Diab v Cavasinni

Land and Environment Court (NSW)|2022-10-11|Before: Robson J, Preston CJ, Preston J

Judgment

Before the Court is an application filed by the applicant in these Class 4 civil enforcement proceedings seeking that the respondents pay her costs of, and occasioned by, the hearing of a separate question in proceedings involving neighbours commenced on 15 December 2017.
By way of amended summons filed on 16 February 2018, Mrs Dolly Diab ('applicant'), the registered proprietor of 29 Nelson Parade, Hunters Hill, sought declaratory and consequential injunctive relief against each of Mrs Maria Cavasinni, Mr Francesco Cavasinni and Cavcorp Australia Pty Limited (collectively, 'respondents') in relation to certain construction and development work undertaken at 27 Nelson Parade, Hunters Hill, in breach of development consent DA08-1096 granted by this Court in May 2010 ('Consent').
On 24 December 2019, Preston CJ of LEC ordered that the question of whether work done by the respondents was in breach of the Consent be determined separately and in advance of other issues.
The separate question was heard over four days on 3 and 4 February, 20 May and 24 June 2020. Judgment was delivered on 20 August 2020: Diab v Cavasinni (No 3) [2020] NSWLEC 119.
For the reasons that follow, I consider that it is appropriate that the respondents pay 85% of the applicant's costs.

