Cachia v The Hills Shire Council

CASES CITED: Cachia v Hanes (1994) 179 CLR 403 Gardiner v Hornsby Shire Council [2000] NSWLEC 37

LEGAL REPRESENTATIVES: RESPONDENT Mr M Fraser

SOLICITORS The Hills Shire Council

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

JUDGMENT A successful litigant in person seeks compensation 1 HIS HONOUR: Mr Cachia, the applicant in this appeal, seeks by notice of motion dated 16 May 2010 orders that the respondent, The Hills Shire Council, compensate him for his out-of-pocket expenses incurred in the appeal and/or as a consequence of an order issued by the Council under s 124 of the Local Government Act 1993. 2 There are two sources of power on which Mr Cachia seeks to rely: first, under the Court's power to order costs to a successful litigant under s 98 of the Civil Procedure Act 2005 and Pt 3 r 3.7 of the Land and Environment Court Rules 2007 and, secondly, the Court's power to award compensation under s 181 of the Local Government Act. 3 In relation to the first source of power, Mr Cachia seeks an order for reimbursement of his out-of-pocket expenses incurred in the appeal as a result of the Court, by the consent, upholding Mr Cachia's appeal and revoking the order under s 124 the Council had issued in respect of Mr Cachia's premises at 3 Yalding Avenue, Carlingford. 4 Mr Cachia submits by reason of these consent orders he has been successful in his appeal and that it is fair and reasonable that he should be compensated for the expenses he incurred and those incidental to the appeal. 5 In relation to the second source of power, Mr Cachia submits that the consent orders upholding the appeal and revoking the order under s 124 demonstrate that the giving of the order was unsubstantiated and that, under s 181(1) of the Local Government Act, he should be compensated for all expenses incurred as a consequence of the order. 6 The Council opposed Mr Cachia's motion and submits that there should be no order for costs or an award of compensation for Mr Cachia's expenses.

The Council's order and appeal against it 7 On 4 January 2010, the Council issued an order under s 124 of the Local Government Act to Mr Cachia to: "Remove all existing stormwater guttering around the perimeter of the dwelling, downpipes and drainage line to the street and replace it with new stormwater guttering, downpipes and sealed drainage line to the street gutter system." 8 The order stated the reasons for the order as being twofold: "1. The failure to install an intact stormwater disposal system fails to ensure appropriate control of stormwater from the property; and

2. The failure to install an intact stormwater disposal system fails to minimise the potential hazard to the pedestrians utilising Council's road reserve." 9 The order required Mr Cachia to complete the specified works by 4 February 2010. 10 On 27 January 2010, Mr Cachia lodged an appeal against the order under s 180 of the Local Government Act. The Land and Environment Court Act 1979 assigns appeals under s 180 of the Local Government Act to Class 2 of the Court's jurisdiction: see s 18(a) of the Land and Environment Court Act. For one reason or another, the appeal was wrongly commenced in Class 1 of the Court's jurisdiction. 11 This error was later realised at a conciliation conference between the parties on 22 March 2010. Mr Cachia queried what he should do. The Acting Registrar of the Court advised Mr Cachia he could seek leave, by notice of motion, to have the appeal transferred from Class 1 to Class 2 of the Court's jurisdiction. 12 Mr Cachia accordingly filed a notice of motion on 4 April 2010 seeking the transfer of the proceedings, but he also sought three other orders relating to interlocutory steps and preparation of the appeal. 13 Mr Cachia's notice of motion was heard on 13 April 2010 by the Acting Assistant Registrar of the Court. For reasons she gave at the conclusion of the hearing of the motion, the Acting Assistant Registrar made the order transferring the appeal to Class 2 of the Court's jurisdiction by consent, but declined to make the three other orders sought by Mr Cachia.

14 Mr Cachia, by further notice of motion, sought review of the Acting Assistant Registrar's decision and orders under Pt 49 r 49.19 of the Uniform Civil Procedure Rules 2005. That motion was listed for hearing on 29 April 2010. I was allocated to hear the motion.

