The plaintiffs commenced these proceedings by Summons filed on 5 July 2019. The plaintiffs sought relief in respect of alleged interferences with their rights under a registered easement. The proceedings continued by way of a Statement of Claim filed on 24 September 2019, in which the relief sought was substantially the same as that within the Summons. The defendants filed a Defence on 14 November 2019. The Defence contains a number of admissions, including that certain locks were placed on gates to the easement, and that various gates and fences were installed in the easement area.
By Notice of Motion filed on 26 February 2021, the plaintiffs seek leave to discontinue the proceedings pursuant to Uniform Civil Procedure Rules 2005 ("UCPR") r 12.1(1)(b), and an order pursuant to UCPR r 42.19(2) that the defendants pay the plaintiffs' costs of the proceeding. The defendants seek an order that the plaintiffs pay their costs.
The plaintiffs rely on the affidavit of Sally Crosby affirmed on 26 February 2021. The Court has read this affidavit and the exhibits attached. The Court has also read the plaintiffs' submissions dated 26 February 2021, the defendants' undated submissions (received on about 4 March 2021), and the plaintiffs' submissions in reply dated 22 March 2021.
[2]
Background
The parties are registered proprietors of neighbouring farming properties near Forbes. The plaintiffs' property has the benefit of an easement that burdens the defendants' property. The plaintiffs use the easement in connection with the irrigation of their land using water pumped from the nearby Lachlan River. In brief, the easement permits the owner of the dominant tenement to use and in part occupy the land the subject of the easement for pumping and irrigation purposes. The easement also allows for the owner of the dominant tenement to have access, including with machinery, to undertake maintenance and repair works.
It is helpful to describe in brief the geography of the easement. There is a pump site on the defendants' property which contains a pump that takes water from the Lachlan River into a stilling pool. From there, the water flows along an irrigation channel which runs from north to south, and then east to west onto the plaintiffs' property. The easement area allows access to the pumping site and the irrigation channel.
The plaintiffs claim that the defendants interfered with the plaintiffs' use of the easement in a number of ways. The first plaintiff deposes that the defendants placed padlocks on gates, erected new gates, and inconveniently fenced an area along the irrigation channel. Annexed to the first plaintiff's affidavit is correspondence between the parties' solicitors in 2017 about the easement. The dispute was not then resolved.
Since the commencement of the proceedings the defendants have taken various steps which have had the practical effect that the plaintiffs' complaints have been resolved. A padlock to a gate has been removed, and some fencing has been relocated or removed. In 2020, the defendants built a culvert over the irrigation channel, which meant the plaintiffs could bypass a locked gate to access the north side of the irrigation channel. Further, in May 2020, the defendants removed the fence on the southern side of the irrigation channel. The first plaintiff deposes that, as a consequence, there was no longer any practical impediment to the plaintiffs accessing the easement. However, around 10 August 2020, the defendants effectively rebuilt the fence that was on the southern side of the irrigation channel. Later in 2020, the first plaintiff observed the defendants removing this fence, and on 4 January 2021, the first plaintiff noticed that the fence was removed entirely. The first plaintiff deposes that there are now no impediments to the plaintiffs accessing the easements (as of 26 February 2021).
[3]
Leave to discontinue the proceedings
When considering whether to grant leave to discontinue proceedings, the Court has a wide discretion to do justice between the parties. It is undesirable to compel a party to litigate against its will, but the Court should also consider whether discontinuance will prejudice the other party, perhaps by removing from them an advantage that they had gained in litigation (see Greaves v CGU Insurance Ltd [2004] NSWSC 912 at [5]-[8]).
In the circumstances of this case, the Court will grant leave to discontinue the proceedings pursuant to UCPR r 12(1)(b). The defendants have removed any impediments to the plaintiffs' access to the easement. As such, the plaintiffs have achieved, in a practical sense, what they had sought by commencing these proceedings. Accordingly, the proceedings no longer serve any useful purpose. No relevant prejudice will be inflicted on the defendants if the proceedings are discontinued.
[4]
Costs of the proceedings
UCPR r 42.19 applies to proceedings that are discontinued under UCPR r 12.1, and it therefore applies here. UCPR r 42.19 provides that unless the Court orders otherwise, the plaintiff must pay such of the defendant's costs as, at the date on which the notice of discontinuance was filed, had been incurred by the defendant in relation to each claim in respect of which the proceedings have been discontinued.
Accordingly, the usual position is that the discontinuing party pays costs. There must be "some sound positive ground or good reason for departing from the ordinary course" (see Australiawide Airlines Limited v Aspirion Pty Limited [2006] NSWCA 365 at [54]; Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32 at [54]).
The plaintiffs submit that a departure from the ordinary course may be justified where the defendant has acted unreasonably (see One Tel Ltd v Commissioner of Taxation (2000) 101 FCR 548; [2000] FCA 270 at [5]). The plaintiffs submit the defendants acted unreasonably in defending the proceedings "in circumstances where the nuisance caused by them locking of [sic] the gate on the southern side of the channel and erecting the fence was manifest". In that respect, the defendants submit that they "have never denied the Plaintiffs their right to their full access".
