The Court delivered judgment in this matter on 11 June 2019 (see Jarosz v State of New South Wales [2019] NSWSC 692 - "the Principal Judgment"). The Court rejected the plaintiffs' claim that a certain road became a public road at common law in about the mid-nineteenth century. The Court also rejected the plaintiffs' claim in private nuisance. An order was made dismissing the plaintiffs' Amended Statement of Claim. Directions were also made for the filing of affidavits and written submissions on the question of costs, with a view to that question being dealt with on the papers.
The plaintiffs and each of the first defendant ("the State") and the second defendant ("the Council") have filed affidavits and two sets of submissions in accordance with those directions.
In brief summary:
1. The plaintiffs seek an order that each party pay its own costs of the proceedings;
2. The State seeks an order that the plaintiffs pay its costs of the proceedings on the ordinary basis; and
3. The Council seeks an order that the plaintiffs pay its costs, or at least some of them, on an indemnity basis.
The plaintiffs, who relied upon the affidavit of their solicitor, Grant Watson, submitted that grounds existed to depart from the general rule, embodied in Uniform Civil Procedure Rules 2005 (NSW) r 42.1, that costs follow the event. The plaintiffs referred to Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 and submitted that the proceedings were concerned with public rights, not merely private rights, and served the useful purpose of ending the confusion that existed (including within parts of the State and Local governments) as to the status of the road. It was further submitted that the plaintiffs were invited or encouraged to have their dispute determined by the court, and that attempts by the plaintiffs to have their dispute resolved through settlement discussions were either rebuffed or not responded to. It was submitted that the plaintiffs were prepared to settle the matter in December 2018 on the basis that one or other or both of the defendants would agree to maintain the road "to the standard of a public access dirt road".
Jarosz v State of New South Wales [2019] NSWSC 861 | Case summary | Zoe
The State, which relied upon the affidavit of its solicitor, Paul Rankins, and some correspondence that passed between the solicitors for the respective parties, submitted that there were no circumstances that would warrant a departure from the position set forth in UCPR r 42.1. It was submitted that the plaintiffs were acting as private rather than public interest litigants, and were seeking an outcome that would enhance the values of their properties and remove any need to negotiate access licences to facilitate access to those properties. The State further submitted that the deficiencies in the plaintiffs' case were clearly pointed out to them at an early stage, including in the course of an application to strike out the Statement of Claim, yet the plaintiffs persisted with their claims. The State submitted that it was not unreasonable of it not to accept the plaintiffs' offer of settlement in December 2018.
The Council, which relied upon two affidavits of its solicitor, Carlo Zoppo, submitted that it should receive all or at least some of its costs on an indemnity basis because the plaintiffs did not have reasonable prospects of success against it, and this was pointed out to the plaintiffs at an early stage. In particular, the plaintiffs were informed in November 2017 that they would need to establish that a common law dedication of the road as a public road occurred prior to the commencement of the Local Government Act 1906 (NSW). It was noted that by November 2017 the State had accepted that the National Parks and Wildlife Service had responsibility for the care, control and management of the road. The Council also noted that in February 2018 (and again in April 2019) it put the plaintiffs on notice that if they proceeded with the litigation against it, the Council may seek indemnity costs (see Drummond v Drummond [1999] NSWSC 923 at [52]-[54]). It was put that the plaintiffs' continued conduct of the proceedings against the Council was relevantly delinquent (see Oshlack v Richmond River Council (supra) at [44]), and an indemnity costs order was warranted to compensate the Council for having to defend proceedings which it ought not have had to. The Council also took issue with the plaintiffs' contentions that the litigation was in the nature of public interest litigation, and that the plaintiffs were invited to bring their dispute to court. The Council further submitted that it ought not be criticised for not accepting the offer made by the plaintiffs in December 2018, as its stance was vindicated by the decision of the Court.
In their submissions in response, the plaintiffs criticised both the State and the Council for failing to engage in any alternative dispute resolution processes, and submitted that it was no answer to style the plaintiffs' claims as misconceived. Further, in relation to the Council, the plaintiffs submitted that whilst their public road claim failed it was not misconceived, untenable or lacking in reasonable prospects of success. The plaintiffs noted that the Crown Lands Alienation Act 1861 (NSW) was not drawn to their attention until it was mentioned in the State's written submissions served shortly prior to the hearing.
