Meehan v Fuller[1999] QCA 37

SUPREME COURT OF QUEENSLAND

1. [1]
   THE COURT:  On 26 February 1999 the court published reasons for allowing the appeal, but postponed the making of formal orders until the receipt of further submissions.
2. [2]
   The order against which the appeal was brought was in the following terms: “1. The plaintiff is beneficially entitled to an unencumbered one half share in the property described as Lot 72 on Registered Plan 44332 in the County of Ward, Parish of Gilston, Land Title reference 1294160 being the property situated at 44 Messines Crescent, Miami in the State of Queensland and the defendant is entitled to the other half share in that property.

2. The plaintiff is beneficially entitled to an interest in the defendant’s one half share of the property situated at 44 Messines Crescent, Miami in the State of Queensland and in his two taxi licenses, being Regent Taxi License number 121 and number 161 in the amount of THREE HUNDRED AND TEN THOUSAND DOLLARS ($310,000.00)

IT IS ORDERED that:

1. The defendant pay the plaintiff’s costs of and incidental to the action on a solicitor and client basis, but limited to six hearing days on trial, including the costs of and incidental to the appearance on 16 January 1998 and including the costs of the hearing of 20 February 1998 insofar as it concerned the finalisation of the orders made as result of judgment delivered herein.
2. Insofar as the hearing of 20 February 1998 concerned the application for a stay of the orders pending appeal the costs of and incidental thereof be reserved.

AND BY CONSENT IT IS ORDERED that:

UPON the defendant paying to the plaintiff the sum of TWO HUNDRED THOUSAND DOLLARS ($200,000.00) within seven days of today’s date;

AND UPON the undertaking of the defendant not to sell, encumber, further encumber, charge or otherwise deal with the property situated at 44 Messines Crescent, Miami in the State of Queensland pending further order of this Honourable Court after the determination of the appeal in this action;

The orders made herein be stayed pending the defendant appealing such orders and the determination of such appeal.”

The first two paragraphs of the order will be referred to as declaration number 1 and declaration number 2, and the following two paragraphs of the order will be referred to as order number 1 and order number 2.

3. [3]
   The parties now agree that no alteration is required to declaration number 1, but that in accordance with this court’s reasons the amount in declaration number 2 should be reduced from $310,000 to $186,041.
4. [4]
   A number of submissions were advanced on behalf of the respondent seeking what are in effect determinations by this court of the rights of the parties in the light of various events that have occurred since 20 February 1998 when the above order was made.  It is noted that that order granted a stay of the original judgment on condition that the appellant pay to the respondent the sum of $200,000.  In accordance with that order the appellant paid the respondent $200,000 on 25 February 1998.  It will be seen that that amount slightly exceeds the money sum which this court has decided should be paid to the respondent pursuant to the judgment.
5. [5]
   In the course of his reasons for judgment the learned trial judge indicated his acceptance of evidence suggesting that the value of the Messines Crescent property was $240,000.  That however formed no part of the order that was made, and no consequential orders were made in relation to the disposition by either party to the other of their respective interests in the Messines Crescent property.  Apparently the appellant has continued to make use of that property, and negotiations have ensued between the parties in relation to his acquisition from the respondent of her declared half interest in that property.  These negotiations however were not concluded.  The final submission in reply on behalf of the respondent purported to seek an order from this court for the sale of the property and for the appointment of trustees.  This misconceives the functions of this court and the issues that are before it.  The respondent also sought orders from this court for the payment of money sums by the appellant, on the footing that the appellant should have purchased her half share in the Messines Crescent property for $120,000 some time ago.  Once again these submissions misconceive the function of this court.
6. [6]
   There is however no good reason to relieve the respondent at this stage of his undertaking not to deal with the Messines Crescent property.  The original undertaking contemplated a further order in the Supreme Court after determination of the appeal, and in the light of the unresolved differences between the parties it is better that the undertaking should remain at least for the present.

