Byron Shire Council v Wookey (No 2)

Parties: Byron Shire Council (Applicant)
Robert Wookey (First Respondent)
Ben Webster (Second Respondent)

Representation: Counsel:
R Coffey (Applicant)
B K Nolan (Respondents)
Solicitors:
Wilshire Webb Staunton Beattie Lawyers
Green & Associates Solicitors

File Number(s): 2024/00278717

Publication restriction: Nil

JUDGMENT

Nature of proceedings

Facts

1. These proceedings were Class 4 civil enforcement proceedings. Shortly after the commencement of the hearing on 5 May 2025, the parties resolved the proceedings by consent.

2. The Applicant seeks its costs of the proceedings, either as a gross sum cost order, or in the alternative the usual order as to costs. The Respondents oppose the making of an order in the Applicant’s favour and contend that there be no order as to costs.

3. The proceedings were commenced by application filed on 30 July 2024 (Class 4 Application). The final relief sought was:

5 An order that within 14 days from the date of this order the First Respondent, and his agents, servants and contractors be restrained from carrying out or permitting the carrying out of development (Development, as that term is defined in the Environmental Planning and Assessment Act 1979) (EPA Act), being the occupying or using; or causing, permitting or authorising the occupation or use, of the four buildings located on Lot 2 in DP 208063 and known as 333 Skyline Road Middle Pocket NSW (the Land) as shown on the plan annexed and marked ‘A’ to these orders as buildings ‘A’, ‘B’, ‘C’, ‘E’, and ‘F’ (the 4 Buildings) for any purpose:

(a) that is prohibited under the zoning of the Land under the Byron Local Environmental Plan 2014 (BLEP), or

(b) that requires development consent unless or until development consent has been granted for that development or until further order.

6 An order that within 14 days from the date of this order the First Respondent, and his agents, servants and contractors be restrained from carrying out or permitting the carrying out of Development being the occupying or using; or causing, permitting or authorising the occupation or use, of all of the dwelling house on the Land known as the Treehouse approved by the Applicants building approval No. 6.19782154.1 dated 11 July 1978 (the Dwelling House) as shown on the plan annexed and marked ‘B’ to these orders as building ‘D’, for any purpose other than as a single dwelling house.

7 An order that within 5 days from the date of this order, the Frist Respondent take all necessary actions and steps to cease, and remove or delete, any advertising, listing, post or publication in any way or form that any of the 4 Buildings or the Dwelling House can be used and occupied for any period or periods by any third parties, whether for financial gain or otherwise, until further order.

8 An order that within 14 days from the date of this order the Second Respondent be restrained from occupying or using; or causing, permitting or authorising, the occupation or use of the building which is also shown on the plan annexed and marked ‘A’ to these orders as the ‘BW Cabin’.

4. On 15 November 2024 the Court made interim orders in the following terms:

1 An order that, until further order, within 3 days from the date of this order the First Respondent, and his agents, servants and contractors be restrained from carrying out or permitting the carrying out of development (Development, as that term is defined in the Environmental Planning and Assessment Act 1979) (EPA Act), being the occupying or using; or causing, permitting or authorising the occupation or use, of the four buildings located on Lot 2 in DP 208063 and known as 333 Skyline Road Middle Pocket NSW (the Land) as shown on the plan annexed and marked ‘A’ to these orders as buildings ‘B’, ‘C’, ‘E’ and ‘F’ (the 4 Buildings) for any purpose:

(a) that is prohibited under the zoning of the Land under the Byron Local Environmental Plan 2014 (BLEP), or

(b) that requires development consent unless or until development consent has been granted for that development or until further order.

2 An order that, until further order, within 3 days from the date of this order the First Respondent, and his agents, servants and contractors be restrained from carrying out or permitting the carrying out of Development being the occupying or using; or causing, permitting or authorising the occupation or use, of all of the dwelling house on the Land known as the Treehouse approved by the Applicants building approval No. 6.19782154.1 dated 11 July 1978 (the Dwelling House) as shown on the plan annexed and marked ‘B’ to these orders as building ‘D’ , for any purpose other than as a single dwelling house.

