Lister v Fraser

PRELIMINARY ISSUE

1. Despite the Motion being listed for hearing before the Court on 1 February 2018, at the commencement of the hearing both the Respondents' counsel, Mr Craig Bolger, and the Applicant's solicitor, Ms Janet Lazzaro, expressed their embarrassment that neither expected the hearing that day to be anything beyond a mention and that, in those unfortunate circumstances, both sought the indulgence of the Court to adjourn the hearing so as to enable them to prepare their respective cases. Further, Ms Lazzaro expressed her concern, on behalf of the Applicant, that he would be prejudiced by not having the opportunity to brief counsel to represent him on the Motion if the hearing continued without an adjournment. She advised the Court that if the hearing was to proceed that day, she was aware that Mr L T Livingston of counsel was not available to appear, which would be doubly prejudicial as Mr Livingston had been the counsel retained by the Applicant throughout the proceedings.
2. The Court concluded that the confusion on the part of both parties was such that a fair and reasonable opportunity to present their cases was likely to be prejudiced without an adjournment. Rather than adjourning to a second hearing day, the Court ordered that it would proceed "on the papers", making orders that the Respondents file their initial submissions by 4.30pm Friday 2 February, that the Applicant files his submissions by 4.30pm Wednesday 7 February, and that the Respondents file their submissions in reply by 4.30pm Friday 9 February. The Court accordingly reserved its judgment pending its consideration of the written submissions to be filed.

RELEVANT STATUTORY PROVISIONS

1. In Class 2 proceedings before the Land and Environment Court the general (or usual) rule is that each party pays their own costs: see rule 3.7 Land and Environment Court Rules 2007 (LEC Rules). As will be explained more expansively below, the Court may only make a costs order if the making of such an order is "fair and reasonable in the circumstances": r 3.7(2).
2. The power to make an order for costs arises under s 98 of the Civil Procedure Act 2005. Pursuant to rule 3.10(1)(a)(iv) of the LEC Rules, the functions of the Court to make general orders as to costs are not exercisable by a commissioner dealing with proceedings pursuant to a direction under s 36 of the Land and Environment Court Act 1979 (LEC Act). It was for that reason that Acting Commissioner Fakes observed in her judgment that she could not make an order as to costs and so, consequently, the proceedings were brought before me pursuant to the Applicant's Notice of Motion.
3. Relevantly, the Court's Practice Note for Class 2 Tree Applications at par 55 states: "Where a Commissioner has heard and determined a tree application, any party seeking an order for costs of the proceedings must apply for costs by notice of motion filed within 28 days of the final orders of the proceedings". The note to that paragraph then helpfully refers to r 3.7, quoting r 3.7(2), and then directing attention to r 3.7(3). Paragraph 56 of the Practice Note then confirms that "The notice of motion for costs will be heard and determined by either the Registrar or a Judge of the Court".
4. In proceedings falling in Class 2 of the Court's jurisdiction, the discretion to award costs must be exercised in accordance with r 3.7 of the LEC Rules. Rule 3.7(2) provides that "The Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances". Rule 3.7(3) lists a number of circumstances in which it might be considered fair and reasonable to make an order for costs (emphasis added): Rule 3.7 Costs in certain proceedings (1) This rule applies to the following proceedings (except for appeals under section 56A of the Act): (a) all proceedings in Class 1 of the Court's jurisdiction, (b) all proceedings in Class 2 of the Court's jurisdiction, … (2) The Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances. (3) Circumstances in which the Court might consider the making of a costs order to be fair and reasonable include (without limitation) the following: (a) that the proceedings involve, as a central issue, a question of law, a question of fact or a question of mixed fact and law, and the determination of such question: (i) in one way was, or was potentially, determinative of the proceedings, and (ii) was preliminary to, or otherwise has not involved, an evaluation of the merits of any application the subject of the proceedings, (b) that a party has failed to provide, or has unreasonably delayed in providing, information or documents: (i) that are required by law to be provided in relation to any application the subject of the proceedings, or (ii) that are necessary to enable a consent authority to gain a proper understanding of, and give proper consideration to, the application, (c) that a party has acted unreasonably in circumstances leading up to the commencement of the proceedings, (d) that a party has acted unreasonably in the conduct of the proceedings, (e) that a party has commenced or defended the proceedings for an improper purpose, (f) that a party has commenced or continued a claim in the proceedings, or maintained a defence to the proceedings, where: (i) the claim or defence (as appropriate) did not have reasonable prospects of success, or (ii) to commence or continue the claim, or to maintain the defence, was otherwise unreasonable.

