This is the Court's fifth judgment in these proceedings. It deals solely with the issue of costs. Events, matters and persons are referred to in this judgment in the same way as they are in the Court's four previous judgments. This judgment should be read together with the Court's prior judgments in the proceedings.
Mr Vinden of counsel continues to appear for the plaintiff and Mr Waugh of counsel continues to appear for the defendant. They each advanced argument on behalf of their respective clients at the costs hearing held on 7 March 2017.
[2]
The Prior Course of the Proceedings
The Court gave its first judgment on 24 November 2015. In the first judgment the plaintiff, Mrs Lord, had some success on her action in trespass and nuisance. The defendant, Mr McMahon, failed in his Cross-Claim seeking an easement for batter, arising either from the application of doctrines proprietary estoppel or for relief under the Encroachment of Buildings Act 1922: Lord v McMahon [2015] NSWSC 1619 ("the first judgment"). The outcome of the proceedings after the first judgment were summarised at the conclusion of that judgment (at [316] to [320]), as follows:
"316. The result of these proceedings on the Summons and the Cross Summons may be shortly summarised. The plaintiff, Mrs Lord, has failed to prove that the dam wall that the defendant placed on Lot 2 in 2000 is either a trespass or a continuing trespass upon her land. But she has been successful on one aspect of her nuisance claim associated with the dam wall that straddles the boundary of Lot 2 and Lot 3: she has established that overflows of water from the dam onto her property cast excessive water and some debris upon it, thereby eroding Lot 2 and reducing the quality of her pasture on Lot 2. But some of that debris on Lot 2 is also the product of her own unsuccessful attempts to abate any nuisance emanating from the dam on Lot 3. Given the complexities of this the Court has determined an appropriate structure for relief on this issue. Parties may wish to put submissions on the form of relief on this issue.
317. But Mrs Lord has been unsuccessful in showing on the evidence presently before the Court that the dam wall is leaking. The expert evidence indicated that if it is leaking then potentially a catastrophic failure of the dam is possible. A conclusion that such a failure is in any sense "on the cards" is not justified on the evidence before the Court. But the experts indicated that it is one issue that could be further investigated. For the reasons elaborated earlier in this judgment, because of the potential dangers to persons of such a failure, the Court has decided to hear from the parties as to whether they want an opportunity to undertake these investigations. The Court has therefore reserved further consideration of this issue.
318. On the Cross Summons, Mr McMahon fails on his proprietary estoppel claim. He has not established that Mrs Lord's conscience was bound by his dealings with Mr Lord. He also fails in his Encroachment Act claim for failure to prove that the dam wall on Lot 2, was a "building" within the meaning of that Act.
319. Mrs Lord has also failed to establish on the evidence that the table drain along the Lot 2 and Lot 3 battle axe handles encroaches onto Lot 3, but she has been successful in proving that the road on Lot 3 causes a flooding nuisance on Lot 2. Once the parties have had an opportunity to analyse these reasons, the Court will hear the parties as to the conditions to be placed in the precise form of relief to remedy the nuisance that has been found.
320. Both parties have had some success in the proceedings. This may lead to arguments about the appropriate order for costs in the circumstances and one or other party may seek a special costs order. The Court will hear submissions on costs after the parties have had an opportunity to consider these reasons and then to formulate and put submissions about appropriate orders for such relief as has been found in the plaintiff's favour."
The Court gave the parties an opportunity to agree upon the form of final relief consequent upon the first judgment. They were unable to do so by June 2016. So the Court made orders for the proceedings to be set down for a final relief hearing on 31 August 2016.
On 19 August 2016 the parties applied to vacate the 31 August 2016 hearing on the basis that the experts engaged by each side had insufficient time to reach a consensus about the form of final relief that might be appropriate in relation to the driveway and the dam areas that each required rectification. The Court declined to vacate the hearing, indicating in its judgment that the Court did not have confidence that an adjournment and a continuation of the already lengthy negotiations was likely to result in any consensus between the experts as to the form of final relief: Lord v McMahon (No. 2) [2016] NSWSC 1153 ("the second judgment").
