Barel v Segal

The Issues 9The principal issue is whether I should accede to the plaintiff's application for partition. If not, there should be a sale. If I do order partition, the defendant contends that I should only do so conditional on the payment by the plaintiff to the defendant of equality money in the sum of $612,500, an occupation fee in the sum of $829,750 and an amount that represents the plaintiff's proportionate responsibility for the joint housing loan from the Commonwealth Bank in the sum of $885,122. Against these three amounts, the defendant accepts that there should be an adjustment in the plaintiff's favour representing the greater contributions made by him in cash and in kind towards the construction of the buildings on the land. The amount of the difference in the parties' contributions has not been determined. It is one of the matters that I had hoped would be resolved in the reference. I deal with this issue in paragraphs [35] - [40] below.

Partition 10In my first judgment, Barel v Segal (No 1) [2011] NSWSC 1181, I expressed a number of opinions about the appropriateness of partition, rather than sale, on the particular facts of this case. I said among other things that having regard to the physical features of the property and an examination of the plans relating to the construction, strata subdivision is "an overwhelmingly obvious and logical choice": [2] and [25]. I explained that "both the plaintiff and the defendant commenced on the path to strata subdivision in 1997": [26], and that the achievement of a strata subdivision represented their intention: [2]. I observed that even when their relationship deteriorated in 2002, work continued on their separate houses. Their continuing mutual intention could only have been to achieve a strata subdivision. They had known since 1998 that a Torrens title subdivision was impossible given the Council's minimum allotment requirements: [27]. And I am quite satisfied that joint ownership, continuing indefinitely, was never intended. 11Following the breakdown of their relationship in 2002, the parties came to an arrangement that the plaintiff would work on his house on the [proposed] Lot 1 and would also assist the defendant with his house on the [proposed] Lot 2: [29]. I am satisfied that this was predicated on an intention to achieve a strata subdivision. When the defendant gave evidence at the hearing last year, he made clear that he did not oppose strata subdivision of the property. He simply opposed the particular form of strata subdivision propounded by the plaintiff. His dispute was with "the form and detail of the plan of subdivision, not whether there should be a plan of subdivision": [3]. 12The defendant's submissions in opposition to partition at this hearing were circumscribed. As I have mentioned, he contended that, if there were to be a partition, a large amount of money should be paid to him, and his counsel submitted that there was no satisfactory evidence of the plaintiff's ability to pay such a sum. As I have explained in paragraph [41] below, I have concluded that in fact, there should be a financial adjustment in favour of the plaintiff. 13The defendant's principal contention was that a sale would provide a "clean break" for the parties and by implication, that partition would not do so. The unstated premise of that contention was that, because partition would not provide a clean break for the parties, it was not "more beneficial" for the defendant than sale. Alternatively, it was a reason why I should not exercise my discretion in favour of partition. 14I should make clear at the outset that this is not a case requiring comparison of the respective economic benefits to be derived from partition and sale. The defendant advanced no submission that his economic benefit from partition would be less than that which he would derive from sale. He led no valuation or other evidence to this effect. If such evidence had been available, it would almost certainly have been a conclusive answer to the plaintiff's claim for partition. It seems more probable than not that the defendant's return on investment will be greater on a strata subdivision than it would be on sale of the undivided land. That, after all, appears to have been the basis on which the parties originally set out on their joint adventure. The defendant's approach adds support to the view that I expressed in Barel v Segal (No 1) at [12] - [14] as to the width of the expression "more beneficial" in Section 66G(4) of the Conveyancing Act 1919. In effect, the defendant's case in opposition to partition disavows the need to resolve the question of whether partition is more beneficial solely by reference to an evaluation of the economic benefits. In any event, the reasonable inference in this case is that such an evaluation would not assist the defendant. 15In my view, partition of the land by strata subdivision will be "more beneficial" to both parties. The defendant's contention that there will not be a clean break if partition is ordered, is neither determinative nor entirely accurate. It is neither a reason for concluding that partition is not "more beneficial" nor a reason why I should exercise my discretion against partition. There are several reasons why this is so: (a) The statutory discretion in Section 66G(1) is not expressly qualified by any necessary requirement for a "clean break", whatever that might mean. Nor is the statutory discretion in Section 66G(4). The only express qualification imposed by sub-section (4) is the need to show that partition "would be more beneficial" than sale. (b) A strata subdivision will give the defendant his own independent title with which he can deal as he wishes. The choice will be his whether he retains it or sells it. Whatever his decision, it will not be trammelled by any need to consult or consider the plaintiff. (c) The necessity for the plaintiff and the defendant to come together as lot owners and members of the proposed owner's corporation is not sufficiently material to detract from the factors favouring partition. The proposed scheme of strata subdivision is of the most simple variety. There is currently minimal common property. And there may be even less when the trustees for partition have prepared a scheme pursuant to Section 66(5)(a). If the defendant chooses to retain his lot, he will control his own destiny. It will be in his interest to conduct himself reasonably. (d) There is a qualitative difference between the nature of a dispute between co-owners as to the disposition of jointly owned land and the nature of a dispute that may or may not arise between two lot owners in a modest scheme of strata subdivision with minimal common property. The plaintiff is not an unreasonable person. Disputation is not inevitable and the opportunities for disagreement will be limited. I do not think that I should assume that the parties will act unreasonably in the limited sphere of activity that will be necessary in the conduct of the affairs of the owners corporation in the proposed scheme of strata subdivision. (e) And finally, for what it is worth, the inference from the defendant's past conduct and his apparent antipathy to the plaintiff is that he may well be more likely to sell than hold. And sale of the existing property and crystallisation of his share of the value of the land are of course what he has sought to achieve in these proceedings. 16For those reasons, and subject to what follows, I do not accept the defendant's submissions. I regard partition as more appropriate and more beneficial for both parties within the meaning of Section 66G(4). That is not the end of the matter however.