Resolution of the appeal 15 At the commencement of the hearing of the motion on 29 April 2010, I raised with the parties the issue of the validity of the order the Council had issued to Mr Cachia and gave the parties an opportunity to consider and to address on the issue. 16 The issue arose because of the terms of the power under s 124 of the Local Government Act to issue orders. Section 124 confines the power in terms of the types of the orders that may be issued, the circumstances in which each type of order may be issued and the persons to whom an order may be issued. Section 124 states: "A council may order a person to do or to refrain from doing a thing specified in Column 1 of the following Table if the circumstances specified opposite it in Column 2 of the Table exist and the person comes within the description opposite it in Column 3 of the Table." 17 The Council in this case relied on item 12 in the Table to s 124. Item 12 of the Table states: Column 1 Column 2 Column 3 To do what? In what circumstances? To whom? 12. To do such things as are necessary to control the flow of surface water across land. Other land, or a building on the land or other land, is being damaged or is likely to be damaged Owner or occupier of land

18 The order the Council issued on 4 January 2010 was directed to Mr Cachia who is the owner of the premises at 3 Yalding Avenue, Carlingford. The order therefore complied with Column 3. The order directed Mr Cachia to remove and replace the stormwater guttering downpipes and drainage lines to the street. Such work was capable of meeting the description of work specified in Column 1. 19 The problem, however, was whether the circumstances specified in column 2 existed. For an order under item 12, the circumstances that must exist in order to the Council to issue an order under s 124 of the Local Government Act is that, "Other land, or a building on the land or other land, is being damaged or is likely to be damaged." 20 In the case of the order issued by the Council to Mr Cachia on 4 January 2010, however, the Council did not allege that such circumstances existed. The Council expressly stated in the order its reasons for issuing the order. They were that the existing stormwater disposal on Mr Cachia's premises "fails to ensure appropriate control of stormwater from the property". 21 The only consequence the Council stated in the order of the lack of control of stormwater from Mr Cachia's premises was a failure "to minimise the potential hazard to the pedestrians utilising Council's road reserve." 22 Hence, there was no allegation by the Council in the order issued on 4 January 2010 that the uncontrolled stormwater was damaging or was likely to damage Mr Cachia's land or any building on it (the expressed concern was uncontrolled flow of stormwater "from" Mr Cachia's premises) or the Council's road reserve or any building (which includes a structure) on it (the expressed concern was for pedestrians using the Council's road reserve not the land or any structure on the land constituting the road reserve).

23 Hence, on the face of the order issued by the Council on 4 January 2010, the circumstances specified in Column 2 for item 12 that must exist in order for the Council to have power to issue an order under s 124, did not exist. The order, therefore, was outside power. 24 The solicitor appearing for the Council on 29 April 2010 sought instructions in relation to this issue and indicated that the Council would consent to the appeal being upheld and the order being revoked. Mr Cachia also consented to these orders. 25 Accordingly, I ordered that Mr Cachia's appeal be upheld and that the Council's order of 4 January 2010 be revoked. 26 Because those orders finally resolved the proceedings, it was unnecessary to determine Mr Cachia's further notice of motion seeking review of the Acting Assistant Registrar decision and orders and I did not do so.

