Chetwynd v Rose

Supreme Court of NSW|2020-07-01|Before: Kunc J

Summary

The Court delivered its reasons in this matter on 21 February 2020: Chetwynd v Rose [2020] NSWSC 111 (the "Principal Judgment"). This judgment deals with costs and other consequential matters. It assumes familiarity, and should be read, with the Principal Judgment. Defined terms in the Principal Judgment have the same meaning in these reasons.
The Chetwynds have failed in these proceedings, except in relation to two relatively minor matters (the "Minor Matters"). In the Principal Judgment, the Court found, first, that Glynis owes the Chetwynds $15,953 for dividend payments that they should have received but did not, and second, that the Chetwynds are entitled to a declaration that their loan account in the books of Wincot should be adjusted by $53,740 being deducted from Glynis' loan account and a corresponding credit being made to the Chetwynds' loan account.
For her part, Glynis has had the vast measure of success in these proceedings. She has succeeded in all but the Minor Matters, and, most importantly, has satisfied the Court that she is a one third beneficial owner of the Armidale Property who is entitled to orders for the sale of that property pursuant to s 66G of the Conveyancing Act 1919 (NSW) (the "Act").
To crystallise a number of issues outstanding to give effect to the Principal Judgment, Glynis filed an amended notice of motion which sought: "1. Pursuant to section 66G of the Conveyancing Act 1919 (NSW), that: (a) That Morgan James Chubb and David Michael Morgan ("the Trustee") be appointed trustee of the property situated at XXX Drive, Armidale, NSW, 2350, being the whole of the land comprised in Folio Identifier XXX/XXXXX ("the land"); (b) the land vest in the Trustee subject to any encumbrances affecting the entirety thereof but free from any encumbrances affecting any undivided share or shares therein upon the statutory trust for sale pursuant to Division 6 of Part 4 of the Conveyancing Act 1919; 2. That Trustee pay out of the proceeds of sale of the land: (a) Council rates, water rates, strata levies and other statutory duties or charges (if any) in respect of the land; (b) real estate agent's commission and charges and any other costs of the sale of the land; (c) the Trustee's costs of acting as trustee. 3. That the net proceeds of sale remaining after all such payments have been made be divided and distributed as follows: (a) Subject to paragraph (b) below, the sum be divided and distributed in equal 1/3 shares ("Shares" ) between the First Plaintiff , the Second Plaintiff , and the Defendant; (b) The following amounts be distributed to the Defendant from the combined Share of the First and Second Plaintiff: (i) the sum $100,679.04, being the 66G adjustment referred to in paragraph [376] of the Judgment ("Adjustment Sum"); (ii) interest on the Adjustment Sum, in a sum to be determined by the Court; (iii) the Defendant's costs, pursuant to the orders in paragraph 4 and 5 below. 4. Pursuant to section 98(1) of the Civil Procedure Act 2005 ("Act"), and (sic) order that the Plaintiffs are jointly and severally liable for the costs of the Defendant on an indemnity basis. 5. Pursuant to section 98(4) of the Act, an order that the Defendant is entitled to a gross sum of costs in the amount of $350,000 instead of assessed costs, and that the Plaintiffs are jointly and severally liable for that sum."

The costs of the proceedings

Glynis submitted that Brian, Jill and Wincot should be jointly and severally liable to pay her costs of the proceedings on the indemnity basis. However, as will be apparent from the amended notice of motion (see paragraph [4] above), Glynis sought an order that those costs be fixed at $350,000 (being a significant discount from her solicitor client costs).
Brian submitted that the Court should order that each party pay their own costs. I pass over a submission made by Brian in passing that Glynis should pay the plaintiffs' costs. He went on to submit: "In the alternative, the Plaintiffs submit that the Court order a costs assessment of the Defendant's costs as submitted by them. In the alternative, the Plaintiffs submit that all costs identified by the Plaintiffs as being incorrect, unfair or improper, be deducted from Gross Costs Order that otherwise might have been made by the Court."
The issue of whether Glynis is entitled to her costs can be shortly dealt with. In paragraph [599] of the Principal Judgment, I expressed "my preliminary view that costs should follow the event so that the Chetwynds and Wincot will be liable to pay Glynis' costs of the proceedings". As I have set out above, Glynis has (with the exception of the Minor Matters) succeeded in this case, above all establishing that she is a one third beneficial owner of the Armidale Property.
Costs are in the discretion of the Court. Nevertheless, unless the Court is persuaded that some other order should be made, generally costs should follow the event (see UCPR Part 42, rule 42.1). Given her almost complete success, the Chetwynds and Wincot should pay Glynis' costs of the proceedings (subject to the further consideration below of the plaintiffs' respective liability to Glynis for those costs).
In his submissions, Brian raised, in essence, two matters in support of his submission that each party should pay their own costs. Each of those submissions is rejected for the following reasons.
First, Brian submitted that Glynis had been intransigent in her approach to the litigation and had sought "to deliberately frustrate, delay and hinder the Plaintiffs, by taking advantage of same being a self litigant". A detailed history of these proceedings is set out in paragraphs [14] to [71] of the Principal Judgment and in the affidavit of Glynis' solicitor, Mr Campbell, sworn 16 March 2020. Having regard to that history, the matters to which Brian has referred the Court and my observation of the proceedings over an extended period of time, I am in no doubt that Brian's characterisation of Glynis' conduct of the proceedings is the opposite of what in fact occurred.
The Court is satisfied that every appropriate concession (and more) was extended to the Chetwynds and Wincot by Glynis in the conduct of the proceedings. To my observation, the proceedings were a model of how a represented party should conduct litigation against an unrepresented party: not sacrificing the represented party's interests but ensuring that the overriding purpose under s 56 of the Civil Procedure Act 2005 (NSW) (the "CP Act") is achieved by not insisting on technicalities and offering practical and procedural assistance to the self-represented litigant (to the extent that the latter will accept that assistance).
The second basis advanced by Brian to resist an order that costs should follow the event was that "the matter should never have come to this Court in the first place. The Plaintiffs made every attempt at various times to settle the matter, however the Defendant continued to refuse to talk or negotiate". Brian laid particular emphasis on an offer which he said had been accepted by Glynis in June 2015 from which he alleged Glynis subsequently resiled.
Dealing first with the offer allegedly accepted in late May or June 2015, Brian's evidence was that Glynis had agreed to be bought out of the Armidale Property for $130,000. Glynis accepted such an offer had been made but denied that she had ever said any more than that she would consider it. The Chetwynds did not seek to enforce the alleged agreement, so that its status was not a matter determined in the Principal Judgment and it is not appropriate to do so now.
However, conformably with the Court's views of the parties' credit as set out in the Principal Judgment, if necessary the Court would prefer Glynis' recollection of events and find that the offer was never accepted. That finding is fortified by the fact that the parties also accepted that at the time of the alleged offer they were aware of a market valuation of the Armidale Property for $675,000. It is highly unlikely that Glynis would have accepted an offer of nearly $100,000 less than what appeared at the time to be the value of her interest in the Armidale Property.
In relation to the various other offers made by the Chetwynds to resolve the proceedings that are referred to in the evidence, the difficulty for the plaintiffs is that some of those other offers did not even acknowledge Glynis as having any interest in the Armidale Property and contemplated her not only transferring the property to the Chetwynds, but making payments to them. There was also an incomplete offer (by which I mean not capable of acceptance in its terms) during the first hearing whereby the Chetwynds offered to pay Glynis $213,000 for the transfer of the Armidale Property "conditional upon the other issues in our Summons being resolved".
On any view, the outcome of these proceedings for Glynis is far better than the position she would have achieved if she had accepted any of the offers referred to by Brian. They are irrelevant to the Court's consideration of who should pay the costs of the proceedings.

