Pasade Holdings v Sydney City Council [2003] NSWSC 913 | Case summary

JUDGMENT (COSTS) 1 HIS HONOUR: I have given two earlier judgments in these proceedings [2003] NSWSC 515 and [2003] NSWSC 584. These observations relate to the second, third and fourth defendants' claim against the plaintiff for an order for costs. These defendants are referred to as the RSL Club Trustees. They own a City building at 5-7 Barrack Street, Sydney. The plaintiff owns the office building at 65 York Street, on the corner of York and Barrack Streets. The two buildings adjoin each other. Behind the buildings are two strips of land, approximately rectangular, which have no freehold owners who can be identified. One strip, the land in Deposited Plan 639380, referred to as the 8 ft strip adjoins 65 York Street and also 5-7 Barrack Street and runs generally north and south; at its southerly end it abuts another strip, referred to as the 12 ft strip, the land in DP619464 which runs approximately west; together the two provide access to York Street from the rear of these two buildings. The RSL Club Trustees' land has the benefit of two rights of way over the 8 ft strip, created in the 19th Century and referred to in notifications on their Certificate of Title as appurtenant to their land. The plaintiff sought and obtained orders under s.88K of the Conveyancing Act 1919 which gave it easements for light and the air over the two strips. 2 When the proceedings were commenced by Summons on 5 May 2003 Pasade Holdings sought only the grant of an easement for light and air over the 8 ft strip. There had been correspondence before action, and the solicitor who acted and still acts for the RSL Club Trustees had inspected the site, with a surveyor, and obtained a surveyor's report which said to the effect that the easement for light and air would not adversely affect the easements to which the RSL Club Trustees were entitled. The RSL Club Trustees were joined as defendants. It was appropriate and necessary that they be joined as defendants because subs.88K(2)(b) requires consideration of compensation for any loss or disadvantage that will arise from imposition of the easement to any person having an estate or interest in the land burdened. (I interpose that it has sometimes happened in applications under s.88K that persons with similar interests have not been joined as parties, where evidence has shown that they had agreed on arrangements about compensation and did not wish to be parties.) 3 The Summons came before Justice Hamilton on 23 May 2003. On 23 May 2003 counsel for the RSL Club Trustees applied for an adjournment so that these defendants' solicitor could get some instructions regarding filing any summons and affidavit material which the they might wish to bring so as to claim easements themselves. The proceedings were adjourned to 4 June 2003, and the adjournment was ordered on the application of the sixth and seventh defendants and over the plaintiff's opposition. On 4 June I heard the plaintiff's application and announced that I had decided in principle to grant the easement over the 8 Pt strip. I published reasons on 12 June 2003 [2003] NSWSC 515 and the proceedings were adjourned to 27 June 2003 when I proposed to give attention to the terms of the order. The RSL Club Trustees were represented by solicitors and counsel. Counsel did not oppose Pasade Holdings' application; nor did he consent. Counsel explained to me concerns which the RSL Club Trustees had about their rights over the 8 ft strip which might lead them also to make an application under s.88K and possibly to rely on some evidentiary material which Pasade Holdings had brought forward. 4 The RSL Club Trustees appeared by counsel again on 27 June 2003 when the plaintiff applied for an order amending its Summons to add Claim 1A and claim another easement for light and air over the 12 ft strip; and I granted this. So far as appears the RSL Club Trustees do not have any easements over the 12 ft strip, although their easements over the 8 ft strip can be of little use unless in fact passage is available from there to York Street along the 12 ft strip. Whether or not there are any easements over the 12 ft strip, there has been no identifiable owner of the 12 ft strip for well over a century and there are no practical difficulties for using it for passage. The amended claim presented no difficulties for the RSL Club Trustees' need to use the 12 ft strip and they did not oppose it. 5 Subsection 88K(5) provides: The costs of the proceedings are payable by the applicant, subject to any order of the Court to the contrary.

