(p) a letter of 10 November 2004 from the plaintiff's solicitors to the defendant's solicitors again following up matters involving the loan account of Paino Holdings Pty Limited.
26 The plaintiff adds that there was, at all material times, uncertainty about the value of the defendant's land in Filicudi. Indeed, that uncertainty continues: see paragraphs [175] to [177] of the judgment of 5 April 2006. The question of the value of the Filicudi properties - or, more particularly, the admissibility of evidence the plaintiff sought to tender as to their value - became a major matter of contention in the proceedings. The defendant submits, in reply (and I accept), that the defendant disclosed everything he was required to disclose. As I said at paragraph [176] of the earlier judgment, I do not regard the defendant as having been under a duty to disclose values (a matter of opinion) as distinct from the existence of assets (a matter of fact).
27 The inability of the plaintiff to come to any reliable view about the value of the Filicudi properties, while in no way the fault of the defendant, means, in my view, that it is not possible to characterise as unreasonable her rejection (or non-acceptance) of each offer made by the defendant. Other matters of uncertainty affected any assessment of the plaintiff's several offers and the defendant's reactions to them. There was a progressive unfolding of the defendant's financial position. While I do not think he was guilty of any deliberate non-disclosure, the ordinary course of events meant that the plaintiff was, at all material times, not able to make a full assessment of the value of the pool of assets.
28 In summary, I do not consider that, to the extent that the third criterion mentioned in Kardos v Sarbutt (No 2) pays attention to the "bettering" of an offer of compromise, the circumstances of this case in which there was no real way of coming to grips with the central issue of value are such that the concepts of "bettering" and of reasonable and unreasonable reactions to offers of compromise are not really meaningful.
29 It follows that the third criterion does not warrant any costs consequence.
30 I turn now to the fourth criterion mentioned in Kardos v Sarbutt (No 2), that is, matters related to the conduct of the proceedings. The defendant raises seven matters under this heading in support of his application for costs.
31 The first such matter relates to conduct in the pre-trial phase. The defendant refers to a number of notices to admit facts served on the plaintiff. The results are detailed in annexures to Mr McCauley's affidavit (JPM28, JPM32 and JPM35). I do not need to go into detail. It is sufficient to say that all the matters in issue concerned values and that the plaintiff eventually agreed to most, even though in some cases she maintained for some time that the value was greater than that she was asked to admit. I do accept that the correspondence on this subject shows, in general, a readier willingness on the part of the defendant than the plaintiff to agree values. In the end, however, there was substantial agreement.
32 Second and in relation to the same general subject, the defendant refers to two attempts on his part to reach a position where one valuer would be retained by both parties. To this suggestion, the plaintiff replied on each occasion by saying merely that she had commissioned her own valuer and did not consider it "appropriate" for a jointly retained valuer to be instructed. I am not prepared to think that this was conduct of a kind that should be reflected in an adverse costs order.
33 Third, the defendant points to the circumstance that, because the plaintiff maintained that the relationship began in 1982, it was necessary to obtain evidence of assets and their value as at 1982. Because the court found that the relationship began in 1988, all that work was, in his submission, wasted. The plaintiff says, in response, that it was always known that there was a dispute as to the times at which the relationship began and ended, with the result that it was going to be necessary to canvass values at a number of alternative dates. I accept the submission made on the plaintiff's behalf.
34 Fourth, the defendant points to the fact that there was no agreement on the value of the Smithfield land, that the parties both called valuers to give evidence on that matter and that the court accepted the evidence of the defendant's valuer. This could have been avoided, in the defendant's submission. The plaintiff's reply (which I accept) is that there was agreement on the value of Smithfield until, effectively, the last moment when, on 8 June 2005, a sale of adjoining land caused the matter to be re-opened in such a way that each party appropriately sought a new valuation. The matter of contention in relation to the Smithfield valuation which occupied most of the court's time concerned the sale of the adjoining property.