RELEVANT CASE LAW

1. The effect of r 3.7 is that there is a presumption that each party will pay its own costs. As noted by Pain J in Fox v Ginsberg (No 3) [2011] NSWLEC 139 at [9]: Class 2 proceedings are intended to provide a cost effective and efficient means of delivering justice in tree disputes between neighbours within the limits identified by the Act. The presumption is that each party will pay his or her own costs and that is an important presumption in Class 2 proceedings when considering what is fair and reasonable.
2. As a result of the presumption in r 3.7, the Court is not to make a costs order unless the Court considers that the particular circumstances in a case are of sufficient weight to warrant it, thereby overcoming the presumptive rule. In Burns v St Clair (No 2) [2015] NSWLEC 115, Biscoe J said at [9]: In conventional litigation, costs are generally awarded to the successful party. In contrast, in (inter alia) Class 2 of the Court's jurisdiction, the Court is prohibited from making a costs order unless the Court considers that a costs order is "fair and reasonable in the circumstances": r 3.7(2) of the Land and Environment Court Rules 2007. All rational considerations are relevant to the formulation of the judgment whether a costs order is "fair and reasonable in the circumstances". In the end, the question is whether, in the opinion of the Court, they are of sufficient weight to overcome the presumptive rule that there will be no order as to costs. A no discouragement principle underlies this no costs rule. That is, persons generally should not be discouraged from making an application by the prospect of an adverse costs order if the application fails: ...
3. In Patane v Singh [2016] NSWLEC 13, Moore J said at [6]-[7]: 6. There are a number of matters that require to be considered as to whether or not it is fair and reasonable to make a costs order in favour of the Applicant on the motion, because, as is required by the Land and Environment Court Rules 2007, costs orders in Class 2 matters within which Trees Act applications fall (amongst a range of other matters in the Court's jurisdiction), do not have a Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 presumption that costs follow the event, but there is an assumption that each party will bear their own costs unless it is "fair and reasonable" to depart from that position and make some further order. 7. The nature of the sorts of matters that might be engaged in considering what principles would go to exercising the discretion to make a costs order in such circumstances were set out by Preston CJ in Kiama Council v Grant [2006] NSWLEC 96; 143 LGERA 441. Essentially, in a matter such as this, the position has to be that the application was proceeded without any attempt to either engage in negotiation with the other side or without any proper evidentiary foundation for the application.
4. Summarising the collective effect of the cases just cited, Sheahan J in Song v Hackney (No 2) [2016] NSWLEC 155 said at [11]: "These three judgments are consistent, and suggest that the fact that a party brought unsuccessful Class 2 proceedings is no reason, of itself, for the Court to depart from the presumption against an order for costs".
5. In Grant v Kiama Municipal Council [2006] NSWLEC 70, Preston CJ at [15] identified a number of considerations (or circumstances) as to when the Court may award costs in Class 2 proceedings. These considerations or circumstances reflect r 3.7. Of those circumstances, the relevant consideration pertinent to the current application, according to the Respondents' counsel, is that set out at [15(f)] of Grant v Kiama Municipal Council and r 3.7(3)(f) (emphasis added): (f) where the proceedings or the defence of the proceedings has been commenced or continued in circumstances where the applicant or respondent respectively, properly advised, should have known that it had no chance or very poor prospects of success: Broadwater Action Group Inc v Richmond Valley Council (No. 2) (2003) 129 LGERA 401 at 411 [31]- 421 [36]; Quota Corporation Ltd v Leichhardt Municipal Council (1981) 45 LGRA 319 at 325; Minas v Botany Municipal Council (1988) 65 LGRA 129 at 136; Raiti v Leichhardt Municipal Council (1991) 72 LGRA 333 at 335-336; Wyong Shire Council v Smith [1992] NSWLEC 134 (24 December 1992) at pp 8-9; Cadonia Pty Ltd v Leichhardt Municipal Council [1994] NSWLEC 122 (5 August 1994) at p 5; Morris v Gosford City Council [1996] NSWLEC 254 (29 November 1996) at pp 15-16; Mudie v Gainriver Pty Ltd (2002) 124 LGERA 393 at 406 [38], [40]-[42], 414 [66], [68]; and Krivanek v Blue Mountains Council (No. 2) [2004] NSWLEC 732 (24 December 2004) at [4].
6. Having regard to paragraph [15(f)] of Grant v Kiama Municipal Council and r 3.7(3)(f), it is Moore J's conclusion in Patane v Singh where at [7] he said: "the position has to be that the application was proceeded… without any proper evidentiary foundation for the application" (emphasis added), which is most pertinent to determining the differing views of the parties before the Court in this case.
7. In Song v Hackney (No 2), Sheahan J considered a request for a costs order from a successful respondent who had put her case as follows: "this case fits squarely within rule 3.7(3)(f), as it had no reasonable prospects of success from the outset, and those prospects did not improve at any stage during the proceedings: Ms Song has forced Ms Hackney to spend money she was not able to afford on legal costs and arborist's fees, and to cut down a tree unnecessarily, while ignoring persistent requests for evidence to support her entitlement to orders in Class 2, failing to negotiate in a meaningful way, and failing to recognise the fatal flaw in her position on the crucial question".
8. On the facts in that case his Honour concluded at [25]: "Despite … his complaint that Ms Song did not provide him in advance with evidence upon which she relied, I am not satisfied that the applicant's conduct is so "unreasonable" that it should displace the presumption that no order for costs should be made in the proceedings such as the present". And at [26]: "Ms Song was entitled to take action on her concerns, and the fact that she failed in the proceedings, after maintaining her position, is not a sufficient basis for an order for costs against her".