At the hearing on 31 August 2016, the Court heard argument about the form of final relief. By the time of that hearing the experts and the parties had reached broad consensus about the drainage works to rectify the nuisance associated with the roadway leading to Mr McMahon's property and orders to effect the rectification of the roadway nuisance were made: Lord v McMahon (No. 3) [2016] NSWSC 1686 ("the third judgment"). But disputes remained about the earthworks necessary to solve the nuisance and trespass problems with the dam near the boundary between Mrs Lord's and Mr McMahon's properties.
The 31 August 2016 relief hearing was principally concerned with these issues. Supported by their respective experts, each party advanced different solutions to abate the nuisance from the dam. In the third judgment given on 1 December 2016, the Court considered the advantages and disadvantages of each solution by reference to particular issues debated between the parties.
After considering preliminary issues (about whether the experts had agreed on certain issues and about the extent to which the Court should be involved in the detail of the proposed engineering solutions), the Court ultimately preferred the solution advanced by Mr McVey on behalf of Mr McMahon for the reasons set out at [30] to [37] of the third judgment. In summary, these were that Mr McVey's solution was more economical; many of the assumptions made by Mr Diversi (on behalf of Mrs Lord) and Mrs Lord's submissions were predicated on the incorrect assumption that the nuisance had to be eliminated completely, rather than the likelihood of further injury to her land being reduced; and, various technical engineering issues on which the Court preferred Mr McVey's solution to that of Mr Diversi.
The third judgment also dealt (at [38] to [42]) with the question of how the conditional nature of the relief should be formulated. Relief was granted on a conditional basis because Mrs Lord's attempts at abatement of the nuisance in the dam area had actually made the nuisance worse (see [218] to [219] of the first judgment). The Court noted the difficulty in determining a number of issues in advance of performing the earthworks: namely, exactly how much of the dam-related earthworks would need to be done on Mrs Lord's land; the consequent difficulty in ascertaining in advance what proportion of the earthworks should be undertaken at Mrs Lord's expense; and assessing the size of that part of the area to be regraded and re-grassed, under Mr McVey's solution, on Mrs Lord's land that Mrs Lord herself had interfered with and was therefore responsible for repairing. In the third judgment, the Court applied an interim cost-sharing formula to give effect to the first judgment, so as not to create an unfair burden on either party. In the result the Court required, on an interim basis only, Mrs Lord to pay 50 per cent of the costs of all earthworks on her own land and Mr McMahon the other 50 per cent. This expenditure was to be a charge over each party's land. The Court made orders; including that within three working days the parties were to bring in short minutes of order to give effect to its reasons. The Court expected to receive orders for the execution of the dam works modelled on the orders made in the third judgment in relation to the roadway works.
The parties could not agree upon a form of short minutes of order. Resolution of the differences between the parties' competing short minutes of order required a further hearing on 8 December 2016. This additional hearing resolved the differences between them and led to finalisation of the orders. Those differences and the outcomes resolved by the fourth judgment given on 20 December 2016, Lord v McMahon (No. 4) [2016] NSWSC 1854, were:
1. The parties differed as to whether the final orders in relation to the road drainage works should be varied to make reference to the cost of solving a minor seepage problem. Given the low value of the issue (which was estimated to cost about $1,000 to resolve) and the confidence of the experts that it could be resolved between them, the Court decided not to vary the orders to refer to this problem.
2. The parties disagreed about the form of charge that should be imposed on Lots 2 and 3 for the costs of executing the dam works. The Court preferred Mrs Lord's proposal (of a charge modelled on the orders made with the third judgment to secure the costs of the road drainage works, which orders had charged both properties) over Mr McMahon's proposal (that only Mrs Lord's land should be charged for these costs).
3. The parties disagreed over whether the orders in relation to the dam works should include reference to Exhibit L. Mr McMahon objected to any reference to Exhibit L in the orders. The only relevance of that exhibit to the dam works related to the construction of a fence, and the Court decided that it would not mandate the construction of a fence in precise accord with Exhibit L, or otherwise require construction of the dam works in accordance with Exhibit L. However, the Court did consider that construction of a fence was inevitable and therefore ordered the parties to undertake their best endeavours to agree upon the form of a boundary fence to be erected at the joint cost of the parties on the boundary of Lots 2 and 3, after the completion of the dam works.