Planning Issues 17The defendant also complains about several planning aspects of the plaintiff's draft plan of strata subdivision. But those complaints are no reason for not ordering partition. The defendant's complaints and submissions overlook the independent role of the trustees for partition including their responsibility to prepare a scheme of partition and the statutory process available to a person who is dissatisfied with the scheme that the trustees prepare. I will in due course make an order for partition generally in accordance with the plan of strata subdivision to which Waverley Council has already given in-principle approval. But any order I make will preserve for the trustees the right to entertain submissions and exercise their own judgment on the three planning matters which the defendant has raised. I referred to this issue in my first judgment, when I said at [24]: The trustee, if and when appointed, may herself take the view that, before submission to Council, the plaintiff's proposed plan of strata subdivision should be altered in some way. And of course the plaintiff is prepared to do what is necessary and has given the undertaking to which I referred in paragraph [4] above. 18The three matters of which the defendant now complains concern the path of a proposed inclinator, the adequacy of provision for a turning area outside the garage on the proposed Lot 2 and the apparent encroachment of some polycarbonate roofing onto what would otherwise have been a void area. There is no longer any issue about the path of the proposed inclinator. The plaintiff accepts that the defendant and any successors in title should be entitled to have access by an inclinator to the proposed Lot 2. The plaintiff will do what is necessary to achieve this objective, which may include the removal of any current obstruction. 19The other two issues are in a separate category. They are matters on which, in the first instance, the trustees for partition should exercise their judgment in preparing a scheme of partition pursuant to Section 66G(5). The first of those issues concerns the extent of the turning area outside the garage on the proposed Lot 2. The second concerns the presence of some polycarbonate roofing in a place to which the defendant objects. As to the first, it does not seem unreasonable that any person residing on the proposed Lot 2 should be able to leave the garage on that lot and drive down the steep driveway in a forward direction, rather than reversing all the way. But there may be other considerations which militate against the defendant's desire for an increased turning area to facilitate egress from the garage. As to the second, the evidence does not permit me to express even a preliminary view. 20The trustees for partition will be in a better position that I am to decide what is fair and appropriate, especially if they consult with the parties and Council officers and bring to bear their own experience and expertise. If an outcome is reached with which the defendant remains dissatisfied, he has the right pursuant to Section 66G(5)(a), to apply to the court for a variation of the scheme of partition. 21The existence of a statutory regime for the resolution of issues arising out of a party's dissatisfaction with a scheme of partition prepared by court appointed trustees is a good reason why I should not decline to order partition simply because of the defendant's unresolved discontent with two out of the three planning issues that he has raised. Those issues will in due course be resolved. Given the nature of those issues and the available statutory process for their resolution, I should not allow them to detract from the overwhelming logic that favours partition by strata subdivision. They do not affect the exercise of my discretion. A similar approach was adopted in Dunston v Dunston (unreported, Supreme Court of New South Wales, Cohen M, 14 September 1983), by the experienced former Master in Equity and later judge of this Division who presided in that case.