35 Fifth, the defendant says that the trial was prolonged by cross-examination of witnesses from whom it was sought to elicit detailed evidence on relatively minor matters concerning the plaintiff's alleged contributions, particularly to the commercial ventures - which efforts were largely in vain because the court's findings were substantially in line with the case put by the defendant. The plaintiff's response is that there was a factual dispute as to all but one of the matters going to the plaintiff's contributions (the exception related to the care she gave him during his illnesses) and that the plaintiff was confronted with a defence to almost every point on an evidentiary basis. On that basis, the plaintiff implies, extensive factual inquiry was inevitable. That is no doubt so, but I am nevertheless satisfied that the factual inquiry was, in some areas, taken to unnecessarily detailed level and that it was the plaintiff, not the defendant, who was responsible for this.
36 Sixth, the defendant refers to matters concerning the preparation of valuation evidence relating to the Filicudi properties. The plaintiff proposed calling Mr Fumia to give expert evidence in July 2005. Ultimately, the plaintiff did not do so and was granted an adjournment to allow her to obtain further evidence on the matter. The decision not to call Mr Fumia followed notification by the defendant that objection would be taken to Mr Fumia's evidence on the basis of lack of expert qualification. However, before the plaintiff decided not to call Mr Fumia, the defendant had arranged for his Italian valuer, Mr Scafidi, to be in Sydney at the time Mr Fumia was expected to give evidence. Mr Scafidi came and went without giving evidence. The plaintiff points out that the defendant had known for over a year before questioning his qualifications in June 2005 that the plaintiff would seek to rely on Mr Fumia as an expert. It is not clear, however, that the precise differences between valuers, real estate agents and other kinds of property professionals under the Italian system were known until relatively late in the piece. Ultimately, the plaintiff was unsuccessful in tendering any evidence of the value of the Filicudi land. Yet, for the purposes of the plaintiff's foreshadowed attempt to do so in July 2005 and her actual attempt in December 2005, the defendant had to bring Mr Scafidi from Italy a second time to no avail.
37 The seventh and final point made by the defendant regarding the plaintiff's conduct of the case is that the plaintiff instructed several firms of solicitors in succession. The plaintiff concedes that any burden of additional costs thereby occasioned should be borne by her.
38 My basic conclusions on the several considerations made relevant to the question of costs by the observations of the Court of Appeal can be briefly stated:
1. For reasons outlined, I am not satisfied that the plaintiff should be seen as having acted unreasonably in not accepting any of the offers of compromise. Likewise, the defendant did not act unreasonably in not accepting any offer of compromise.
2. There was an element of unreasonableness in the lengths to which the plaintiff went to bring out a multitude of small details of fact many of which were of no real assistance in determining questions of her alleged contributions in various areas.
3. The course taken by the plaintiff in and about the matter of valuation of the Filicudi land was, because ineffectual, productive of an unwarranted burden of expense on the defendant.
4. Any increment in costs on either side attributable to the plaintiff's changes of solicitors must be for the plaintiff's account.
39 Those conclusions must be given effect to in the context of one of two basic approaches. Neither of those basic approaches is the simple principle that costs should follow the event: in any case, and as I have said at paragraph [8] above, I do not regard either party as having achieved "success" in a context where, on the basic facts, it was to be expected that there would be some award in favour of the plaintiff. As was pointed out at paragraph [29] of Kardos v Sarbutt (No 2), the choice is between the matrimonial causes analogy (paragraph [27] of Kardos v Sarbutt (No 2)) and the partnership analogy (paragraph [28] of Kardos v Sarbutt (No 2)).
40 It seems to me that, in the context of a statute concerned with adjustment of interests in property, the partnership analogy is likely to be more apt where both parties bring property to the relationship. In the context of a partnership as such, each partner typically contributes capital which is deployed in the partnership business in ways which entail acquisition of partnership property (in which each partner, as a partner, has an interest) and generation of partnership profits (or losses). The relationship is essentially property-based.
41 Where, as here, one party only brings property to the partnership and the award under the Property (Relationships) Act is based overwhelmingly on domestic and homemaker contributions (with only a very minor element related to the acquisition, conservation or improvement of property), the stronger analogy is with dissolution of marriage, in that the aspect of personal separation and termination of a personal tie is predominant. The several considerations outlined at paragraph [38] above must therefore be accommodated and given effect to by way of adjustment to the principle that each party should bear his or her costs. That principle should be modified in four ways to recognise such an adjustment.