Ordinary or indemnity costs

Glynis submitted that she should have her costs on the indemnity basis. For the reasons advanced on her behalf, which I shall summarise in what follows, the Court accepts that submission. In reaching my conclusion I have taken into account that an order for indemnity costs is a departure from the usual position and is not to be made as some form of punishment of the costs respondents.
Brian's submissions did not engage in terms with the distinction between ordinary and indemnity costs and the way in which Mr Stowe's submissions approached that question. As I understood them, Brian's submissions on this point raised two matters.
The first of these was to draw attention to the history of the Chetwynd's settlement offers, to which I have referred in paragraphs [15] to [17] above. Just as they proved to be irrelevant to the question of who pays costs overall, the Chetwynds' various offers of settlement to Glynis are irrelevant to the distinction between ordinary and indemnity costs because, given the outcome of the proceedings, on no view was Glynis' failure to accept any of those offers unreasonable.
The second matter was that in his submissions Brian identified a number of examples of what he, without the benefit of expert evidence, asserted were unreasonable levels of charging by Glynis' lawyers. The Court does not accept his assertions (especially in the face of Glynis' expert costs evidence to which I refer in paragraphs [42] and following below). In any event, I do not regard Brian's submissions on this point as relevant to whether or not an order for indemnity costs should be made.
If they were otherwise well founded, they may have some relevance to a submission that certain costs should be disallowed, even on the indemnity basis, because they are unreasonable. While Brian did not put his arguments in this way, even such a submission would not avail the plaintiffs, because the Court is well satisfied that even if there were some charges that were unreasonable (and I emphasise that the Court makes no findings to that effect) they would be well and truly accounted for in the very conservative figure which Glynis claims as gross sum costs ($350,000, representing a 34% reduction from her solicitor client costs).
I accept Mr Stowe's submissions as to why this case is an appropriate one for an indemnity costs order. However I express my reasons, while based on Mr Stowe's submissions, as follows, being the cumulative effect of seven considerations, each of which is a classical basis for enlivening the Court's discretion to award indemnity costs.
First, I am satisfied that these proceedings were clearly an example of proceedings commenced or continued in circumstances where the plaintiffs, properly advised, should have known that they had no chance of success. While this was clear in relation to the proceedings brought by the Chetwynds alone, this conclusion is all the stronger in relation to the claims advanced on behalf of Wincot.
This is not a conclusion which the Court has reached simply with the benefit of hindsight having regard to the conclusions in the Principal Judgment. As the Principal Judgment records, Brian brought the proceedings in the face of a number of documents prepared by him and referred to in the Principal Judgment which were, in effect, contemporaneous admissions that the three way split arrangement applied in relation to the Armidale Property. The Chetwynds, properly advised, should have known that, as the Principal Judgment found (see Principal Judgment at [8]), Brian's attempts to rationalise or explain those admissions were completely unpersuasive, perhaps even to him.
The same considerations support the Court's second conclusion, being that these were proceedings that were commenced or continued in wilful disregard of known facts.
Third, on any view the Chetwynds ought subjectively have been aware of the weakness of their case. As I noted in the Principal Judgment (at [9]), Brian is a "strong character, articulate and intelligent". Brian brought on Jill's and his case, and then added Wincot, with a stubborn intransigence that bespoke an intelligent man who simply refused to face the facts of what he had done in making arrangements on behalf of the Chetwynds with Glynis in relation to the Armidale Property.
Fourth, I noted at paragraph [5] of the Principal judgment that "The case also expanded into a vociferous attack on Glynis' integrity and the accuracy of the accounts for Wincot which Glynis had maintained as bookkeeper. That attack extended to Wincot's longstanding external accountant, Mr William ("Bill") Herd, who provided accounting services to Wincot from the 1990s until December 2013." Mr Stowe submitted that one ground for a special costs order was if proceedings are commenced or continued for some ulterior motive. While I accept that one motive for the proceedings was the entirely proper one of attempting to vindicate what Brian saw as the Chetwynds' rights in the matter, I am also satisfied to the Briginshaw standard that another significant motive for the proceedings, at least by the time of the first hearing before me, was a deeply misguided, perhaps even irrational, vendetta against Glynis and Mr Herd.
Fifth, I accept Mr Stowe's submission that an additional ground for ordering indemnity costs in this case was the Chetwynds' conduct in causing undue prolongation of the case by groundless contentions. The proceedings were greatly lengthened and complicated by Brian's introduction of the reconstructed ledger for Wincot which he had prepared himself. As I found in the Principal Judgment (at [258]): "…the reconstructed ledger is exactly that: a reconstruction by Brian to reflect what he would like the Court to find happened, without providing any persuasive evidence by reference to which the Court could be satisfied that the reconstructed ledger gives a true and fair view of what actually occurred at the time…."
Sixth, I accept Mr Stowe's submission that an additional factor in favour of the making of a special costs order were the numerous and repeated allegations of fraud made by Brian against Glynis and Mr Herd. I am not persuaded that Brian genuinely believed those allegations. I am, however, persuaded to the Briginshaw standard that he was recklessly indifferent to their truth or not because, in the absence of any expert or other persuasive evidence, Brian had little or no basis for the wholesale attack that he made on Glynis and Mr Herd.
While it may be accepted that, in the course of his cross-examination, Brian identified matters which Glynis accepted were errors, they were far from indicative of fraud. A lawyer, properly seized of his or her ethical obligations, could not have responsibly advanced the allegations of fraud or of conduct tantamount to fraud which became an important part of Brian's case. In relation to Mr Herd, Brian was unable to establish any matter which could possibly have justified the wide ranging and serious allegations which Brian sought to make against someone who had formerly been his trusted accounting advisor.
Seventh, Mr Stowe relied on a pre-action settlement offer sent to the Chetwynds by Glynis' solicitors. That letter is reproduced at paragraph [148] of the Principal Judgment. It was headed "Without Prejudice save as to Costs" and concluded that if the offer was not accepted, Glynis would commence proceedings under s 66G of the Act and would "be seeking an order for costs in [her] favour, including all legal costs". The offer was that, by reference to a valuation commissioned by Glynis, the Chetwynds should purchase her interest in the property for $225,000, applying the $73,964.87 held by Glynis on behalf of the Chetwynds towards the deposit for the sale of her interest to them.
In the events which happened, the Chetwynds would have been well advised to have accepted this offer. I am also satisfied that Brian must, or ought to, have been aware of the matters set out in paragraphs [25] to [31] above such that the Chetwynds' refusal of the offer is unreasonable. Were this offer and its rejection the sole basis for Glynis' application for an indemnity costs order, it would be necessary for the Court to come to definitive conclusions about whether or not the letter constitutes a Calderbank offer, including the effect (if any) of its failure to refer to the decision in Calderbank v Calderbank or to threaten an application as to indemnity costs. However, in this case, it is not necessary for the Court to embark upon that exercise. The letter represents a carefully considered and entirely reasonable offer of settlement by Glynis to the Chetwynds. She has achieved in this litigation a result at least as good as that contemplated by the offer.
Whatever its effect may have been on the exercise of the Court's costs discretion if it were a standalone consideration, I have taken into account the making of the offer and its unreasonable rejection by the Chetwynds as a further, cumulative feature with the other six matters to which I have referred. Collectively, these matters have satisfied me that doing justice in this case warrants the making of an order that Glynis have her costs paid on the indemnity basis.

A gross sum costs order?