3 An order that within 2 days from the date of this order, the First Respondent and Second Respondent:

(a) take all necessary actions and steps to remove or delete, any advertising, listing, post or publication in any way or form that any of the 4 Buildings or the Dwelling House can be used and occupied for any period or periods by any third parties, whether for financial gain or otherwise; and

(b) not create or cause to be created any advertising, listing, post or publication in any way or form that any of the 4 Buildings or the Dwelling House can be used and occupied for any period or periods by any third parties, whether for financial gain or otherwise.

4 An order that within 3 days of complying with Order 4, the First Respondent cause evidence to be provided to the solicitor for the Applicant confirming:

(a) compliance with Order 4(a) has been completed;

(b) persons who have booked to use the 4 Buildings, whether directly with the First Respondent, Second Respondent or through a third party agent or website, have been advised of these orders or that the booking cannot proceed.

5 An order pursuant to rule 23.8 of the Uniform Civil Procedure Rules 2005 (UCPR) that the Applicant (including its servants agents and contractors) is authorised to enter the Land and inspect the curtilage, the external areas and the internal areas of the 4 Buildings and the building which is also shown on the plan annexed and marked 'A' to these orders as the 'BW Cabin' in accordance with the following:

(a) 48 hours notice to be given by the Applicant to the Respondents;

(b) the notice is to be given by email to the Respondents at the following email addresses: [redacted] (Robin Wookey) and [redacted] (Benjamin Webster), or as otherwise advised by the Respondent.

(c) the Applicant (by its servants, agents or contractors) is authorised to do anything necessary to gain access to the Land or any of the 4 Buildings and the BW Cabin for the purpose of inspections (Inspections).

(d) as part of carrying out the Inspections, the Applicant (by its servants, agents or contractors) is authorised to:

(i) examine and inspect;

(ii) take measurements;

(iii) make such examination, inquiries or tests as the Applicant, their servant, agent or contractor, thinks necessary;

(iv) take photographs, films, audio, video and other recordings;

(v) open draws, cupboards, receptacles, doors and similar receptacles;

(vi) take and remove samples of any item for the purpose of testing, examination or analysis.

5. The Respondents filed a Defence to the Class 4 Application on 11 February 2025 (Defence). The Defence largely disputed the allegations made and made complaints about the nature of the pleading. The Respondents did not raise a positive defence.

6. The Applicant filed an amendment to the Class 4 Application on 27 March 2025 (Amended Application). The Amended Application sought as final relief:

Restraint of use of Buildings “A”****, “B”, “C”****, “E” and “F”

(5) An order pursuant to s 9.46 of the Environmental Planning and Assessment Act 1979 (EPA Act) that the First Respondent, by himself, his agents, servants and contractors be restrained from carrying out or permitting the carrying out of development (as the term is defined in the EPA Act), being the occupying or using, or causing, permitting or authorising the occupation or use of the four buildings, located on Lot 2 in DP 208063, and known as 333 Skyline Road Middle Pocket NSW (the Land), and shown in the aerial image annexed and marked “A” to these orders as Buildings “A”, “B”, “C”, “E” and “F” unless and until development consent has been obtained.

Restraint of use of Building “D”

(6) An order pursuant to s 9.46 of the Environmental Planning and Assessment Act 1979 (EPA Act) that the First Respondent, by himself, his agents, servants and contractors be restrained from carrying out or permitting the carrying out of development (as the term is defined in the EPA Act), being the occupying or using, or causing, permitting or authorising the occupation or use of the all of the dwelling house on the Land, known as the Treehouse, approved by the Applicant’s building approval No. 6.19782154.1, dated 11 July 1978 (the Dwelling House), as shown in the aerial image annexed and marked “A” to these orders as Building “D”, for any purpose other than as a single dwelling house, unless and until development consent has been obtained.