The entitlement to payment of expenses 27 As Mr Cachia claims, there are two sources of power of the Court to order the Council to pay Mr Cachia's costs and expenses. First, there is the cost power under s 98 of the Civil Procedure Act. The Court's discretionary power to order costs is subject to the rules of the Court. Part 3 r 3.7 of the Land and Environment Court Rules regulate the discretion in relation to proceedings in Classes 1, 2 and 3 of the Court's jurisdiction. Rule 3.7(2) provides that: "The Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances." 28 Circumstances in which the Court might consider the making of a cost order to be fair and reasonable include those specified in r 3.7(3), including that the proceedings involve, as a central issue, a question of law, a question of fact or a question of mixed fact and law and the determination of such question was preliminary to, or otherwise has not involved, an evaluation of the merits of any application the subject of the proceedings (r 3.7(3)(a)(ii)); that a party has acted unreasonably in circumstances leading up to the commencement of the proceedings (r 3.7(3)(c)); and that a party has commenced or continued a claim in the proceedings, or maintained a defence to the proceedings, where the claim or defence did not have reasonable prospects of success or where to commence or continue the claim, or to maintain the defence, was otherwise unreasonable (r 3.7(f)). 29 As the High Court decision in Cachia v Hanes (1994) 179 CLR 403 makes plain, the costs for which rules of court provide (such as s 98 of the Civil Procedure Act and r 3.7 of the Land and Environment Court Rules) are confined to money paid or liabilities incurred for professional legal services and do not include compensation for time spent by a litigant in person who is not a lawyer in preparing and conducting his case. 30 However, an order for costs can include reimbursement of expenses incurred in the proceedings. A litigant in person is entitled to be reimbursed for his or her out-of-pocket expenses incurred in and for the purposes of litigating the proceedings. 31 Hence, the Court would have power to order, under the Court's costs power, the Council to reimburse Mr Cachia for his out-of-pocket expenses incurred in and for the purposes of the appeal, if the Court considers the making of such an order is fair and reasonable in the circumstances. 32 Secondly, the Court has power under s 181 of the Local Government Act. That section provides: "(1) The Land and Environment Court, on the hearing of an appeal or otherwise, has a discretion to award compensation to a person on whom an order is served for any expense incurred by the person as a consequence of the order, including the cost of any investigative work or reinstatement carried out by the person as a consequence of the order, but only if the person satisfies the Court that the giving of the order was unsubstantiated or the terms of the order were unreasonable.

(2) A claim for compensation may not be made more than 28 days after the date on which the Court gives its decision on the appeal or more than 3 months after the date of the order if an appeal is not made against the order.

(3) Compensation under this section is to be awarded against the council." 33 As subs (1) states, the Court's power to award compensation is made conditional on the claimant satisfying the Court that the giving of the order under s 124 of the Local Government Act was either "unsubstantiated" or "the terms of the order were unreasonable". 34 In Gardiner v Hornsby Shire Council [2000] NSWLEC 37, Pearlman J expressed a tentative view in paragraph 4 that: "I take the words 'unsubstantiated' in s 181 to mean that the circumstances which triggered the giving of the order were unsubstantiated ... But without having the benefit of full argument on the matter, since Mr Gardiner appeared for himself in these proceedings, I would say that the reference to the giving of the order being 'unsubstantiated' in s 181(1) is a reference to the circumstances which are set out in the second column of the table to s 124." 35 In the present case, the circumstances are those I have quoted earlier, namely that, "Other land, or a building on the land or other land, is being damaged or is likely to be damaged."

36 As I have noted, the order issued by the Council on 4 January 2010 to Mr Cachia did not state in terms that those circumstances existed or were the factual foundation for the issue of the order. 37 The Council submitted that subsequently, on 3 March 2010, in response to Mr Cachia's request for further and better particulars made in the course of the appeal, the Council replied that the house on Mr Cachia's land was being damaged by the inadequate stormwater drainage system and this provided substantiation of the order. 38 However, I consider that a belated statement in the appeal cannot retrospectively substantiate the order made on 4 January 2010. The order at the time it was made was not substantiated by reference to the circumstances specified for item 12 in Column 2 of the Table to s 124. The order, therefore, was unsubstantiated for the purposes of s 181 of the Local Government Act. 39 Accordingly, the discretionary power in s 181(1) of the Local Government Act is enlivened and the Court may award compensation to Mr Cachia for any expense incurred by him as a consequence of the order.

The claimed expenses 40 Mr Cachia initially itemised his out-of-pocket expenses in his letter to the Council of 30 April 2010 as follows: "25/01/10 Appeal filing fee $749.00 13/03/10 F.O.I Application fee $30.00 03/04/10 F.O.I. Application Review fee $40.00 03/04/10 Notice of Motion filing fee $173.00 (re Supplementary S of F & C) 13/04/10 Transcript request filing fee $76.00 16/04/10 Notice of Motion filing fee $173.00 (re Review of Decisions of Registrar) TOTAL $1,241.00"

41 Subsequently at the hearing of this motion, Mr Cachia added another Court expense as: "17/05/10 Notice of Motion filing fee $173.00 (Re Application for cots)