Glynis sought a gross sum costs order pursuant to s 98 of the CP Act in the sum of $350,000. Brian's submissions, about which I will say more below, did not really engage with Mr Stowe's submissions both as to whether a gross sum costs order should be made and in what amount. Nevertheless, I understood the position of the plaintiffs to be that if they were ordered to pay Glynis' costs, those costs should be assessed. Alternatively, Brian submitted on the basis of what he said was research he had undertaken and his own view of the matter, that if Glynis' costs were assessed as a gross sum, the amount should be $150,000.
The plaintiffs did not file any evidence in response to the evidence filed on this point on behalf of Glynis. Glynis relied on affidavits sworn by her solicitor, Mr Campbell, on 16 March 2020 and 5 June 2020, together with an independent expert's report dated 4 June 2020 from Ms Alyson Ashe, a former Registrar of this Court and now a highly experienced legal costs consultant and assessor. Quite apart from the fact that the plaintiffs filed no evidence in response, I accept Mr Campbell's and Ms Ashe's evidence, all of which I have carefully reviewed, as thorough, reasonable and inherently plausible.
In his affidavit of 16 March 2020, Mr Campbell's evidence was that Glynis' total solicitor client costs to that point were $490,202.41 comprising: 1. Solicitor's costs of $179,882.26; 2. Counsels' fees of $274,454.18; and 3. Disbursements of $35,865.97.
In his later affidavit of 5 June 2020, Mr Campbell updated his evidence of Glynis' total solicitor client costs to take account of what had been incurred since the delivery of the Principal Judgment and, in particular, preparation of the extensive materials for the various applications the subject of these reasons. By the time of Mr Campbell's second affidavit, Glynis' total solicitor client costs had increased to $532,881.21. The most important point to note for present purposes is that, notwithstanding that increase, Glynis maintained her submission that her costs should be assessed in a gross sum of $350,00 (i.e. she did not seek an increase in that amount to reflect the additional costs that had been incurred since the application had first been brought).
The balance of Mr Campbell's first affidavit was concerned with a detailed history of the proceedings, explaining why the matter had been primarily conducted by himself as a highly experienced commercial litigator admitted to practice in 1979 together with a very senior junior counsel, being Mr Stowe. The burden of Mr Campbell's first affidavit, was to offer his reasoned opinion - which the Court accepts - that Glynis' costs were fair and reasonable in all of the circumstances.
In what the Court assumes was an entirely sensible decision to contain costs, Ms Ashe was not asked (as sometimes occurs in applications of this kind) to conduct her own assessment of Glynis' likely recoverable costs. Instead, she described her task as having been "asked a series of questions as to the process and cost of determining fair and reasonable costs by various processes of costs assessment in New South Wales". Significantly, she approached the questions she had been asked on the basis Glynis was to recover her costs on the ordinary basis, and not the indemnity basis.
I gratefully adopt the summary of Ms Ashe's conclusions that was included in paragraph 25 of Mr Stowe's written submissions dated 7 June 2020: "25 Her report addresses a number of matters which provide extremely strong support for the making of a gross costs order for no less than $350,000: (a) in paragraphs [48]-[89], Ms Ashe describes the ordinary cost assessment process, as to which Ms Ashe: (i) concludes that the bill of costs would likely be 150 pages: [70]; (ii) agrees with the observation by Perram J in Clipsal Australia Pty Ltd v Clipso Electrical Pty Ltd (No 4) [2017] FCA 436, that the process is "slow, expensive and gruelling": [68]; (iii) notes that the costs are generally in the order of 7% to 10% of professional fees: [66]; (iv) estimates that the total costs of Ms Rose in the assessment process would be in the order of $45,000 plus GST: [89] (v) observes that "the costs assessment is likely to "marr" at least a further year of the Chetwynd's retirement (assuming Mr Chetwynd and his wife retain conduct of objecting to the costs assessment) and likely much longer if a Review ensues": [81]; (b) in paragraphs [90]-[107], Ms Ashe describes an alternative process of costs assessment based on the appointment of a referee pursuant to Part 20, Division 3. Ms Ashe observes that this process "has occurred on various appropriate occasions…..it is a "user pays" situation and potentially more expensive than costs assessment": [91]. [94]. Ms Ashe comments that "the rationale for gross costs is that it is the trial judge who undertakes the assessment with the resultant benefit that the trial judge has direct knowledge of the proceedings, and therefore there are cost savings achieved through not having to put on extensive evidence about the background and features of the case which could impact on costs. Accordingly…a reference out is therefore not conventional practice when an application for gross costs is made. Further it adds a significant overlay of costs compared to a court making the order without assistance of a referee": [96]. Ms Ashe's estimate that the "costs of the Reference would be in the order of $66,000 incl GST - especially if the objecting parties require an approach more in the nature of a taxation of costs": [106]; (c) Ms Ashe concludes that the following specific aspects of the Defendant's costs (which were the subject of specific complaint by the Plaintiffs) were fair and reasonable: (i) Mr Campbell's charge out rate of $450/h (plus GST): [134]; (ii) Mr Campbell's sole carriage of the matter (subject to minor adjustment): see paragraph 15(b) above (iii) Mr Stowe's fee rate of $450/h: [136]. Ms Ashe further concludes that counsel's fees "are likely to be at least 90% recoverable": [137]; (iv) Mr Herd's expert witness fees: see paragraph 15(c). (d) Ms Ashe was instructed to opine on the "typical range of percentage recovery of solicitor-client costs in a cost assessment in the Supreme Court on a party-party basis, and indemnity costs basis": [143]. She concludes: (i) Party-party costs: "The range….is 60% to 75% of solicitors' fees; 90% to 100% of counsel's fees and witness and expert expenses and most miscellaneous disbursements…..This can equate to between 70% and 80% of the claim": [163]; (ii) Indemnity Costs: "On the indemnity basis the typical outcome is 85% to 95% of the claim": [167] (e) On the basis of certain (reasonable) assumptions about the nature of the proceedings (summarised at [122]), Ms Ashe concluded that: (i) "it is possible to determine whether costs [in these proceedings] are likely to be recovered within the range of typical outcomes, or above or below them, and can be a tool for settlement of costs on a broad brush basis": [170]; (ii) there is a reasonable basis for "positive inference" that the recoverable costs in this case will "fall within the typical range", for detailed reasons elaborated in paragraphs [171] to [174]; (iii) "there is no positive basis for doubting that the percentage recovery of solicitor client costs in this case will fall within the range of percentage recovery of solicitor-client costs I have identified": [177]; (iv) based on a "broad brush" assessment, the application of the typical range of recovery for different components of costs translates to a "76% overall recovery of the costs incurred" on a party-party basis: [166]."
Furthermore, not least in order to demonstrate that Ms Ashe had not taken an entirely uncritical approach to the information with which she had been presented, I record and accept these conclusions expressed in her report: "163. The range that I have identified in my answers in paragraphs 154, 160 and 162 is for party party costs is 60% to 75% of solicitors' fees; 90% to 100% of counsel's fees and witness and expert expenses and most miscellaneous disbursements (external photocopying and travel expenses). This can equate to between 70% and 80% of the claim. Sometimes more - depending upon the relative proportion that solicitor's fees bear to Disbursements. 164. The amounts I discuss in the following example are in "broad brush" terms. By way of example and taking into account the circumstances of these proceedings; the total fees of FWO (some of which are unbilled) are in the order of $180,000; Counsel fees total $274,454.18 and together with Mr Herd's witness expenses and miscellaneous disbursements, total in excess of $300,000. If 75% of the solicitor's fees are allowed 135,000) and 90% of disbursements ($270,000). The total recovery of $405,000 is 84% of the total claim $480,000. 165. The 75% allowance to the solicitor (rather than 60%) is likely where the rates are reasonable. In this matter, where there is little opportunity for duplication because of the lack of delegation, the 25% disallowance is most likely to be a reduction in time spent. 166. Finally I opined in Answer to Question 7 that the lack of delegation and some concerns with the use of the 6 minute minimum unit would result in a likely further discount of 8% below the 84% result in paragraph 164. In the result the "typical percentage" translates to a 76% overall recovery of the costs incurred. 167. On the indemnity basis the typical outcome is 85% to 95% of the claim. Since an indemnity order has not yet been made I have not addressed where in that range this matter would fall. However based on the party party opinions I express, it would be at the higher end."
As I have noted, Brian's submissions did not engage in terms with the way Glynis' application was put for a gross sum costs order by reference to either principle or the particular calculations that were urged upon the Court. His submissions did draw attention to some specific matters which he said should not be taken into account such as the costs incurred for the mediation and senior people such as Mr Campbell and Mr Stowe undertaking tasks that someone more junior could have done. Ms Ashe responded to these points in a way which I accept, including by making an 8% deduction for lack of delegation and related matters (see paragraph 166 of her report set out in the preceding paragraph).
I should nevertheless also make express my agreement with Ms Ashe and Mr Campbell, based on my observation of the matter, that this was a case where having most of the work done by Mr Campbell and Mr Stowe rather than more junior personnel was entirely appropriate. I am satisfied that the proceedings were run very efficiently and cost effectively because there were two experienced practitioners, solicitor and counsel, exclusively responsible for its conduct.
In any event, by my calculation, Brian put into specific issue approximately $50,000 of Glynis' solicitor client costs. On any view, the monetary value of the matters relied upon in Brian's submissions is considerably less than the discount from solicitor client costs of more than $150,000 proposed by Glynis in maintaining her application for a gross sum assessment in the sum of $350,000.