Equality Money 22I should now turn to the defendant's exorbitant money claims. His first claim is for $612,000 as "equality money". Equality money is an amount that may be ordered to be paid to one party when land is partitioned in unequal shares. It is recognised in Section 66F(3) and derives from general equitable principle. Its purpose is, of course, to prevent injustice. See Chatterton v Chatterton (1989) 52 SASR 337 at 340-341 (Jacobs J); Croghan v Grosvenor (1991) 57 SASR 545 at 549; Story, Equity Jurisprudence (14th ed, 1918) at p661, [654]; Butt, Land Law (6th ed, 2010) at [1495]. 23The application of the principle on which equality money is based is illustrated by the decision of the Supreme Court of India in T S Swaminatha v Official Receiver (1957) 44 AIR (SC) 577. In that case, although there had been an order for partition of various properties among the members of a family, partition was not able to be achieved equally. Bhagwati J explained at 581: While effecting such a partition it would not be possible to divide the properties by metes and bounds there being of necessity an allocation of properties of unequal values amongst the members of the joint family. Properties of a larger value might go to one member and properties of a smaller value to another and therefore there would have to be an adjustment of the values by providing for the payment by the former to the latter by way of equalisation of their shares. 24That principle has nothing to do with the facts of this case. It is not impossible to effect a division of the land in accordance with the parties' expectations as to the share of the parcel which each should receive. There is no need for adjustment. There is, or will be, no injustice and no unequal partition of the property. The proposed Lot 2 to which the defendant will be entitled happens to be less valuable currently than the proposed Lot 1 to which the plaintiff is entitled simply because the defendant has chosen to cease carrying out construction work on the dwelling house that was intended to be his. That house is incomplete while the plaintiff's house, in which he lives with his family, is complete. The current value of the proposed Lot 2 is understandably less than that of the proposed Lot 1. But the lesser value of the proposed Lot 2 is a function of the defendant's own conduct. 25I will in due course adjust the rights of the parties to take account of their unequal contributions in cash and in kind to the construction of the buildings on the land. I will also adjust their rights to take account of their different proportionate responsibilities for the Commonwealth Bank housing loan. But there is no occasion or necessity to provide for equality money to prevent any injustice to the defendant.