Restraint on advertising

(7) An order pursuant to s 9.46 of the Environmental Planning and Assessment Act 1979 (EPA Act) that the First Respondent, by himself, his agents, servants and contractors be restrained from advertising, listing, posting or publishing, in any way or form, that Buildings “A”, “B”, “C”, “D” ,”E” and “F” shown in the aerial image annexed and marked “A” to these orders, and “BW Cabin” shown in the aerial image annexed and marked “B” to these orders, can be used and occupied for any period or periods, by third parties, for financial gain.

Costs

(11) An order that the Respondents pay the Applicants costs of and incidental to these proceedings.

7. Numerous affidavits were filed by each party in the proceedings.

8. The proceedings were opened by both parties. Upon opening the parties sought an opportunity to consider the further conduct of proceedings. On 5 May 2025, after consideration and by consent the Court made orders in the following terms:

By Consent:

1. The Court orders, pursuant to s 9.46 of the Environmental Planning and Assessment Act 1979 (EPA Act) that the First Respondent, by himself, his agents, servants and contractors be restrained from carrying out or permitting the carrying out of development (as that term is defined in EPA Act), being the occupying or using, or causing, permitting or authorising the occupation or use, for Tourist and Visitor Accommodation, of the five buildings located on Lot 2 in DP 208063 and known as 333 Skyline Road Middle Pocket NSW (the Land) as shown in the aerial image annexed and marked ‘A’ to these orders as buildings ‘A’, ‘B’, ‘C’, ‘D’, ‘E’ and ‘F’ unless and until development consent has been obtained.

2. The Court notes that the First Respondent's consent is on a without admission basis.

2A. The proceedings, save as to costs, as against the Second Respondent are dismissed.

3. The Court orders that on or before 30 May 2025 the Applicant file and serve any evidence concerning the question of costs.

4. The Court orders that on or before 20 June 2025, the Respondents file and serve any evidence concerning the question of costs.

5. The Court Orders that on or before 27 June 2025, the Applicant file and serve any evidence in reply on the question of costs.

6. The Court orders that on or before 10 July 2025 the Applicant file and serve any submissions concerning the question of costs.

7. The Court orders that on or before 24 July 2025, the Respondents file and serve any submissions concerning the question of costs.

8. The Court Orders that on or before 9 August 2025, the Applicant file and serve any evidence in reply on the question of costs.

9. The proceedings are listed for a costs hearing on 20 August 2025.

9. The Applicant filed a Notice of Motion on 23 July 2025 setting out the basis for its claim for costs in the following terms:

1. The Respondent is to pay the Applicant’s costs on an indemnity basis in the proceedings.

2. An order for the Applicant’s costs in a gross sum is made pursuant to section 98 of the Civil Procedure Act 2005.

10. The Applicant did not press the order for indemnity costs at the hearing and confirmed it was seeking costs on an ordinary basis.

Costs application

Applicable principles

11. Section 98(1) of the Civil Procedure Act 2005 (NSW) (CP Act) provides:

98 Courts powers as to costs

(1) Subject to rules of court and to this or any other Act—

(a) costs are in the discretion of the court, and

(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and

(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.

12. In proceedings such as these the general rule is that expressed in the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 42.1 which provides:

42.1 General rule that costs follow the event

Subject to this Part, 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.

13. In addition, where proceedings are dismissed UCPR r 42.20(1) provides:

42.20 Dismissal of proceedings etc

(1) If the court makes an order for the dismissal of proceedings, either generally or in relation to a particular cause of action or in relation to the whole or part of any claim, then, unless the court orders otherwise, the plaintiff must pay the defendant’s costs of the proceedings to the extent to which they have been dismissed.

14. Whilst relevant UCPR rules are expressed as the usual orders, the determination of the appropriate order for costs in each matter remains discretionary.