9. The Applicant bears the evidentiary onus of establishing whether the test in s 10(2) of the Trees Act has been met. Craig J said in Smith & Hannaford v Zhang & Zhou [2011] NSWLEC 29, at [62] "something more than a theoretical possibility is required in order to engage the power under [the Trees] Act...". In Robson v Leischke [2008] NSWLEC 152, Preston CJ at [176]-[189] confirmed the requirement for a clear nexus between the tree, the subject of the application, and the damage to property. However, his Honour noted at [179] that the tree the subject of an application need not be the sole cause of the damage in order to engage the Court's jurisdiction to make orders under s 9 of the Trees Act.
10. In that context, clearly with the nexus needing to be established, the onus is always on applicants to prove their cases. In cases where there is a nexus needed to be established between tree roots and alleged damage to structures, I consider the judgment of Acting Commissioner Galwey in Fang v Li [2017] NSWLEC 1503, to be particularly instructive. For the purposes of the proceedings before me, particularly to assist in understanding what the Applicant should have done in order to sustain his Tree Application, I adopt the "Tree Dispute Principle: demonstrating cause of structural damage" which appears in Fang v Li at [58]-[60]. There is utility in setting out the Tree Dispute Principle in full, but the preceding contextual observations of Acting Commissioner Galwey are additionally helpful, being [52]-[57]: 52 Appendix B to AS 2870 at clause B2.3(c) suggests setbacks for trees from buildings using the following wording: Restrictions on trees and shrubs Planting of trees should be avoided near the foundation of a building or neighbouring building on reactive sites as they can cause damage due to drying of the clay at substantial distances. To reduce, but not eliminate, the possibility of damage, tree planting should be restricted to a distance from the house as follows: (i) 1½ x mature height for Class E sites. (ii) 1 x mature height for Class HI and Class H2 sites. (iii) ¾ x mature height for Class M sites. Where rows or groups of trees are involved, the distance from the building should be increased. Removal of trees from the site can also cause similar problems. Alternatively, the footing system may be designed for the effect of trees, for example as given in Appendix H. 53. While a homeowner may choose to refer to this when selecting what type of tree they might plant or where to plant it, to use this guide as justification for removing any tree within these relative distances of dwellings would be patently absurd. In a suburb like Wahroonga, where this matter arises, to remove all trees within a distance from dwellings of ¾ their height, or even more than their height when in groups or in problematic soils, would leave a scene of rooftops rather than the well treed landscape that seems to be valued by those living here. 54. Secondly, the mere reading of guidelines such as those in AS 2870 and other documents, including those in Mr Paheerathan's reference list, does not and cannot in any way satisfy the Court, as required at S 10(2), that the tree concerned has caused, is causing or is likely to cause damage to the applicant's property. A mountain of general references cannot replace the specific investigations required to demonstrate a nexus between roots of a specific tree and damage to a specific property. Most built structures have trees in their vicinity, but not all structural damage is attributable to trees. 55. Thirdly, Appendix B2.3 of AS 2870 includes distances to trees as only one of several issues requiring attention when trying to maintain stable soil moisture conditions in moderately-extremely reactive clay soils. Other issues requiring attention include: • Site drainage; • Avoiding overwatering gardens close to building footings; • Maintaining pipes and downpipes, repairing any leaks promptly; and • Designing footing systems to withstand the effects of trees. 56. The final point above can only be implemented at the time of building. The others are all site issues that can contribute to soil moisture changes and movement of footings. Yet Mr Paheerathan, like many other engineers who have prepared expert reports for matters before this Court (and others), has not turned his mind to these possibilities, even for the purpose of discounting them. Mr Marshall stated during his oral evidence that tree roots may have been one factor contributing to damage of Mr Fang's dwelling, but the likely explanation is a more complex interaction of multiple factors. I accept this to be the case. It can be difficult to identify and prove a cause of damage. However the Court's ability to be satisfied that tree roots have caused damage is often assisted by the elimination of other possible causes. 57. Similarly, publications such as the CSIRO document referenced in Mr Paheerathan's report and other informative documents promulgated by local governments and utility organisations, although developed with helpful intentions, do not demonstrate in a case before the Court that a tree of a certain species, or within a given distance of pipes or footings, is causing or is likely to cause damage. Tree dispute principle: demonstrating cause of structural damage 58. At this point, it may assist future parties applying to the Court pursuant to Part 2 of the Trees Act, where such applications include claims of structural damage to property, to provide some framework for inquiry that might assist an engaged expert to carry out the relevant investigations that would assist the Court to consider and determine the matter. This list of investigations is not exhaustive, but would assist in forming a sound chain of reasoning to demonstrate causation, and to eliminate other factors. Each site is unique, and each situation may require its own combination of investigations. 