Occupation Fee 26The defendant also claims an occupation fee of $829,750. The principle on which this claim is based is another that has no application to the facts of this case. In Forgeard v Shanahan (1994) 35 NSWLR 206, Meagher JA (with whom Mahoney JA agreed) said at 223: As far as equity is concerned, an occupation fee will be exacted in at least two circumstances: first, in a partition suit (or related litigation): if there has been an exclusion, the tenant in occupation will be charged with an occupation fee (see, eg Pascoe v Swan (1859) 27 Beav 508; 54 ER 201); this is an example of equity following the law: and secondly, if the owner in occupation claims an allowance in respect of improvements effected by him, equity will permit such an allowance only on terms that he is accountable for an occupation fee - this is an example of he who comes to equity having to do equity: see Teasdale v Sanderson (1864) 33 Beav 534; 55 ER 476. 27Both circumstances explained by Meagher JA contemplate one co-owner in occupation and another that is not: Forgeard at 223-4 (Meagher JA) and 215 (Kirby P). The above quoted passage from Forgeard is preceded by the following prefatory words which explain and confine its operation: Turning to the liability of a co-owner in occupation to pay an occupation fee, the position at law is fairly clear. He was not liable unless he excluded his co-owner. 28In this case, the plaintiff is not in occupation to the exclusion of the defendant. The defendant is and has been free to come and go as he pleases. It so happens that the plaintiff has completed his house and the defendant has chosen to cease construction of his. But there is no exclusion and no sole occupation. It cannot matter that the defendant is understandably not welcome in the plaintiff's home. This is not the sole occupation or exclusion on which the principle depends. And the defendant has expressed no desire to enter the plaintiff's home, or any reason for doing so. There is no injustice and no occasion or need to require the plaintiff to pay an occupation fee to prevent injustice to the defendant. 29See also Ryan v Dries [2002] NSWCA 3 at [6] (Sheller JA), [12] (Giles JA), and [27], [61] and [75] (Hodgson JA); Luke v Luke (1936) 36 SR (NSW) 310 at 314 (Long-Innes CJ in Eq); McMahon v Public Curator (Qld) [1952] St R Qd 197 at 201 (Macrossan CJ); and McCormick v McCormick [1921] NZLR 384 at 387-388 (Salmond J).

Commonwealth Bank Loan 30The defendant also claims an order that partition be conditional on the payment by the plaintiff of an amount that represents his proportionate responsibility for the Commonwealth Bank loan. This is more orthodox. The defendant relied on the evidence of an accountant named Mr Low. There was no competing evidence from the plaintiff and no attempt in cross-examination to demonstrate error in Mr Low's analysis. Subject to one matter, I accept his figures. 31Mr Low's figures demonstrate that up to 31 March 2009, the amount of the plaintiff's responsibility for the monies outstanding to the bank was $896,942 and the amount of the defendant's responsibility was $7,093. The ratio is 897:7. As at 3 September 2012, the precise sum owing to the bank pursuant to the joint facility was $894,172.29. Mr Low calculated the amount of the defendant's current proportionate responsibility by taking the sum of $7,093 and compounding it at a rate of 7% to August 2012. This equated to $9,050. It is a little more than the figure that would be reached by applying the ratio of 897:7 to the sum of $894,172 but I will act on the basis of Mr Low's calculations. The defendant submitted that I should do so. The amount of the plaintiff's current responsibility was then calculated by deducting $9,050 (the defendant's share) from $894,172 (the current total debt). This leads to an amount of $885,122. 32That figure should be adjusted downwards to take account of a factual error in one of the assumptions made by Mr Low. That error was no fault of his and has its origin in the referee's report. Mr Low assumed that a drawdown of $150,000 in August 2005 was for the equal benefit of each of the parties. In fact, the evidence adduced by the plaintiff at the hearing made it reasonably clear that the sum of $150,000 should be wholly characterised as a drawdown in favour of the defendant. No oral or documentary evidence that might have served to contradict this conclusion was elicited from the defendant. 33The correct analysis of what occurred is that, in the events which happened, the defendant received the benefit of the whole of the drawdown of $150,000. The referee's finding in paragraph [19] of the report that "a further $150,000 was drawn down on 15 August 2005 for the benefit of the plaintiff as to $75,000 and the defendant as $75,000", represents an incorrect statement of the factual position. In fact, the $75,000 received by the plaintiff was set off against monies due by the defendant. Whether or not the referee had the benefit of the evidence that I received, the correct position should be recognised and acted upon. I will deal later in this judgment with the referee's report and the competing claims in relation to it. 34The result is that Mr Low's figures should be re-worked. The proportionate responsibility of the plaintiff at 31 December 2005 should be $711,016 not $786,016. This will affect the consequential interest calculations and lead to a lower figure than the $885,122 for which the defendant ultimately contends as the plaintiff's responsibility.

