Kenyon v Akeroyd

1 On 19 December 2008, the Court delivered judgment, allowing in part the appeal by Ms Kenyon, and varying aspects of the order of the trial judge in favour of the respondent, Mr Akeroyd. On that occasion, only two Justices were present. As counsel for Mr Akeroyd was not in a position to make submissions concerning the form of orders or as to costs, the Court ordered that written submissions be filed. A further hearing was held on 13 March 2009.

2 The provisions of s 24 of the Supreme Court Act 1986 (Vic) and r 64.24 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) make it clear that the determination of the question of costs is in the Court's discretion. The discretion is absolute and unfettered, but must be exercised judicially.

3 Ms Kenyon's contention is that, by reason of her successful attack on the trial judge's evaluation of her claim, she is entitled to all of the costs of the appeal. She relies on the general rule that a successful party should receive his or her costs.[1]

4 In the usual case, the costs of an appeal will follow the event. Where there is part success and part failure, however, the position is not so straightforward. As this Court said in Major Engineering Pty Ltd v Helios Electroheat Pty Ltd (No 2): [2]

where there is a mixed outcome in the proceeding, such as here, the apportionment of the comparative importance of the relevant claims in the proceeding - here, the claim and the counterclaim - can only be carried out on a broad basis, it being primarily a matter of impression and evaluation, rather than arithmetic precision.

5 Adopting that 'broad' approach, we consider that the costs of this appeal should lie where they fall. Our reasons are as follows.

6 First, a claim under Part IX of the Property Law Act 1958 (Vic) is a singular statutory claim. It is quite different from a claim for damages or a claim for recovery of moneys. Absent agreement, the only means by which domestic partners can achieve finality in the adjustment of their financial interests is by a Court order under s 285 of the Property Law Act 1958 (Vic).[3] In most such cases, the court will be required - as it was here - to fix the quantum of an asset pool, and determine each party's entitlement and how the assets should be distributed. The Court's process can thus be seen to be at once necessary and beneficial for both parties.

7 Secondly, the respective positions adopted by the parties on the appeal are relevant. Ms Kenyon was successful in disturbing some aspects of the trial judge's findings, concerning the value of her contribution and the concession that the value of the company should be brought into account in the pool. But she was unsuccessful in her attacks on other items - the value of the superannuation, the stock and the debt to Mr Akeroyd's father. She had claimed at trial that she should have the farm and be able to reside there. In the course of the appeal she withdrew that claim. Thus, neither party to the appeal achieved complete success. It is appropriate that each side bear its own costs.

8 One other matter requires brief mention. Ms Kenyon sought the costs of the day when the reasons for judgment were handed down. Because only two members of the Court could be present on that date, it would not have been possible to hear argument concerning appropriate orders, notwithstanding the unpreparedness of counsel for Mr Akeroyd. In those circumstances, we make no order in relation to the costs of that day.

9 The trial judge made orders that Ms Kenyon pay Mr Akeroyd's costs of the trial. Those orders were made on a party/party basis on County Court Scale D up to 29 September 2005 and thereafter on an indemnity basis. The basis for ordering costs on an indemnity basis was a Calderbank offer made by Mr Akeroyd to Ms Kenyon prior to the trial. It was accepted by counsel for Mr Akeroyd before us, that the altered outcome meant that the Calderbank offer was no longer relevant.

10 The Calderbank offer could not have affected Ms Kenyon's entitlement to costs. Rejection of a Calderbank offer will only be relevant, if at all, in determining whether the offeror is entitled to a special costs order.[4] That is to say, the fact that an offer is reasonably rejected will not of itself give the offeree any entitlement to special costs.

11 As we have said, neither side has achieved total success. The substituted result lies somewhere between the respective positions adopted at trial. As in relation to the appeal, we think that the costs of the trial should lie where they fall.

12 There is one other matter. The parties are unable to agree as to an appropriate order in relation to the costs of the transcript of trial. We see no reason to disturb the order of the trial judge that the parties equally bear the costs of the transcript.[5]

13 Ms Kenyon sought interest on the sum awarded in her favour. As Giller v Procopets (No 2)[6] demonstrates, neither s 58 nor s 60 of the Supreme Court Act 1986 (Vic) applies to a pecuniary award made under Part IX of the Property Law Act 1958 (Vic).[7] No submission was made suggesting that there was any other basis, such as in equity, upon which interest might be allowed on the property adjustment amount.

14 In any event, given that Ms Kenyon occupied the premises for a considerable time after the separation, it is highly unlikely that any equitable allowance could have been justified.

15 The parties were agreed as to a number of the orders necessary to give effect to the Court's decision. Taking account of the matters disposed of in these reasons, the following orders will be made:

(2) Paragraph 2 of the orders of Judge Wilmoth made on 2 October 2006 be set aside.

(3) The respondent pay the appellant the sum of $101,364.

(4) Orders 1, 3, 4, 5 and 6 of the orders of Judge Wilmoth made on 2 October 2006 be confirmed.

(5) The respondent shall indemnify the appellant in respect of any claim upon her in respect to the debt due to the respondent's father.

(6) The orders of Judge Wilmoth made on 15 December 2006 be set aside, save for order 4.

(7) Each party bear his or her own costs of the trial and of the appeal.

(8) Within 60 days of the date of this order, the respondent refinance into his sole name the mortgage secured against the property at 170 Chambers Road, Bruthen ('the real property') and further indemnify the appellant against all liability for all apportionable rates, taxes and outgoings of or with respect to the real property.

(9) Upon the respondent complying with paragraphs (3) and (8) of these orders, the appellant remove at her expense the caveat registered by her against the real property.

(10) Upon payment of the sum of $101,364 to the appellant and the refinancing of the real property by the respondent, the parties will retain for their own benefit all items of real and personal property in their own names.

16 There was discussion in argument as to whether s 4 of the Appeals Costs Act could apply where - as here - the Court makes no order for the costs of the appeal. The operation of s 4 of the Act does not depend upon the making of an order for costs, but upon whether 'an appeal ... succeeds ....' It may be that partial success on the part of an appellant would entitle the other party to apply for an indemnity certificate.

17 It is unnecessary for us to resolve this issue. Even if Mr Akeroyd were entitled to seek a certificate, we would not exercise the discretion to grant him one. It would be unfair, in circumstances where each side is bearing its own costs, for only one party to the appeal to receive such an indemnity.

[1] Ritter v Godfrey (1920) 2 KB 47, 52.

[2] [2006] VSCA 114, [5] (citations omitted).

[3] Part IX of the Property Law Act 1958 (Vic) has been repealed. Chapter 3 of the Relationships Act 2008 (Vic) (effective 1.12.08) now applies to a dispute between domestic partners.

[4] See Hazeldene's Chicken Farm v Victorian Workcover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435, 440-41.

[5] Order 4 of the orders of Judge Wilmoth made 15 December 2006.

[6] [2009] VSCA 72.