Background

Although the factual background to the dispute between the parties has been recorded in a number of judgments (Diab v Cavasinni [2019] NSWLEC 204 at [2]-[18] (Preston J); Diab v Cavasinni (No 2) [2020] NSWLEC 32 at [4]-[11] (Robson J); Diab v Cavasinni (No 3) [2020] NSWLEC 119 at [4]-[14] (Robson J)), the following narrative is sufficient for the present application.
These civil enforcement proceedings were commenced by the applicant seeking to remedy and restrain breaches of the Environmental Planning and Assessment Act 1979 (NSW) ('EP&A Act') resulting from Mr and Mrs Cavasinni and the third respondent, Cavcorp Australia Pty Ltd, carrying out a residential development on neighbouring land at 27 Nelson Parade, Hunters Hill, otherwise than in accordance with the Consent.
The applicant filed an amended summons on 16 February 2018 and points of claim on 16 March 2018. Paragraphs (36)-(37) of the points of claim identified the respects in which it was alleged the development had been carried out not in accordance with the Consent as follows: "36. The Further Unauthorised Work includes the following built structures or parts of built structures, each of which is development that was only able to be carried out with development consent under the EP&A Act: a. the lower roof ridge levels of the Cavasinni House are not in accordance with the Approved Plans, being at RL 31.19 (in excess of the height of RL 30.16 shown in the Approved Plans) (Unapproved Roof); b. there are two glass doors on the western façade of the Cavasinni House that are not shown on the Approved Plans (Unapproved Glass Doors); c. the structures labelled "garage", "storage room" and the roof depicted in Annexure A to the Amended Summons are not in accordance with the Approved Plans and encroach upon the Easements for Water, Services and Support and the Right of Carriageway (Unapproved Garage, Storage Room and Roof). Particulars Reports of Mr Stuart de Nett, Registered Surveyor, dated July 2017. d. the structures labelled "pier", "masonry retaining wall" and "stone utility cupboard" depicted in Annexure A to the Amended Summons are not in accordance with the Approved Plans and encroach upon the Easements for Water, Services and Support (Unapproved Pier, Masonry Retaining Wall and Utility Cupboard); Particulars Reports of Mr Stuart de Nett, Registered Surveyor, dated July 2017. e. steps and a tiled landing have been built on the boundary with the Diab Property as depicted in Annexure A to the Amended Summons and extending along the boundary with the Diab Property to the south otherwise than in accordance with the Approved Plans (Unapproved Steps and Landing); f. excavation of vegetation and sandstone, concreting and planting of vegetation has been carried out in the area of the Cavasinni Land that is to the north of the Easement for Right of Carriageway that is not in accordance with the Approved Plans (Unapproved Excavation and Concreting); and … 37. The following demolition work has been unlawfully carried out: a. a private electricity pole owned by Mr and Mrs Diab has been removed, other than in accordance with the Development Consent and Approved Plans and the consent of Mr and Mrs Diab and in circumstances where it was not permissible to remove the private electricity pole without development consent under the EP&A Act; and …"
The respondents filed their (initial) points of defence on 11 May 2018 which responded to the points of claim as follows: "36 In response to paragraph [36], the respondents say that at the time of preparing these Points of Defence they are in the process of obtaining planning and surveying advice in relation to the work referred to and (until that advice is received) do not know and cannot presently admit whether the allegations are true (but will provide further answer once that advice is received). 37 In response to paragraph 37, the respondents say that at the time of preparing these Points of Defence they are in the process of obtaining planning and surveying advice in relation to the work referred to and (until that advice is received) do not know and cannot presently admit whether the allegations are true (but will provide further answer once that advice is received). … 40 In answer to the whole of the Points of Claim, the Respondents say that the Court in the correct exercise of its discretion would not grant the relief sought."
By amended points of defence filed 8 January 2020 (20 months after their initial points of defence), the respondents further responded to the points of claim as follows: "36 The respondents answer each of the alleged breaches of the development consent adopting the subparagraph numbering used as follows (a) The finished RL levels for the ridges of the lower gables scale at around RL 30.6 on a number of the DA plans but are marked on stamped [sic] Construction Certificate Approved Plans" sheets DA-A-402 South Elevation and DA-A-405 West Elevation Detail as RL 30.16. The finished gables have a completed ridge height of around 31.16. The extra height at the apex of the gables is presently a breach of the Development Consent. … (b) There are two additional glass full length windows which are added to the west elevation which are not shown on the approved DA plans. The respondents admit that this is presently a breach of the Development Consent. … (c) The respondents understand the allegation made in the Points of Claim relating to the garage structure to be directed to its lateral encroachment into the easements described (noting the particularisation of the subparagraph). The respondents admit that the footprint of the garage and the configuration of the surrounding landscaping has changed to a minor degree as relevant to the nature of the extension of the building work into affected easements. The respondents admit that these minor changes are a breach of the development consent. They also admit that the constructed garage and garbage room, and associated excavation extends into the easement for services as depicted in the Geometra Consulting survey dated 31 August 2017 at folio FC-89 to the Affidavit of Francesco Cav[a]sinni as depicted in the Geometra Consulting survey dated 31 August 2017 at folio FC-89 to the Affidavit of Francesco Cav[a]sinni. … (d) The respondents deny that the piers and fence as constructed depart from the development consent. … … (e) The respondents admit that steps and tiled landing are a departure from the approved plans which show landscaping in that location and as such are a breach of the development consent. … (f) The respondents say that the only vegetation in the location referred to before the Development Consent issued were weeds and grass. The respondents deny any significant exc[a]vation of sandstone in that location other than to dig planters into the stone for plants. The respondents admit reconfiguration of the finished landscaping in that location to accommodate the parking of vehicles which has involved additional con[c]reting. They admit that the additional concreting is a breach of the development consent. … … (h) The respondents deny removing the electricity pole, and say it was removed by the local electricity network operator. The respondents understand that the local electricity network operator consulted with the Applicant and/or her husband during that work. … 37 The respondents answer each of the alleged breaches of the development consent adopting the subparagraph numbering used as follows: (a) The respondents refer to their answer to 36(h) above. ... … 40 In answer to the whole of the Points of Claim, the Respondents say that the Court in the correct exercise of its discretion would not grant the relief sought."
On 11 May 2018, the substantive proceedings were first fixed for hearing from 3 to 5 October 2018, which dates were vacated on 10 August 2018 due to the applicant expecting to be overseas. The respondents were ordered to file any application seeking to regularise the alleged non-compliances by no later than 5 September 2018 and the proceedings were listed for further directions on 7 September 2018.