Contributions in Cash or in Kind 35The final area of adjustment relates to the difference in the parties' contributions in cash and in kind towards the construction of the buildings on the land. The parties produced a schedule of their respective contributions, setting out each of the plaintiff's and the defendant's versions of their respective contributions. The defendant disputed three items in the plaintiff's version. Subject to those three matters, the plaintiff's version of the schedule showed plaintiff's contributions in the amount of $2,257,783 and defendant's contributions in the amount of $779,024 - a difference in favour of the plaintiff of $1,478,759. The three disputed items are $259,951 for labour and materials paid for by the plaintiff; $567,656 representing other labour and materials paid for or supplied by the plaintiff to the extent not otherwise covered; and $28,690 for surveyor's fees and council rates.

The sum of $28,690 36The last item is easily resolved. At the hearing before the referee, the plaintiff apparently claimed $33,080 for a number of expenses paid by him including the $28,690 for surveyor's fees and council rates which the defendant now disputes. Unfortunately, during the reference, the plaintiff did not refer to, or did not provide, any evidence to support these payments. The referee was left in the position that he had nothing on which to base a finding. The necessary supporting evidence has now been provided to me. The defendant did not seek to contradict it. Nor did his counsel cross-examine the plaintiff on the correctness of the statements in his affidavit that he made those payments. I should acknowledge and act upon the reality of what has occurred. I will return later to the referee's report but I should observe that the referee did not make an adverse finding on this issue. He merely noted that "I have been referred to no evidence confirming those payments": [33].

The sum of $259,951 37The dispute over the sum of $259,951 should also be resolved largely in favour of the plaintiff. This figure represents an amount which the referee allowed to the plaintiff after reducing by $17,028 the amount which the plaintiff claimed under this head, namely $276,979. The amount of $259,951 is itself made up approximately of two components - $120,000 for materials and $139,000 for labour. The referee allowed each of these amounts in favour of the plaintiff. The defendant contends that certain adjustments should be made so as to reduce the amount of each of these two sums. He says the plaintiff should only be allowed $59,506 for materials (instead of $120,000) and $110,320 for labour (instead of $139,000) - a total of $169,826. 38The supposed need for those adjustments arises partly from an arithmetical error, which the plaintiff accepts, and partly from the contentious assertion that there was no evidence before the referee to support a number of the amounts which made up the plaintiff's claim. As the arithmetical error is conceded, I should deduct $11,753 from the sum of $259,951. This leaves $248,198 in favour of the plaintiff. I do not accept the defendant's contentions concerning the absence of supporting evidence. I am not satisfied that the absence of evidence has been proved as a matter of fact on the balance of probabilities. Even if it were, I would not, as a matter of both principle and discretion, allow a re-opening of the reference to permit a review by me to determine the content, cogency and probative effect of the detailed evidence that was presented to the referee over a nine day hearing. The experienced referee was well qualified to make that judgment. I will return later to the principles which govern my approach to the report.

The sum of $567,656 39The dispute over the sum of $567,656 is more problematic for the plaintiff. The sum of $567,656 represents the sum total of invoices rendered by the plaintiff for work done by him on the defendant's proposed house on Lot 2. The work was done at the defendant's request during the period 7 February 2005 to 20 March 2007. The defendant paid for most of this work in an amount which the parties have now agreed at $480,715. As the plaintiff has already been compensated for this work, he cannot also claim an allowance for it in the accounting between the parties. He should however be allowed the unpaid balance of $86,941, which should be substituted for the figure in the schedule of $567,656.

