Land and Environment Court New South Wales

• Medium Neutral Citation: Moorebank Recyclers Pty Ltd v Liverpool City Council (No 5) [2013] NSWLEC 132
• Hearing dates: 12 August 2013
• Decision date: 16 August 2013
• Jurisdiction: Class 3
• Before: Biscoe J

Decision

The second respondent is to pay 5 per cent of the applicant's costs and is to indemnify the applicant for 5 per cent of the costs which the applicant is liable to pay the first respondent.

• Catchwords: COSTS - easements of carriageway and construction granted under s 88K Conveyancing Act 1919 - whether a neighbour joined as a respondent to protect its intertwined interests should be ordered to pay part of applicant's costs and part of the costs applicant was ordered to pay the respondent owner of the servient tenement - whether in such a case costs follow the event - whether the applicant and the neighbour respectively won and lost - whether the neighbour's conduct of the proceedings was such as to unreasonably prolong the proceedings.
• Legislation Cited: Environmental Planning and Assessment Act 1979 Part 3A; Land and Environment Court Act 1979 s 20(1)(cj); Conveyancing Act 1919 s 88K; Civil Procedure Act 2005 s 98; Uniform Civil Procedure Rules 2005 Part 42, r 42.1
• Cases Cited: 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504; Khattar v Wiese [2005] NSWSC 1014; Mitchell v Boutagy [2001] NSWSC 1045, (2001) 118 LGERA 249; Moorebank Recyclers Pty Ltd v Liverppool City Council, SC/NSW, 22 February 2013, unreported; Moorebank Recyclers Pty Ltd v Liverpool City Council [2013] NSWLEC 33; Moorebank Recyclers Pty Ltd v Liverpool City Council (No 2) [2013] NSWLEC 93; Moorebank Recyclers Pty Ltd v Liverpool City Council (No 3 ) [2013] NSWLEC 95; Moorebank Recyclers Pty Ltd v Liverpool City Council (No 4) [2013] NSWLEC 129; Owners Strata Plan 13635 v Ryan [2006] NSWSC 342; Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2, (2010) 171 LGERA 286
• Category: Costs
• Parties: Moorebank Recyclers Pty Ltd (Applicant); Liverpool City Council (First Respondent); Tanlane Pty Ltd (Second Respondent)
• Representation: COUNSEL: J Lazarus (Applicant); N/A (First Respondent); T S Hale SC and Z Steggall (Second Respondent); SOLICITORS: Mark McDonald & Associates (Applicant); N/A (First Respondent); Minter Ellison (Second Respondent)
• File Number(s): 30141/13

Judgment

1 This is a costs matter at the end of proceedings for the grant of easements under s 88K of the Conveyancing Act 1919. I granted the applicant, Moorebank Recyclers Pty Ltd, easements of carriageway and construction over land owned by the first respondent, Liverpool City Council, on complex terms including terms which protected the interests of the Council and the second respondent, Tanlane Pty Ltd, as owner of adjoining land: Moorebank Recyclers Pty Ltd v Liverpool City Council (No 2) [2013] NSWLEC 93 (draft orders), Moorebank Recyclers Pty Ltd v Liverpool City Council (No 3 ) [2013] NSWLEC 95 (final orders), Moorebank Recyclers Pty Ltd v Liverpool City Council (No 4) [2013] NSWLEC 129 (amended final orders). Pursuant to s 88K(5), I ordered Moorebank to pay the Council's costs. I made no order for costs as between Moorebank and Tanlane but gave leave to apply for a costs order.

2 Moorebank now moves for:

(a) an order that Tanlane pay 50 per cent of its costs of the proceedings, and

(b) an order for an indemnity from Tanlane in respect of 50 per cent of the costs of the Council ordered to be paid by Moorebank.

3 Tanlane submits that there should be no order for costs against it.

4 Moorebank commenced the proceedings against the Council in the Supreme Court in September 2012. In December 2012 the Court of Appeal dismissed Moorebank's appeal against the Supreme Court's grant of an easement to Tanlane over the panhandle of Moorebank's land adjacent to the Council land. In February 2013, the Supreme Court made orders transferring these proceedings to this Court and, on Tanlane's motion, joining Tanlane as second respondent in order that it could protect its interests: Moorebank Recyclers Pty Ltd v Liverppool City Council, SC/NSW, 22 February 2013, unreported, Pembroke J. His Honour noted that counsel for Tanlane had informed him that "there was no intention whatsoever that there be any duplication between the evidence called on behalf of Tanlane and that called by...Council". In Moorebank (No 2) at [15] I said:

Although the Supreme Court joined Tanlane to the present proceedings in order that Tanlane could protect its interests, Tanlane in evidence and submissions has entered quite fully into the entire fray. Nevertheless Tanlane says that its only concerns are that if easements are granted (a) Tanlane's interests are taken into account, (b) Tanlane is in no way consenting to an MRF on Moorebank's land and (c) its forthcoming s 88K easement over Moorebank's panhandle is registered before registration of any easements granted to Moorebank. Tanlane says that three terms of the easements and one undertaking by Moorebank proposed by the respondents in draft short minutes reflect what Tanlane seeks in that regard. Those proposed terms are broadly to the effect that the owner of the Moorebank land not hinder, interfere or prejudice rights under the Tanlane easement for construction or use of the road bridge the subject of the construction development consent. The proposed undertaking by Moorebank - which, however, Moorebank declines to give - is to the effect that Moorebank's rights in relation to any easements that I grant, particularly the right of registration of the easements, be postponed until after registration of the Tanlane easement.

SUBMISSIONS

5 Moorebank accepts that if Tanlane had confined itself to matters that were relevant to its interests, no order for costs could be made against it. According to Moorebank, there were only two such matters: the timing of the registration of their respective easements, and the conditions imposed on the Moorebank easements in order to prevent any inconsistency with the Tanlane easement. Moorebank also accepts that as Tanlane was joined as a respondent without any conditions being attached, it was entitled to enter fully into the fray but submits that it would be liable for costs if it lost.

6 In summary, Moorebank seeks costs on two broad bases:

(a) Moorebank was successful and Tanlane was generally unsuccessful in the proceedings. Therefore, under r 42.1 of the Uniform Civil Procedure Rules 2005 (UCPR) Tanlane is prima facie liable to pay the costs of Moorebank attributable to Tanlane's joinder, which Moorebank submits are, impressionistically, 50 per cent. If credit is given for any limited Tanlane success concerning terms of the easements, this might be reduced to 37.5 per cent.

(b) Additionally or alternatively, Tanlane's conduct unreasonably prolonged the proceedings, with costs consequences.

7 In summary, Tanlane submits:

(a) Tanlane and the Council obtained a significant measure of success in the proceedings. In any case, it is inappropriate to apply the prima facie costs follow the event rule in r 42.1 of the UCPR given the nature of these proceedings and Tanlane's interests. By the same token, Tanlane would not be in a position to ask for costs under the costs follow the event rule had Moorebank failed to obtain the easements.

(b) Whilst opposing the grant of the easements in the terms sought by Moorebank, at a relatively early stage of the hearing Tanlane agreed to Council's open offer to resolve the proceedings by granting the easements sought on certain terms including (in effect) that the Council would be the consent authority for an unspecified decision - which Moorebank did not find acceptable. From that time, Tanlane's opposition was only to the extent to which Moorebank's proposed terms sought to go beyond Council's offered terms and could significantly impact on Tanlane's interests. Tanlane did advocate a Ramps A condition whereas the Council was more amenable to a different option.

(c) The proceedings were not unreasonably prolonged as a result of Tanlane's involvement. There was some duplication of expert evidence as between the Council and Tanlane, but this was due to insufficient time for their respective experts to confer and assess what duplication there might be and was therefore excusable. This came about because Sheahan J, on 28 March 2013, made orders for an expedited hearing from 20 May 2013 and required the respondents to file their evidence within four weeks, which included the Easter vacation.

CONSIDERATION

8 These proceedings were transferred by the Supreme Court to this Court and are therefore within class 4 of this Court's jurisdiction: Land and Environment Court Act 1979 s 20(1)(cj). Through an administrative error in this Court's registry, the proceedings were wrongly numbered as class 3 proceedings, but that does not change the effect of the statute and has no costs consequence.

9 Costs as between Moorebank and Tanlane are governed by s 98 of the Civil Procedure Act 2005 and r 42.1 of the UCPR. Subject to the rules of court, costs are in the discretion of the Court: s 98. Subject to Part 42 of the UCPR, if the Court makes any order as to costs, the Court is to order that the 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: r 42.1 of the UCPR.

10 Moorebank's first submission is that it succeeded in the proceedings and therefore Tanlane should pay its costs under the general costs follow the event rule in r 42.1. I disagree.