On 7 September 2018, the Court fixed the substantive proceedings for hearing from 18 to 20 February 2019.
On 14 September 2018, the respondents made a modification application pursuant to s 4.56 of the EP&A Act to Hunters Hill Council ('Council') which effectively sought (retrospective) approval for certain works that had been constructed although the modification application did not deal with a number of the applicant's claims including what was alleged to be unauthorised excavation and the removal of a sandstone outcrop and its replacement with additional carparking, and with what were alleged to be encroachments onto an easement for services.
On 14 December 2018, as a result of the modification application having been lodged with Council, the hearing dates of 18 to 20 February 2019 were vacated.
On 3 July 2019, the Court again fixed the substantive proceedings for hearing from 3 to 4 February 2020.
Following Council's refusal of the modification application on 19 December 2018, the respondents commenced Class 1 appeal proceedings in this Court in respect to the modification application and on 23 December 2019, Mr and Mrs Cavasinni filed a notice of motion in these Class 4 proceedings seeking to vacate the hearing dates that had been set down for 3 to 4 February 2020. That motion was opposed by the applicant and was heard by Preston J on 24 December 2019.
On 24 December 2019, pursuant to Pt 28 of the Uniform Civil Procedure Rules 2005 (NSW) ('UCPR'), his Honour (in Diab v Cavasinni [2019] NSWLEC 204) ordered that the following question be determined on the two days that had been fixed for the substantive hearing: "The question of breach of the development consent and the Environmental Planning and Assessment Act 1979 is to be heard and determined separately from any other question, including the appropriate remedy and relief that should be granted by the Court in relation to any breach found."
The hearing of the separate question proceeded before me over four days being the two days on 3 and 4 February 2020 initially allocated for the substantive hearing and two further hearing days on 20 May and 24 June 2020. I gave judgment on 20 August 2020 in Diab v Cavasinni (No 3) [2020] NSWLEC 119 where I recorded the essential issues in dispute at [25]-[26] as follows: "Issues in dispute [25] As a number of allegations of breach made in the points of claim are admitted by the respondents and noting that some further aspects of the works are agreed (in the statement of agreed facts) to be not in accordance with the Consent, it is convenient to record that the following breaches (although there remains some dispute regarding the extent of some of the breaches) are now generally admitted: (1) The lower roof ridge levels (also referred to as the "apex of the gables") are approximately one metre higher than the height specified in the approved plans; (2) Two additional glass full length windows (alternatively described as "French doors") have been added to the west elevation that are not included in the approved plans; (3) The footprint of the garage and the configuration of the surrounding landscaping are not in accordance with the approved plans; (4) The structures labelled "garage", "storage room" and the roof depicted in "Annexure A" to the points of claim (and similarly this judgment) encroach upon the "Easement for Support", "Easement for Services" and "Right of Carriageway" shown in that annexure. (5) Steps and a tiled landing have been constructed on the boundary with the Diab property; and (6) Concreting and planting of vegetation has been undertaken in the area of the Cavasinni property to the north of the concrete driveway (Right of Carriageway). [26] Given the respondents' various admissions, the issues remaining in dispute (in relation to breach) have been narrowed substantially and, although there are a number of disagreements between the parties regarding various aspects of the works, the following primary matters remain for determination by the Court at this stage of the proceedings: (1) Whether the roof of the dwelling has been constructed otherwise than in accordance with the Consent or the [EP&A Act] and, if so, the extent of any non-compliance with the approved plans; (2) Whether a private electricity pole erected on behalf of the applicant has been removed otherwise than in accordance with the Consent or the [EP&A Act]; and (3) The nature and extent of the material removed adjacent to the concrete driveway and, in particular, whether the respondents (in concreting and the planting of vegetation referred to at 25 above) have excavated what is alleged by the applicant to be a substantial sandstone outcrop (variously referred to in the evidence and submissions as "rock outcrop", "stone outcrop", and/or "rock escarpment") located north of the concrete driveway servicing the Diab property or whether, as the respondents contend, the excavation undertaken was only so much as was necessary to "dig planters", and whether such removal constituted a breach of either the Consent or the [EP&A Act]."
Having stated the issues, I then dealt with the primary outstanding matters at [34]-[97] under the various headings being "Construction of the roof"; "Electricity pole"; "Sandstone outcrop"; "Garage, storage room and roof"; "Steps and tiled landing"; and "Piers, fence and stone utility cupboard". By way of summary, the issues which I determined were: 1. Roof heights not in accordance with the Consent ('Issue A'); 2. Unapproved full-length French doors on the ground floor of western façade not in accordance with the Consent ('Issue B'); 3. Unapproved structures (garage and storage room) built in the Diab easement for services not in accordance with the Consent ('Issue C'); 4. Unapproved steps and tiled landing constructed on the boundary with the Diab land not in accordance with the Consent ('Issue D'); 5. Piers and fence adjacent to and south of the driveway servicing the Diab property not in accordance with the Consent ('Issue E'); 6. Unapproved excavation of sandstone outcrop and replacement with a concreted area for parking not in accordance with the Consent ('Issues F to H'); and 7. Removal of electricity pole and replacement with junction box on public land not in accordance with the Consent ('Issue I').
My findings can be shortly noted. In relation to Issue A, the applicant was primarily successful. Issue B, relating to the French doors, was admitted in the amended points of defence filed on 8 January 2020 (as the applicant submits 20 months after the allegation was first made). In Issue C, relating to the construction of a garage and storage room on the easement for services, the respondents admitted in the amended points of defence dated 8 January 2020 (but not earlier) that the garage and storage room were constructed not in accordance with the Consent, and I found that no part of the floor or the walls of the storage room was authorised to be constructed in the respective easements. In relation to Issue D, the respondents admitted in the amended points of defence dated 8 January 2020 that the steps and tiled landing were not approved by the Consent. In relation to Issue E, regarding the piers and the style of the fence, success in this issue was divided between the applicant and the respondents. Issues F to H, regarding the sandstone outcrop (which I considered was one of the primary contested issues, and which occupied a significant proportion of the hearing time), were decided in favour of the applicant. In relation to Issue I, regarding the removal of an electricity pole, the applicant was not successful, although as I noted in the judgment (at [45]), it was submitted by counsel for the applicant that it had never been a "major" issue.
The Class 1 appeal proceedings (from Council's refusal of the modification application) proceeded in this Court before Clay AC and were determined in Cavcorp Australia Pty Ltd v Hunters Hill Council [2021] NSWLEC 1392. Although I have been referred to and have read this decision, I do not consider that it is significant in relation to the application presently before the Court.

