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FitzGerald v Foxes Lane [2024] NSWSC 1458 | Case summary | Zoe

NSWNSWSC

FitzGerald v Foxes Lane

[2024] NSWSC 1458

Supreme Court of NSW|2024-11-18|Before: Peden J, Ward P, Payne JA, White JA

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At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2024-11-18

Before

Peden J, Ward P, Payne JA, White JA

Source

Original judgment source is linked above.

Judgment (4 paragraphs)

[1]

JUDGMENT

On 21 October 2024, I delivered the principal judgment in these proceedings: FitzGerald v Foxes Lane (NSW) Pty Ltd [2024] NSWSC 1312 (Judgment). These reasons assume familiarity with that judgment.
The defendants, Foxes Lane Co, Mr Kurstjens and Ms Kurstjens, accepted that they must pay Mr FitzGerald's costs in the proceedings until the obstructions to the ROC were removed on 20 December 2022: Judgment at [88]. Order 4 reflects this concession.
Order 5 required Mr FitzGerald to pay the defendants' costs of the Amended Statement of Claim from 21 December 2022, and of the Amended Statement of Cross-Claim, as agreed and assessed. I made that order in light of the "substantial success" of Foxes Lane Co in the proceedings: Judgment at [152].
Order 6 granted the parties liberty to apply for an alternative costs order. Exercising that liberty to apply, Mr FitzGerald by notice of motion filed on 29 October 2024 seeks the following orders: 1. Order 5 made on 21 October 2024 be vacated. 2. The plaintiff pay the defendants' costs of the Amended Statement of Claim (ASOC) from 21 December 2022 and of the Amended Statement of Cross-Claim (ASOCC) relating to the proper construction of the ROC as agreed or assessed. 3. The first defendant/cross-claimant pay the plaintiff's costs of the ASOCC relating to the claim for the extinguishment of the ROC as agreed or assessed. 4. There otherwise be no order as to costs, with the intention being that each party bear its own costs.
For the reasons that follow, Mr FitzGerald's notice of motion must be dismissed.

[2]

Principles and determination

The principles governing the exercise of the Court's discretion as to costs under s 98 Civil Procedure Act 2005 (NSW) and pursuant to r 42.1 Uniform Civil Procedure Rules 2005 (NSW) (UCPR) where a party is only partly successful are well known and were not in dispute between the parties. They were recently summarised in Access Training Group Ltd v Jane [2024] NSWCA 204 (Access) at [182]-[192] (Ward P, Payne JA agreeing) and [217]-[220] (Basten AJA), and in Creak v Ford Motor Co of Australia Ltd (No 2) [2023] NSWCA 323 (Creak) at [24] (White JA, Gleeson and Kirk JJA agreeing).
In the proceedings, Mr FitzGerald sought a declaration about the proper construction of the ROC and alleged that the defendants had substantially interfered with the exercise of his rights under the ROC. The defendants pleaded a claim for the extinguishment or modification of the ROC and a claim alleging that Mr FitzGerald's grading of the ROC was excessive user. The defendants also sought a declaration as to the proper construction of the ROC.
Mr FitzGerald submits that his claims in respect of the ROC and defence of the cross-claim that sought the extinguishment or modification of the ROC should be treated as separate events, with costs being awarded on an issue by issue basis. He contends that he ought not be required to pay the defendants' costs of their unsuccessful extinguishment claim as he was wholly successful on that dominant and separable issue. Mr FitzGerald also relies on the affidavit of his solicitor, Mr Richard Baker, dated 28 October 2024, which asserts that the costs of the different issues are readily identifiable and apportionable.
In support of his submission that there should be differentiation between issues for the purpose of costs, Mr FitzGerald points out that in the defendants' opening submissions, they presented the extinguishment claim as their "primary case", seeking declarations as to the proper construction of the ROC only if the defendants were "unsuccessful in the extinguishment claim". He notes that the defendants accepted that the expert evidence was "primarily relevant to the extinguishment case", as distinct from the proper construction of the ROC. He further submits that despite the defendants' concession in closing submissions that their success on the construction issue would mean that the court "wouldn't need to deal with" the extinguishment claim, the "demotion" of this claim to a "secondary" one ought not deprive Mr FitzGerald of his costs in preparing for and meeting that claim.
As for the parties' respective claims in tort, Mr FitzGerald contends that the award of damages of $2,500 in favour of each constituted a "zero-sum outcome". He submits that each party should bear their own costs on those claims, which were "largely discrete and separable from both the extinguishment and the construction claims".
I reject Mr FitzGerald's submissions. I consider that costs ought not be awarded on an issue-by-issue basis for the following reasons.
The defendants' extinguishment claim was not a "clearly dominant or separable" issue: Access at [191]; Creak at [24]. As the defendants observe, the expert evidence informed the reasoning as to both the proper construction of the ROC, including the reasonable necessity of Mr FitzGerald's proposed works for his enjoyment of the easement, and the extinguishment claim: see Judgment at [60]-[63], [71]-[72], [118]-[112], [138]-[139]. These issues were also closely linked, with the parties' rights under the ROC being relevant to the extinguishment claim: see Judgment [121]-[122], [140]. So much was acknowledged by Senior Counsel for Mr FitzGerald in his opening oral submissions: [O]bviously, the two questions [ie construction of the ROC and extinguishment] are related, as we have pointed out in our written submissions, in that the question of what use of the right of carriageway is within the grant, and the question of extinguishment, are related in the sense that the more use that Mr Fitzgerald is entitled to make of the right of carriageway, the more difficult it would be for your Honour to find - particularly given the well-recognised need for caution before exercising a power that deprives a person of his or her property rights - that Mr Fitzgerald would suffer no substantial injury if the right of carriageway were taken away from him. So, in a sense, the logically anterior question is, what can Mr Fitzgerald do on the right of carriageway? Is he entitled to grade it? Is he entitled to put a road there?
Similarly, Senior Counsel for the defendants conceded in closing that: [I]f the servient owner is found to be entitled to crop across the carriageway, or if the dominant owner is not permitted to build a road on the carriageway, then the extinguishment case is difficult, if not impossible for me, and I candidly acknowledge that.
In circumstances where the extinguishment claim was brought as a defensive claim in response to Mr FitzGerald's contention that he was entitled to construct an unsealed crowned road and drains on the ROC, and where the outcome of the extinguishment claim was contingent on the proper construction of the ROC, I do not consider that there is any hardship occasioned by applying the general rule as to costs: Access at [189].
Further, Mr FitzGerald did not have "success" in his nuisance claim that persuades me he is entitled to costs of that element of the case. From the outset, the defendants admitted they had inappropriately obstructed the ROC for a few months and were liable to pay Mr FitzGerald's costs up to the date the obstruction was removed: Judgment [77], [88]. Therefore, no time was taken up in proving that case, and Mr FitzGerald already had a costs order in his favour. The only argument at the trial concerned a brief legal one about the quantum of any damages Mr FitzGerald could prove he ought receive. He did not obtain an order for $75,000 as he sought, nor exemplary damages: Judgment [80], [86], [93].
For completeness, I note that it is not the case that the defendants "unfairly, improperly or unnecessarily increased the costs" by bringing the extinguishment claim. Nor was it the case that "the bulk of the time" was taken up on the issue of the extinguishment or modification of the ROC: Access at [191].
Therefore, it is not appropriate to differentiate between the issues in these proceedings for the purposes of costs.