11 In considering the appropriate exercise of discretion under r 42.1 in the present case, an important consideration is the nature of the proceedings. These proceedings are a far cry from conventional civil litigation. Conventional civil litigation is about vindication of rights. That is the essential context for the general costs follow the event rule in r 42.1. An application for an easement under s 88K of the Conveyancing Act is not about vindicating rights but about obtaining rights by appropriating the property of another. The fundamental costs principle under s 88K is that, generally, the owner of the land to be burdened by the threatened easement should be entitled to resist it without fear as to costs, and that the applicant seeking the easement must pay that owner's costs. This is reflected in s 88K(5) which provides: "The costs of the proceedings are payable by the applicant, subject to any order of the Court to the contrary". In my opinion, given the context of the whole of s 88K, this refers to the costs of the owner of the land to be burdened by the easement: Mitchell v Boutagy [2001] NSWSC 1045, (2001) 118 LGERA 249 at [60]; Khattar v Wiese [2005] NSWSC 1014 at [77]; Owners Strata Plan 13635 v Ryan [2006] NSWSC 342 at [12]; 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504 at 523. In Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2, (2010) 171 LGERA 286 at [181] Preston CJ at LEC referred to s 88K(5) creating an entitlement in "the person affected by the easement" but his Honour was not contemplating a third party joined to the proceedings, such as Tanlane. The s 88K(5) entitlement to costs will only be lost if and insofar as the person entitled to it has engaged in unreasonable conduct, such as by making the proceedings more expensive: Rainbowforce at [182].

12 Secondly, this is a rare case where the interests of a third party, Tanlane, were intertwined with and not dissimilar to the Council's interests, and were potentially affected by the proposed easements such that it was joined to the proceedings. The Council was at risk of appropriation of its land and disruption of its long term plan for a road bridge connecting various lands east of Brickmakers Drive to Brickmakers Drive. Tanlane was at risk of conflict with its development consent granted by the Council and its ancillary agreement with the Council for the construction of the road bridge, as well as with its easement over Moorebank's land granted by the Supreme Court (subject to valuation) for that purpose. The road bridge was necessary to service Tanlane's proposed large residential subdivision and marina.

13 A major concern of the Council and Tanlane was that the location and design of Moorebank's proposed ramps to the road bridge, structure or embankment, or other road access to Brickmakers Drive, might conflict with their interests, particularly if, as Moorebank proposed, the Planning Assessment Commission and not the Council became the approval authority pursuant to Part 3A of the Environmental Planning and Assessment Act 1979. The further amended summons was silent as to the location and design of any such ramps. The Marshall plan for surface access to Brickmakers Drive over the council land, which Moorebank was pursuing when it commenced the proceedings, would conflict with the Tanlane easement and was exhibited in early 2013 as part of the Part 3A process. It was conceivable that the Marshall Plan might have been approved under the Part 3A process, although Moorebank was professing in early 2013 to have moved to an alternative ramps design.

14 Having regard to these matters, in my opinion Tanlane should not have had to fear an adverse costs order if it unsuccessfully resisted the imposition of the easements, unless it engaged in unreasonable conduct which added to the expense of the proceedings. Conversely, as Tanlane recognises, given the involvement of the Council as a contradictor Tanlane would not be in a position to ask for costs if it were successful in resisting the imposition of the easements. In short, in my opinion, there should be no order for costs against Tanlane, unless it was unreasonable in its conduct of the proceedings whereby costs were increased.

15 I would add that the premise of Moorebank's above submission that it won and Tanlane lost the proceedings is not black and white. In fact, the parties each enjoyed some success. Moorebank was successful in that it obtained the easements and the owner's consent term that it wanted, but it was unsuccessful in otherwise limiting the terms to those set out in the further amended summons. Council and Tanlane achieved a substantial measure of success in that the orders for the easements were subject to extensive conditions for their protection. For example, orders 5 and 5A contained important undertakings by Moorebank in relation to its Part 3A application, the ramps design and related matters.

16 I turn to Moorebank's alternative submission that Tanlane's conduct unreasonably prolonged the proceedings in the following respects.

17 First, Moorebank submits that Tanlane went beyond the matters which were necessary to protect its interest, namely the conditions of any easement that might be granted, which would have taken little time, and that the vast amount of its submissions and evidence related to issues that went to whether the easements should be granted. I do not accept the submission. I have earlier held that Tanlane was entitled to resist the imposition of the easements without fear of an adverse costs order.