15. Where there has been no determination of the merits of a proceeding, in the determination of an appropriate costs order, the relevant principles to be applied were identified by the Court of Appeal in Nadilo v Eagleton [2021] NSWCA 232; (2021) 250 LGERA 89 (Nadilo), per Brereton JA with whom Meagher JA agreed, at [6]-[9] where it was stated (footnotes omitted):

6 The power to award costs is an important aspect of rendering justice between litigants. Underlying the general rule that costs follow the event, and the qualifications to it, is the idea that costs should be borne in a way that is fair, having regard to the responsibility of each party for the incurring by the other of the costs. The general rule reflects the notion that justice to a successful party is not achieved if it comes at the price of being substantially out-of-pocket, so that a party who is responsible for litigation should bear its costs. It is unjust that a plaintiff who has to come to court to vindicate its legal rights should have to bear the costs of doing so, just as it is unjust that a defendant who is wrongly sued should have to bear the costs of its defence. Costs follow the event generally because, if a plaintiff wins, the plaintiff was caused to incur costs by the defendant's failure otherwise to accord to the plaintiff that to which the plaintiff was entitled; while if a defendant wins, the defendant was caused to incur costs in resisting a claim for something to which the plaintiff was not entitled.

7 UCPR, r 42.20, does not create a presumption, but is merely a default position. It reflects the general rule that costs follow the event: prima facie*,* if proceedings are dismissed, the plaintiff has lost. In exercising the discretion to “order otherwise”, the general rationale for costs orders provides important context, as does whether the formal disposition of the proceedings by dismissal truly reflects “the event”. Thus one circumstance in which the discretion to “order otherwise” may be exercised is where a discontinuance or dismissal is consequent upon a plaintiff having obtained practical extra-curial success, rendering the further prosecution of the proceedings pointless.

8 In Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin, McHugh J said:

In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties (Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201). To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action (Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201). In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation.

…

Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried.

…

If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings.

9 In ONE.TEL Ltd v Commissioner of Taxation, Burchett J explained that the approach endorsed in Lai Qin is applicable in cases involving compromise, where there is no clearly successful party, as distinguished from cases in which one party, after litigating for some time, effectively surrenders to the other, rendering further litigation unnecessary; and that in the latter type of case, the outcome is sufficient to justify an “order otherwise” without it being necessary to demonstrate unreasonableness:

[6] In my opinion, it is important to draw a distinction between cases in which one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event or settlement so removes or modifies the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case, there will commonly be lacking any basis for an exercise of the Court's discretion otherwise than by an award of costs to the successful party. It is the latter type of case which more often creates problems, since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs. In Ex Parte Lai Qin, McHugh J was careful to state (at 624) that the principles with which he was concerned were those that “govern an application for costs when a party elects not to pursue an action because he or she has achieved the relief sought in the action either by settlement or by extra-curial means”. As his Honour recounted the facts, the instant case was one where the applicant had challenged a decision of the Refugee Review Tribunal denying her status as a refugee but, during the pendency of her action in the High Court, the Minister had exercised his special discretion in her favour under s 417 of the Migration Act 1958 (Cth). The question whether the tribunal had or had not erred in law thus became moot. Sun Zhan Qui v Minister for Immigration and Ethnic Affairs was a similar case. Following the decision of the Full Court in Sun v Minister for Immigration and Ethnic Affairs (1997) 81 FCR 71, the Minister exercised his discretion under s 417, with the result that an outstanding proceeding in respect of one of several decisions of the Refugee Review Tribunal lost any significance for either party. Beaumont J followed Ex parte Lai Qin. Gribbles v Health Insurance Commission was a variation on the theme. There, the Health Insurance Commission was sued by a pathologist because it declined to recognise particular services as eligible for the payment of Medicare benefits; but during the pendency of the proceeding, certain arrangements affecting the performance of the services were changed, with the result that the Commission reversed its decision. The original dispute thus ceased to have any significance, and the argument about the appropriate costs order had to take place in the absence of any determination of the merits. Again, in Australian Securities Commission v Aust-Home Investments Ltd and in Australian Securities Commission v Berona Investments Pty Ltd, as Cooper J put it in the latter case (at 777), “events had overtaken the proceedings”. The relief originally sought was no longer required, and the proceedings were terminated without any decision on the merits. Neither side had won or lost (see the former case at 202, and the latter at 777). Reddy v Hughes and Rizal v Minister for Immigration and Multicultural Affairs perhaps each turned even more clearly on an assessment of the reasonableness of a party's behaviour. In Reddy v Hughes, the respondent had offered the applicant a substantially complete remedy before the institution of proceedings, and Branson J held (at 415) that her Honour was “not able to be satisfied that the applicant acted reasonably in commencing the proceeding”. In Rizal, although the applicant achieved the result he sought by his proceeding in the Court, there was an “at least arguable” objection to the Court's jurisdiction to entertain the application, and a proposed amendment to overcome the jurisdictional problem would have required leave to file an application long out of time. That leave had not been granted when the proceeding became moot because of the Minister's plainly reasonable decision to reconsider the request the previous rejection of which was the subject and casus belli of the litigation.

