Joseph v Kiama Municipal Council and Ors

Evidence and submissions

1. Council and Mr Joseph each provided detailed evidence and written submissions. Council reads the affidavit of Patrick Synon Holland, its solicitor, sworn 7 March 2024, and Mr Joseph reads his affidavit affirmed 4 March 2024.

Council's position

1. In his affidavit, Mr Holland deposes to the detailed background of the matter including various attendances, correspondence and dealings between Council's solicitors and Mr Joseph. In summary, Mr Holland deposes to the conduct of Mr Joseph which he describes as "conduct resulting in unnecessary costs". This relates primarily to various requests by Mr Joseph for various orders, including the expedition of these proceedings commenced on 28 August 2023; that Council stay its assessment of the most recent development application lodged by the Spencers; and raising many allegations against Council, including that Council had breached the 2021 Terms of Settlement (reached in relation to the 2021 proceedings).
2. Mr Holland also deposes to correspondence in September 2023 informing Mr Joseph of Council's solicitors' view that the summons failed to disclose any proper cause of action, and subsequent conduct and correspondence from Mr Joseph stating that he intended (at that time) to make an application to transfer the proceedings to the Supreme Court of New South Wales, and repeating his request that Council stay its consideration of the Spencers' development application, and repeating allegations that Council had breached the 2021 Terms of Settlement.
3. Mr Holland details Council's solicitors' further correspondence detailing concerns relating to the alleged defects in Mr Joseph's summons leading to Council's notice of motion which resulted in the primary judgment. Mr Holland deposes to further email correspondence in October and November 2023 in relation to the preparation of evidence for the hearing of the motion including the preparation and exchange of various submissions by each of the parties.
4. Mr Holland also deposes to events after 7 February 2024 when the parties were informed that Council had determined the Spencers' development application by way of refusal, and correspondence between the parties in relation to the likely agreement as to the discontinuance of the proceedings which led to further discussions between parties in relation to agreement (or otherwise) in relation to costs.
5. Mr Holland deposes that, as at 28 February 2024, the total of legal costs billed to Council was approximately $63,000 (which included disbursements including counsel's fees and Court filing fees) and that, as at 7 March 2024, those costs had increased to approximately $67,000. Various invoices regarding legal fees are referred to by Mr Holland. Mr Holland also deposes that there had been further costs since that date.
6. Mr Holland suggests that Council's conduct (and that of its solicitors) was reasonable at all times given Mr Joseph's serious allegations of bias and apprehended bias against current and former officers of Council and that it was reasonable for Council to retain counsel to prepare submissions and appear at the hearing on 2 November 2023.
7. In its written submissions, Council responds to Mr Joseph's position (noted later in this judgment) that there should be a fixed sum costs order in the sum of $20,000 (or a fixed sum in a different amount, possibly at a discount of 60% of Council's suggested total legal costs) and refers to the various factors relevant to making a fixed sum costs order as considered by the Court of Appeal in eInduct Systems Pty Ltd v 3D Safety Services Pty Ltd (No 2) [2015] NSWCA 422 ('eInduct Systems') at [8] (Beazley P, Basten JA), and submits that there is no persuasive case presently raised for departure from the usual order that costs be agreed or assessed.
8. Council submits that there is no reason to suggest that the cost assessment process in this matter would be attended by significant complexity and points to the detail in the relevant invoices exhibited to Mr Holland's affidavit sworn 7 March 2024 and notes that there is no evidence that any appropriate assessment of costs would not be recoverable from Mr Joseph.
9. Council submits that a costs assessor is better placed to estimate the appropriate amount within reasonable limits and that the Court is not in such a position.
10. Council submits that the evidence highlighting the relative responsibility of the parties for costs incurred (and any degree of disproportionality between the issues litigated in the costs claimed) does not support the making of a fixed sum costs order as contended for by Mr Joseph. In any event the 60% discount sought by Mr Joseph is an excessive and unreasonable discount in the circumstances of the proceedings.
11. Council submits that if the Court was so minded, a figure of 75% of solicitor/client costs would provide adequate compensation for Council and that such an order would be to the advantage of both parties in bringing all matters to a conclusion.