59. In cases where it is alleged that tree roots are causing structural damage to a building or other property, consideration of the following matters, via appropriate investigations, may provide useful information. (1) If roots are found near footings, especially in areas where footings have moved, it is necessary to identify the tree to which the roots belong. This may be possible by physically tracing a root's path, or may require microscopic or DNA analysis. An arborist can provide useful information regarding species and growth traits of any nearby trees. (2) It is important to collect information on the building's history and construction methods, as well as the history of the surrounding area, including any trees removed in recent years. (3) The age, depth and construction type of the footings, especially in areas where footing movement is identified, is relevant and should be investigated and reported. (4) Identifying the part of the building or structure that has moved, and in which way it has moved, is critical to determining causation. This might be done by undertaking a survey of the building or structure to identify and be able to demonstrate where and how it has moved and the nature of the movement (whether lateral, rotational or vertical). This is important as some movements of a building or structure may not, in the circumstances, be possible to attribute to a tree. (5) Knowledge of where the building is still actively moving, during which seasons, and in which directions, will further assist in identifying causation. Where time constraints allow, this might be done by repeating the level survey over time, as well as monitoring any cracking patterns. (6) Where footing movement is identified, it is important to know the ground conditions and soil moisture conditions in the vicinity of movement, as well as in other areas for comparative purposes. This can be done by undertaking routine soil investigation, such as boreholes for soil classification and soil moisture testing. If these conditions vary over time as a consequence of seasonal or other climatic conditions, more extensive testing to ascertain the impact of such variable conditions may be required. (7) Downpipes and other pipes near the building, especially those near any areas of relatively higher soil moisture levels, can contribute to movement of footings. Therefore, the condition of all downpipes and other pipes should be investigated and reported. 60. To the extent to which the Court must be satisfied of causation, the burden of proof lies with the applicant. Such investigations would ordinarily be expected of an engineer engaged by an applicant to demonstrate the cause of structural damage. It would be unusual for an engineer to be able to demonstrate cause by simply recording the locations of cracking and noting the proximity of trees and locations of tree roots. Reports that include consideration of the above matters, with photographs and plans that clearly show their findings, would greatly assist the Court.
11. All these case law authorities confirm that there is an obligation on an applicant to assemble such evidence as is necessary to sustain their case so as to satisfy the Court that the tree concerned: (a) has caused, is causing, or is likely in the near future to cause, damage to the applicant's property, or (b) is likely to cause injury to any person (s 10(2) of the Trees Act). Understanding that it is the applicant who bears the onus in Class 2 Tree Applications is important and that a failure to satisfy that onus can be relevant in the exceptional cases when a costs order is contemplated. I consider that if there is an element of fault, unreasonableness in the conduct of an applicant's case, say in the deficient preparation or assembling of evidence, which overtly disregards the onus requirement, then such circumstances could well sustain an argument for the award of costs. This is not to say that applicants will necessarily find themselves facing a costs order should their evidence prove to be weaker than contradicting evidence produced by respondents, rather it is necessary for a further element of fault to be identified for an applicant to be susceptible to such an order.
12. So with the onus being squarely with an applicant to establish their case, instances where an applicant's case has failed for want of evidence have been held as being sufficient reason to justify an award of costs to a successful respondent. In Bailey v Gould [2011] NSWLEC 96 Craig J determined that costs should be awarded where there was insufficient evidence to establish the tree was causing or going to cause damage. His Honour found that in the circumstances before him, the application did not have reasonable prospects of success. Another instance was in Low v Elliott [2008] NSWLEC 111 wherein Pain J awarded costs to successful respondents from the date of the respondents' expert evidence having been served (such evidence having given fair warning of the final outcome) in circumstances where the Court had determined that no damage was being sustained (or likely to be sustained) by the subject tree in the 12 month period from the making of the application.
13. The Court has held in some cases the parties should not be compensated for legal costs (as opposed to costs of experts) as the parties in 'tree disputes' are not always required to engage lawyers to conduct the proceedings. The necessity of legal representation in applications made under the Trees Act was considered by Pain J in Fox v Ginsberg (No 3). After stating the general costs principle, as set out above at [15], her Honour said at [13]: As stated above, I make no assumption in tree dispute matters that legal representation is essential and I am not satisfied that it was on this occasion. I do not intend any criticism of the Applicant or her solicitor in making this finding but I am emphasising that in matters of this type legal representation is not the norm and will not automatically be compensated.
14. In O'Connor v Kerr (No 2) [2015] NSWLEC 1542, the Court applied Fox v Ginsberg (No 3) and allowed 50% of the 'legal' costs but 100% of the expert's fees. In Harrison v Neuer (No 2) [2015] NSWLEC 1375 the Court allowed the respondents two-thirds of their costs in circumstances where the applicants failed to investigate and establish whether the tree was on the respondents' property.