While Brian's submissions may not have engaged with the particulars of the way Glynis' application was put, I have taken into account the tone of Brian's submissions. They include submissions to the effect that "the costs detailed by the Defendant are grossly overstated and in some areas completely unjustified". Then in reference to Mr Herd's report, the sum claimed was "at the least, quite vague, nebulous and altogether quite dubious" and represented "just another example of the exaggeration in the claim for costs", and that "Mr Campbell simply 'loaded' his charges to a much higher level than was commercially an acceptable going rate at the time".
In fairness to the plaintiffs, I have also taken into account that they suggested that the figures which they had queried were not a submission that their alternative calculations "be used", but rather that they demonstrated the case for "the defendant's costs claim to be properly and professional assessed". Nevertheless, the way in which Brian has responded to Glynis' submissions as to costs fortifies me in a conclusion which my observation of Brian's conduct of the proceedings in any event compels, namely that any costs assessment would be unduly protracted by an unreasonable and unnecessarily combative approach on the part of Brian.
There was no dispute about the applicable legal principles for a gross sums costs order. I respectfully adopt and apply the summary set out by Beazley JA (as her Honour then was and with whom Giles and Whealy JJA agreed) in Hamod v State of New South Wales & Anor [2011] NSWCA 375: "813. I have already set out the relevant provisions of s 98. The discretion thereby conferred upon the court is not confined and may be exercised whenever the circumstances warrant its exercise, having regard to the scope and purpose of the provision: Harrison & Anor v Schipp [2002] NSWCA 213; 54 NSWLR 738 per Giles JA at [21]-[22]. In Harrison v Schipp, Giles JA considered that the discretion in s 98(4) may be exercised where the assessment of costs would be protracted and expensive and, in particular, if it appeared that a party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment. However, his Honour stated, at [22]: "The power should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available." 814 See also Wentworth v Wentworth (Court of Appeal, 21 February 1996, unreported). The courts have typically applied a discount in assessing costs on a gross sum basis: Ritchie's Uniform Civil Procedure NSW , LexisNexis, Sydney, 2005 to date, " Civil Procedure Act ", at [s 98.65]; Charlick Trading Pty Ltd v Australian National Railways Commission [2001] FCA 629; Sony Entertainment (Aust) Ltd v Smith (2005) 215 ALR 788; Idoport Pty Ltd v National Australia Bank Ltd ; Lorenzato v Lorenzato & Anor (No 2) [ 2011] NSWSC 790 per Black J. 815 In Beach Petroleum NL v Johnson (No 2) (1995) 57 FCR 119; 135 ALR 160, von Doussa J noted that the specified gross sum costs procedure was particularly useful in complex cases, that the power must be exercised judicially and only after giving the parties an adequate opportunity to make submissions, and that before exercising the power the court should be confident that the approach taken to estimate costs is fair, logical and reasonable. 816 The terms of s 98(4), together with the more general considerations reflected in the Civil Procedure Act , ss 56(1), 57(1)(d) and 60, suggest the factors that merit particular consideration include: the relative responsibility of the parties for the costs incurred (for example, Harrison v Schipp ); the degree of any disproportion between the issue litigated and the costs claimed; the complexity of proceedings in relation to their cost; and the capacity of the unsuccessful party to satisfy any costs liability: Ritchie's Uniform Civil Procedure NSW at [s 98.45]. 817 The exercise of the power conferred by s 98(4) is particularly appropriate where the costs have been incurred in lengthy or complex cases and it is desirable to avoid the expense, delay and aggravation likely to be involved in contested costs assessment. This may arise either from the likely length and complexity of the assessment process: Beach Petroleum NL v Johnson (No 2) at 120; Charlick Trading Pty Ltd v Australian National Railways Commission ; Australasian Performing Rights Association Ltd v Marlin [1999] FCA 1006; or from the likelihood that the additional costs of formal assessment would disadvantage the successful party because of the likely inability of the unsuccessful party to discharge the costs liability in any event: Harrison v Schipp ; Sony Entertainment (Aust) Ltd v Smith (2005) 215 ALR 788 at [90], [194]-[195]; Hadid v Lenfest Communications Inc [2000] FCA 628. 818 The power may also be exercised where a party's conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceedings: Leary v Leary [1987] 1 WLR 72; [1987] 1 All ER 261; Sony Entertainment (Aust) Ltd v Smith; Microsoft v Jiang (2003) 58 IPR 445; [2003] FCA 101; Ritchie's Uniform Civil Procedure NSW at [s 98.60]). 819 The assessment of any lump sum to be awarded must represent a review of the successful party's costs by reference to the pleadings and complexity of the issues raised on the pleadings; the interlocutory processes; the preparation for final hearing and the final hearing: Smoothpool v Pickering [2001] SASC 131. In the exercise of its discretion the court is not required to undertake a detailed examination of the kind that would be appropriate to taxation or formal costs assessment: Harrison v Schipp at 743; Hadid v Lenfest Communications Inc at [35]; Auspine Ltd v Australian Newsprint Mills Ltd (1999) 93 FCR 1 at 5; [1999] FCA 673. 820 The costs ordered should be based on an informed assessment of the actual costs having regard to the information before the court (for example, by relying on costs estimates or bills): Beach Petroleum NL v Johnson (No 2) ; Leary v Leary ; Harrison v Schipp at 743 ; Sparnon v Apand Pty Ltd (FCA, 4 March 1998, unreported) . The approach taken to estimate the costs to be ordered must be logical, fair and reasonable: Beach Petroleum NL v Johnson at 164-165 ; Hadid v Lenfest Communications Inc at [27]; Harrison v Schipp at 743 . This may involve an impressionistic discount of the costs actually incurred or estimated, in order to take into account the contingencies that would be relevant in any formal costs assessment: Leary v Leary at WLR 76 per Purchas LJ; Beach Petroleum NL v Johnson (No 2) at 123; Auspine Ltd v Australian Newsprint Mills Ltd at 164-165."
The gravamen of Mr Stowe's submissions was that virtually all of the recognised discretionary reasons why a gross sum costs order should be made were present in this case. I agree. To this may be added my conclusion that the reasons which follow demonstrate that making a gross sum costs order satisfies the Court's duty to exercise any discretion under the CP Act to achieve the overriding obligation.
I observed at paragraph [2] of the Principal Judgment that "A particularly unfortunate aspect of this case is that it has marred several years of what should otherwise have been well earned retirement years for each of the parties". Each of the Chetwynds and Glynis are of an age where they should be entitled to enjoy their retirement. Over the course of my management of these proceedings, each of them has had health issues. It is clear from the evidence that Glynis, both before and after the commencement of these proceedings, has had significant illnesses with an ongoing impact on her physical and mental wellbeing. It would be profoundly unjust to commit these parties to what I find will be a lengthy and complex costs assessment process, made all the more so by what I am satisfied (see paragraph [48] above) will be the unreasonable attitude that Brian will bring to such a process.
Furthermore, although not the subject of specific evidence for the purposes of this application, enough has been said to me by Brian about the Chetwynds' financial position to satisfy me that there is a very real question whether the Chetywnds will be able to meet a costs order likely to result from an assessment, even if that were to be paid from the proceeds of sale of their share of the Armidale Property. Nor am I satisfied that the Chetwynds will be able to pay the costs of a formal assessment.
As will also be apparent from the Principal Judgment and what I have said earlier in these reasons, the plaintiffs are primarily responsible for the very substantial costs which Glynis has incurred by reason of their having advanced claims which, as I have found above, properly advised they ought to have known had little or no chance of success. Their conduct resulted in converting what could have been a relatively straightforward piece of litigation about beneficial ownership in the Armidale Property to something much longer and more complex, requiring a detailed examination of a largely undocumented personal and commercial relationship which had existed to their mutual benefit for many years.
Finally, I find that on the basis of Mr Campbell's affidavits and Ms Ashe's report, the Court is in a position to make an informed assessment of Glynis' costs which is logical, fair and reasonable. I am fortified in that conclusion, and am satisfied that no additional discount is required, because the figure of $350,000 advanced by Glynis represents a more than sufficient discount to her likely recoverable costs on the indemnity basis to which I have determined she is entitled. Furthermore, even if I were wrong in my conclusion that she was entitled to her costs on the indemnity basis, in my view the discount represented by her claim for $350,000 would yield the same result (and I would make an order to like effect) even if her costs were assessed only on the ordinary basis.
Turning to the detail of the quantum, I accept Mr Campbell's evidence that the professional costs charged by him and by counsel were reasonable and proportionate. The Court also accepts Ms Ashe's opinions set out in paragraphs [42] and [43] above. On the ordinary basis, it was Ms Ashe's opinion the broad brush assessment that would apply to a case such as this would translate to a 76% overall recovery of the costs incurred on a party party basis. She went on to say that on the indemnity basis the typical outcome is 85% to 95%, with this case likely to yield a result towards the higher end of that range. For present purposes I will adopt the mid-point of 90%.
The $350,000 contended for by Glynis represents 71.39% of her solicitor client costs set out in Mr Campbell's first affidavit ($490,202.41) and 65.68% of her solicitor client costs as set out in Mr Campbell's second affidavit ($532,881.21). Having regard to Ms Ashe's evidence, the Court concludes that the sum of $350,000 represents a more than adequate discount in fairness to the plaintiffs from what Glynis would be likely to recover on an assessment of her costs on the indemnity basis. The discount is equally sufficient if, contrary to the conclusion I have reached above, the assessment were to be undertaken on the ordinary basis. The Court concludes that in the exercise of its discretion Glynis is entitled to an order for her costs of the proceedings on the indemnity basis assessed as $350,000.