Mr Joseph's position

1. Mr Joseph's evidence (and further submissions) notes that the reason for the proceedings being discontinued was that the Spencers' most recent development application was refused in early February 2023 in circumstances where Council (as consent authority) effectively upheld his objection to the proposed development which was that there was effectively an unresolvable breach of a development standard relating to a foreshore development area which was (or would have been) determinative of the development application.
2. In his affidavit affirmed 4 March 2024, including the 115 pages annexed thereto, and in an earlier 7-page letter, Mr Joseph details much of the background and maintains that the manner in which Council and its solicitors conducted themselves in incurring the costs now claimed militate against Council being entitled to the whole of its costs.
3. Mr Joseph refers to Council's conduct which he says is, effectively, "disentitling" (in relation costs) including, first, unnecessary expense incurred in various reviews of material and the unnecessary briefing of counsel; second, delaying and non-responsive conduct thereby "inviting" litigation; third, the fact that Council only enjoyed "mixed success" in the strike out motion; fourth, that there was no suggestion that there was no evidence to support Mr Joseph's various allegations; fifth, Council's ongoing failure to adhere to the Model Litigant Policy; and sixth, Council's "belligerent" conduct in refusing to respond to various of Mr Joseph's emails.
4. Mr Joseph submits that there should be a discount of 60% of any costs awarded to Council. He also submits that Council's conduct effectively flouted the overriding purpose detailed in s 56 of the Civil Procedure Act mandating conduct which facilitates the just, quick and cheap resolution of the real issues in proceedings.
5. Mr Joseph refers to his 7-page letter in response to Council's offer to settle the costs dispute in the sum of $45,000 which was itself in response to Mr Joseph's offer to settle the dispute in the sum of $17,500 in which he set out further submissions that would justify the Court making a gross sum costs order in the sum of $20,000. In that letter, Mr Joseph also raises various matters in relation to many of the invoices otherwise provided by Council's solicitors. Mr Joseph analyses a number of the invoices particularly dealing with the number of lawyers (of various levels of seniority) who had acted for and advised Council, and also refers to the number of conferences held with counsel, and that many of the items raised in the invoices relate to "considering issues" and "considering strategy".
6. Mr Joseph further refers in some detail to earlier litigation before the present proceedings and indicates that the evidence shows that he has always been a "reluctant litigant" who was prepared to compromise if Council had acted in a similar manner. The litigation referred to by Mr Joseph goes back to certain orders made in March 2018 in relation to earlier development applications. He also refers to his further dealings with Council since that time and refers to the correspondence he had with various Council officers and various advice which he understands Council had received. He points to the many concerns that he has raised over the years in relation to the appointment (and non-appointment) of various Council officers and town planners to assess various of the development applications which had been lodged by, or on behalf of, the Spencers. He also refers to various "off the record conversations" and concerns he had expressed over some period of time as to the lack of "transparent governance" in Council's conduct.
7. Subsequent to receiving Mr Holland's affidavit sworn 7 March 2024, Mr Joseph provided further written submissions filed 16 March 2024 raising Mr Holland's failure to address various matters raised in Mr Joseph's earlier correspondence including, first, Mr Joseph's concerns about Council's conduct pursuant to the Model Litigant Policy; second, Council's refusal to address Mr Joseph's submissions in relation to the appropriateness of a specific costs order; third, Council's refusal to address matters in relation to various redactions in the invoices and costs agreement that Council had with its solicitors; and fourth, Council's failure to recognise that Mr Joseph's primary objection to the Spencers' development application related to concern in relation to the jurisdiction resulting from the restraint in cl 6.7 of the Kiama Local Environmental Plan.

