Lavender View v North Sydney Council
[1999] NSWSC 775
At a glance
Source factsCourt
Supreme Court of NSW
Decision date
1999-08-04
Before
Rolfe J, Young J
Catchwords
- Costs DECISION : Plaintiff to pay the defendant's costs of the inquiry into damages
- Plaintiff sued defendant for negligence
- Order made pursuant to Part 32 rule 2 that liability be determined prior to damages.
- Defendant conceded liability and an order made that it should pay the plaintiff's costs to that point
Source
Original judgment source is linked above.
Catchwords
Judgment (14 paragraphs)
Introduction 1 On 14 July 1999 I held that the plaintiff was entitled to judgment in the sum of $224,321.51, being the then agreed amount for costs wasted in respect of certain Class IV proceedings in the Land and Environment Court together with agreed interest to 1 June 1999, and interest thereon from 1 June 1999 to 14 July 1999. The defendant agreed to pay this amount unconditionally, in the sense that the judgment was to include this amount irrespective of any other findings. I ordered that costs and interest be reserved for future agreement or argument. Subsequently, it was agreed that the additional interest was $2,704.15, so that on the figures then agreed, there would have been judgment for the plaintiff, inclusive of interest to the date of judgment, in the sum of $227,025.66. However, when the matter was mentioned on 30 July 1999 I was informed that the parties may well agree on another figure but, on 2 August 1999, I was informed that the agreed figure is $227,025.66. The remaining issue is what order should be made in relation to costs, each party contending that the other should pay its costs of the proceedings, in so far as a costs' order has not been made previously. It must be unusual to find a case in which a defendant, which has suffered judgment in such a sum, seeks an order that the apparently successful plaintiff should not only be deprived of a costs' order but should pay the apparently unsuccessful defendant's costs. Accordingly, the particular circumstances of this case require closer review than might otherwise be necessary in deciding the question of costs. 2 I shall assume the reader has access to a copy of my first judgment, and I shall incorporate the detail of certain matters by reference to the paragraphs in which I considered them in that judgment. 3 The proceedings, in which the plaintiff sued the defendant seeking to recover some $64m for the defendant's alleged negligence, were commenced on 25 September 1997 and, on 19 June 1998, an order was made that the issue of liability be heard prior to that of damages: paragraph 10. This was a course to which the parties consented. On 3 August 1998 the parties resolved the former issue in terms of consent Short Minutes of Order: paragraphs 10 and 11, which provided that the defendant pay the plaintiff's costs of the proceedings to date on the issue of liability. 4 On 8 March 1999 I commenced the inquiry into the amount of damages the plaintiff had sustained. That hearing continued for six days and, thereafter, an application was made by the plaintiff for leave to re-open, which was opposed and which I granted. Subsequently, the matter was mentioned on various occasions. 5 There were two substantial issues litigated. The first was whether the defendant's agreed negligence was causative of any damages to the plaintiff. The second was the amount of such damages. I have set forth the issues in paragraphs 13, 14, 16, 19 and 20, and the findings for which the defendant contended in paragraph 18. 6 In paragraph 360 I stated my conclusions on causation, which were, in essence, that the plaintiff had failed to prove that the defendant's conceded negligence was causative of the damages claimed by the plaintiff. It was unnecessary for me to make detailed findings on the various amounts, which would have been payable by the defendant if the plaintiff's case in one of its various manifestations had succeeded, because the expert accountants reached substantial agreement on the figures, which would be applicable depending on my findings on causation and several other matters. However, there can be no doubt that the parties expended considerable sums in retaining those experts and in having them reach agreement. Whilst this exercise resulted in a considerable saving of time in Court it was one for which the parties will still have to pay appropriate fees. Of course, the experts had prepared witness statements and, notwithstanding the substantial measure of agreement as to relevant figures, each was required for cross-examination. It was necessary for me to consider their evidence and to reach certain conclusions in relation to it. 7 In paragraph 12 I noted that whilst the plaintiff had initially made a claim for damages for loss of opportunity, that had not been pressed save in a very limited way, and that whilst the defendant had pleaded failure by the plaintiff to take all reasonable steps to mitigate its loss and contributory negligence, neither of those allegations was pursued. I also noted in that paragraph the steps taken by the experts. 