4. Mrs Lord's proposed orders contained a set of seven outcomes that the works were designed to achieve. The Court decided not to adopt that course, because her proposed orders contained a degree of false precision, and otherwise for the reasons set out at [16] to [18] of the fourth judgment.
5. The parties disagreed as to whether the Court should order a swale to limit the catchment area of the modified dam to 4,000m² to 6,000m². The Court concluded that the parties had already resolved this area of contention through the proposals exhibited and referred to in the existing orders. It did not therefore make an additional order on this subject of the type Mrs Lord sought.
The Court also placed responsibility for performance of the works on Mr McMahon but provided for a continuing inspection regime to allow Mrs Lord's expert to monitor progress of the works.
The parties were sharply divided on the appropriate costs order. Mrs Lord claimed that Mr McMahon should pay 80% of her costs of the proceedings. Mr McMahon claims that the substantial costs orders detailed below should be made in his favour. These reasons first set out the parties' competing contentions on costs.
[3]
Heather Lord's Claim for 80% of her Costs on the Ordinary Basis
Mrs Lord's written submissions referred to Re Estate of Hodges (dec'd): Shorter v Hodges (1988) 14 NSWLR 698 at 708 where Powell J noted that while costs are discretionary, that discretion is a judicial one and must be exercised in accordance with established principle. The general principle that costs follow the event, referred to in Re Estate of Hodges, is now contained in UCPR, r 42.1:
If the court makes any order as to costs, the court shall, subject to this part, order that the costs follow the event, except where it appears that some other order should be made as to the whole or any part of the costs.
Mrs Lord contends that Mr McMahon should be ordered to pay 80% of her costs of the claim and Cross-Claim on the ordinary basis.
Mrs Lord's main argument, set out in the conclusion to her written submissions, is that she has achieved overwhelming success in "the event", and it would be a very harsh outcome, indeed an injustice, for that to be eroded by any significant reduction in the costs which she recovers.
Mrs Lord argues that she succeeded in the parts of the claim on which most of the evidence was focussed. She also claims a high degree of success as her nuisance claim succeeded in relation to water flows from McMahon's land onto two areas of her land which she identified in her evidence, namely her access road and her north-western paddock. She also successfully defended Mr McMahon's two-pronged Cross-Claim based on proprietary estoppel and the Encroachment of Buildings Act 1922.
Mrs Lord submits that in contrast, Mr McMahon succeeded in only three respects:
1. resisting the claim in trespass in respect of the access road and north-western paddock;
2. resisting the claim that he had caused leakage through the dam wall; and
3. persuading the Court that his proposal to mitigate the nuisance in respect of the concentration of water flows onto Mrs Lord's north-western paddock was adequate.
In relation to (i), Mrs Lord argues that the relief ordered was hardly (if at all) less than would have been achieved had she succeeded in trespass as well: the road drainage is indeed to be redesigned and built and the dam is to be relocated wholly on Mr McMahon's land away from the common boundary with her land. She also argues that it was tolerably plain from the evidence that the water nuisance was at the heart of her claim and through this litigation she succeeded in compelling the defendant to mitigate it.
In relation to (ii), Mrs Lord argues that although she failed in her assertion that there was leaking from the dam wall caused by the defendant this ultimately had no part to play in determining the relief to be granted.
In relation to (iii), Mrs Lord argues that even if this could be considered a success for Mr McMahon it was only a limited success. She says argument about dam-related nuisance mitigation was focussed on just the following three points:
1. her preference for a southern spillway (which was necessarily longer and required a higher dam wall);
2. a larger trickle pipe (Mr McMahon's expert having accepted her expert's proposal for the installation of a trickle pipe at an early stage); and
3. questions of water volume and surface flow with related questions regarding catchment area.
Mrs Lord says that Mr McMahon succeeded on (a) and (b) but she succeeded on (c) "to the extent that swales to limit the catchment, and thus water flows to the dam, are to be included in the works."