The Net Balance 40The result therefore is that the amount representing the plaintiff's contributions towards the construction of the buildings on the land, should be reduced. The sums of $11,753 and $480,715 should be deducted from the sum of $2,257,783. This leaves a total for the plaintiff's contributions in cash and in kind of $1,765,315. According to the plaintiff's version of the schedule, the defendant's contributions were $779,024. The defendant's version of the schedule does not nominate a total figure for the defendant's contributions. However, counsel for the defendant informed me that the only dispute was as to three items attributed to the plaintiff in his version of the schedule - namely $259,951, $567,656 and $28,690. It is not clear to me therefore whether the figure for the defendant's contributions of $779,024 is agreed, or if not agreed, why it is not agreed. If I proceed on the basis of the figure of $779,024, which I think I should do, the difference in contributions in favour of the plaintiff is $986,291. 41Although some further arithmetical calculation and adjustment will be necessary, the result of the accounting between the parties will be broadly as follows. I will make no orders for equality money or an occupation fee. The difference in contributions towards the building and construction costs appears to be approximately $1 million in favour of the plaintiff. Against that, the plaintiff's proportionate responsibility for the Commonwealth Bank loan is likely to be approximately $800,000 when Mr Low's calculations are re-worked. The net balance in favour of the plaintiff will therefore be in the order of $200,000. After delivery of these reasons, I will allow a short further opportunity to the parties for the purpose of finalising these amounts and settling appropriate orders. The plaintiff will be entitled to an order for payment of the net balance. He will also be entitled to an equitable charge over the defendant's [proposed] Lot 2 to secure the monies owing to him.