Submissions

This application for costs has proceeded on the papers. Each of the parties provided detailed written submissions supported by reference to extensive documentary evidence. Without disrespect to the careful submissions made by counsel for each of the parties, the respective positions may be briefly noted.

Applicant's position

The applicant submits that she was substantially successful on the issue of breach and that in the circumstances costs should follow the event. The applicant submits that the findings in Diab v Cavasinni (No 3) [2020] NSWLEC 119 make it clear that she should be regarded as the successful party in relation to the separate question where she was substantially successful in relation to most matters raised, including two major issues relating to the excavation of the sandstone outcrop and replacement with a concreted area for parking north of the driveway, and the unapproved structures (garage and storage room) built in the easement for services, as well as the more minor issues (such as roof heights, unauthorised French doors, unauthorised steps and landing, and the form of the sandstone and palisade fence).
The applicant also points to the historical fact that a number of the significant allegations made in the points of claim were not, contrary to the position submitted on behalf of the respondents, admitted until shortly before the hearing of the separate question.
The applicant submits that the measure of her success is demonstrated by a simple comparison of closing submissions and draft orders provided to the Court in the hearing of the separate question and the orders which were ultimately made. The applicant accepts that she was not successful in relation to the location of the sandstone and palisade fence and her concern in relation to the removal of the electricity pole. Moreover, the applicant submits that the fact that she did not succeed on all issues is not a reason to refuse an order for costs.
The applicant submits that the manner in which the hearing of the separate question assisted and/or contributed to the ultimate determination of the Class 1 proceedings (in which her position was aligned with that of Council) is a matter that should be taken into account in her favour in determining her costs application.
Finally, the applicant submits that there is nothing in her position that offends the principle in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622; [1997] HCA 6 ('Lai Qin') because the order for the separate question pursuant to Pt 28.2 of the UCPR, and the determination thereof, effectively meant that there was no utility in any final hearing.