In relation to the reasonableness of the parties' conduct of their cases, Mrs Lord made the following submissions. She noted that after the first judgment, the parties were given an opportunity to negotiate an agreed scope of works to deal with the abatement of each of the two nuisances that the Court had found. While Mr McMahon's expert made a promising proposal relating to the dam works in early December 2015, directions made on 14 December 2015 for further detail to be provided within 21 days were not complied with. Although these were complied with in February 2016, little progress was made through the first half of 2016 resulting in the unsuccessful joint application to vacate the relief hearing date of 31 August 2016.
By the time of the 31 August 2016 relief hearing some common ground had been reached such as re-shaping part of Mr McMahon's road and relocating the dam entirely on to his land. Alternative proposals were identified by the parties and contended for at the hearing.
In relation to the dam-related works, proposals put by Mr McMahon as to the new dam's size and location were accepted by Mrs Lord and some proposals put by Mrs Lord such as the installation of a trickle pipe and, much later, the limitation of catchment area, were accepted by Mr McMahon. However, by the time of the relief hearing Mrs Lord submits there was no Offer of Compromise or Calderbank offer made by Mr McMahon. Accordingly, she submits it could not be said that the relief hearing was unnecessary on this issue: there was no offer which Mrs Lord should have accepted to avoid the relief hearing. Further, Mr McMahon's concession that he should contribute to the cost of earth work undertaken on Mrs Lord's own land only came in his counsel's submissions, at a figure of 50%. That figure was adopted in the third judgment on an interim basis only. Mrs Lord submits that his earlier position, that Mrs Lord should bear all such costs, was doomed to fail and at odds with his own earlier proposal.
Mrs Lord accepts that Mr McMahon's proposal on the disputed issues in relation to the dam works (the spillway location and length, the dam wall height and the size of the trickle pipe) were ultimately found to be adequate in the third judgment. However, while Mrs Lord accepts this outcome fell short of what she wanted, she submits that what Mr McMahon proposed was only made clear during the relief hearing. It was only shortly before the commencement of that hearing that the remaining areas of dispute came into focus: the agreed expert's documents (exhibits J, K, L, M) did not quite encapsulate Mr McMahon's expert's position and the expert's preference for a smaller northern spillway came in his report just days before the relief hearing (exhibits 11, 12 and 13). It was only here, for the first time Mrs Lord submits, that water volume and flow measurements were referred to, leading to the response from Mrs Lord's expert (exhibits Q and R) and the oral evidence on this point.
Thus, while accepting that Mr McMahon obtained a favourable outcome in relation to these issues and succeeded as to that part of the "event", Mrs Lord submits that otherwise the "event" in relation to the dam work was determined in her favour: she established an entitlement to have Mr McMahon carry out works to mitigate the nuisance from the dam, albeit with some contribution from her to works on her own land on account of the extent to which the nuisance was exacerbated by her efforts at self-help. Mrs Lord submits that Mr McMahon's initial failure to offer to contribute to work undertaken on Mrs Lord's land was reason enough not to accept what was being proposed, which was in any event never expressly offered and was only clarified during the relief hearing. Mrs Lord also says that once the parties descended into the detail of water volume and water flow measurements, succeeded on the important point of whether swales would be used to limit the dam's catchment area.
In relation to the road drainage works, within a day or two of the start of the relief hearing, Mrs Lord made a Calderbank offer that the parties contribute to the works necessary to abate the roadway nuisance in the proportion 74% for Mr McMahon and 26% for Mrs Lord. This was accepted by Mr McMahon on 7 September 2016 but the exact scope of those works was not agreed by the time the relief hearing resumed on 15 September 2016. Further agreement was reached by the parties' experts in their joint evidence, leaving only one small item requiring further design, discussion and agreement (the seepage issue), which was not finally resolved even at the point of the orders made in the fourth judgment: Lord v McMahon (No. 4) [2016] NSWSC 1854. Given that Mr McMahon accepted the proposed apportionment of costs (74% to 26%) Mrs Lord submits that he should bear Mrs Lord's costs, because Mr McMahon made no offer. Although the parties were close to a fully concluded agreement, Mrs Lord submits that the relief hearing was still required to determine precisely what work would need to be done.