As between the Chetwynds and Wincot, who should be responsible for Glynis' costs?

In paragraph [599] of the Principal Judgment, I expressed the preliminary view "that costs should follow the event so that the Chetwynds and Wincot will be liable to Glynis' costs of the proceedings. Wincot's liability should only relate to the 2018 hearing being the only hearing to which it was a party". As she was entitled to do, Glynis took issue with that preliminary view. It was submitted for her that the Chetwynds and Wincot should be jointly and severally liable for the costs of the entire proceedings.
It will be recalled that Wincot did not pursue the separate proceedings which it had commenced, but that it was added as the third plaintiff in these proceedings by the further amended summons (Principal Judgment at [51] to [61]). Mr Stowe's submissions began with the general proposition that unsuccessful parties are ordinarily jointly and severally liable for the costs of the successful parties, save for a party who has entered a submitting appearance or one unsuccessful party not being liable for costs incurred as a result of a discrete issue raised by another unsuccessful party.
However, he submitted (and the Court accepts) that there is no rule of law to the effect that the Court must deviate from the usual rule that unsuccessful parties are jointly and severally liable for the successful parties' costs, merely because particular costs in relation to particular dimensions of the proceedings were exclusively referable to one of the unsuccessful parties: Probiotec Limited v The University of Melbourne [2008] FCAFC 5; (2008) 166 FCR 30 at [58] per Rares J (with whom Finn J agreed). He contended that when there are multiple unsuccessful parties, the Court must ultimately exercise its discretion in relation to costs "having regard to the object of doing substantial justice in the context of the proceeding as a whole", recognising that the "exercise of the costs discretion depends on the facts of the case": Jack Brabham Engines Ltd v Beare [2010] FCA 1096 at [17] and [22] per Jagot J.
Mr Stowe relied on the following matters to demonstrate why, in his submission, the usual rule ought to apply so as to do substantial justice in the context of these proceedings: 1. Wincot's claim was in effect conducted for the exclusive benefit of the Chetwynds. 2. The Chetwynds personally caused Wincot to press its claims, the first and foremost of which was that Glynis held the Armidale Property on trust for Wincot. 3. Wincot's claim was prosecuted by Mr Chetwynd personally on behalf of the company. 4. Additional costs in relation to the conduct of the 2018 hearing had only been incurred because the Chetwynds had not joined Wincot as a party in the first place, notwithstanding that many of their claims involved claims by Wincot and both Glynis' solicitors and the Court had actively encouraged Mr Chetwynd to consider joining Wincot as a party to the original proceedings. 5. The issue of joint and several liability turned on the broader question of whether Glynis or the Chetwynds should bear the risk that Wincot would be unable to discharge its liabilities for costs in the proceedings. Given how hopeless the claims were, it was only just that the Chetwynds should bear that risk. 6. As it was put somewhat colourfully in Mr Stowe's submissions, "The Chetwynds caused the commencement of the Wincot proceedings to get another bite at the cherry for their personal benefit. They should pay for the cherry." 7. The plaintiffs could not approbate and reprobate. The plaintiffs had gained a considerable procedural advantage by being permitted to join Wincot as a plaintiff to these proceedings and avoiding exposure of Wincot to an application for its separate proceedings to be dismissed as an abuse of process, together with the ability to rely on the evidence in the 2017 hearing for the 2018 hearing. The plaintiffs could not now seek to avoid what was submitted to be the "conventional procedural consequences of the election to conduct proceedings on behalf of multiple plaintiffs".
In his submissions in reply, Mr Stowe - correctly - drew attention to the fact that Brian's submissions had not engaged at all with the question of the plaintiffs being jointly and severally liable for the entire costs of the proceedings. However, Mr Stowe did go on to draw attention to features of Brian's submissions which it was submitted supported joint and several liability. First and foremost was the concession in Brian's submissions that Wincot "should have been part of the proceedings from the beginning". He submitted that the Chetwynds provided no explanation why Wincot was not joined from the very commencement of the proceedings, being a time when the Chetwynds had been legally represented, including by senior counsel. It was contended that Brian's attempt to explain the failure to join Wincot earlier by reference to the Chetwynds' inexperience or being placed under impossible time pressures was disingenuous.
Having considered Mr Stowe's submissions, I no longer adhere to the preliminary view I expressed at the end of the Principal Judgment. The Court is satisfied that doing justice in this case requires the plaintiffs to be jointly and severally liable for the entirety of Glynis' costs, irrespective of whether those costs were incurred in the 2017 or the 2018 hearing. In both practical and legal terms, the 2017 and 2018 hearings were two halves of the one hearing. So much is demonstrated by the order which I made on 10 September 2018 (see Principal Judgment at [67]) that evidence from the 2017 hearing was admitted as evidence at the 2018 hearing in respect of the new claims brought by Wincot.
It could not be otherwise. The claims of all the plaintiffs arose from precisely the same set of facts and, as to the key issue of ownership of the Armidale Property, the claims of the Chetwynds and Wincot were in the alternative, but with Wincot's claim being advanced at the behest, and for the sole benefit, of the Chetwynds.
Furthermore, no proper reason has been advanced by the Chetwynds as to why Wincot was not joined as a party for the purposes of the 2017 hearing. Had it been so joined, then a hearing which took place in two tranches would have been dealt with as a single hearing. The identity of the facts in issue relating to the Chetwynds' and Wincot's claims would have resulted in only one possible outcome, namely that all of the plaintiffs would have been jointly and severally liable for Glynis' costs of that single hearing. Justice requires that to be the outcome in the events which have happened, notwithstanding that the hearing was conducted in two parts with Wincot not being a party until the 2018 hearing.
For these reasons, the Court concludes that all three plaintiffs must be jointly and severally liable for Glynis' costs fixed above in the sum of $350,000.