Referee's Report 42As events transpired at the hearing, the parties adopted a pragmatic approach to the findings in the referee's report. Both counsel co-operated in identifying the findings with which they agreed and those with which either one of them disagreed. Where there was no relevant finding, evidence was led and I was asked to arrive at the correct figure. In effect, the addresses of counsel subsumed their individual objections to particular findings in the report in more general submissions designed to persuade me to reach the figures for which each respectively contended. The principal focus, putting aside the amounts claimed for equality money and an occupation fee, was on the amount of the parties' respective contributions towards the construction costs and the amount of the plaintiff's proportionate responsibility for the Commonwealth Bank loan. 43The defendant's counsel led the way in this sensible, co-operative and pragmatic approach. The hearing was largely conducted by reference to a schedule which he prepared. It was described as "Defendant's Combined Schedule 04.09.12 (Agreed figures in green)". As I have already mentioned, only three items appearing on the schedule were in dispute. I have identified those items and my reasoning in relation to them in paragraphs [35] to [38] above. 44The resolution of those three disputed amounts necessarily implies some adoption, rejection or variation of findings by the referee. It also required, in part, an attempt by the defendant to have me engage in the determination of whether, on some issues, there was sufficient evidence before the referee to support the plaintiff's claim or the referee's finding. In addition, there was one issue on which the plaintiff's evidence in support of a particular claim had not been put before the referee but was tendered before me. 45I have approached all of these issues by reference to the well known principles that govern the treatment of referees' reports. Those principles were set out in Chocolate Factory Apartments Limited v Westpoint finance Pty Ltd [2005] NSWSC 784. The reasoning in that decision has been applied and approved by intermediate appellate courts in New South Wales and Victoria, by the Supreme Court of South Australia and by the Federal Court of Australia: Cordon Investments v Lesdor Properties Pty Ltd [2012] NSWCA 184; Wenco Industrial Pty Ltd v WW Industries [2009] VSCA 191; Built Environs Pty Ltd v Saunders International Ltd [2012] SASC 111 and Shannon v North East Wiradjuri Co Ltd (No 3) [2012] FCA 106. 46To those principles, it is appropriate to refer to the gloss which was added by Spigelman CJ and Allsop P in Bellevard Constructions Pty Ltd v Energy Pty Ltd [2008] NSWCA 228 at [46]: [46] In stating the principles to be applied in the adoption of the referees' report, Einstein J recited the helpful statement of the principles by McDougall J in Chocolate Factory Apartments Pty Ltd v Westpoint Finance Pty Ltd [2005] NSWSC 784 at [7] ... No issue was taken with this expression of the approach to the task of the primary judge. That is not said with any unstated reservation or criticism of how McDougall J expressed the matter. We would only add that the approach of a judge faced with the requested adoption of a referee's report should be determined according to the nature of the issues and the circumstances of the case. . (emphasis added) 47With that qualification, the individual principles articulated in Chocolate Factory that have particular reference to this case, include the following: (7) Generally, the referee's findings of fact should not be re-agitated in the Court. The Court will not reconsider disputed questions of fact where there is factual material sufficient to entitle the referee to reach the conclusions he or she did, particularly where the disputed questions are in a technical area in which the referee enjoys an appropriate expertise. Thus, the Court will not ordinarily interfere with findings of fact by a referee where the referee has based his or her findings upon a choice between conflicting evidence. (8) The purpose of Pt 72 would be frustrated if the Court were required to reconsider disputed questions of fact in circumstances where it is conceded that there was material on which the conclusions could be based. (9) The Court is entitled to consider the futility and cost of re-litigating an issue determined by the referee where the parties have had ample opportunity to place before the referee such evidence and submissions as they desire. (13) A question as to whether there was evidence on which the referee, without manifest unreasonableness, could have come to the decision to which he or she did come is not raised "by a mere suggestion of factual error such that, if it were made by a trial judge, an appeal judge would correct it". The real question is far more limited: "to the situation where it is seriously and reasonably contended that the referee has reached a decision which no reasonable tribunal of fact could have reached; that is, a decision that any reasonable referee would have known was against the evidence and weight of evidence. 48My discretion in relation to the adoption, rejection or variation of a referee's report is wide. In this case, it has been influenced by the fact that I have conducted a further hearing which covered much of the same factual ground and was designed to finalise the position between the parties. I readily allowed the parties to tender further evidence and to put further submissions on matters that had been agitated before the referee. The objective was to finalise the accounting on all issues between the parties, not all aspects of which had been achieved in the reference. 49The result has been that I have acquired a good appreciation of the issues, the evidence and the competing contentions that are relevant both to the merits and to the questions of adoption, rejection or variation of the report. The process has enabled me to be confident about where the interests of justice lie and the extent to which my discretion should be exercised - either to intervene in the findings of the referee or to refrain from doing so. Where a clear mistake was demonstrated, even of a factual nature, I have thought it appropriate to correct it in accordance with the evidence that was tendered in the hearing before me. Where the referee was unable to make a finding because of the absence of evidence, and that evidence was tendered before me, I have made the finding that I thought was appropriate. Where the defendant contended that the evidence before the referee did not support the finding made by him, I have taken into account the plaintiff's opposing contention, considered the nature and quality of the evidence that was available to the referee, and in each case exercised my discretion to refrain from interfering with the findings in issue. 50Although, in a practical sense, the need to do so was overtaken by the course taken at the hearing, I should state the outcome of the competing applications in relation to the referee's report: (a) To the extent necessary, I grant the relief sought in prayers 1A and 2 of the plaintiff's notice of motion. The relief sought in prayer 1B does not arise given the agreement between the parties as to the combined schedule of contributions and the identification of only three amounts in dispute. (b) I dismiss the defendant's notice of motion to the extent that it seeks orders rejecting or varying findings in the report, remitting questions for further consideration and report and deferring adoption of certain findings in the report. (c) Subject to (a), and to the other qualifications and findings that I have explained in these reasons, I adopt the referee's report. 51The fact of the further hearing before me removed any justification for remitting matters to the referee for further consideration and report. It also made it unnecessary to defer the adoption of certain findings in the report. Having followed the methodology that I explained in paragraph [49] above, my investigation of the several complaints that there was no evidence to support certain findings led me to conclude that the exercise of my discretion to reject any findings was not appropriate or justified. 52As I have mentioned, a general consideration which I have taken into account is the fact that the parties put forward a combined schedule, with only three items in dispute. This had the practical effect of rendering somewhat superfluous the necessity for detailed consideration and rulings on the individual complaints set out in the defendant's notice of motion. This was reflected in the way counsel for the defendant conducted the hearing. Rather than directing attention to the formal claims for relief in his notice of motion, the focus was on the admirably clear schedule which he produced and the notes which he attached to it.