42 Mr Cachia also claimed other expenses: "Travel expenses to the Court, about 8 times $55.00 each $440.00 Travel expense to the site, about 27 times $18.00 each $486.00 Agent's fee: various, including typing, collating about $600.00 Photocopying, about 300 pages at 30 cents each $90.00 Photographs, about 42 at 50 cents each $21.00 Work done at site: open curb exit hole and clear silt $150.00 TOTAL $1,787.00"

The Court should order payment of certain expenses under costs power 43 I consider the Council should reimburse Mr Cachia for certain of the expenses he has claimed under the costs power.

44 First, I consider it is fair and reasonable in the circumstances to order the Council to pay certain of Mr Cachia's out-of-pocket expenses incurred in and for the purpose of the appeal. The circumstances in which the order of 4 January 2010, which was the subject of the appeal, was stated to have been issued were not the circumstances specified for item 12 in Column 2 of the Table to s 124 of the Local Government Act. The order was outside power. This was the basis for the orders the Court made by consent on 29 April 2010. The appeal was therefore resolved on a preliminary question without determination of the merits. 45 I consider Mr Cachia should be reimbursed for the expenses incurred in bringing the appeal so that this resolution was able to be achieved. This includes the filing fee of $749 to commence the appeal which, by reason of the orders made by the Court, has been successful. 46 The fees for lodging two applications under the Freedom of Information Act 1989 to the Council to obtain documents (the original application and then the review application) are not expenses incurred in, but rather are external to, the appeal and should not be reimbursed. 47 The filing fee on 3 April 2010 was in respect of Mr Cachia's notice of motion which was heard and determined by the Acting Assistant Registrar. Although this notice of motion sought an order for the transfer of proceedings from Class 1 to Class 2, this order was not contested by the Council. The notice of motion also sought other orders including orders that Mr Cachia be given leave to supplement his statement of facts and contentions with further facts and to raise further contentions. Mr Cachia was unsuccessful in obtaining such leave and also in obtaining the other orders he sought, except for the transfer order, which was by consent. 48 I do not consider it is fair and reasonable for Mr Cachia to be reimbursed for the filing fee for this notice of motion in respect of which Mr Cachia was largely unsuccessful. 49 Mr Cachia by further notice of motion sought to review the decision and orders of the Acting Assistant Registrar and to that end also requested and paid the fee for a transcript of the hearing, decision and orders of the Acting Assistant Registrar. That review did not take place because of the resolution of the proceedings by reason of the order being unsubstantiated. 50 There was no resolution in Mr Cachia's favour, therefore, of this further notice of motion. I do not consider it fair and reasonable that Mr Cachia be reimbursed for the filing fee for this further notice of motion or for the fee for the transcript request in circumstances where it has not been established that Mr Cachia would have been successful. 51 A further reason for my conclusion that is it not fair and reasonable to order the payment of the filing fees for these two notices of motion and for the transcript request fee is that they do not relate directly to the reason for the appeal being resolved in Mr Cachia's favour. The orders Mr Cachia sought in these notices of motion were unrelated to the power question which lead to the appeal being upheld and the order being revoked. 52 Mr Cachia's expenses of typing and collating, photocopying and photographs may be said to be incurred in the appeal. Mr Cachia has not proven by admissible evidence the precise quantum of these expenses. However, I consider that it is fair and reasonable to make some allowance for such types of expenses. I should make a deduction from Mr Cachia's claimed expenses as some part of these expenses would relate to the unsuccessful notices of motion. I will allow $300 for typing and collating, $80 for photocopying and $31 as claimed for photographs. 53 I do not allow the claimed travel expense to and from the Court. I note such expense was not allowed in Cachia v Hanes at 417. I also do not allow the claimed travel expense to and from the site as an expense incurred in and for the purpose of the appeal. 54 Finally, I will allow Mr Cachia's filing fee for the notice of motion for costs as Mr Cachia will be partially successful in obtaining an order for payment of his expenses. It is fair and reasonable that he be reimbursed this filing fee.