What interest, if any, should be payable on the Adjustment Sum to which the Court has found Glynis is entitled?

Glynis' claim for an adjustment in relation to disproportionate contributions made by her for the vendor finance repayments for the Armidale Property is considered in paragraphs [353] to [376] of the Principal Judgment. This included: "368 Glynis submitted she was entitled to recover two thirds of the amount paid from the Chetwynds on two alternative bases: (1) A claim analogous to a claim for contribution for disproportionate contributions to the discharge of a joint mortgage; and (2) A claim for indemnity as trustee. Glynis incurred liability to Wincot in her capacity as trustee of the Armidale Property, giving rise to a right of indemnity against the beneficiaries of the trust. … 376 The Court is satisfied that on either of the bases she has identified, Glynis is entitled to an adjustment in her favour in the amount of $100,679.04."
It was submitted for Glynis that interest should be paid on the Adjustment Sum pursuant to s 100(1) of the CP Act, which provides: "(1) In proceedings for the recovery of money (including any debt or damages or the value of any goods), the court may include interest in the amount for which judgment is given, the interest to be calculated at such rate as the court thinks fit-- (a) on the whole or any part of the money, and (b) for the whole or any part of the period from the time the cause of action arose until the time the judgment takes effect."
Mr Stowe submitted that, ordinarily, successful plaintiffs who obtain a money judgment are generally entitled to an award of interest and that there were no discretionary reasons in the present case why Glynis should not be entitled to interest on the Adjustment Sum.
In relation to the quantum of interest, Mr Stowe submitted that interest accrued from the date on which Glynis incurred the liability the subject of the Adjustment Sum. Insofar as one of the alternative grounds which the Court accepted was a claim for indemnity as trustee, it was submitted that the right of indemnity accrued at the time the obligation was incurred: Lemery Holdings Pty Ltd v Reliance Financial Services Pty Ltd [2008] NSWSC 1344; (2008) 74 NSWLR 550 at [19] per Brereton J (as his Honour then was). For what was described as simplicity of calculation, Glynis elected to limit her claim to interest to the period from June 2000, being the date of the final repayment of the mortgage over the Armidale Property. Glynis therefore claimed pre-judgment interest on the Adjustment Sum at Supreme Court rates from 1 July 2000.
In his final submissions in reply, Brian submitted that the plaintiffs did "not have the legal expertise or resources to provide an argument" in response to Glynis' claim. However, his submission went on: "…the Plaintiffs submit that it is their view and opinion that there are no factual or legal grounds for any order to be made to pay the Defendant any monies whatsoever for either the claim under Sect 66G or any claim for interest. The Plaintiff submits that the Court dismiss any claim by the Defendant for any payment or interest under Sect 66G. The basis is as follows: (i) The Defendant never, ever paid $1 for the purchase of the property, nor did ever pay even $1 for any mortgage repayments, the evidence of which is by her own words in Court. (ii) The Defendant did not any anytime provide any security or collateral, either directly or indirectly, against the mortgage or performance of same. (iii) The Plaintiffs provided an unconditional guarantee of performance of the mortgage and paid or caused to be paid and repaid, all payments up until the mortgage was discharged. (iv) As the Defendant did not pay, or incur any loss, either directly or indirectly, no interest should be accrued or paid thereto."
Insofar as Brian's submissions seek to reargue the Court's conclusion concerning Glynis' entitlement to the Adjustment Sum, those submissions are rejected. Nevertheless, the fourth point made by Brian does raise the question of what loss Glynis has suffered in respect of which she should be compensated by an award of interest.
Mr Stowe's submissions drew attention to the proposition that the purpose of the discretion to award interest was to permit a successful party to be properly compensated for the practical loss it had suffered: Screenco Pty Ltd v RL Due Pty Ltd [2003] NSWCA 319; (2003) 58 NSWLR 720. As Tobias JA said (with whom Sheller JA agreed) in that case: "90 In my opinion, it follows from the foregoing considerations that pre-judgment interest is only to be awarded to a plaintiff where, as a consequence of being deprived of the use of the judgment money during the relevant period, it has suffered a real and practical loss or detriment for which it should be compensated in order to ensure that it is restored fully to the position in which it would have been but for the defendant's wrongdoing."
The Court has a discretion both as to whether or not prejudgment interest should be ordered at all and, if so, pursuant to s 100(1)(b) of the CP Act as to what part of the period from the time the cause of action arose interest should run. While it may be accepted that Glynis' right to indemnity accrued at the time the obligation was incurred, this is a case where interest should only be awarded for "part of the period from the time the cause of action arose" so as to reflect properly Glynis' "real and practical loss or detriment" (to use the words of Tobias JA).
The fundamental finding in the Principal Judgment was that the Armidale Property was held in accordance with the parties' longstanding "three way split" agreement. The Court has no doubt that Glynis would not have claimed any adjustment while all three parties were happy with the status quo. Furthermore, insofar as she was entitled to any adjustments, the Court is also satisfied from the parties' common evidence about the "three way split" that those are matters which the parties were, and would have been, content to leave to the time when their arrangement was brought to an end.
The Court concludes that Glynis' real and practical loss in relation to the Adjustment Sum for which she is entitled to compensation by interest began when she sought to bring the arrangements between the parties to an end. That end did not occur in reality other than through the medium of these proceedings. Glynis sought to bring those arrangements to an end by her email of 3 January 2015 (see Principal Judgment at [134]) in which she said to the Chetwynds "Armidale property must be sold and finances sorted". The reference to "finances" encompasses such rights as she may have had upon the sale of the Armidale Property, including the adjustment to which the Court has found she is entitled. Accordingly, in the exercise of the Court's discretion, the Court finds that Glynis is entitled to pre-judgment interest at Court rates on the Adjustment Sum from 3 January 2015, and not from 1 July 2000 as contended for Glynis by Mr Stowe.