Respondents' position

The respondents submit that the principles identified by McHugh J in Lai Qin are applicable. Relying upon comments made by Payne JA (with whom Meagher JA agreed) when applying Lai Qin in Nichols v NFS Agribusiness Pty Ltd (2018) 97 NSWLR 681; [2018] NSWCA 84 at [30], to the effect that, when a matter has been settled without a final hearing on the merits, where both parties have acted reasonably in commencing and defending the proceedings, the proper exercise of the Court's cost discretion will usually mean the Court will make no order for costs.
The respondents submit that this is particularly so in circumstances where they had consistently raised the issue of discretion to grant relief (even if any breach was found) in their points of defence and submit that, if the matter had proceeded to final hearing, there would have been "real issues" as to whether the Court would have granted any relief in relation to the matters raised by the applicant primarily because of a substantial delay "of many years" following the work complained of before the applicant brought her proceedings in December 2017.
The respondents submit that although their primary submission is that no order should be made, in any event, the result in the hearing of the separate question was "mixed" and, in these circumstances, as considered by the Court of Appeal in James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 ('James v Surf Road') at [31]-[36], it is appropriate for the Court to apportion costs in circumstances where separate issues fell in different ways. Considered in this way, the respondents submit that the Court should order that the respondents pay one quarter of the applicant's assessed costs incurred in relation to the hearing of the separate question.
The respondents submit that before 24 December 2019, when Preston J made an order that the question of breach of the Consent be decided separately, earlier dates from 3 to 5 October 2018 fixed for the substantive hearing had been vacated on the application of the applicant (due to the applicant expecting to be overseas); that it was following that application, that the respondents made the modification application of 14 September 2018 to Council (under s 4.56 of the EP&A Act) as directed by the Court on 10 August 2018 to address the alleged breaches of the Consent; and that it was the progress of the modification application that ultimately led to the separate question being ordered.
The respondents submit that there were a number of matters (described as "departures from the development consent") that were "conceded" in the statement of environmental effects dated September 2018 prepared on behalf of the respondents to support the modification application and, in those circumstances, it is wrong for the applicant to submit that the respondents had not admitted "any" of the alleged breaches at an earlier time, and that the affidavit of Mr Cavasinni of 23 December 2019 (which was read before Preston J) provided detail as to the extent of unauthorised works in relation to each of the applicant's allegations.
In particular, the respondents had admitted that the roof levels contained discrepancies of "small compass"; that the glass doors shown on the western façade of the development were not approved; and that while at one stage there had been a shed with a portable toilet installed, that structure had been removed. The respondents submit that those matters were supplemented by more detailed concessions made within their amended points of defence which also pleaded that there had been "changes" to the garage and storage area which were "minor and had minimal effect".
The respondents submit that the consequence of various admissions and/or concessions meant that the only questions for determination at the hearing of the separate question related to - whether the completed roof constituted a breach of the Consent; concerns in relation to the temporary light pole; concerns in relation to the masonry pillars and fencing and the electricity pole; demolition of part of the Diab driveway; and removal of an area of sandstone outcrop and replacement with a concreted area for parking. In all the circumstances, a settlement agreement that had been reached in relation to the Class 1 appeal proceedings (before Clay AC) cannot be seen to be a "capitulation" in circumstances where the respondents' position had always been that there would be an application to modify the Consent.