These submissions invite some assessment of the substantive dispute between the parties, which is whether the defendants caused substantial and unreasonable interference with the plaintiffs' use and enjoyment of the easement. However, where proceedings have been terminated before a hearing, the Court should avoid engaging in a hypothetical trial to determine the issue of costs (see Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622 at 624; One Tel Ltd v Commissioner of Taxation (supra) at [5]). This is not an inflexible rule; the Court may award costs if it is confident that one party was almost certain to succeed if the matter was fully tried (see Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin Lai (supra) at 625).
It is also relevant to consider whether the defendants relevantly changed their position. In OPENetworks Pty Ltd v Myport Pty Ltd [2019] FCA 1659 O'Bryan J stated the following at [68]:
Where a defendant changes its position so as to give the plaintiff substantively what it sought in the proceeding and thereby renders the proceeding futile, the Court may award costs in favour of the plaintiff… it would be unjust if the plaintiff were denied his or her costs incurred in achieving the relief sought by the commencement of the proceeding.
I approach the present dispute in light of these principles.
The plaintiffs' claim is for private nuisance, and there are a number of acts said to constitute a substantial and unreasonable interference with the plaintiffs' use and enjoyment of the easement.
The defendants placed a gate with a padlock on it near the pump site and did not provide a key to the defendants. The plaintiffs say this prevented them from accessing the pumping station. However, the defendants state in their Defence that the lock was a "dummy lock", intended for security purposes; as a result, the gate was never locked and so the plaintiffs were not denied access to the pumping station. The defendants removed the padlock on the gate soon after plaintiffs filed their Summons. The parties were also in dispute about whether certain other gates were locked by the defendants. However, it is clear that the defendants placed a lock on the gate that had given the plaintiff access to the northern (and western) side of the irrigation channel. It is also clear that the fence erected on the southern side of the irrigation channel narrowed the path alongside the irrigation channel, and was said to inconvenience the plaintiffs in carrying out various works along the easement. In this respect, the plaintiffs seem to have had a strong prima facie case, as there is evidence that the plaintiffs had difficulty manoeuvring in the narrowed path to complete maintenance works on the easement. However, I am not confident that the plaintiffs would have inevitably succeeded on this claim. The interference to the easement is said to arise from the narrowness of the path, and this is a question of degree requiring some precision. The required precision is both factual and legal: the width of the path must be identified, and the terms of the easement must be properly construed so as to determine whether the path is so narrow that it constitutes a substantial and unreasonable interference with the plaintiffs' rights.
In my opinion, the plaintiffs were justified in commencing the proceedings. Nevertheless, it has not been shown that the defendants generally acted unreasonably in contesting the proceedings. However, without embarking upon any hypothetical trial involving the determination of factual issues that are or may be in dispute, it is clear that in practical terms the plaintiffs succeeded in obtaining redress so as to satisfy the complaints that led them to commence the proceedings. Over a period of time since the commencement of the proceedings in July 2019, the defendants did a number of things that eventually satisfied the plaintiffs' complaints, and thus removed the need for the proceedings to continue.
The defendants submit that they should be entitled to costs because the plaintiffs did not fulfil "rights from mediation" and rejected the "Agreed Deed" from mediation. The plaintiffs submit in reply that those submissions are evidentiary materials that are not in admissible form. The plaintiffs also submit that events transpiring in mediation are privileged, and the plaintiffs have not waived that privilege: Civil Procedure Act 2005 (NSW) s 30(4). I accept the plaintiffs' submissions on this point, and I have not taken into account the assertions concerning the parties' mediation.
In my opinion there are good reasons to order otherwise under UCPR r 42.19 so that the plaintiffs do not have to bear the costs of the proceedings (as the discontinuing party). The plaintiffs were justified in commencing the proceedings. The defendants' changes of position by removing the locks and fencing, and constructing the culvert, have obviated the need for the proceedings to continue. The plaintiffs have thereby achieved practical success. I do not think that this practical success should be seen as entirely the result of a capitulation on the part of the defendants. The actions taken by the defendants might not have been motivated by a belief that their legal position was untenable. Nevertheless it is clear, including from some of the admissions contained in the Defence, that the plaintiffs would have almost certainly succeeded in obtaining some relief had the defendants not acted. Moreover, the defendants could have acted more quickly and thus avoided the need for some costs to be incurred. In these circumstances, I have formed the view that the appropriate exercise of the Court's discretion as to costs is to order that the defendants pay one half of the plaintiffs' costs of the proceedings.
Accordingly, the Court will:
1. Grant leave to the plaintiffs to discontinue the proceedings pursuant to UCPR r 12.1(1)(b); and
2. Order that the defendants pay one half of the plaintiffs' costs of the proceedings.
[5]
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Decision last updated: 10 May 2021