in both affidavits (comprised of 75% of her solicitor's fees, and 100% of her disbursements, including counsel's fees) is $329,815.53 before GST. The total amount inclusive of GST is $362,797.08. As I have stated at [72] above, the Court will order Jerry to pay Ashley 70% of her costs of the proceedings on the ordinary basis. 70% of that amount is $253,957.95, inclusive of GST.
7. It is usual when a court assesses a party's costs on the gross sum basis to allow a discount from the assumed result of a conventional cost assessment to allow for the fact that the successful party has not been put to the trouble, cost and delay of the assessment process, and that the other party is denied the opportunity to challenge line items of the costs claim that must generally be accepted on their face unless obviously unreasonable. See Dal Pont at [15.21]. The learned author referred to a range of discounts that is commonly applied of 25 to 40%. He also considered the circumstances in which a lower discount will be appropriate. As the Court decided that the award of costs on a gross sum basis would be appropriate in this case, and as I consider that Ashley's case was conducted efficiently, I am satisfied that the appropriate discount should be less than the common range. I consider that a discount of 15% will be fair and appropriate. On that basis, the amount payable by Jerry to Ashley for costs will be $215,864.26, say $215,000.

Orders

1. The Court's orders are: 1. ORDER declaring the deed between the plaintiff and the defendant dated 3 October 2013 (Deed) void in whole. 2. ORDER that the Deed be set aside. 3. ORDER that, subject to the set off provided for in order 6 below, the fair and reasonable amount of compensation payable to the plaintiff for the renovation and improvements to [the Winston Hills property] is $400,000. 4. ORDER that the plaintiff pay the defendant's costs of the proceedings in the fixed gross sum of $215,000. 5. ORDER that the total amount of costs payable by the plaintiff to the defendant in the sum of $215,000 be set off against the amount of compensation payable to the plaintiff in the sum of $400,000 so that the total amount payable by the defendant to the plaintiff is $185,000. 6. ORDER that the amount payable by the defendant to the plaintiff in the sum of $185,000 in order 5 will, subject to further order, be stayed so that it is only payable out of the proceeds of sale of the property called the Winston Hills property in the judgments in these proceedings. 7. ORDER that the Amended Statement of Claim otherwise be dismissed. 8. ORDER that the Cross Claim otherwise be dismissed. 9. GRANT the parties liberty to apply on 3 days' notice.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 February 2023