42 The first modification to the principle that each party should bear his or her costs is that the plaintiff should bear so much (if any) of the defendant's costs (assessed on the ordinary basis) as is attributable to changes of solicitors by the plaintiff.
43 Second, there should be recognition that the plaintiff prolonged the proceedings by her ultimately unsuccessful attempts to adduce evidence of the value of the Filicudi properties. She should bear all of the defendant's costs (assessed on the ordinary basis) after an adjournment was granted on 29 July 2005 to afford her an opportunity to adduce admissible evidence, something she eventually failed to do.
44 Third and to the extent that they are not covered by the second item just mentioned, the plaintiff should be responsible for sums actually outlaid by the defendant in bringing Mr Scafidi to Sydney on two occasions for the purposes of the proceedings, including Mr Scafidi's professional fees for the period he was away from his office in Italy on the defendant's business in connection with the proceedings.
45 Fourth and to provide a measure of compensation to the defendant for item 2 at paragraph [38] above, the plaintiff should bear an amount on account of the defendant's costs for two typical hearing days. In order to represent a reasonable approximation of the party/party basis, this should be 60% of the actual daily fees of the defendant's solicitors, senior counsel and junior counsel at the rates in their relevant fee disclosures, multiplied by two.
46 Subject to those four adjustments - and to two further matters of importance yet to be mentioned - each party should bear his or her own costs. I should add that I do not regard the matters giving rise to the adjustments as sufficiently egregious to warrant an order for assessment on the indemnity basis.
47 The first of the additional matters concerns payments already made by the defendant on account of the plaintiff's costs. I have referred above to the consent regime under which the defendant made funds available towards the plaintiff's legal expenses and the fees of accountants and valuers. The regime was one invoking interim costs orders of the kind considered in Parker v Parker (1992) 16 Fam LR 458. These items must now be brought to account in the appropriate way. The second matter still requiring attention is the part of the consent regime that saw the defendant contribute to the maintenance of the plaintiff.
48 The two matters just mentioned were the subject of the following observations in the judgment of 5 April 2006:
"[212] It may also be thought that there is a question whether there should be an adjustment for the defendant's post-termination contributions by way of weekly maintenance payments, provision of a motor vehicle and the meeting of motor vehicle expenses plus, in the earlier post-separation phase, provision of housing and accommodation. I should record, however, that, with property valued at the date of trial, I have regarded those aspects as forming part of the defendant's financial contributions of the s.20(1)(b) kind in striking the figure of 75% at paragraph [206] above. No such adjustment is accordingly required, at least for payments up to the date of trial (for these purposes, June 2005). Payments thereafter should, however, be brought to account (together with interest at Supreme Court rates) by way of deduction from the award of $2,046,575.90.
[213] At this stage, I exclude from what I have said in the immediately preceding paragraph sums outlaid by the defendant to assist the plaintiff with legal fees and outgoings directly related to these proceedings (including accountancy fees and valuation fees). This is because I regard these as relevant to the costs of the proceedings, being a matter on which submissions will be required."
49 As to the second of the additional matters, it is unnecessary to say more than has been said at paragraph [212] of the earlier judgment - except to note that the several progressive figures mentioned at paragraph [12] above include the maintenance and related payments, as well as legal costs and accounting and valuation fees.
50 As to the first of the additional matters, I note that the sum attributable to costs and fees paid since 18 February 2002 is acknowledged in submissions filed by the plaintiff's solicitors to be $463,318.48. In accordance with the basic premise that each party should bear his or her own costs, this sum of $463,318.48 should be allowed by the plaintiff to the defendant.
51 In the result therefore, the outcome on costs is that each party will be left to bear his or her own costs, subject to allowances by the plaintiff to the defendant of sums giving effect to paragraphs [42], [43], [44], [45] and [50] of these reasons.
52 The parties should bring in short minutes embodying costs orders as I have outlined, together with orders covering all other matters necessary to bring the matter to finality, including orders giving effect to my decision that the sum of $2,046,575.90 should be paid by the defendant to the plaintiff, the decision at paragraph [212] of the judgment of 5 April 2006 and the parties' agreements concerning retention of the Mercedes car by the plaintiff and the costs of the subpoena directed to Randwick Council.
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