JUDGMENT
1 HIS HONOUR: The plaintiffs and the defendant, respectively, own neighbouring properties in Bell Place, Burraneer. The defendant's property is the higher land. As at October 2004, there was a retaining wall that stood, at least in part, on the plaintiffs' property. It was in a seriously dilapidated state and required substantial rectification (there had been spillage from the wall on to the property of the plaintiffs).
2 In October 2004, the defendant brought proceedings in the Local Court. It sought relief pursuant to s7(1) of the Access to Neighbouring Land Act 2000 (NSW) (the Act). It is described as a "neighbouring land access order" (it is defined in s3 as an order authorising access) and jurisdiction is expressly conferred on a "Local Court". An application may be made by "a person who, for the purpose of carrying out work on land owned by the person, requires access to adjoining or adjacent land."
3 Initially, access was sought to demolish the existing retaining wall and to construct a replacement retaining wall, to be erected on the land of the defendant. The application also sought the removal of hedges, trees or shrubs within two metres of the boundary. The application was amended on 15 November 2004. The only change was the removal of the vegetation within four metres of the boundary.
4 The plaintiffs sought expert advice (from a builder and a consulting engineer). Advice was given and affidavits were sworn by the experts.
5 Subsequently, the defendant came to further amend the application. A draft further amended application gave notice that, what was then sought, was what has been described as a landscape batter or a batter slope (the batter) in lieu of a retaining wall and the removal of one umbrella tree. A further amendment was made on 2 May 2005, this amendment sought the removal of vegetation within five metres of the boundary.
6 The plaintiffs then sought expert advice on this amended application (from Mr Yanchenko). The stance then taken by them was that the costs incurred in employing the previous experts had been thrown away. At the time of the making of the last amendment, the proceedings had been fixed for hearing (for three days). Presumably, the amendments were made without any conditions as to costs being sought.
7 The hearing came before Mr Abood (LCM). After the case had been opened, discussions took place between the parties and a settlement was reached (save as to costs).
8 The settlement was recorded in an agreement which was noted by the Court. It provided for the removal of the existing retaining wall and the construction of the batter in its place (the access was to a strip having a width of three metres along the boundary). It also provided for the removal only of "The umbrella tree or trees".
9 There was an issue between the parties as to whether or not the Court had power to order the removal of vegetation. Orders were made in terms of the agreement (to the extent, if at all, it is within power of the Court).
10 The Magistrate was then set the demanding task of determining the question of costs. He heard argument (the matter was before the Court on three days). He delivered a reserved judgment on 26 September 2005 (giving written reasons for his decision). He came to the conclusion that each party should pay its own costs.
11 The stance that had been taken by the plaintiffs was that an order for costs should be made in their favour. The defendant took the position that the appropriate order was the one that was subsequently made by the Magistrate.
12 In support of their application, the plaintiffs put three arguments. It was said that the Magistrate should approach the task on the basis that the defendant was seeking an indulgence and that the plaintiffs should have their costs, unless it was shown that they had been unreasonable. By way of an alternative, it was said that they should have the costs because the Court did not have power to order the removal of the umbrella trees. Finally, it was said that, in any event, they should have the costs thrown away by reason of the amendments to the application.
13 The plaintiffs have brought proceedings in this Court by way of challenge to the costs order made by the Magistrate (it had been preceded by a misconceived appeal to the Land and Environment Court). The proceedings were not filed until 12 April 2006. The plaintiffs now proceed on an amended summons.
14 The plaintiffs contend that they have a right to challenge the decision on two bases. It is said that a right to appeal is conferred by s64 of the Local Courts Act 1982 (NSW) (as opposed to pursuant to Part 7 thereof, which allows an appeal on a question of costs by way of leave only). The section applies to an appeal in relation to any order arising from an application notice. It is also said that it has a challenge pursuant to s69 of the Supreme Court Act 1970 (NSW). These provisions allow a challenge where there has been, inter alia, error of law that appears on the face of the record.
15 If the plaintiffs have to rely on s64 of the Local Courts Act, an extension of time is required in which to bring the appeal. It is presently incompetent.
16 The proceedings were heard on 23 October 2006. The parties were represented by senior counsel. The costs of the plaintiffs were said to be in excess of $180,000.
17 There is issue between the parties as to the right of appeal. The defendant contends that the resort to s64 of the Local Courts Act is misconceived and that the only avenue of appeal is that provided by s31 of the Act. I shall return to this matter in due course. It is convenient to first look at the merits of the challenge.
18 The plaintiffs contend that the Magistrate erred in respect of each of the three arguments that were put on their behalf. It is said that, whilst the Magistrate accepted the indulgence principle as the approach to be taken, he erred in not applying it (it was said, inter alia, that he reversed the onus). It is said that he erred in finding that the Act conferred a power to order the removal of trees. Finally, it is said that he erred in not dealing with the costs thrown away argument.
19 The Act contains its own costs provision (s27). Sub-section (1) thereof provides that the costs of an application are payable at the Local Court's discretion. Sub-section (2) thereof provides that in determining whether the whole or part of the costs of an application are payable by a party, the Local Court may consider the matters listed in (a), (b) and (c) thereof. The matters are as follows:-
"(a) any attempts by the parties to reach agreement before the proceedings,
(b) whether the refusal to consent to access was unreasonable in the circumstances,
(c) any other matter it thinks fit."
20 The specified matters do not fetter the discretion of the Local Court. However, the specification of such matters, together with other provisions (such as s11(2)(a)) contained in the Act, provide indication that unreasonable conduct of the party required to give access is merely one of the matters the Local Court may consider. The provisions of the Act emphasise the importance of the conduct of the parties (as opposed to a concentration on the conduct of one of them). Generally speaking, a discretion is to be exercised having regard to the relevant circumstances of the particular case before the Court and so that the dictates of justice are best served. The onus rests with the party seeking an exercise of the discretion in his or her favour.
21 In the present case, the neighbours were confronted by a mutual problem that had existed for some years. There had been considerable communication. It was a problem that they had not been able to resolve without the bringing of court proceedings. The defendant had been unaware of the problem when she purchased in 2001.
22 A result was reached that saw the batter being located entirely on the defendant's property. It was a consensus result. One possibility may have been that the plaintiffs may have preferred the batter to a new retaining wall. The settlement reflected an entitlement had by the defendant to relief and to that relief being acceptable to the plaintiffs (whether or not there was agreement as to a power to remove vegetation).
23 In Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 at pp 624-625, McHugh J looked at the question of the making of an order for costs in those cases where there has been no hearing on the merits. He observed that the Court cannot try a hypothetical action between the parties.
24 His Honour made the following further observation:-
"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. This approach has been adopted in a large number of cases." [Footnote omitted]
25 It seems clear that the Magistrate was provided with lengthy and detailed submissions. The submissions threw up competing approaches as to how he should go about his task. He identified the relevant statutory provision (s27) and referred to Lai Qin. He identified the three arguments relied on by the plaintiffs. He made certain observations in relation to those arguments. It may be that those observations (or at least certain of them) provoke contest as to what was intended by him. Be that as it may, any such differences are not of significance in this case.
26 Before making particular comment on how he dealt with the three arguments, it seems to me to be more productive to first determine the basis on which the Magistrate came to his decision.