What interest, if any, should be payable on the $76,457.08 held by Glynis for, and subsequently paid by her to, the Chetwynds from the sale of the Neutral Bay Property?

Before turning to the parties' submissions on this point, it is convenient to set out the facts.
There was never any dispute between the parties that Glynis held the Chetwynds' share of the sale proceeds of the Neutral Bay Property (the "Neutral Bay Proceeds") on trust for the Chetwynds. She did so by placing the money in interest bearing deposits and dealing with it from time to time according to Brian's directions. In his affidavit of 2 November 2015, Brian said: "89. My wife and I have subsequently over the years utilised some of our proceeds out of the sale [of the Neutral Bay Property]. 90. As I understand, Ms Rose holds approximately $70,000 of our remaining proceeds from the Neutral Bay property in similar Term Deposits and Saver Accounts."
The next relevant correspondence is set out in full in paragraphs [134] to [138] of the Principal Judgment. It may be summarised as follows: 1. In Glynis' letter of 3 January 2015 which precipitated the present dispute, she said "Term Deposit and Netbank Saver Accounts must be transferred to your names." This was put as part of the overall resolution which she proposed in that letter. 2. In his reply of 9 January 2015, Brian said "The Term Deposit and Netbank Saver can be transferred to us shortly, as we have discussed with you before Christmas. No problem if you have rolled the Term over and we'll get back soon with the transfer details." Brian has not pointed to any evidence that he did "get back soon" or at all with those details. 3. In Glynis' response of 14 January 2015 she said, "The [Term Deposit] has rolled over and should remain in my name until a solution re the [Armidale] property is resolved". 4. In the Chetwynds' reply of 16 January 2015, they said: "Regarding the Term Deposit, the decision on those funds has already been agreed upon by the 3 of us and it is a result of each of us receiving an equal share of sale proceeds. The Term Deposit is ours (Jill's component in fact) and it cannot be retained by you under any circumstances."
The parties then made various attempts to resolve the dispute. The fate of the Neutral Bay Proceeds held by Glynis for the Chetwynds formed part of those discussions. So, for example, in the offer which Brian made to Glynis in late May or early June 2015 (see paragraph [15] above) it was proposed that the Neutral Bay Proceeds would be applied towards the deposit for the purchase by the Chetwynds of her one-third share in the Armidale Property.
Similarly, the offer to the Chetwynds made by Glynis' solicitor by letter dated 24 June 2015 also suggested that the Neutral Bay Proceeds be treated as the deposit for the proposed sale. That letter said of those funds: "Glynis opened a Netbank Saver Account on 11 October 2010 and Term Deposit on 4 April 2011, to hold funds on behalf of you both. I am instructed that, since this time, Glynis has continually held moneys on your behalf; releasing interest payments to you and not retaining any payments for herself (not even to cover bank fees). I am instructed that the current amount in the Netbank Saver Account is $3,964.87. The current amount in the Term Deposit is $70,000."
On 30 July 2015, the Chetwynds commenced these proceedings by summons. That summons neither made any reference to, nor sought any relief about, the Neutral Bay Proceeds held by Glynis.
Various "further claims" by the Chetwynds were dealt with in a position paper prepared by Mr Stowe for a mediation which took place on or around 1 August 2016. The Neutral Bay Proceeds are not listed in that document as a matter in dispute between the parties.
In February and March 2017 offers of settlement passed between the parties in which the payment or retention by Glynis of the Neutral Bay Proceeds formed a part.
The first time the Chetwynds made what can be characterised as a matter of law as an unconditional demand by for payment of the Neutral Bay Proceeds to them by Glynis came in the form of an order to that effect in their Amended Summons filed in Court on 4 April 2017.
During the course of Mr Chetwynd's opening on the Amended Summons on that day, this exchange is recorded in the transcript (T55:46-T57:10): "PLAINTIFF: Paragraph 6 relates to a declaration the defendant is holding the sum of $74,082.75 in trust for the first and second plaintiffs in the Commonwealth Bank of New South Wales and (a), (b) and (c), which I won't read in total at the moment, but what I would like to say, your Honour, is that those funds were in fact funds from or the funds owned by my wife and I, which resulted from the property sale of Neutral Bay. So when the Neutral Bay property was sold there was a day of reckoning, as one would say, and all the figures were added up and subtracted and each of the three parties agreed to apportion those figures which were agreed upon and they are all in the evidence, but in January of 2015 when the defendant sent the email-- HIS HONOUR: Pardon me one moment, Mr Chetwynd. PLAINTIFF: Yes. HIS HONOUR: Yes, when you were settling up the Neutral Bay property. PLAINTIFF: Yes, yes, but in December of - sorry, January 2015 there was still remaining in an account in Coffs Harbour the sum of $74,000 or thereabouts and the defendant refused to repay that money, claiming some sort of lien on it. I don't really know quite what the defendant was claiming, but I have used the word "lien" or some sort of - what would you - in other words, she was saying - I presume she was saying, "I'm not going to pay you back until this other - the house is sorted out." The two are separate issues, your Honour, and I believe now that there is no contest in that regard, but my - Mr Stowe would have to confirm that about the fact that that money is held in trust and should have been paid and will be paid immediately or whatever, but only Mr Stowe would confirm that, but that's my understanding. HIS HONOUR: Mr Stowe? STOWE: Entirely correct, there's no contest in respect of that. HIS HONOUR: That money is to be paid across? STOWE: To be paid across and there has never been any objection to its payment. It was originally held by my client at the specific request of the plaintiffs. It has been held in an interest bearing deposit from that time. It has been rolled over with the consent of the plaintiffs from time to time and there has never been a resistance to its repayment. PLAINTIFF: That's not entirely correct, your Honour. The email in January or February 2015, which is in evidence, clearly states that that money will be held. However, I do acknowledge-- HIS HONOUR: Do you want the money? PLAINTIFF: Yes, please, your Honour. HIS HONOUR: Why can't that be dealt with? STOWE: In fact the interest bearing deposit expired on 4 April and arrangements have been made to make that money available and it can be paid if he wants it immediately. HIS HONOUR: Do you want it immediately, Mr Chetwynd? PLAINTIFF: Well, we don't have any money, your Honour, and the answer is yes. HIS HONOUR: There you are. Mr Stowe, you have heard that and if those arrangements can be made, that would take away one thing I need to worry about. PLAINTIFF: Thank you, your Honour."
The Neutral Bay Proceeds (including the interest that had accrued on them at the time) were paid to the Chetwynds on or about 7 April 2017.
Against that factual background, Brian submitted: "6.) When a dispute arose and these proceedings commenced in January / February 2015, the Plaintiffs requested the Defendant to pay the monies held, however, the Defendant refused. 7.) In approximately March 2017 the matter was mentioned before His Honour who questioned the details of the monies owing, whereupon the Defendants agreed to pay. The monies were subsequently paid to the Plaintiffs. 8.) The Plaintiffs submit that the money held by the Defendant was inappropriate and improper. The Defendants [sic] had no valid or legal reason to withhold the monies. Accordingly, the Plaintiffs claim that interest at Supreme Court rated be paid by the Defendant to the Plaintiffs for the period January 2015 until March 2017."
In response on behalf of Glynis, Mr Stowe submitted that Brian had extensively cross-examined Glynis about the Neutral Bay Proceeds. He submitted that Brian never put to Glynis that she had asserted beneficial ownership of the Neutral Bay Proceeds, or that she failed to deal with the funds at the direction of the Chetwynds, or that she wrongfully retained those funds. In response to a question from the Court, Glynis acknowledged that the Neutral Bay Proceeds were beneficially owned by the Chetwynds.
Mr Stowe submitted that Glynis had at all times acknowledged that she held the Neutral Bay Proceeds for the Chetwynds and had dealt with those proceeds at their direction. There was no evidence that she ever denied the Chetwynds' beneficial interest in the Neutral Bay Proceeds, or that the Chetwynds had unconditionally required the transfer to them of the entire Neutral Bay Proceeds, or that she had ever failed to transfer any part or all of those proceeds at their direction. Furthermore, no propositions to that effect were ever put to Glynis in cross-examination.
While accepting Mr Stowe's submissions, it seems to me that the answer to the Chetwynds' claim for interest in relation to the Neutral Bay Proceeds is a more straightforward one. There was no dispute that Glynis had invested the Neutral Bay Proceeds in an interest bearing deposit. The Chetwynds were paid both the principal and the interest that had accrued, being $72,627.56 from the Term Deposit and $3,829.52 from the Netbank Saver Account. To award further interest would be double compensation. Nor has Mr Chetwynd attempted to demonstrate that a claim for pre-judgment interest at Court rates based on the principal of the Neutral Bay Proceeds would have yielded a higher amount than the interest that was in fact earned on the deposit and paid by Glynis to the Chetwynds.
Although the preceding paragraph is sufficient to dispose of the Chetwynds' claim for interest, I am fortified in that conclusion by the fact that there is no suggestion that Glynis dealt with the Neutral Bay Proceeds up to and including January 2015 other than in accordance with Brian's directions. His own affidavit evidence (referred to in paragraph [77] above) confirms that when they required funds from the Neutral Bay Proceeds, they were provided by Glynis as directed.
Furthermore, after the dispute was precipitated in January 2015, there is no evidence of an unconditional demand by the Chetwynds for repayment of the Neutral Bay Proceeds prior to their filing the amended summons. To the extent that any of the various offers made by the Chetwynds could be characterised as demands, the payment or retention by Glynis of the Neutral Bay Proceeds was sought as part of the conditions proposed of any particular offer. In other words, the parties were content to allow the Neutral Bay Proceeds to form part of the elements of a potential settlement of their dispute, with no unconditional demand being made until the filing of the amended summons. Upon the filing of that document Glynis paid the Neutral Bay Proceeds to the Chetwynds without demur.
The Chetwynds have therefore failed to demonstrate that they have suffered any loss compensable by interest in relation to the Neutral Bay Proceeds.