EVIDENCE

1. The Respondents, in support of their Notice of Motion and the relief sought, relied on and read the affidavit of Mr Rodney Kenneth Mitchell sworn 3 January 2018 and the annexures and documents referred to therein. Mr Mitchell is the Respondents' solicitor and, as was apparent from his affidavit, has full knowledge of the history of the proceedings. Apart from annexing the Acting Commissioner's judgment, the primary purpose of the affidavit was to annex various invoices to verify the costs incurred by the Respondents in the proceedings, amounting to $23,772.33.
2. The nature of the Class 2 dispute was such that both parties felt compelled to retain an arborist and a structural engineer for the hearing before the Acting Commissioner. The Applicant retained Mr Michael Ell, an engineer, and Mr Kyle Hill, an arborist. The Respondents retained Mr Hugo Garcia, an engineer, and Mr Michael Sullings, as their arborist. The Applicant had also produced a surveyor's report. For the purposes of the Motion, I was able to review the evidence filed with the Court for the primary hearing, which included that produced by the professional experts.

SUBMISSIONS OF THE PARTIES

1. The Respondents contend that the Tree Application did not have any, or sufficient, evidentiary foundation for the orders sought and that this was the ultimate finding of Acting Commissioner Fakes: see [70]-[71] of Lister v Fraser:
2. The Respondents stressed that the Applicant's claims and the relief sought were dismissed. With respect to the Acting Commissioner's order made for the "removal of the dead wood" from the Blackbutt, that was not relief that had been sought in the Application, nor was it opposed by the Respondents. In the context of the claims being significant and substantial, the Applicant failed in all aspects of the claims made in the proceedings. In order to best understand this argument, it is useful to focus on the relief sought by the Applicant against the Respondents in the Tree Application: 1. For the removal of a Eucalyptus Pilularis (the "Blackbutt") located on the Respondents' property near the boundary with the Applicant's property; 2. That the Respondents remove the Blackbutt within 30 days and that the roots of the tree are to be ground; 3. The Respondents re-instate the existing dividing fence if it is removed during the Tree removal works; 4. The Respondents pay to the Applicant the sum of $35,560 in compensation for damage to the Applicant's garage caused by the Blackbutt; 5. The Respondents pay the Applicant's costs of and incidental to the proceedings.
3. The Respondents observed that the Applicant did not engage in any attempts at mediation or compromise in respect of the Tree Application and the orders sought. The Court notes that this is a relevant consideration to the question whether a costs order might be granted, as identified by Preston CJ in Grant v Kiama Municipal Council. On this point, the Applicant in response submitted that the various efforts by the Applicant over four years since 2013 to engage with Ku-ring-gai Council to convince it to take action regarding the tree indicate a willingness to resolve the dispute before commencing the proceedings.
4. Counsel for the Respondents acknowledged that the mere fact that the Applicant failed in his claim is not sufficient to warrant a cost order, conceding that more is required. Rather, the Respondents submitted that it is the finding that there was "insufficient evidence" and the criticism of the Applicant's expert evidence that provide the basis for their submission that it is "fair and reasonable" that the Applicant pay the Respondents' costs.
5. It was stressed in the submissions on behalf of the Respondents that the dispute between the parties over the Blackbutt and the purported damage it was causing to the Applicant's property had a history extending over 4 years, during which time the local council, Kur-ring-gai Council had investigated the Applicant's complaints in respect of the tree and had advised that there was insufficient evidence to establish that the tree was causing damage to the Applicant's property or that it should be removed.
6. It was submitted that, due to the earlier exchanges with the local Council, the Applicant had been on notice, as early as 2013, of the need to properly investigate and show that the Blackbutt was the actual cause of the damage to the garage. The Respondents' submissions said that the same issues raised before the Acting Commissioner were raised in correspondence from Kur-ring-gai Council, with this correspondence forming part of the evidence relied upon by the Applicant and attached to the Tree Application. In particular: 1. On 23 October 2013, Council's Tree Management Officer (TMO) wrote to the respondents and advised that their request for removal (of the Blackbutt) needed to be supported with additional information. The letter clearly details the information to be provided and includes the need for a physical investigation, by way of a trench adjacent to the structure, in order to establish the presence of roots and the need for a detailed report from a practising structural engineer. 2. On 22 July 2015, Council's TMO, who had dealt with the 2013 application from the respondents, again wrote to the Applicant's solicitors informing them that one of Council's arborists had inspected the tree in October 2013 and determined that the condition of the tree at that time did not warrant removal and that while the damage to the garage was observed it was noted that the garage was quite old and housed two cars and heavy machinery. The letter states that given the type of damage, further information was requested. The TMO also comments on the arborist's findings and whether the arborist was qualified to opine on the structural aspects of the garage.
7. The Applicant, following these unsuccessful efforts to have the Council take measures to address the tree issue, was on notice from 2013, so the Respondents said, of the need to properly investigate the nexus between the cause of the damage to the garage and the Blackbutt. Counsel for the Respondents submitted that instead the Applicant did not carry out proper investigations and the Applicant's experts provided "speculative opinions" that were not "substantiated". In essence, the Respondents submitted that in the context of the 2013, 2014 and 2015 interchanges with the Council regarding the Blackbutt, there was a heightened responsibility on the Applicant to properly found his Class 2 Tree Application when he commenced it before the Court. It was said, in effect, that with the Council declining to take steps earlier, with explanations given of the need to obtain a structural engineer report, the Applicant was forewarned to assemble proper and reliable evidence.
8. Further, the Respondents submitted that as the Applicant was legally represented throughout the proceedings, proper attention should have been made and drawn to the inadequacy of the expert evidence and the failure of the experts to properly investigate the issue of causation. It was submitted that the Applicant's evidence, at the time of commencement of the proceedings, was clearly deficient.
