Thomson v Sweeney [2013] NSWSC 1383

This case concerned the costs of section 66G proceedings. The usual course is that the court orders both parties’ costs to be paid out of the proceeds of sale. However the court found that the fact that one party initially pressed for partition and a set-off on account of improvements, and then later abandoned those issues, justified a departure from the usual rule.

The court said:

It is not necessary to show that the party acted unreasonably in pursuing the claim for partition. Nor is it necessary to show that they could not possibly have succeeded on their claim that there be a set-off from the plaintiff’s share of the proceeds of sale, of a sum to reflect the work done as a result of improvements to the property…. I do not think it necessary to delve into the likely outcome of the proceedings….In respect of those issues, the defendants have effectively surrendered to the plaintiff and the plaintiff can be seen to be the successful party. Costs should follow the event.

The court ordered that costs incurred up to the time the defendant’s issues were abandoned should be borne out of the proceeds of sale, being costs of a usual section 66G application, but should exclude those costs which related to issues of partition and improvements, which were later abandoned. Further the court ordered that the losing party should bear the other party’s costs of the proceedings from the point at which they surrendered.

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