What interest, if any, should be payable on the $15,953 for dividend payments owed by Glynis to the Chetwynds?

Brian submitted in relation to this amount: "11.) The amount of $15,953 relates to dividends declared by Wincot Pty Ltd during the period 1993 to 1997. Such dividends were paid by the Defendant to herself and retained by her in an improper manner. The Plaintiffs were not paid the monies properly due to them. 12.) Apart from the plaintiffs having suffered a financial loss, this was further exacerbated by not having the use of the funds, which were rightly due to them. Despite various attempts to recover these funds, the Defendant either ignored or refused to pay. 13.) The Plaintiffs submit that interest should be paid in the amount stated above at Supreme Court rates from the respective dates in the 1990's that the dividends were paid, up until this date. The payment should be made by the Defendant to the Plaintiff."
Glynis did not oppose the award of interest on that sum, but did not address how it should be calculated.
I do not accept Brian's submission that interest should be calculated "from the respective dates in the 1990s that the dividends were paid" because this would mischaracterise what occurred.
Dealing with the dividend claim in the Principal Judgment, I said: "447 Glynis owing a dividend payment to the Chetwynds is uncontested. As Mr Herd noted in his affidavit sworn 28 April 2016: "In view of the "3 way split" arrangement in relation to the shares in Wincot, it is appropriate that there be some "reckoning" between Brian, Glynis and Jill, in relation to the amount now recorded as a payment of a dividend to Glynis (even though the dividend was only a journal entry, and there was no cash payment to Glynis). That is because the effect of the dividend journal entries is that a loan debt in Glynis' loan account has been cleared, and therefore the company has lost an asset comprising a loan due from Glynis, and Brian and Jill are therefore worse off (in their capacity as shareholders of Wincot). A fair reckoning would require Glynis to pay each of Brian and Jill 1/3 of the amount of the "dividend"." … 452 The Court accepts the evidence of Mr Herd when calculating the dividend owing to the Chetwynds. It is important to take into consideration the tax liabilities Glynis paid on the dividend and as such, the amount should be reduced to reflect this. I note the Chetwynds' objection to a deduction being made in accordance with the dividend being franked, however I do not accept this submission."
Brian's submissions did not particularise the "various attempts to recover these funds". Mr Herd's evidence, to which I have referred, makes it clear that in a "real and practical" sense for the purposes of the Court's discretion in relation to interest (see paragraph [72] above), the Chetwynds' entitlement to that sum was enlivened as part of the "reckoning" between the parties. While Glynis paid tax on the relevant amount, she never actually received any cash which it could be said she withheld from the Chetwynds because the dividend was achieved by a journal entry. In real and practical terms neither party had, nor was deprived of, the benefit of those funds until the time came for the dissolution of their arrangement. This came with Glynis' letter of 3 January 2015.
By parity of reasoning with the Court's conclusion in relation to pre-judgment interest on the Adjustment Sum, in the exercise of the Court's discretion under s 100(1)(b) of the CP Act, the Court concludes that the Chetwynds are entitled to pre-judgment interest on the sum of $15,953 at Court rates calculated from 3 January 2015, being the date on which Glynis precipitated the final reckoning between the parties.

To what is Glynis entitled from the proceeds of sale of the Armidale Property?

Glynis submitted that she should receive her costs of the proceedings and the Adjustment Sum (together with interest) out of the proceeds of sale of the Armidale Property before any balance is distributed between the parties in accordance with their respective interests in the Armidale Property. Brian opposed this, submitting that the trustees for sale should do no more than sell the Armidale Property and deal with the proceeds in accordance with the parties' respective interests in that property. He submitted that Glynis should be left to recover any costs awarded in the ordinary course and that any attempt to have Glynis' entitlements paid out of the proceeds of sale before their division "would be grossly unfair and inappropriate".
I dealt with the legal basis of how the Adjustment Sum could be dealt with in paragraphs [370] to [375] of the Principal Judgment, concluding that the Court could direct the trustees for sale to make adjustments as part of the general working out of the Court's orders. This applies not only to the Adjustment Sum but also to Glynis' costs of the proceedings (which necessarily includes her application under s 66G of the Act).
These proceedings represent the final working out of the longstanding arrangements between the parties. For that reason, and taking into account the parties' ages and circumstances in life, there is an overwhelming interest that the Court's orders, so far as they can, should bring about a complete financial resolution between the parties. To that end, the Court will make orders that whatever amounts each party has been found to owe to the other are to be set off, with the remaining balance to be paid to the net creditor before whatever is left (if anything) is divided between the parties in accordance with their respective interests in the Armidale Property.

Conclusion

The Court will provide the parties with draft orders to give effect to the Principal Judgment and these reasons so as to bring the proceedings to a conclusion. They will be given an opportunity to consider those orders and to make the necessary interest calculations.

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: 07 July 2020

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