Consideration

1. The principles in relation to the Court's power to award costs are well-established. The Court has a broad discretion as to costs pursuant to s 98 of the Civil Procedure Act 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 at 543; [1990] HCA 59.
2. Ordinarily, costs follow the event and 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].
3. Further, the circumstances leading to the discontinuance of the proceedings and the conduct of the parties are relevant in the exercise of the Court's discretion: Ralph Lauren 57 Pty Ltd v Byron Shire Council [2014] NSWCA 107; (2014) 199 LGERA 424 at [20]-[34]. The position may be different where a respondent simply capitulates: Nadilo v Eagleton [2021] NSWCA 232; (2021) 250 LGERA 89 at [12], [89], [94].
4. The principles relating to whether to make a gross sum costs order are also well-known and have been considered in eInduct Systems at [8]-[10]; Strathfield Municipal Council v Malass (No 5) [2024] NSWLEC 74 at [5] (Pain J); and Hamod v State of New South Wales [2011] NSWCA 375, where Beazley JA (with Giles and Whealy JJA agreeing) stated: "[813] I have already set out the relevant provisions of s 98. The discretion thereby conferred upon the court is not confined and may be exercised whenever the circumstances warrant its exercise, having regard to the scope and purpose of the provision: Harrison & Anor v Schipp [2002] NSWCA 213; 54 NSWLR 738 per Giles JA at [21]-[22]. In Harrison v Schipp, Giles JA considered that the discretion in s 98(4) may be exercised where the assessment of costs would be protracted and expensive and, in particular, if it appeared that a party obliged to pay the costs would not be able to meet a liability of the order likely to result from the assessment. However, his Honour stated, at [22]: 'The power should only be exercised when the Court considers that it can do so fairly between the parties, and that includes sufficient confidence in arriving at an appropriate sum on the materials available.' … [816] The terms of s 98(4), together with the more general considerations reflected in the Civil Procedure Act, ss 56(1), 57(1)(d) and 60, suggest the factors that merit particular consideration include: the relative responsibility of the parties for the costs incurred (for example, Harrison v Schipp); the degree of any disproportion between the issue litigated and the costs claimed; the complexity of proceedings in relation to their cost; and the capacity of the unsuccessful party to satisfy any costs liability: Ritchie's Uniform Civil Procedure NSW at [s 98.45]. [817] The exercise of the power conferred by s 98(4) is particularly appropriate where the costs have been incurred in lengthy or complex cases and it is desirable to avoid the expense, delay and aggravation likely to be involved in contested costs assessment. This may arise either from the likely length and complexity of the assessment process: Beach Petroleum NL v Johnson (No 2) at 120; Charlick Trading Pty Ltd v Australian National Railways Commission. Australasian Performing Rights Association Ltd v Marlin [1999] FCA 1006; or from the likelihood that the additional costs of formal assessment would disadvantage the successful party because of the likely inability of the unsuccessful party to discharge the costs liability in any event: Harrison v Schipp; Sony Entertainment (Aust) Ltd v Smith (2005) 215 ALR 788 at [90], [194]-[195]; Hadid v Lenfest Communications Inc [2000] FCA 628. … [820] The costs ordered should be based on an informed assessment of the actual costs having regard to the information before the court (for example, by relying on costs estimates or bills): Beach Petroleum NL v Johnson (No 2); Leary v Leary; Harrison v Schipp at 743; Sparnon v Apand Pty Ltd (FCA, 4 March 1998, unreported). The approach taken to estimate the costs to be ordered must be logical, fair and reasonable: Beach Petroleum NL v Johnson at 164-165; Hadid v Lenfest Communications Inc at [27]; Harrison v Schipp at 743. This may involve an impressionistic discount of the costs actually incurred or estimated, in order to take into account the contingencies that would be relevant in any formal costs assessment: Leary v Leary at WLR 76 per Purchas LJ; Beach Petroleum NL v Johnson (No 2) at 123; Auspine Ltd v Australian Newsprint Mills Ltd at 164-165."
5. Having considered the principles noted above, I have given particular consideration to first, the complexity, and hence the likely costs, of the assessment process in this matter; second, whether the costs would be unrecoverable (on the basis that they will be significant); third, my view that presently before the Court is sufficient material in the evidence (in particular the evidence of Mr Holland and the annexures to his affidavit); and fourth, the correspondence between the parties in relation to attempts at settlement and my understanding of the history of the relationship between the parties and the respective allegations in relation to conduct.