9. With the decision in Fang v Li having been handed down on 19 September 2017, the Respondents argued that the Applicant, being legally represented, should have been aware of the 'Tree Principle' enunciated in the Fang v Li decision with respect to the necessity for full investigations of structural damage caused by tree roots to buildings. The Applicant should have been aware of the requirement to properly investigate the cause of the structural damage prior to commencing proceedings - confirmed as being necessary in Fang v Li. It was said that although the Applicant did obtain further expert evidence after the decision in Fang v Li, the experts still failed to properly investigate the cause of the structural damage and so the evidence was flawed as it did not establish the connection between the tree and the damage. It was said that opinion evidence had been provided by the Applicant's experts which had no evidentiary basis, foundation or support and which, at the hearing before the Commissioner, ultimately contradicted each other.
10. The Respondents' counsel stressed the words of Moore J in Patane v Singh, saying the Application was commenced and maintained without any proper evidentiary foundation, and that the oral evidence and the cross examination of the Applicant's experts at the Acting Commissioner's onsite hearing, only emphasised this point. It was argued that the Applicant should not have commenced and/or maintained the proceedings in the absence of firm evidence that provided a basis, foundation and/or support for the relief sought. The Respondents should not have been put to the cost and expense of defending the proceedings, including engaging experts, in circumstances where the Applicant did not have sufficient evidence or an evidentiary foundation to establish his claim.
11. The Respondents' counsel submitted that the Applicant only, in effect, relied upon expert evidence to support the relief sought in the Tree Application when expert evidence was first necessary to establish causation. It was said that on even the most favourable reading of the Applicant's expert evidence it was inadequate, insufficient and the opinion was not supported by any evidence or proper investigation. The opinion was described as pure assumption and speculation and so therefore was not evidence, being without any support or foundation. The Respondents concluded that the orders and relief sought in the Tree Application did not have and "was proceeded… without any proper evidentiary foundation for the application": relying on Patane v Singh at [7].
12. With respect to the necessity or otherwise of the parties being legally represented, the Respondents' counsel pointed out that the Applicant was legally represented from the outset. The Applicant was aware of the potential for costs, as he specifically (though erroneously) sought a costs order in his Tree Application. In Fox v Ginsberg (No 3) the applicant (who sought her legal costs) was only partially successful in the proceedings and Pain J held that, as no order was made for the removal of the trees, the respondent was justified in opposing such a costs order, with the final decision being not to award legal costs. That decision turned on the facts, one of which was the respondent was not legally represented and there was no issue as to causation.
13. In reply to the Respondents' submissions, the Applicant's counsel submitted that there was no unreasonable conduct by the Applicant in bringing the proceedings. Contrary to the Respondents' submissions, it was said the proceedings cannot be characterised as having "no chance or very poor prospects of success" or as lacking "any proper evidentiary foundation", citing Grant v Kiama Municipal Council and Patane v Singh respectively.
14. In referring to the pre Tree Application period, the Applicant gave a different perspective of his interactions regarding the Blackbutt. Confirming that in the period from 9 September 2013 to 19 February 2016, the Applicant personally and through his solicitors wrote to the Respondents on a number of occasions in an attempt to resolve the matter prior to the commencement of the proceedings. This correspondence, including the Respondents' replies, was annexed to the Tree Application. The Applicant then referred, as noted by Fakes AC in her judgment at [10]-[16], to two separate applications in 2013 and 2016 which were made to Ku-ring-gai Council by the Respondents and one application which was made by the Applicant, seeking removal of the tree. It was submitted that these interactions were indicative of the Applicant acting reasonably. It was said this conduct showed that the Applicant attempted to resolve the dispute before commencing the proceedings. He applied to the Council to have the tree removed. He supported the Respondents' earlier applications for removal of the tree. He obtained, and relied upon, expert engineering and arborist reports which supported the claim prior to deciding to commence the proceedings.
15. The Applicant submitted that, having the benefit of oral evidence at the on-site hearing, the Court was critical of the expert evidence adduced by both parties: Lister v Fraser at [68]-[70]. The Acting Commissioner observed at [69] that "both arborists [ie Mr Hill for the Applicant and Mr Sullings for the Respondents] believe the root has contributed to the crack", but the Court concluded that neither of them had substantiated, to the requisite standard, that opinion. Further, Fakes AC observed at [69] that both engineers (ie Mr Ell for the Applicant and Mr Garcia for the Respondents) had advanced theories as to the causes of the differential settlement of the south-eastern corner of the garage, but again the Court was not satisfied that either theory was substantiated to the requisite standard.
16. The Applicant further submitted that Fakes AC did not make any finding to the effect that the application "did not have any evidentiary foundation for the orders sought". Nor was there any (specific) finding or suggestion that, in substance, the proceeding had "no chance or very poor prospects of success" or was "without any proper evidentiary foundation". (The Court observes, as will be apparent later, that perhaps the maxim: "the proof of the pudding is in the eating", ought be considered in the context of these submissions). It was said that the conclusions reached by Fakes AC at [70] and [71], upon which the Respondents rely, were directed to the sufficiency and nature of (both parties') expert evidence and the question of which parts, if any, of that expert evidence should be accepted or rejected. The conclusions at [70] and [71] were not (and could not be) directed to any asserted absence of evidence (the Court again observes in response to these submissions, that the analysis above of who bears the onus of establishing their case is rather pertinent).
17. At [70] of her judgment, Fakes AC recorded her findings that the evidence was "insufficient", having regard to the "speculative nature of the expert opinions", for the Court to be satisfied to the extent required by s 10(2)(a) of the Trees Act that the tree had caused the large crack in the corner of the garage. At [71], the Acting Commissioner similarly concluded, for the purpose of s 10(2)(b), that there was "insufficient evidence to prove the nexus between the damaged corner and the tree". The Applicant's counsel submitted that "those findings were unremarkable in the context of Class 2 litigation. They do not establish that the claim lacked reasonable prospects of success. The findings are well removed from a circumstance of unreasonable conduct by the Applicant or other state of affairs capable of supporting a conclusion that it is "fair and reasonable" for the Court to make a costs order against the Applicant".