…

Applicant’s submissions

16. In this case, the Applicant seeks its costs on the basis that it contends that by entering into the consent orders the Respondents in effect capitulated. It was contended that the terms of the agreed orders was to give the Applicant success in the form of the relief it had sought in the proceedings.

17. In the alternative, the Applicant contended that the Respondents had acted unreasonably in the maintenance of their Defence. In particular, it was submitted that the Respondents’ maintenance of the Defence was akin to the characterisation of unreasonableness as outlined in Nadilo at [12] that:

12 ...However, if there were such a requirement, the respondents’ persistence in defending the proceedings, rather than availing themselves earlier of any opportunity to avoid the applicant incurring costs, would satisfy it. The respondents had every opportunity to avoid the applicant incurring costs: they could have installed compliant machinery in the first place; they could have rectified it before proceedings were commenced; they could have rectified it promptly after proceedings were commenced; and they could have conceded at any earlier stage of proceedings that they were bound to rectify it. To defend the proceedings rather than to take any of those steps was, in the relevant sense and context, unreasonable.

Respondents’ submissions

18. The Respondents oppose the making of the orders sought. The Respondents note that the orders that were made by consent were made “without admission” such that a finding of capitulation is not open, rather the Respondents consented to bringing the proceedings to an end to avoid the cost of continuing litigation the outcome of which was of no benefit to them.

19. Further, the Respondents’ agreement to confined prospective restraints ought not be characterised as capitulation. It was, rather, an exercise of restraint consistent with the overarching obligations imposed by ss 56 to 60 of the CP Act to facilitate the just, quick and cheap resolution of the real issues in dispute. Once the Applicant had abandoned its broader claims and reformulated its case by the Amended Application, it was neither proportionate nor efficient to insist on a contested hearing about relief that was no longer pressed. The Respondents acted in accordance with their duty to the Court and to the efficient administration of justice by consenting to narrow orders, thereby containing costs and avoiding the unnecessary ventilation of issues that had been overtaken.

20. In addition, the Respondents contend that their position in the proceedings was significantly altered by the Applicant’s amendment to the Class 4 Application. The effect of which was characterised in the written submissions in the following terms:

7. The Applicant’s Points of Claim, filed in September 2024, were notably lacking in precision. They alleged that structures were being used “from time to time” for tourist accommodation, but did not identify the persons involved, the dates of such use, or the zoning provisions said to be engaged. Advertising was pleaded, but not tied to any allegation of actual use. Relief was also sought against the Second Respondent despite the absence of any pleaded conduct on his part.

8. These shortcomings were addressed in the Respondents’ opening submissions and in their objections to evidence. They consistently maintained that the Applicant’s case did not disclose a cause of action and that much of the evidence was inadmissible or irrelevant to the pleaded issues. The record shows the Respondents pressing these points in a careful and measured way.

9. The Applicant ultimately recast its case by Amended Summons, abandoning relief it had previously sought and narrowing its position to prospective restraints. That step reflects not surrender by the Respondents, but recognition by the Applicants that the case as originally framed could not be maintained.

10. Both parties acted reasonably once the proceeding was confined. The First Respondent accepted limited orders rather than prolong argument about relief that was no longer pressed. The Applicant accepted the dismissal of proceedings against the Second Respondent.