Mrs Lord submits that the proper bases for reducing the costs order she should obtain in her favour are that: (i) she did not succeed on her trespass claim or the claim related to leakage through the dam wall; (ii) she is to contribute 26% to the cost of the road drainage works; and (iii) Mr McMahon's proposed solution in relation to the dam was considered adequate, contrary to Mrs Lord's preference for the spillway to be located to the south, requiring a higher dam wall and with a larger trickle pipe.
She submits that none of these reflect a significant failure in terms of her achieving a favourable result.
As to basis (i), Mrs Lord argues that the amount of time spent eliciting evidence and on submissions in relation to trespass was not significant and the total was clearly less than that spent on the defendant's Cross-Claim. The failure of the trespass claim had no impact on the relief ordered. Similarly, the failure of her claim in relation to the dam wall leak was of no consequence given the relief ordered.
As to basis (ii), Mrs Lord argues her 26% is only a modest contribution with her nevertheless gaining "total success as to 74%".
As to basis (iii), Mrs Lord argues that had she accepted the smaller northern spillway and smaller trickle pipe solutions the relief hearing would not have been obviated, just reduced in length. Mrs Lord submits that detail in support of the adequacy of Mr McMahon's proposal was only clarified in oral evidence, mostly on the second day of the relief hearing. She accepts that having regard to the greater cost of her proposal, she would have done well to change her position and accept Mr McMahon's proposal, but that only became the case on the second day of the relief hearing, so she submits that she should not now be heavily penalised for this. She argues that time spent on water volume and flow measurements is a neutral factor: while it played a part in Mr McMahon's proposal being found to be adequate, it also resulted in an order for swales to limit the dam's catchment area.
Mrs Lord submits that while there could be an apportionment of costs for discrete aspects of the case, it would be an arid exercise to seek to distil which evidence and submissions (and therefore time and cost) goes to one issue as distinct from another. Mrs Lord submits that even if this approach were taken, she should be entitled to recover some of her costs in engaging expert evidence regardless of the final outcome, as that expert evidence formed the foundation upon which both sides' arguments and the detailed designs were based. She therefore submits that the Court should take an approach to the assessment of costs based on a single overall discount. She submits that Mr McMahon should pay 80% of her costs of the claim and Cross-Claim on the ordinary basis, which would strike a fair balance given her modest failures and Mr McMahon's modest successes.
[4]
Mr McMahon's Submissions on Costs
Mr McMahon advances two alternative proposals as to costs.
First, Mr McMahon proposes that Mrs Lord should not be granted any costs award and should be ordered to pay his costs. He claims:
1. 75% of his costs in the proceedings up to the conclusion of the first judgment;
2. 100% of his costs in relation to the hearing to which the third judgment relates;
3. 66% of his costs in relation to the hearing to which the fourth judgment relates; and
4. The parties otherwise bear their own costs.
Second, and in the alternative, if the whole of the proceedings are looked at on a global basis Mr McMahon submits that Mrs Lord should pay 75% of his costs.
In advancing those positions, Mr McMahon submits that the costs award should reflect the parties' relative successes and failures and the relative time and resources expended on those successes and failures. On that approach, Mr McMahon submits that he has been much more successful than Mrs Lord and should receive a costs order in his favour. Mr McMahon sets out the way in which the issues dealt with in each of the first, third and fourth judgments (the second being concerned with procedural matters and not requiring detailed analysis) were determined and then compares the final orders for relief with the prayers for relief contained in the Summons.
Mr McMahon cites the relevant principles as to the assessment of costs where parties have success and failure on different issues, as being those set out in Hancock v Rinehart (Costs) [2016] NSWSC 11; Sze Tu v Lowe (No 2) [2015] NSWCA 91 and James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296. The Court accepts that these authorities state the applicable principles.
[5]
First Judgment
In relation to the first judgment, Mr McMahon referred separately to issues concerning the dam; issues in relation to the table drain; the Cross-Summons; and evidentiary issues.