CONSIDERATION

1. In the context of the foregoing analysis of the relevant statutory provisions, relevant case law and the opposing submissions made by the parties, I have concluded that the Respondents have made out their case and so the Applicant should pay their costs of the primary hearing before the Acting Commissioner and, with the Respondents having been successful on their Motion, that the Applicant should pay their costs incurred in bringing the Motion.
2. The Court is of the opinion that the one very material aspect of difference in these proceedings from other tree application cases, where a successful respondent has failed to secure a costs order against an applicant who had failed in their primary tree application, are the ramifications of the Applicant's Tree Application regarding the Blackbutt being, in effect, a "repeated round". Over the course of at least four years, on repeated occasions the Applicant had complained about the alleged damage caused to his old garage by the Blackbutt's roots and on every occasion he was advised or warned that real evidence was required to establish the relevant nexus. Yet he chose to pursue his Tree Application on insufficient evidence and speculative opinions which the Acting Commissioner had no alternative but to dismiss. In short, the Applicant was forewarned, but chose not to forearm himself adequately when prosecuting his case. With each successive knock-back, if the Applicant wanted to persevere, the obligation to be more exacting, more accurate, more focussed was heightened.
3. The Applicant's "earlier rounds", which are recounted in the Acting Commissioner's judgment at [9]-[16], commenced first in 2013 when the Applicant had evidently pressed the Respondents to apply to have the Blackbutt removed. The Respondents actually acquiesced, trying to accommodate the Applicant's concerns. However the Respondents "Request for Tree Works" was denied when the Council advised that it was not satisfied that there was evidence of a nexus between the deteriorating garage and tree roots from the Blackbutt, advising that a detailed report from a practising structural engineer would be required. Secondly and thirdly, in both 2014 and 2015 when the Applicant had pressed the local Council for some remedial action regarding the tree, alleging the same impacts and damage, similar advice as to what was required was received. The examination and assessment of the tree by the Council, particularly the letters of advice to the Applicant that followed, should have demonstrated to the Applicant that any further steps, such as action under the Trees Act, would have to be well founded on full evidence. Despite the Respondents acceding on two occasions to try and accommodate their pressing neighbour, their own solicitors' letter of 4 March 2015 accurately and unambiguously stressed the failings in the Applicant's perspective: "It is not good enough for a so called expert to simply assume that the tree has caused the damage as alleged based solely on proximity… In terms of the evidence supplied by your client, in all due respect, we believe a Court would find it to be circumstantial at best".
4. The Court accepts that the Applicant was repeatedly forewarned, albeit through the intermediary of his lawyers (which makes no difference), that a full investigation was required if a case was to be made against the Blackbutt. It was patently clear from repeated communications that in order to get action on the tree a focussed investigation, specifically directed at proving the nexus between the Respondents' Blackbutt's roots and the actual damage to the Applicant's old garage wall was required. It was never going to be sufficient to simply repeat assertions and assumptions. If the Applicant's initial reports from his engineer and his arborist were weak, or unfocussed or were insufficiently attentive to the critical garage wall issue, then the experts should have been directed to investigate further. If the reports were still unconvincing, then further professional opinion should have been sought. With similar words of doubt, rejecting the submitted "evidence", reappearing in 2013, 2014, 2015 and finally in the Acting Commissioner's judgment in December 2017, I must conclude that, at his peril, the Applicant and his team failed to do what was required.
5. I reject the Applicant's submissions that the reliance by the Respondents upon Fang v Li was misplaced, saying that "the Court in Fang v Li emphasised that the nature and extent of testing and investigation which may be required in order to demonstrate causation necessarily varies according to the case, since each site is unique". The Court confirms that one of the clear and pertinent messages gained from Fang v Li - is that the specific features of each subject property had to carefully examined with testing attuned to the particular evidentiary requirements of the critical issues identified in each case. If the trench that was dug by the Applicant's garage was too superficial to be adequately revealing with respect to the nexus between the tree roots and the wall, then better evidence was required.
6. I also reject the Applicant's submissions that I ought take note that the Acting Commissioner was critical of both the Applicant's evidence and aspects of the Respondents evidence. It is true that the Commissioner criticised aspects of the evidence of the Respondents, but the critical and unavoidable obligation, as exhaustively discussed earlier, is that the onus squarely rests upon the applicant in tree applications. Even if all the arguments of the Respondents were not upheld, if the Applicant failed to establish its contentions then that is determinative of the issue. The Applicant's counsel's submission is correct when he said: "This was a case in which expert evidence was adduced and tested at the on-site hearing but ultimately found to be insufficient to prove the requisite causal nexus between the tree and the large crack in the corner of the garage" but he was incorrect when he said: "There was no disentitling conduct by the applicant which justifies displacement of the usual presumption that there should be no order for costs". The repeated warnings to the Applicant, which said, in effect, produce the evidence or you will fail, is the relevant context in this case.