21. It was also contended that the Respondents’ position was a reasonable one, reinforced by the discretionary considerations. As set out in the Respondents’ opening submissions at the substantive hearing, it was contended that the Council’s Points of Claim were incapable of sustaining relief, the evidence relied upon was inadmissible or irrelevant to the pleaded issues, and there was no cogent basis on which the Court could be satisfied that coercive injunctive orders were either necessary or proportionate. The structures in question were longstanding, largely unused, and the subject of genuine efforts to regularise. These considerations meant that, both before and after the Amended Application was filed, the discretion to grant final relief was far from straightforward. The Respondents were therefore justified in maintaining their Defence of the proceedings until their resolution by consent, as the case for relief remained contestable on multiple discretionary bases throughout.

Findings on costs

22. In considering whether the resolution of a matter represents a success to a particular party the relevant task is that described by the Court of Appeal in Nadilo, per Preston CJ of LEC, at [85] as:

85 …the applicant’s success was to be evaluated not by a close comparison of the precise terms of the orders made by the Court by consent of the parties and the prayers for relief in the summons, but rather by looking to the substance of the outcomes sought and obtained by the applicant.

23. In this case, it appears on its face that by the terms of the consent orders the Respondents agreed to orders that largely accorded with the relief sought in the Amended Application. To the extent that the final relief was different from that in the Amended Application, it was of no real consequence in the context of the whole of the proceedings and the nature of the Defence raised by the Respondents. In the circumstances, I accept the Applicant’s submission that the entering into consent orders in the form ultimately made, should be characterised as a capitulation.

24. The reliance upon the reference to the orders being made “without admission” does not alter the finding of capitulation. Whilst the First Respondent entered into the orders without making admission, the fact of the terms of the orders made, when considered in the manner identified at [22] above, by looking to the substance of the outcomes sought and obtained by the Applicant, the form of orders was, in effect, a capitulation.

25. Where a finding of capitulation is made it is unnecessary that the Applicant also establish that the Respondents acted unreasonably in the maintenance of the Defence. Notwithstanding that such a finding is unnecessary as both parties addressed this alternative basis, I consider it appropriate, for completeness, that I address it.

26. In this case, the question as to whether the Respondents’ acted unreasonably turns upon whether the Application was sufficiently different as to warrant the Respondents’ change in position. I find that it was not. The Amended Application was a document filed to clarify the position that would be taken by the Applicant at the hearing. It removed certain relief no longer pressed but retained the substantive relief to which the Respondents objected. Contrary to the submissions made by the Respondents in the costs hearing the change was not one of substance, relating to the ability to regularise the use, rather the claims were and remained focussed on the fact that no development consent had been obtained for the purported use of the First Respondent’s land.

27. As to the remaining issues of discretion, like the merits of the proceedings it would be inappropriate to conduct a hearing on the merits of such a claim in an application for costs. On the face of the discretionary claims made I am unable to find that there would have been an outcome favourable to the Respondents in the event that the hearing proceeded to a consideration of the discretionary factors raised.

Appropriate costs order

28. In this case, there are two Respondents. The First Respondent is the owner of the land and the primary agitator of the Defence in these proceedings. The Second Respondent was a person identified as having occupied a building on the land at a relatively undetermined time.

29. The Respondents were represented by the same solicitor and the Defence was drafted on behalf of both Respondents, wherein the Respondents were referred to collectively. Such a pleading approach would appear to indicate that each Respondent was equally invested in all of the claims in the case. However, in light of the case as it related to the Second Respondent was limited in scope and the final orders were unrelated to the Second Respondent, and as the proceedings were dismissed as against him, I consider it appropriate that the costs considerations due not apply equally to each Respondent.

30. The findings I have made above at [23]-[27] are applicable to the First Respondent. I consider that the dismissal of the proceedings against the Second Respondent without the making of orders operates other than as a capitulation by the Second Respondent.

31. I consider that the Second Respondent’s maintenance of a Defence in so far as it pertained to the claims made in connection with him were not unreasonable to the same extent as that of the First Respondent. In the circumstances, I do not consider it appropriate that an order for costs be made against the Second Respondent.