In relation to the dam, Mr McMahon referred to the first judgment (at [18] where the Court noted this issue occupied most of the Court's time in hearing the proceedings. Mr McMahon submits that Mrs Lord only succeeded in relation to the dam on her claim "that the dam overflows from time to time causing spoilage of her pasture". Mr McMahon submits the Court dealt with this issue at [203]-[224] based on evidence summarised and findings made at [203]-[213] and it represented a very small proportion of the evidence, the time taken at hearing and the Court's reasons for judgment. Mr McMahon submits that Mrs Lord failed on all other issues concerning the dam, namely trespass (dealt with at [141]-[163] of the first judgment. He further submits that although the narrative on the dam issue starts immediately after [18] and goes to [136] "so it seems the trespass issue goes from [19] to [163]"), the nuisance by leakage through the dam wall is identified at [187] and then decided at [194]-[202]).
In relation to the table drain, Mr McMahon notes that the narrative of events began at [261] and there were two groups of issues, identified by the Court at [258]: encroachment and flooding nuisance. Mr McMahon states that Mrs Lord failed on the encroachment issue dealt with at [271] - [276]. Mrs Lord succeeded on the flooding nuisance issues (dealt with at [277]-[305]) but, even on those issues, she did not have complete success because, as he submits:
1. The Court found her partly responsible for the problems and said she would have to contribute to the costs of remedying them;
2. The solution reached was based on Exhibit 7, which was Mr McMahon's expert's solution and not one proffered by Mrs Lord;
3. The actual work to be done is not based on Exhibit 7 which involved the construction of a new table drain but is instead based on a different solution reached between the experts which involves changing the fall of the road (see paragraph 43(1) of the third judgment); and
4. As set out at [298], relief was conditional on Mrs Lord making an election or giving an unequivocal indication about whether she would consent to there being an encroachment if the solution put forward in Exhibit 7 were adopted but she never gave the unequivocal indication required.
In relation to the Cross-Summons, dealt with in the first judgment (at [225]-[255]), Mr McMahon acknowledges he failed but submits: there was no additional evidence called in relation to the Cross-Summons; little time was devoted to it in written or oral submissions; and the claims made in it were in reality back-ups, in case the Court found the presence of the dam was a trespass and the encroachment had to be removed (something he says the Court adverted to at [237] of the first judgment).
In relation to evidentiary issues, Mr McMahon submits that a number of these occupied a significant time at the hearing and in submissions, and were ultimately decided in favour of Mr McMahon. Specifically these were: whether the late Mr Lord had provided consent to the construction of the dam; the nature and effects of the earthworks carried out for Mrs Lord in September 2011 (first judgment at [95] - [106]); and the cause of the trench found in the dam wall in 2012 ([107]-[126]). Mr McMahon notes in his submissions the Court's comments (first judgment at [107] that "[t]he issue was strongly contested" and (at [126]) that the inference ultimately drawn by the Court "damages [Mrs Lord's] credit. She was prepared to propound what I find was a misleading account for her actions in relation to the dam and to tailor her evidence to minimise the extent of her and Mr Lanyon's work."
[6]
Third Judgment
In relation to the third judgment, Mr McMahon noted that by the time of the hearing to which it related there was broad consensus in relation to the roadway drainage works but disputes remained in relation to the earthworks related to the dam. The relief hearing was principally concerned with the dam earthworks. He notes that the drainage works were dealt with briefly at [9]-[10] in an uncontroversial way, and this issue occupied very little hearing time. In relation to the dam earthworks, this was dealt with at [11]-[42] and in summary, Mr McMahon submits that the Court preferred Mr McMahon's expert's solutions "on all matters in issue" (referring to, for example, [30] and [31]). That is, Mr McMahon says he succeeded on all issues contested at the hearing decided in the third judgment.
[7]
Fourth Judgment
In relation to the fourth judgment, Mr McMahon referred to the five issues dealt with in that judgment, and as are set out at [10] - [11] above in this judgment. In relation to the issues set out at [10], Mr McMahon submits: that Mrs Lord failed on issue (1) (although this is not recorded in the judgment); Mr McMahon failed on issue (2); and Mrs Lord failed on issues (3) to (5). He states that the matter dealt with under the heading "other issues", which is referred to at [11] above, did not appear to address any difference between the parties. In the result, he states that of the five issues canvassed in the fourth judgment, Mrs Lord failed on four and Mr McMahon failed on only one.