6. For the following reasons, I have formed the view that Council is entitled to the majority of its costs.
7. First, irrespective of the background material, and to a limited extent the conduct of the parties, Mr Joseph's summons the subject of the primary judgment was significantly not in proper form, and it is clear the notice of motion for strike out was substantially successful. It is my primary view that the costs involved in those proceedings, irrespective of the detailed matters put by both parties, should follow the event and (subject to matters below) are properly awarded to Council for the reasons which were stated in the primary judgment.
8. Second, the withdrawal of the amended summons consequent upon Council's determination (by refusal) of the Spencers' more recent development application raises somewhat different circumstances and adds some complexity of the question of costs. The proceedings raised various serious allegations (including misconduct) against Council and sought to rely on the lengthy history of various proceedings between the parties (including proceedings in the NSW Civil and Administrative Tribunal) which were not ultimately determined. Those matters aside, the reasonableness of the discontinuance itself by Mr Joseph is otherwise understandable.
9. With these matters in mind, I am of the view that it is appropriate that a gross sum costs order in favour of Council be made. As noted above, this was an initial suggestion of Mr Joseph and was not warmly embraced by Council. However, given the matters I have referred to above, and being conscious that costs are compensatory and not punitive (Latoudis v Casey [1990] 170 CLR 534; [1990] HCA 59), and although conscious that the assessment of costs in the absence of agreement is the usual approach, I consider that s 98(4)(c) of the Civil Procedure Act provides a mechanism that is part of the cost regime.
10. I am comfortable that there is sufficient evidence before the Court as to the legal costs incurred by Council and I have taken into account what appears to be common ground that there would be some discount of a proportion to reflect the likely assessment on that basis. I am also conscious of the time and effort that would be involved given my understanding of the background of the disputes between the parties, and the likely conduct of the parties to date, would have in any assessment.
11. Although there is no evidence of the impecuniosity or otherwise of Mr Joseph (a matter which has been said to play some part in previous consideration by the courts for applications for a gross sum costs order), I take into account the fact that, given the essential dispute between the parties (which again has not been the result of any concluded determination) has existed for a number of years, and while I accept that Mr Joseph has genuinely maintained his concern in relation to the past conduct of Council in relation to the various development applications on his neighbouring property, he has to a large extent not been successful in the manner in which he has pursued these proceedings.
12. As the material before me is sufficient to ground a relatively well-informed exercise of the discretion of making a gross sum costs order, I have determined the amount generally by way of 65% of the approximately $70,000 costs otherwise arising from the material in Mr Holland's affidavit, being $45,500.
13. In determining the figure of $45,500, I am satisfied that the evidence permits some confidence as to what is an appropriate sum and that the Court has sufficient evidence to determine a lump sum figure (cf. Colquhoun v District Court of New South Wales (No 2) [2015] NSWCA 54 at [7]; Tim Barr Pty Ltd v Narui Gold Coast Pty Ltd [2011] NSWSC 11 at [56]) in circumstances where it is desirable given the lengthy background of dispute between the parties and the further aggravation likely to be part of any contested costs assessment.
14. For completeness, I note that, having considered the detailed correspondence and attendances and intercourse between the parties, I do not accept Mr Joseph's submission that Council has conducted itself in a manner that has inappropriately increased costs and I accept Council's submissions that the proceedings concerned significant allegations of inappropriate and unlawful conduct on behalf of Council, none of which proceeded to ultimate determination. Further, as I have noted a number of times in this judgment, Mr Joseph chose to discontinue the proceedings when a determination of Council in relation to the relevant development application effectively disposed of his primary concern.

Orders

1. The orders of the Court are: 1. Michael John Joseph is to pay Kiama Municipal Council the specified gross sum of $45,500 pursuant to s 98(4)(c) of the Civil Procedure Act 2005 (NSW) within 2 months of the date of this order.

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: 21 February 2025