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[2019] NSWCA 153
Court of Appeal (NSW)
2019-04-30
Gleeson JA, Sheahan J, Emmett JA
Original judgment source is linked above.
Introduction By summons filed on 24 December 2018, the applicants, Mr Leonardo Muriniti and Mr Robert Newell (together the Lawyers), seek leave to appeal from costs orders made by the Land and Environment Court (the L&E Court) on 26 September 2018 (the Impugned Costs Orders ) [1] . Leave is required by reason of the operation of s 58 of the Land and Environment Court Act 1979 (NSW). Under s 58(1), where a party to proceedings in Class 4 of the Court's jurisdiction is dissatisfied with an order or decision (including an interlocutory order or decision) of the L&E Court, the party may appeal to the Supreme Court against the order or decision. The Costs Orders were made in proceedings in Class 4 of the L&E Court's jurisdiction. However, s 58(3)(c) relevantly provides that an appeal does not lie to the Supreme Court against an order or decision as to costs, except by leave of the Supreme Court.
The Litigation between Ms Young and the Kings
The Muriniti Costs Application
The Primary Judge's Reasons for making the Impugned Costs Orders
The Lawyers' Challenges to the Impugned Costs Orders
The Correct Test
Evidentiary Questions and the Proposed New Ground
Bias and Recusal
Other Proposed Grounds
Conclusion
Grounds of Appeal 1 The primary judge erred in finding that the Appellants were liable to the Respondents for the costs of Ms Young's proceedings against them. 2 The learned primary judge applied the wrong test or applied the test incorrectly for the invocation of the costs jurisdiction against the Appellants. 3 The learned primary judge erred in that he made findings supporting the conclusion that the Appellants should be subject of a wasted costs order which findings were not open on the evidence. 4 The learned primary judge erred in finding that: 1. The Appellants had maintained fraud allegations with no evidence. 2. The Appellants had pressured Ms Young into maintaining the conspiracy allegation. 3. The Appellants pursued a contempt case that was completely misconceived. 4. The Appellants maintained allegations in the alternative of common mistake and unilateral mistake were entirely misconceived. 5. Mr Newell has engaged in conduct warranting a wasted costs order by reason of prolix pleadings. 6. Mr Muriniti had engaged in conduct warranting a wasted costs order because he certified pleadings as having reasonable prospects bf success. 7. The Appellants' conduct warranted a wasted costs order because they bombarded the court with vast quantities of irrelevant affidavit and other material. 5 The learned primary judge erred in that he denied the Appellants procedural fairness. 6 The learned primary judge erred in that he did not identify reliable or plausible integers for the wasted costs claimed by the Respondents. 7 The learned primary judge erred in that his decision supports a reasonable apprehension of bias. 8 The learned primary judge erred in dismissing the Claimants' application for him to recuse himself. 9 The learned primary judge erred in ordering the Appellants to pay the costs of their recusal application.
Conspiracy propositions 1 The Kings excavated on the boundary changing the levels on that boundary and made necessary a retaining wall in 2001 to support Ms Young's land. They concomitantly created basement rooms where there was previously a 1.5 metre sub-floor space in the path of the overland flow of water and a sub-surface watercourse. The basement rooms dammed the watercourse which flowed across the boundary between no. 35 and no. 37 and under the Kings' house. This created a circumstance in which the house could never obtain an occupation certificate, and by implication, could not be sold - its value necessarily to be achieved in the context of a demolition. 2 The Kings lodged a DA for, inter alia, a retaining wall. The DA was supported by plans. Some plans had the wrong DP number placed on them by the Kings. If those plans which had the wrong DP number on them were removed from the file, the file would speak of a development application in which the Council was never called upon to consider a levels changing excavation. 3 Because of the Water Act there cannot in fact be a retaining wall on the boundary because such a retaining wall would dam a watercourse which crosses the boundary between the two houses and then runs under the Kings' house. 4 A considerable time after Consent was issued, the CC was issued, which did not provide for a retaining wall and claimed reliance on building waste. The CC issued in that form because the Council could not approve a retaining wall on that boundary which would be in conspicuous breach the Water Act. 5 The Council could not approve a retaining wall which meant, by parity of reasoning, that the Council could not acknowledge having been presented with a fact situation which called for a retaining wall by way of remediation. 6 In the premises, the Council connived to create a CC premised on a fabricated account of a build-up of building waste on Ms Young's land - thus denying a duty to perform in connection with an unlawful levels changing excavation on no 37 at or near the boundary. 7 The Kings prepared the CC plans which contended for the false factual premise that they had not undertaken a levels changing excavation on the boundary in the full knowledge that the levels had been the same on both sides of the boundary before they had undertaken their work. 8 The modification of the Consent manifestly required a fresh notification to at least to Ms Young (see Cambridge Credit Corporation Ltd v Partes Developments Pry Ltd (1974) 2 NSWLR 590). However, she was neither formally notified, or in any way informed, of the radical alteration to the Development Application which now proposed to leave her land unsupported. 9 The concealment from Ms Young of the false (and preposterous) account of a building waste build up to obviate the otherwise need to state whether a retaining wall can or cannot be considered by the Council, leaves room for no other conclusion but that neither the Kings nor the Council believed the story or in other words knew it to be a fabrication. 