7. The Court highlights just one of many relevant communications over the course of four years which repeated the need for focussed investigation to categorically verify the assertion regarding the alleged damaging impact of the Blackbutt's tree roots. A letter dated 4 March 2015 from the Respondents' solicitors to the then solicitors for Applicant, Norris Somers Maait, is a relevant and instructive example. It is to be noted that this letter was written some 29 months before the filing of the Tree Application. The letter said: … We refer to the Structural Report of Michael Ell Consulting Engineers which refers to the foundation material being clay. Even though this is a reactive material, and is well known to cause problems, the only mention of damage is to the garage floor slab parting at a joint in the slab. It is not good enough for a so called expert to simply assume that the tree has caused the damage as alleged based solely on proximity. We note the tree in question is quite large, healthy and there is no suggestion of it being senescent. The tree has been there for many years, and we presume equally that the garage has been there for many years. The Court cannot make orders under section 10(2) of the Act, unless it is satisfied that the tree concerned has caused, is causing, or is likely in the near future to cause damage to your client's property or is likely to cause injury to any person. The last category of injury to person is as we understand it, not alleged. In terms of the evidence supplied by your client, in all due respect, we believe a Court would find it to be circumstantial at best. Additionally, section 12 of the Act, there are matters the Court takes into consideration in making any order. Our clients say that the tree is of significant value and historical, cultural heritage, and is also giving stability to the ecosystem and the soil and water drainage. Our client has reservations about the garage and its structural integrity. The Engineers Report appears to cast doubts as to the structural integrity of the garage, and it may well be that the garage should not have been built in such a fashion in a clay soil zone, the geology of the area in question, the limitations of the footing types, and in view of natural drainage and run-off in the zone.
8. It is to be noted that the judgment in Fang v Li was handed down on 19 September 2017, more than two months prior to the hearing before Acting Commissioner Fakes, so the Applicant's legal advisers and experts should be taken to have been aware of the effective reinforcement of standard of evidentiary proof that would be required to satisfy the Applicant's onus. Although in this case the "tipping point" in justifying an order for costs being made in favour of the Respondents was the four year history of repeated warnings that real evidence of the nexus between tree roots and damage to the garage wall would be required, once the decision in Fang v Li was known the need to reinforce past deficiency in evidence should have been accentuated. In this respect, the Court notes that the Applicant did file a further engineering report from Mr Ell on 9 November 2017, but clearly from the judgment of the Acting Commissioner, the evidence was palpably inadequate.
9. Given the implications of legal proceedings being commenced, which necessarily will always have impacts on a responding party (involving financial costs, the commitment of substantial time in responding and, almost inevitably, emotional disruption to everyday life and stress), an avoidable, ill-prepared and unsubstantiated case ought not have been commenced. The history of the dispute over the Blackbutt reveals that the Respondents on two occasions prior to the commencement of the Tree Application had actually acceded to the pressure from the Applicant to seek to have their tree removed, despite their solicitors' letter of 4 March 2015 revealingly stating that "our clients say that the tree is of significant value and historical, cultural heritage, and is also giving stability to the ecosystem and the soil and water drainage". The Court is satisfied that this course of conduct on the part of the Respondents indicated that they had not set out to be uncooperative, but rather would be prepared, quite possibly with a heavy heart, to let the tree go. However, this situation, if anything raised the onus obligation on the Applicant to ensure that his case was 'cast iron'. In the Court's assessment, the Applicant and his professional team had been repeatedly forewarned of what evidence would be required, having failed on each previous occasion he agitated for the remedial action that he perceived was necessary. If such a deficient case is commenced, then there will be consequences. One such consequence is for the Tree Application to fail; another consequence is for the Court to conclude that it ought to depart from the presumption against an order for costs.
10. In all the circumstances, the Court has reached the conclusion that, having regard to the inadequate state of the evidence, despite repeated indications of what would be required, the Applicant should not have commenced or maintained the proceedings, and the Respondent should not have been put to the expense of responding to and defending the Tree Application. Accordingly, I find that this is an exceptional case which justifies the presumptive costs rule in Class 2 applications to be set to one side so that an order for costs in favour of the Respondents can be made, essentially because it is fair and reasonable to do so in the particular circumstances of this case.
11. Although I have concluded that a costs order should be made in favour of the Respondents, I do not believe that the costs should be on an indemnity or solicitor/client basis, rather they should be on the usual party/party basis. In this respect, I agree with counsel for the Applicant's submission that the Respondents are not entitled to a full indemnity for their actual costs. Although the Applicant, for the reasons explained, must pay the Respondents costs, I do not believe his conduct was so culpable that he must pay costs on a solicitor/client basis.
12. The various annexures to the affidavit of Mr Mitchell dated 3 January 2018, set out invoices to substantiate the quantum of costs sought. However, I am unable to interpret those costs as being limited to a party/party basis. Therefore my order for costs will be for the costs to be "as agreed or assessed".
13. Finally, having regard to the fact that the Applicant had engaged lawyers and experts and was seeking substantial compensation, costs and orders for the removal of the Respondents' Blackbutt, I have concluded that it was necessary for the Respondents to match like with like, hence it was reasonable in this case for them to be represented by both solicitors and a barrister. I reject the Applicant's submission that this is a case where the considerations examined in O'Connor v Kerr (No 2), at [36]-[38] warranting a substantial reduction in legal costs, are apposite. I make that finding despite being in total agreement, in the normal course, with view expressed by Pain J in Fox v Ginsberg (No 3) at [13].

CONSIDERATION OF COSTS IN THE CONTEXT OF THE OUTCOME/DETERMINATION

1. Although counsel for the Respondents cited six authorities as to why they would be entitled to their costs on the Motion, I shall cite just one and simply acknowledge that the Court has held, on many occasions, that, on a motion for the determination of costs, the usual order for costs should apply, which is that the successful party is entitled to its costs: Macdonald v Mosman Municipal Council (No 2) (2000) 107 LGERA 211 at [17]-[19].
2. In circumstances where the Respondents have succeeded on their Motion, the Respondents are entitled to their costs on the Motion. There are no mitigating circumstances which would encourage the Court to conclude otherwise.

ORDERS

1. The Court makes the following orders: 1. Pursuant to rule 3.7 of the Land and Environment Court Rules 2007, the Applicant is to pay the Respondents' cost of the proceedings on a party/party basis as agreed or assessed. 2. The Applicant is to pay the Respondents' costs of the Notice of Motion on a party/party basis as agreed or assessed.

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: 08 March 2018