Multiple Trustees 53I mentioned earlier that the defendant had no objection to the appointment of Margaret Hole as a trustee for partition subject to the qualification that Section 66G requires two or more individual trustees to be appointed. The defendant is justified in maintaining this qualification. It is quite clear, having regard to the whole of Section 66G of the Conveyancing Act, but particularly Section 66G(3)(a), that the legislative intention is that at least two individual trustees for partition are required to be appointed. The general provision in Section 8(c) of the Interpretation Act 1987 that the plural form includes the singular form must be read subject to this particular requirement of Section 66G of the Conveyancing Act. The plaintiff has only nominated Mrs Hole. I cannot make an order for the appointment of trustees for partition of the land unless and until there is evidence that at least two trustees have consented and that all other formal requirements have been satisfied.

Costs 54Subject to the finalisation of orders, the plaintiff has succeeded in obtaining the relief that he sought when he filed his summons commencing these proceedings on 13 December 2010. The defendant has opposed him at every step along the way. Ultimately he has failed. The ordinary rule is that costs should follow the event and that the loser should pay. That rule represents good policy. It acts as a deterrent to parties against the risk of adopting what may turn out to be a losing position. It encourages circumspection in the conduct of litigation and promotes the necessity for a realistic appraisal of the strengths and weaknesses of the case. And it discourages unreasonable, excessive and uncompromising conduct by either party to the litigation. 55I am satisfied that the circumstances, including most importantly the result, make it reasonable for me to exercise my discretion by ordering the defendant to pay the plaintiff's costs of the proceedings, including the costs of the reference. Those circumstances include the fact that, in my view, the defendant has behaved unreasonably. I referred to his difficult and intransigent approach in my first judgment at [3]. That approach was evident in both hearings over which I have presided. It infused the defendant's case at all levels. It provides additional justification for the costs order that I consider should be made. 56Further, this is an appropriate case for the making of a gross and fixed sum costs order pursuant to Section 98(4) of the Civil Procedure Act. I referred to the considerations which govern the exercise of this discretionary power in Ireland v Retallack (No 2) [2011] NSWSC 1096 at [38] - [44]. There are a number of factors that persuade me to exercise the power to make a gross and fixed sum costs order in this case. They include the likely length and complexity of the assessment process, the likelihood that the additional costs of formal assessment will disadvantage the plaintiff and the fact that the defendant has in my view caused the proceedings to be unnecessarily protracted and complex. I am satisfied that I will be able to arrive fairly at an appropriate sum. By doing so, the parties, and particularly the plaintiff, will avoid the expense, delay and aggravation that all too often attends a protracted costs assessment. I may well appoint an expert pursuant to Rule 31.46 to assist me.

Conclusion & Orders 57I will stand over the proceedings to Friday 5 October 2012 before me in the Expedition List. The parties should agree on the revised calculation of the plaintiff's proportionate responsibility for the Commonwealth Bank loan having regard to the matters that I explained in paragraph [34] above. They should also agree and confirm the difference in contributions to which I referred in paragraph [40] above. The plaintiff but preferably both parties, should also agree on the appointment of a second trustee for partition and obtain that person's consent. Agreed final orders, consistent with these reasons, should be delivered to my associate before 5 October 2012. 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: 21 September 2012