18 Secondly, Moorebank submits that Tanlane unreasonably prolonged the proceedings by duplicating the Council's expert planning, traffic and structural engineering evidence, notwithstanding that it had assured the Supreme Court, when it applied to be joined to the proceedings, that it would make efforts to ensure there was no duplication: see [4] above. To put that assurance in context, Tanlane points to the transcript of proceedings before Pembroke J where senior counsel for Tanlane said that Tanlane and Council should ensure that they did not duplicate evidence but that Tanlane, having conducted much of the litigation over the years, had collected much of the evidence and was on top of the issues. Tanlane acknowledges that there was duplication and that if there was no reasonable excuse it may have to bear costs. However, Tanlane submits that it was not reasonably able to avoid duplication in its expert evidence because Moorebank, having put on its evidence over about six months, on 21 March 2013 succeeded in obtaining an order from Sheahan J for expedition of the hearing (Moorebank Recyclers Pty Ltd v Liverpool City Council [2013] NSWLEC 33) and on 28 March 2013 his Honour fixed the proceedings for hearing commencing on 20 May 2013 and ordered the respondent to file their evidence within four weeks, which included Easter. Consequently, Tanlane submits, there was no reasonable time for the experts for Tanlane and the Council to confer to avoid duplication. Tanlane tells me it provided Council with its expert evidence, but there is no evidence of efforts to have Council and Tanlane experts to confer to avoid duplication. I think there should also be taken into account that the respondents had Moorebank's evidence (other than valuation evidence) from 7 March 2013, so they in fact had nearer two months to prepare their evidence. In the circumstances, I am not persuaded that duplication could not have been avoided in the available time. Given that Tanlane was joined to the proceedings taking into account its assurance that it would make efforts to avoid duplication in evidence, I think it is reasonable in the circumstances that Tanlane should bear the additional costs thereby incurred by Moorebank and for which Moorebank is liable to the Council.

19 Thirdly, Moorebank submits that Tanlane unreasonably prolonged the proceedings because it raised the following matters which were irrelevant or of little relevance:

(a) Tanlane tendered and addressed what Moorebank describes as a vast number of irrelevant historical planning documents. Although I think far too many such documents were tendered, as they were tendered jointly, with some then removed from the bundle because of Moorebank's objections, and as there was an issue as to the Council's historical long term planning for the area, I am disinclined to conclude that this should have an adverse costs consequence for Tanlane.

(b) Moorebank submits that Tanlane's approach was that the Court should undertake a full merits review of the Part 3A application, including considering air quality evidence, which was irrelevant. As I observed in Moorebank (No 2), in proceedings such as these the court does not look at the likelihood of development consent (or project approval) being granted but can determine whether there is no chance of it being granted. The court also has to consider whether the proposed development is reasonably necessary for the effective use of the applicant's land, which requires some consideration of the development's desirability or economic effect and appropriateness for the area. Expert evidence for both Tanlane and the Council delved into the merits of Moorebank's proposed development, particularly through Tanlane's planner, but could be viewed as going to such issues. The Council's planner generally agreed with Tanlane's planner, and thus in that respect the Council and Tanlane ultimately had a similar evidentiary case. There was overreaching in how far the evidence went to the merits, but I am not satisfied that substantial costs were incurred by Moorebank relating to Tanlane's evidentiary case in this regard over and above the costs relating to Council's evidentiary case on the merits.

(c) Moorebank criticises Tanlane's submissions and evidence at the end of the hearing as to whether Moorebank should be permitted to adduce evidence of the correspondence of Moorebank's planner, Mr Kennan, with the Department of Planning. This related to very recent moves by Mr Kennan behind the scenes to bolster Moorebank's case: see Moorebank (No 2) at [85] - [88]. Although there may have been some initial overreaction by Tanlane to this development, the process which Tanlane instigated disclosed relevant documents which the Court would not have otherwise seen that it was reasonable to put before the Court. I do not think this should adversely affect Tanlane in costs.

20 In the result, duplication of expert evidence is the only matter in respect of which I think Tanlane should have a costs liability. Evaluation of the additional costs thereby incurred is not capable of precise arithmetical assessment (which the parties did not venture) and is a matter of broad impression. My impression is that matters of duplication of evidence made only a modest contribution to the length of the hearing. I infer that its contribution to Tanlane's and the Council's preparation time was similar. My evaluation is that the additional costs for duplication of evidence should be assessed at 5 per cent.

21 Given this result, I do not propose to make any separate order as to the costs of Moorebank's notice of motion.

ORDER

22 The order of the Court is that the second respondent is to pay 5 per cent of the applicant's costs and is to indemnify the applicant for 5 per cent of the costs which the applicant is liable to pay the first respondent.

Amendments

18 September 2013 - typographical erros in 3rd sentence of [12] and 6th sentence of [18]
Amended paragraphs: 12,18

Decision last updated: 18 September 2013