8 One matter in relation to damages, which I was called upon to decide, was the rate at which interest was payable. The plaintiff contended that it was the amount payable on shareholders' funds, as had happened, and the defendant submitted that it should be at bank interest rates. I held that the plaintiff's view was correct. Another issue between the experts was whether one should deduct the value of the land, as the plaintiff's expert contended, or deduct a profit or loss to be achieved from the development, as the defendant's expert contended. I determined this issue favourably to the defendant. The amount agreed, if I had accepted the plaintiff's expert's methodology, was considerably more than the amount agreed by accepting the defendant's expert's apprach. 9 On the basis of those determinations the experts agreed on the amounts to which the plaintiff was entitled, which are set out in paragraphs 369, 370, 374 and 375. Whilst the plaintiff originally claimed damages of some $64m, after the loss of opportunity claim was abandoned and in the light of my findings, the maximum amount to which it was entitled was $24,840,000 and the figure for wasted costs, and the minimum amount was the figure for wasted costs. There were several intermediate positions. 10 There was some dispute in the written submissions on costs as to how agreement was reached on the issue of wasted costs. As this was the only amount on which the plaintiff succeeded, and as that success was based on a concession made by the defendant, it becomes necessary to look at the matter with some care. Whilst the defendant was apparently prepared to make the concession on the hearing, the plaintiff was unable to satisfy it or prove to the Court what part, of a large amount claimed for costs, was attributable to wasted costs. Mr Walker, Tp.330, repeated the concession but said there was no evidence of the amount. On the third day of the hearing Mr Tobias said that the only remaining matter was "to separate out" those legal costs, Tpp.470-1, and that if there was any disagreement the plaintiff would seek leave to re-open. I stated that I would reserve the plaintiff's right to do so and, at Tpp.472-3, Mr Tobias said, with which I respectfully agree, that he found it very odd that that issue "had not been susceptible to agreement between the solicitors", and that if there was no agreement the Court would have to decide it. By the fifth day Mr Tobias stated that the principal sum had been calculated, but interest had not. Ultimately I was provided with the agreed figure, which I set forth in my judgment. On 30 July 1999 I was informed that the solicitors for the plaintiff may have made an error, to which attention had been drawn by the solicitors for the defendant, and I directed that I be informed of the agreed figure by 10 am on 2 August 1999. 11 I have dealt with this matter at some length because one of the plaintiff's complaints is that the defendant, although conceding the amount, made no attempt to settle at least that issue. There are two compelling answers to that submission. Firstly, the defendant was not obliged to settle anything, even if there was a concession, if the plaintiff could not satisfy it what the amount was. The "in principle" concession, from which the defendant did not waiver, could only be applicable to an amount the plaintiff could establish. Secondly, the plaintiff had not established the amount during the hearing, nor, having regard to what transpired on 30 July 1999, by that date. I said then, and I repeat, that I find this failure extraordinary. However, for present purposes it is sufficient to note how the matter progressed to show that the plaintiff's complaints, in this regard, are without substance. 12 I should also note that by its Defence the defendant not only denied the entitlement to damages, but also asserted that if the plaintiff had suffered loss and damage, and that if the defendant was in breach, the loss and damage was not caused by the defendant's breach. Therefore, at all times, the defendant expressly drew attention to the fact that causation was an issue. Certain submissions of the plaintiff suggested that causation was not really in issue or was a subsidiary submission to mitigation. I reject such submissions. Causation was clearly in issue on the pleadings and the case was fought on that basis. Mitigation only became relevant, as the plaintiff conceded, if the defendant failed on the causation point. Further, it was conceded that the defendant, which bore the onus on mitigation, had filed no evidence in support of that issue. 13 It was common ground on the hearing of the costs' argument that notwithstanding its admission of liability, the defendant had made no formal or informal offer of compromise, and nor had the plaintiff. However, as the figure for wasted costs had not been formulated, the defendant, if this was otherwise a valid point, could hardly be blamed for not having done so. 14 The issues are whether the defendant should pay the plaintiff's costs of the inquiry into damages, or whether the plaintiff should pay the defendant's costs of it, or whether there should be some division of costs based on the degree of success each party achieved.