[8]
Comparison of Relief Granted with Prayers in Summons
Mr McMahon states that when comparing the relief claimed in the Summons filed and served with the relief granted, it is arguable that the only relief sought that was granted was that in relation to the table drain. He states that the 13 prayers for relief set out at [138] of the first judgment differ from those contained in the Summons actually filed on 23 July 2013, which contained only 10 prayers for relief. He states that the prayers for relief in the judgment appear to be based on the form of Summons included in the Plaintiff's Court Book (Exhibit G at the first hearing), however this was a draft Summons and he says differed from that actually filed and served.
He states that "in any event" it is arguable that the only relief claimed in the Summons that made its way into the final relief granted is that claimed in prayer 11 of the Summons reflected at [138] of the first judgment. He argues that the final orders made in relation to the earthworks around the dam were not claimed in the Summons, and probably arise from prayer 12 of the Summons reflected at [138] of the first judgment (ie for "such further or other orders that the Court deems appropriate"). He argues that in either version of the Summons, most of the prayers for relief in relation to the dam refer to an "encroachment" which does not find expression in the final relief granted by the Court or in its judgments.
[9]
Consideration
The Court has set the parties' submissions out extensively to show how complex the individual considerations are on all the sub-issues relating to costs. The Court has been well served by the written and oral costs submissions in the proceedings but they strongly demonstrate the impossibility and inefficiency of attempting to divide up the apportionment of costs in this case issue by issue, judgment by judgment, evidence quantity by evidence quantity. Mr McMahon's helpfully analytical submissions show just how far this sub-division of issues can go and what he has submitted has been taken into account.
But the Court must be mindful of false mathematical precision in undertaking analysis in order to reach an appropriate costs order where a plaintiff has been successful in some issues and unsuccessful in others.
In this case in particular it is not possible to separate out issues quite as neatly as Mr McMahon submits. That, together with the fact that attempting to separate out the percentage of costs recoverable in respect of each hearing, would make the costs assessment exercise more complex than it should be, means the Court prefers the second approach to assessment for which Mr McMahon contends and the one for which Mrs Lord contends: namely, that the proceedings should be looked at on a global basis. However the Court does not agree with Mr McMahon's submission that Mrs Lord should pay 75% of his costs assessed on a global basis.
There are several reasons why on a global assessment Mr McMahon should pay a proportion of Mrs Lord's costs. The Court does not agree with Mr McMahon's submission that the dam overflowing from time to time causing spoilage of Mrs Lord's pasture only occupied a very small proportion of the evidence. In my view the background narrative in relation to the dam in the first judgment can be taken as a preliminary to this issue, as much as it can be to the issue of trespass. So it is something of an overstatement in my view to say that the issue of trespass occupies from paragraphs [19] - [163] of the first judgment.
It is true, as Mr McMahon says that the Court has found Mrs Lord partly responsible for the flooding nuisance issues on her land and both the relief and the associated costs orders must take this into account. But in my view a relief hearing involving both the dam and the road would have been necessary in any event and that the holding of the relief hearing helped to refine the issues between the parties.
In relation to the Cross-Summons Mr McMahon's submissions can be largely accepted that it was in reality a back-up claim to deal with the trespass issue on which the defendant succeeded and the Court takes Mr McMahon's argument on this into account.
In relation to evidentiary issues a discount should be applied in respect of the issues on which Mrs Lord failed, especially Mr Lord's consent to the construction of the dam, and the cause of the trench in the dam wall. But in my view these were not dominant issues in the proceedings. Particularly when the time concerned in cross-examination and the examination of related photographs in the course of the hearing is considered. A great deal of time was spent with lay and expert witnesses on the question of the cause and origins of the nuisance upon which Mrs Lord was ultimately found to be successful. Because Mr Lord was deceased there was more limited scope for cross-examination on the question of whether consent to the dam had been given.