The Court should award compensation for certain expenses 55 I turn to consider whether expenses that I have determined should not be made the subject of a costs order, should nevertheless be made the subject of an award of compensation under s 181 of the Local Government Act. I note in Gardiner v Hornsby Shire Council, Pearlman J considered that (at [18]): "However, Mr Clay submitted and I think he is right, that s 181 refers to expenses incurred as a consequence of the order and not costs of litigation. It is no doubt true to say that the litigation in this Court has been brought about as the consequence of the order because the litigation arises under s 180, which provides for an appeal against the order. But the costs of that litigation are costs of the litigation and not expenses incurred as a consequence of the order." 56 I am not convinced that s 181 of the Local Government Act is so restrictive. It may be that certain expenses incurred in litigation are capable of falling within the statutory phrase in s 181(1) of "any expense incurred by the person as a consequence of the order". However, it is not necessary for me to determine this question in this case as I can adjudicate the claims on other grounds. 57 I consider that the filing fees for the notice of motion heard by the Acting Assistant Registrar and the notice of motion to review the decision and orders of the Acting Assistant Registrar and the transcript request fee do not meet the description of being expenses incurred as a consequence of the order; they are too remote. 58 The fees for the freedom of information application and review application are different. Mr Cachia made freedom of information requests to the Council for documents relating to the issue of the order of 4 January 2010. I consider this is a form of investigation of the order and could be described as expenses incurred by Mr Cachia as a consequence of the order. 59 I note that s 181(1) does expressly include the cost of any investigative work carried out by the person as a consequence of the order. Whilst making a freedom of information application is not work, it nevertheless does involve investigation of the circumstances in which and the reasons for which the order was made. I would therefore allow the combined sum of $70 for these fees for the freedom of information applications. 60 I do not consider the travel expense to and from the Court to be an expense incurred as a consequence of the order; it is also too remote. I consider, however, that the travel expense to the site to investigate the land and works, the subject of the order, is capable of meeting the description of being an expense incurred as a consequence of the order. The precise number of visits and the quantum of expense has not been proven, but I will allow $200 as a fair allowance. 61 The work done at the site by the tradesman in opening the kerb exit hole and clearing silt meets the description of an expense incurred as a consequence of the order. The $150 claimed is the cost paid by Mr Cachia to the tradesman and should be allowed in full. 62 I do not consider I should allow any more under s 181 of the Local Government Act for typing and collating or for photocopying than I have already allowed under the costs power.

63 In summary, I consider that the Council should pay, under the costs power, $1,323 and under s 181 of the Local Government Act, $690, which gives a total of $2,013. Costs of the motion 64 Mr Cachia has been successful in obtaining an order that certain of his expenses incurred in the appeal should be the subject of a costs order and also that certain of his expenses should be the subject of an award for compensation under s 181(1) of the Local Government Act. 65 It is true that I have not allowed, under either source of power, all of the expenses or all of the amounts claimed by Mr Cachia. Nevertheless, I consider that he has been sufficiently successful that he should have an order that he be reimbursed for his filing fee for the notice of motion. As noted earlier, Mr Cachia, being a litigant in person, is not entitled to be paid costs otherwise. 66 The Council submitted that Mr Cachia should not be entitled to costs by reason of disentitling conduct after 29 April 2010 when the Court made the consent orders that the appeal be upheld and the s 124 order be revoked. The Council tendered in evidence without prejudice, except as to costs, correspondence between the parties. In that correspondence, the Council made an offer to Mr Cachia to reimburse Mr Cachia for his filing fee of $749. That offer was rejected by Mr Cachia. 67 Because I have determined that Mr Cachia is entitled to not only be reimbursed for the filing fee of $749 but also certain other expenses, Mr Cachia has done better than the offer made by the Council. In the circumstances, I do not consider that Mr Cachia's conduct in declining to accept the without prejudice offer made by the Council was unreasonable or disentitling conduct. Accordingly, I do not consider that Mr Cachia should be denied an order that he have his filing fee reimbursed. 68 It follows from what I have said already that the Council would not be entitled to an order in the circumstances for its costs to be paid by Mr Cachia.

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