Dimento v Dimento & Anor

CASES CITED : Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286 Waterman v Gerling Australia Insurance Co Pty Ltd (No 2) [2005] NSWSC 1111

Giacomo Dimento (plaintiff) PARTIES : Guiseppe Dimento (first defendant) Francesco Dimento (second defendant)

D M Flaherty (plaintiff) COUNSEL : M R Pesman (first defendant) J E Rowe (second defendant)

Mullick & Associates (plaintiff) SOLICITORS : Lloyd & Lloyd (first defendant) John Carmody & Co (second defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EXPEDITION LIST

4545/05 Giacomo (Jim) Dimento v Guiseppe (Joe) Dimento & 1 Or JUDGMENT (ex tempore - costs) 1 HIS HONOUR: Although costs are in the discretion of the Court, the prima facie position is established by (NSW) Uniform Civil Procedure Rules 2005, r 42.1, which provides that if the Court makes any order as to costs, it is to order that costs follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs. However, the general proposition that a successful party is usually entitled to its costs of the proceedings, and the "follow the event" rule, can produce difficult discretionary considerations where the proceedings involve multiple issues and a party succeeds on some issues but fails on others - particularly when an ultimately successful plaintiff fails on issues that occupied a substantial part of the proceedings. 2 As I sought to explain in Waterman v Gerling Australia Insurance Co Pty Ltd (No 2) [2005] NSWSC 1111, although, generally speaking, the Court is reluctant to dissect costs between issues, there are circumstances - for example, where a party, by a late amendment, salvages a nominal victory from otherwise impending defeat, or where an ultimately unsuccessful defendant succeeds on an issue that occupies most of the proceedings - in which it will be appropriate to depart from that approach, and either to dissect costs between issues, or to make some other overall order reflecting the justice of the case. 3 In this case, the plaintiff sued the first defendant primarily for specific performance of a contract to transfer fishing licences and, alternatively, for damages. He joined the second defendant because he also sought orders setting aside dispositions of the fishing licences made by the first defendant to the second defendant after the proceedings were contemplated and commenced. The second defendant cross-claimed for a declaration that he or the deregistered company, Dimento Pty Limited, was the beneficial owner of the vessel, Kimbarra, which remained in the possession of the plaintiff. Ultimately, there were five main issues:

(1) Whether there was a binding and enforceable contract; (2) Whether that contract had been terminated or abandoned; (3) Whether, as a matter of discretion, specific performance should be granted; (4) Whether any, if so what amount of, damages should be awarded; and, (5) On the second defendant's cross-claim, who was beneficially entitled to the Kimbarra and whether declaratory relief was appropriate. 4 The plaintiff succeeded on the contract issue, and on the termination and abandonment issue. The contract issue occupied almost none of the case, and the termination and abandonment issue not much of it. The plaintiff failed to obtain specific performance, because I concluded that the licences were not the beneficial property of the first defendant but of Dimento Pty Limited (or following its deregistration, ASIC) and that it was, therefore, impossible for the first defendant to perform the contract or, alternatively, it would be inappropriate to order the first defendant to do so contrary to his prior equitable obligations in respect of those licences. Specific performance was also refused on the additional ground that even if it were not established that the company were beneficially entitled to the licences, the company or ASIC was at least entitled to be heard, which would have required reinstatement of the company and its joinder - or at least the joinder of ASIC. 5 The specific performance issue - and, as an aspect of it, the question of the beneficial entitlements to the licences - was by far the predominant issue in the case, and on that issue the plaintiff failed. Although the plaintiff ultimately succeeded on the damages issue, it was not by virtue of any evidence relied on for that purpose by the plaintiff; indeed, the plaintiff had more or less conceded that the evidence did not establish any damages, and it was only by resort to the accounts of Dimento Pty Limited, which were otherwise in evidence, that some value was able to be attributed to the licences that the first defendant had contracted to convey to the plaintiff. In that respect, the plaintiff's success on that issue, although not identical, bears some resemblance to the cases in which a party salvages nominal success from the jaws of impending defeat by a late amendment. 6 The claim against the second defendant failed because, the plaintiff having failed to obtain specific performance, the endeavour to set aside the dispositions became unnecessary and superfluous. In those circumstances, prima facie, the second defendant would be entitled to an order for costs. 7 The plaintiff has submitted that this would be an appropriate occasion for an order akin to a Bullock order, to the effect that the plaintiff's costs payable by the first defendant (if so ordered) should include the costs which the plaintiff might be ordered to pay the second defendant. However, since the issue on which the second defendant was joined was the specific performance issue, and the plaintiff failed against the first defendant also on the specific performance issue, I do not accept that this would be an occasion for such an order, even if I were otherwise of the view that there should be a costs order in favour of the plaintiff against the first defendant. 8 The cross-claim also involved argument as to the beneficial entitlement to the boat which mirrored the argument on the licences. The second defendant/cross-claimant succeeded on the substantive issue, but ultimately failed because he sought only declaratory relief, the granting of which would have left entirely open for future litigation the question of possession of the vessel, and thus not resolved the issues between the parties pertaining to Kimbarra. Accordingly, as Mr Rowe adverted to in submissions, relief was declined on the basis of the High Court's decision in Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286. 9 In the course of the proceedings, an application was made by the first defendant, supported by the second defendant, that an order be made referring the matter for compulsory mediation, over the objection of the plaintiff. I declined to make that order, because at that stage the evidence of the second defendant was not complete, and I did not think there was a level playing field on which mediation should be compelled over the opposition of the plaintiff. There is no evidence of any subsequent attempt to mediate. I do not think that I should, in those circumstances, conclude that the plaintiff's opposition to mediation was unreasonable, and I do not do so. 10 There is evidence of an offer, marked "without prejudice as to costs", which, had it been accepted and implemented, may have afforded the plaintiff a better outcome than was ultimately achieved. However, there are difficulties in giving it any weight. First, it was an offer by the second defendant, apparently supported by the first defendant, which involved dealing with the licences and the boat; as I have concluded, they were not theirs to deal with, but the company's. Secondly, it did not deal with the Greenwell Point property, which was also the subject of the contract of which the plaintiff sought specific performance; and because it did not deal with the Greenwell Point property, acceptance would not have resolved the whole of the proceedings. Thirdly, it depended upon the sale of the boat and the licences, and the evidence does not allow me to say whether that would in fact have ultimately produced a better result for the plaintiff than he achieved. In those circumstances, I do not think the offer is entitled to significant weight on the question of costs. 11 The result of all that is that, prima facie:

· the plaintiff is entitled to receive the costs of the claim for damages for breach of contract, which damages amounted to some $38,000, but should pay the additional costs of the first defendant of the plaintiff's failed claim for specific performance - which, as I have recorded, was by far the major issue in the case; · the plaintiff should pay the costs of the claim against the second defendant on which the plaintiff failed, but receive the costs of the cross-claim on which the second defendant failed; · the first defendant should pay the plaintiff's costs of the claim for damages against him, but receive the additional costs of the claim for specific performance which, on a rough appreciation of the case, would equal, if not exceed, the costs of the claim for damages; · The second defendant should receive the costs of the proceedings against him, but pay the costs of his cross-claim. 12 In addition to those matters, I think it is appropriate to take into account that this was essentially a family dispute, arising from the breakdown of relations in a family context, that featured shifting allegiances between the parties prior to the commencement of the litigation. It is also highly relevant to bear in mind that the ultimate success achieved by the plaintiff, though not trivial, was small, and well within the jurisdiction of the Local Court. It is also highly relevant that the various competing parties each had measures of success on different issues in the case, and that while the plaintiff ultimately succeeded in obtaining a judgment, he also failed on the issues which occupied most of the case. 13 In the light of all those matters, and offsetting the various prima facie costs entitlements and liabilities of each of the parties, I have concluded that the appropriate order is that there be no order as to costs, to the intent that each of the parties bear his or her own costs. **********

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