10 Further, as it was a fabrication, and as Ms Young expected a retaining wall, if not primarily reinstatement of the land, the conduct of the Council and the Kings evinced an intention, or special shared knowledge, that Ms Young would not discover that there could never be a retaining wall. 11 Given her necessary anxiety about her land being unsupported, and the obvious inability to conceal from her an obvious physical fact such as her land being supported or not, the ambition that she should not discover that there could never be a retaining wall on the boundary of no. 35 and no. 37 was necessarily supported by an understanding and a devotion to the outcome, that Ms Young would very shortly be caused to sell her home. 12 The passage of 17 years without a retaining wall, and a deafening lack of any honest explanation for that fact, removes any doubt about the forgoing matters if such ingenuous doubt there could be. 13 Jack Davies, an engineer consulted by Ms Young, never informed her that there could not be a retaining wall. This was notwithstanding the fact that in the 2014 hearing before the primary judge he gave unchallenged evidence that the watercourse flowed under the Kings' house. So much is self-evident from the history of the matter leading to an undertaking to lodge a DA for a retaining wall. Jack Davies referred Ms Young instead to Hones Lawyers about whom Ms Young now complains. 14 Ms Young consulted Hones Lawyers who then briefed Mr Hemmings, a highly experienced planning counsel. 15 Those lawyers conducted the case on the basis that the building waste story was correct - a matter which they did not disclose to Ms Young. They knew that the Council had proceeded on the basis of the same story and that that was the reason that Ms Young did not have the mundane retaining wall. It may be concluded that they were committed to the same deceit as the Council and the Kings. Such knowledge is in any event drawn from the fact that the case was conducted on the basis of a supposed groundwater problem, which presupposed that the question of a retaining wall with associated drainage did not arise. 16 The conduct of the case on that basis allowed for a plausible justification for not joining the Council in the proceedings. That is, the undisclosed premise of the non-joinder was that the fact of building waste on no. 35 precluded a duty in the Council by allowing the Council to pretend that there was no a levels changing excavation and by implication that the occasion to consider a retaining wall did not arise. 17 Ms Young gave instructions multitudinous times to join the Council. Her instructions were rejected on each occasion. The instructions were rejected by her lawyers without disclosing (as they had a duty to do) that the basis of the decision or advice not to join the Council was that they contended that the Council had no apparent duty to have performed in a context where there had not been a levels changing excavation on the boundary. This serious nondisclosure confirms that the lawyers knew and intended that she did not know that the cases being conducted on the basis of the building waste story and intended to conceal that fact from her. 18 Further, the lawyers did not inform M. Young that there could not ever be a retaining wall, and the lawyers did this in circumstances where they had deliberately closed off the remedy of reinstatement by repeatedly refusing to join the Council in the proceedings. 19 The ambition that she should not discover that there could never be a retaining wall on the boundary of no. 35 and no. 37 was necessarily supported by an understanding and a devotion to the outcome Ms Young she would very shortly lose her home. 20 The engineers who worked on tine case as her purported experts did not tell her that there could never be a retaining wall. The engineers conducted the case on the basis that the issue was a groundwater problem which could not exist in a context in which a retaining wall is being contemplated to be constructed with associated drainage. They also did not disclose that that was the purport of their expert work. 21 The fact that as Mr Muriniti says in his evidence, a parallel watercourse was invented, is entirely consistent with a wish to have an independent expert create an obligation in Ms Young which is plausible without disclosing that in fact there can never be a retaining wall. 22 Significantly, the DA lodged in purported compliance with the undertaking was the subject of an agreement to represent to the Court involving her lawyers, her engineers, and the Kings' lawyers and engineers that a retaining wall was achievable and to be achieved. This was despite the fact that each of the parties knew that there could not ever be a retaining wall and had conducted the case on the fabricated groundwater basis in order to vindicate the Council (At [--] in Young v King No 4 Chief Justice McClellan states that he was told that the problem was water flowing towards the footing and interrupted by it. His judgment makes plain that he was not only told about the parallel watercourse but was offered an account (for which all of the lawyers and experts were necessarily responsible) which would preclude it.) 23 Although a purported justification for the retaining wall was thus constructed on the basis that a parallel watercourse would make it possible, the Council was never told that the parallel watercourse had been purportedly discovered by the experts. This was although the Council had the DA for "a retaining -wall" on foot for more than two years. 24 Plainly, the "plausible" story as to how the retaining wall could exist because of a parallel watercourse was never going to be used to actually justify a retaining wall approval by the Council. In other words, there was never in fact going to be retaining wall. And the experts and lawyers (not to mention the Kings) had to be acting on the premise that Ms Young would not find that out, despite an undertaking to the Court, in which all of the lawyers and experts participated, that a retaining wall would be promptly constructed to address Ms Young's concerns. 25 Without a retaining wall the lots could not exist as separate lots, which indicates that the Council intention was to solve its problems (which included that the Kings had built basement rooms in the path of the watercourse which in fact crossed the boundary through a consolidation of lots and a real estate Development).
Endnotes
Muriniti
King
Solicitors: L C Muriniti & Associates (Applicants) Terrence Stern Solicitor & Attorney (Opponents) File Number(s): 2018/309605 Decision under appeal Court or tribunal: Land and Environment Court Jurisdiction: Class 4 Citation: [2018] NSWLEC 150 Date of Decision: 26 September 2018 Before: Sheahan J File Number(s): 2016/160767 and 2016/160933
(1998) 156 ALR 169
(1974) 2 NSWLR 590