Costs below

7. [7]
   The learned trial judge made an order against the appellant requiring him to pay costs for six days including the costs of two later appearances.  The costs were ordered to be paid on a solicitor and client basis, pursuant to Order 26 Rule 9(1), in consequence of an offer made by the respondent before trial.  By written notice dated 7 July 1997 the respondent offered to settle her claims for an amount of $350,000 inclusive of costs.  His Honour considered that at trial she had “done significantly better than that offer”.  That was plainly so on the footing that the value of the property declared to be hers in the first declaration was $120,000 and the amount in the second declaration was $310,000.  The evidence presented to this court suggests that the respondent’s costs, on a party and party basis, as at 8 July 1997 were $21,000.  However when the judgment of this court in relation to declaration number 2 is substituted for that of the learned trial judge, the amount at which the respondent was prepared to settle the action on 7 July 1997 exceeds the amount which she ultimately has been found entitled to (including costs to the time of offer).  It seems to us that any justification for an order for indemnity costs thereby disappeared.  It is unnecessary to deal with the appellant’s submission that the value of the respondent’s entitlement in the Messines Crescent property ought not to be taken into account in this exercise, because even if it is taken into account, the respondent’s offer was not one which would entitle her to a benefit under Order 26 Rule 9(1).

8. [8]
   However the limitation of costs to six days and the other declarations in relation to particular appearances should remain.  In the result, the order for costs made by the trial judge should be varied by deleting the words “on a solicitor and client basis” and by adding the words “to be assessed” at the end of that order.

Interest on judgment or on other monies that the respondent alleges should have been paid to her

9. [9]
   As the respondent has had the benefit of the $200,000 paid by the appellant within seven days of the judgment below, and still retains the benefit of that payment, it would be inappropriate to order interest to run on the monetary entitlement the subject of the second declaration (ie her entitlement to $186,041).  In our view there is likewise no proper basis for ordering interest against the appellant with respect to the first declaration which recognises the respondent's entitlement to a half interest in the Messines Crescent property.  It was common ground on the pleading that that property was held by the parties as tenants in common and in equal shares, though the parties' overall equitable entitlements were of course in issue.  The respondent may well be entitled to some allowance for rents and profits or other allowance by reason of the benefit the appellant has had of occupancy of the property since trial.  But such a matter is not in issue before this court.  If the parties are determined to litigate this matter and the associated questions of partition or sale they must do so elsewhere.  The short point at present under consideration is whether an order for payment of interest should be made against the appellant on a notional basis of the value of her interest in the Miami property which has not yet been converted to money.  In our view no such order should be made.

Costs of appeal

10. [10]
    The members of this court indicated in their reasons an intention to order the respondent to pay a limited portion of the appellant’s costs of the appeal, as the points on which the appellant succeeded formed a limited part of the contentions advanced on the appeal. However further submissions have now been received on this question. The appellant submitted that the respondent should be ordered to pay the whole of the appellant’s costs of the appeal (on a party and party basis) in view of certain offers made on his behalf between September and November 1998, shortly before the hearing of the appeal. On 2 November 1998 the appellant offered the respondent a result more favourable than that which has been determined by this court, and the respondent declined the offer. The litigation was of course complicated by a combination of issues including declaration of entitlement to property, payment of a money sum and a complex order for costs below, and we recognise that some difficulty would attend a decision by the respondent in relation to acceptance of the offer. Notwithstanding this, the offer was a good one, and clearly to the respondent's benefit. It is recognised that Order 26 has never applied to the costs of an appeal (Tamwoy v Solomon^[1]) and no submission was made in relation to application of the Uniform Civil Procedure Rules 1999^[2]. The Supreme Court (including this court) however has a general discretion of giving a costs benefit to a party who has made an appropriate informal offer to settle^[3].

11. [11]
    Having fully reconsidered the matter of costs of the appeal we think that the offer that was made was sufficiently meritorious to delete any limitation of costs that might otherwise have been imposed by reason of the appellant's lack of success on one of the major issues raised on the appeal. In short the appropriate order for costs should now be the usual order namely that the unsuccessful respondent pay the appellant's costs of the appeal to be taxed.

Orders

12. [12]
    The following orders should be made:

1. The appeal be allowed.
2. The respondent pay the appellant's costs of the appeal to be assessed.
3. The order below dated 20 February 1998 be varied by deleting the amount of $310,000 and substituting the amount of $186,041.
4. The order for costs in the second numbered paragraph (1) be varied by deleting the words "on a solicitor and client basis" and by adding the words "to be assessed" at the end of the order.
5. The reserved costs referred to in the second numbered paragraph (2), as assessed, be paid by the appellant to the respondent.