Consideration

The principles in relation to the Court's power to award costs are well understood. The Court has a broad discretion as to costs pursuant to s 98 of the Civil Procedure Act 2005 (NSW) and the UCPR to determine by whom, to whom, and to what extent costs are to be paid. This discretion is to be liberally construed and its exercise restricted only by limitations and conditions that are clearly expressed: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [21]; Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 at 543.
Ordinarily, costs will follow the event and be payable on the ordinary basis unless it appears to the Court that some other orders should be made: UCPR, rr 42.1, 42.2. The "event" usually refers to the event of the claim and may be understood as referring to the practical result of a particular claim: Sze Tu v Lowe (No 2) [2015] NSWCA 91 at [39]; Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15].
As a general rule, when a question is determined separately, that determination is treated as an "event" for costs purposes such that the party who was successful on the separate question is entitled to their costs: Floruit Holdings Pty Ltd v Sebastian - Builders & Developers Pty Ltd [2009] NSWCA 411 at [7].
I have reconsidered the earlier evidence and my findings (in the determination of the separate question) and I have taken into account the detailed submissions made. The fact is that there had been construction and development undertaken that was not in accordance with the Consent and although the respondents had made a number of concessions (or admissions) and, indeed, enjoyed some very limited success in relation to the proceedings, I consider that the applicant has been primarily successful.
Accepting that mathematical precision is clearly illusory and accepting that it is a matter of discretion, impression and evaluation (James v Surf Road at [36]) and, again noting that the costs sought relate only to the hearing of the separate question, I am of the view, taking into account all of the above matters, that the applicant is entitled to 85% of her costs of the hearing of the separate question including the costs associated with this application.
My reasons may be shortly stated.
First, I consider the applicant has enjoyed significant success in relation to the issues that were required to be determined at the hearing of the separate question and also enjoyed success by way of late admissions made by the respondents well after the proceedings were commenced and, in some circumstances, relatively shortly before the hearing of the separate question before me. While I accept that the respondents acknowledged that certain work had been done in excess of that which was provided for in the Consent, in simple terms, the admissions/concessions were made late and a number of them were on a limited basis only.
Second, contrary to the respondents' submission, I do not consider that the exercise of any discretion would have played a significant role in the final determination if the matter had proceeded to a final hearing. While there may have been some consideration that significant expense would necessarily be occasioned to the respondents if mandatory injunctive relief had been granted, and this would have be taken into account in the exercise of discretion to grant final relief, and although the respondent would likely have argued that their non-compliances have had little adverse environmental effect, it is clear that there had been breaches of the Consent and in all the circumstances, including any suggestion of delay on the part of the applicant in commencing proceedings (a matter I do not consider significant), I am comfortably satisfied that discretion would not have been in any way determinative in any final hearing.
Third, in relation to the admissions referred to above, I accept that the s 4.56 modification application (while it did not involve significant admissions) was a bona fide attempt by the respondents to attend to what I consider were otherwise relatively obvious breaches, I do not find this relevant in the present application for costs.
Fourth, I accept that during the course of the hearing of the separate question there was some forensic disadvantage caused to the respondents due to the lateness of the applicant's initial claim (which was some time after the completion of the works). Again, this was not determinative either in my consideration of the evidence that was marshalled and, as noted above, I consider would not have been determinative in any exercise of discretion should the proceedings have continued to any final hearing.
In reaching this view, I am conscious of the principles relating to apportionment considered by Ward CJ in Eq in Masters in Building Training Pty Ltd v State of New South Wales (No 2) [2022] NSWSC 697 at [6]-[8] (and the cases cited therein). I am satisfied that the issues on which the applicant was not successful at the hearing of the separate question were separate and clearly discrete from each of the issues upon which she was successful (albeit that the applicant did not enjoy success on Issue I) and, based on the evidence and arguments marshalled, did not occupy a significant portion of the time taken in preparation for and hearing of those issues. In those circumstances, taking into account the above matters, and noting that costs are compensatory and not punitive, I am of the view that the relatively small reduction I have made reflects the very limited success enjoyed by the respondents.

Orders

The Court makes the following orders: 1. The respondents are to pay 85% of the applicant's costs of and occasioned by the hearing of the separate question ordered 24 December 2019 including the costs associated with the determination of this application for costs.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 11 October 2022

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