In relation to the third and fourth judgments in my view it was inevitable that if the parties did not agree upon short minutes of order that there would have had to have been relief hearings of some kind. And as Mrs Lord was successful on at least some of the issues she was justified in insisting on a relief hearing. It must also be acknowledged that as Mr McMahon submitted, the Court needs to scrutinise very carefully any proposal to grant a mandatory injunction to rectify or reduce the effects of a nuisance. That being said, Mrs Lord was not successful on many of the positions that she took on relief and her claim for costs in relation to the relief hearing must be discounted for that reason.
Finally, the issue raised on behalf of Mr McMahon about the differences in the relief claimed in the Summons compared with that in the Court Book is not in my view a matter of substance in relation to costs. The form of relief claimed, which is set out in the Court Book and recorded in the Court's first judgment at [138], is the form of relief on which the parties fought the case and on which the Court understood they were fighting the case. No costs consequences follow from any form of differences between that document and the filed Summons.
On the other hand, Mrs Lord's submissions do not take adequate account of the issues on which she lost in the first judgment and the issues on which she lost in the relief hearings. Nor do her submissions take adequate account of the time that was taken up with the trespass claim and the contest about her responsibility for the digging of the trench.
In my view there should be a substantial discount for these matters against Mrs Lord. But she nevertheless succeeded in obtaining relief against Mr McMahon and in my view should not lose her costs altogether in the way that he proposes. Considering all of these matters, in my view the appropriate order in this case is that Mr McMahon pay 40% of Mrs Lord's costs.
[10]
Conclusion and Orders
The orders of the Court therefore will be:
1. That the defendant pay 40% of the plaintiff's costs of these proceedings incurred up to but not including today.
2. The Court notes that this assessment does not apply in respect of costs incurred on and from today for which the parties may in due course make a separate application for costs depending upon the course of proceedings today and thereafter.
[11]
Further Directions
Upon the giving of judgment the parties addressed the Court in relation to the progress made with the implementation of the Court's orders of 1 December and 20 December 2016. As a result of those submissions the Court noted the following undertakings and made the following orders and directions:
(3) The Court notes the undertaking given by counsel for the plaintiff that the plaintiff will until further order continue to retain Mr Diversi, the civil engineer to assist in the implementation of the Court's orders for the construction of the road works and the dam works and to obtain all necessary approvals for that purpose
(4) The Court notes the undertaking given by counsel for the defendant that the defendant will until further order continue to retain Mr McVey, the civil engineer to assist in the implementation of the Court's orders for the construction of the road works and the dam works and to obtain all necessary approvals for that purpose
(5) The Court directs the plaintiff to instruct Mr Diversi and the defendant to instruct Mr McVey to communicate with each other, the substance of each step that either engineer takes to progress the implementation of the Court's orders for the construction of the road works and dam works including each step in obtaining any necessary approvals for the road works and the dam works and to do so within a reasonable time but within no less than 7 days of such step being taken.
(6) Further direct that the defendant provide to the plaintiff within 7 days, that is, by 10 July 2017, at 4pm a copy of the current form of the development application for the works the subject of these proceedings, as signed by Mr Murray, the defendant's neighbour.
(7) The Court directs the plaintiff to instruct Mr Diversi and the defendant to instruct Mr McVey, and for the plaintiff and the defendant themselves, to co-operate including by timely communications and provision of information in achieving the objectives of implementing the Court's orders of 1 December and 20 December 2016 ("the December 2016 orders").
(8) Direct the parties to obtain instructions from their experts before 4pm on Thursday, 6 July 2017 so that the Court can make orders of the following kind on 7 July 2017.
(i) If the development application for the undertaking of the works contemplated by the December 2016 orders is not lodged with the Shoalhaven City Council by X date, then the parties are to re-list the proceedings within the 7 days thereafter.
(ii) If the contracts are not let for the carrying out of all earthworks and other associated works for the implementation of the December 2016 orders by Y date, then the parties are to re-list the proceedings within 7 days thereafter.
(iii) Upon any re-listing of the proceedings pursuant to orders (i) or (ii), each party should provide to the Court an explanation or account on affidavit at least 48 hours before the re-listed date of the facts as to why the development application has not been filed or the contract not let.
(9) Costs are reserved.
[12]
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Decision last updated: 04 July 2017