32. That being said, I do not consider that it is appropriate that the usual order as expressed in UCPR r 42.20 should be applied. In this case, it was open to the Second Respondent to avoid participation in the proceedings, he did not do so. It was also open to the Second Respondent to only plead to those claims that directly related to him, he did not do so. In the circumstances, I consider it appropriate that there be no order as to costs as between the Applicant and the Second Respondent.

33. In light of the above, however, I do consider it appropriate that the First Respondent be ordered to pay the Applicant’s costs of the proceedings.

Gross sum costs order

34. In this case, the Applicant seeks a gross sum costs order. This is opposed by the First Respondent.

35. The Court has the power to grant a specified gross sum pursuant to s 98(4)(c) of the CP Act.

36. The principles applicable in connection with the making of a gross sum costs order were considered in Hamod v State of New South Wales [2011] NSWCA 375 at [816]-[820] in the following terms:

816 The terms of s 98(4), together with the more general considerations reflected in the Civil Procedure Act, ss 56(1), 57(1)(d) and 60, suggest the factors that merit particular consideration include: the relative responsibility of the parties for the costs incurred… the degree of any disproportion between the issue litigated and the costs claimed; the complexity of proceedings in relation to their cost; and the capacity of the unsuccessful party to satisfy any costs liability…

817 The exercise of the power conferred by s 98(4) is particularly appropriate where the costs have been incurred in lengthy or complex cases and it is desirable to avoid the expense, delay and aggravation likely to be involved in contested costs assessment. This may arise either from the likely length and complexity of the assessment process… or from the likelihood that the additional costs of formal assessment would disadvantage the successful party because of the likely inability of the unsuccessful party to discharge the costs liability in any event…

818 The power may also be exercised where a party's conduct has unnecessarily contributed to the costs of the proceedings, especially where the costs incurred have been disproportionate to the result of the proceedings...

819 The assessment of any lump sum to be awarded must represent a review of the successful party's costs by reference to the pleadings and complexity of the issues raised on the pleadings; the interlocutory processes; the preparation for final hearing and the final hearing… In the exercise of its discretion the court is not required to undertake a detailed examination of the kind that would be appropriate to taxation or formal costs assessment…

820 The costs ordered should be based on an informed assessment of the actual costs having regard to the information before the court (for example, by relying on costs estimates or bills)... The approach taken to estimate the costs to be ordered must be logical, fair and reasonable... This may involve an impressionistic discount of the costs actually incurred or estimated, in order to take into account the contingencies that would be relevant in any formal costs assessment...

37. The Applicant also relied upon the affidavit of Cecilia Rose sworn 30 May 2025 which identified the quantum of costs sought (advised by counsel as the sum of $77,000) and the manner of quantification of such costs. In general, I accept her evidence and accept that the gross sum identified would be a reasonable sum in light of the extent of the litigation and the necessary costs incurred.

38. However, whilst the history of the conduct of this litigation on behalf of the Respondents is less than edifying, in that the Respondents failed to comply with a number of the Court’s directions; the vacation of hearing dates; and also failed to attend on a number of occasions, such conduct does not, of itself indicate that the usual order for costs should not be made. Having regard to the history of this matter it may be tempting to make an order that avoids the parties incurring further costs and delays in undertaking the assessment process, however, such is a natural consequence of the making of an order for costs and does not provide a sufficient reason to justify the making of a gross sum costs order in this case. I decline to make a gross sum costs order.

39. Notwithstanding that I have not made a gross sum costs order I do encourage the parties to attempt to reach some reasonable agreement on costs to avoid incurring further costs in these proceedings.

Costs of the costs hearing

40. As the Applicant has been successful in its application for costs, I consider that it is appropriate that it also has an order for payment of its costs of the costs hearing. For the same reasons outlined above, however, I consider it appropriate that such order be made payable exclusively by the First Respondent.

Orders

41. For the reasons outlined herein, the Court orders:

42. The First Respondent is to pay the Applicant’s costs of the proceedings;

43. The First Respondent is to pay the Applicant’s costs of the hearing on costs; and

44. The application for costs with respect to the Second Respondent is dismissed with no order as to costs of the costs hearing as between the Applicant and the Second Respondent.

**********