I am unable to accept the submission of the plaintiffs that grounds exist to warrant a departure from the general rule that costs follow the event. The proceedings were not in my view in the nature of public interest litigation. Even though the proceedings involved questions that fall within the realm of public law, the central purpose of the proceedings was to establish that one or other of the defendants was legally responsible for maintaining the road to a higher standard than is presently the case, thereby improving the means of access to the plaintiffs' properties. The road in question serves as an access road to four "landlocked" lots within the Burragorang State Conservation Area, two of which lots are in the ownership of the plaintiffs. Success in the litigation would have provided significant benefits to the plaintiffs as the owners and occupiers of their lots.
The plaintiffs chose to pursue the litigation rather than be content to enter into access licences with the National Parks and Wildlife Service. The plaintiffs, or at least the first plaintiff, evidently regard the terms of such licences as unsatisfactory. That is their (or his) right, but the plaintiffs must accept responsibility for taking the path they chose. It is true that in May 2017 the Office of the Minister for Local Government suggested that one option for the plaintiffs would be to take their dispute with the Council to court. However, I note that in the same communication it was indicated that a number of options may be available to the plaintiffs, and it was suggested that the plaintiffs should be "guided by independent legal advice with respect to any options you may have to pursue this matter".
Further, I do not think that the defendants should be criticised for their conduct in relation to the possible settlement of the proceedings. Neither defendant rejected or failed to accept any offer that would have given an outcome more favourable to them than that achieved as a result of the hearing.
In my opinion, it is appropriate in all the circumstances that, in accordance with the general rule, the unsuccessful plaintiffs be ordered to pay the costs of each defendant.
I turn then to consider the Council's application that some or all of its costs be paid by the plaintiffs on an indemnity basis.
There is some force in the Council's submissions concerning the weakness of the plaintiffs' claim against it. That claim essentially rested upon the contention that the road became a public road at common law in about the mid-nineteenth century. The claim as ultimately presented required the Court to find that there had been a dedication of Crown land as a public road.
The plaintiffs principally relied upon a Crown Plan made in about July 1868, and some general evidence of reputation as to use. The evidence as to reputation (admitted over the objection of the defendants) was problematic (see the Principal Judgment at [27]-[28]), and the applicable statutory regime (including s 178 of the Conveyancing Act 1919 (NSW) and its predecessors, and the Crown Lands Alienation Act) made the drawing of an inference of dedication of the road as a public road very unlikely (see the Principal Judgment at [26] and [29]).
The plaintiffs ought to have been aware of the problematic nature of the reputation evidence, and of the applicable statutory regime, including the Crown Lands Alienation Act. (The Crown Plan of 1868 itself contains a reference to that Act - see the Principal Judgment at [11] and [23]). That was especially the case once all of the evidence had been served prior to the hearing. In that regard, the evidence of Mr Groll (which was served in about early April 2019) was important, not least because it showed not only that the land upon which the road ran had been Crown land since at least 1868, but also that there was no record of the land ever being alienated prior to the creation of the Burragorang State Conservation Area in 1991 (see the Principal Judgment at [15]).
In my opinion, from about a month before the hearing (by which time the plaintiffs ought to have considered the content of the letter from the Council's solicitors dated 10 April 2019), it should have been apparent to the plaintiffs that their public road claim was almost certainly doomed to fail. The letter of 10 April 2019 referred to Mr Groll's evidence and the fact that the relevant land was always Crown land. The letter stated that it was inappropriate for the plaintiffs to pursue their claim against the Council as it was clear that the State at all relevant times had the care, control and responsibility for the maintenance of the relevant land. The right of the Council to seek indemnity costs was once again affirmed. In these circumstances, it was unreasonable for the plaintiffs to thereafter continue with their claim against the Council. The Council should not have been put to the expense of thereafter preparing for and appearing at the hearing. In my view this conduct of the plaintiffs amounted to a relevant delinquency which warrants the sanction of indemnity costs.
The Court will therefore order, in respect of the Council's costs of the proceedings, that those costs up to 24 April 2019 be paid by the plaintiffs on the ordinary basis and thereafter on an indemnity basis. Whilst I accept that the plaintiffs' claim against the Council was always weak, I am not persuaded that its pursuit up to 24 April 2019 amounted to a relevant delinquency which would justify an award of indemnity costs.
The Court will further order that the plaintiffs pay the State's costs of the proceedings on the ordinary basis.
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Decision last updated: 10 July 2019