The effect of subs.(5) is that each defendant, whether servient owner or otherwise interested in the servient land, is to recover costs unless there is some ground for a discretionary decision otherwise. References to the servient owner's costs in 117 York Street Pty ltd v. Proprietors of Strata Plan No. 16123 (1998) 43 NSWLR 504 at 515-516 convey no other implication and do not deal with the question. The statement "I make no order as to costs" at para 29 in Kent Street Pty Ltd v. Council of the City of Sydney (2001) 10 BPR 18757 (Barrett J) appears to have deferred, not to have disposed of the question of costs: see para.5 of that judgment. 6 Counsel for the RSL Club Trustees asked for an order for costs; this was opposed, and I gave directions for filing affidavits and written submissions and fixed a very ample time-table under which all submissions would be lodged within 10 weeks. I set ample times because I was to proceed on leave for all of July and August. I made an appointment for the return of Subpoenas and Notices to Produce relating to the question of costs and I said that unless either party asked for a further hearing costs would be disposed of in Private Chambers. I then foresaw that the question of costs would not be a complex matter and that I would be in a position, if costs were awarded, to assess the amount myself. I did not foresee the complexity, the exchange of affidavits and submissions, the subpoenas and debate over compliance with them which took place in my absence. 7 The plaintiff joined the RSL Club Trustees as defendants, and rightly so. They had interest in the proposed servient land, the 8 ft strip, evidenced by registered instruments, the Court was required by subs.88K(2) to be satisfied on matters affecting their interests, and procedural justice required that they be joined as parties. No substantial ground for an order overriding their prima facie entitlement to costs under subs.(5) has been shown to me. 8 The RSL Club Trustees' claim was for an order for payment of their costs and disbursements of $24,783.58 set out in a Bill of Costs of 4 July 2003 rendered to them by their solicitors. The Bill set out attendances of solicitors totalling 20.9 hours which were charged at $275 per hour for the principal of the firm and $200 per hour for his assistant solicitor. The charges included charges for 2.4 hours of attendances in March and April 2003, before the litigation was commenced, when the clients had sought advice on a letter before action from the plaintiff's solicitors which gave particulars and plans of the proposed easements. A surveyor was retained and the principal solicitor attended a site inspection with him. Costs of attendances before the application are not "costs of the proceedings" within subs 88K(5) and will not be included in my assessment Thereafter attendances related to the conduct of the litigation, obtaining an opinion from the surveyor on the claims in the Summons, perusing and considering the plaintiff's evidence and briefing counsel and attending the hearings on 23 May and 4 June and arranging for counsel's attendance on 27 June; and many incidental attendances, correspondence and communications. 9 While the attendances relating to the litigation took place the solicitor and counsel for those defendants also had under consideration the prospect that the RSL Club Trustees would themselves make a claim under s.88K for an easement or further easement of some kind over the servient land. Before action and at the time of the site inspection their solicitor also had under consideration another controversy with a different adjoining owner also involving the servient land, and he said in evidence that the attendances relating to both matters were apportioned; the only apportionment mentioned in the Bill is that half of the total attendance time on the site inspection was allocated to each matter. 10 In his affidavit the principal solicitor Mr Carmody said that he had prepared the Bill to relate only to attendances responding to and considering the impact on the property rights of the RSL Club Trustees of the plaintiff's claims for relief, and that he had omitted any attendances which related to consideration of any possible need to make the client's own application for additional or amended easements. He said that he proposed to issue to the clients a separate Bill relating to consideration of the need to file a Cross-claim, and had received a separate memorandum of fees from counsel relating to that discrete aspect of his brief. 11 The Bill charged fees to counsel totalling $17,666.00, disbursements being $431.75 fees to the surveyor and $652.33 for sundries and disbursements such as copying, courier fees, telephone and postage. The solicitor also charged $548.50 for GST on his own charges. No details were given in the affidavit or in the Bill of counsel's fees which were stated as lump sums of $440.00 for one barrister and $17226.00 for another. This led to procedures by subpoenas - there appear to have been two - with the object of obtaining further information, and there was debate about some supposed privilege against the production of counsel's Memoranda of Fees; the Memoranda were eventually produced. Counsel charged $3,600 for each attendance on 25 May and 4 June, $540 for his attendance at court on 27 June and $7,920 for reading, preparation time and conferences; counsel also charged GST. It was suggested that I should test the quantum of counsel's fees by reference to the fees charged by the plaintiff's counsel. There is no room for the comparison to be relevant, having regard to the forensic burden borne by the plaintiff and its counsel. The suggestion that I should make this comparison was ridiculous. 12 Further, as in my assessment these defendants did not need to have counsel there is no occasion to establish what the charges should be. In my view it would not be just for me to order payment by the plaintiff of this Bill of Costs. The intensity of the attention given to the interests of these defendants, the amount of professional time expended and the charges made were completely out of proportion to any adverse impact on the interest of these defendants which the plaintiff's application could reasonably, have been feared to have. Before the litigation commenced the plaintiff had explained what it wanted in letters before action and the RSL Club Trustees and their solicitor had considered the impact this would have, with a site inspection and advice from a surveyor. The orders which the plaintiff eventually obtained were not exactly those indicated in the correspondence before action, but the alterations introduced no challenge to the interest of these defendants. I cannot see any basis on which, after considering the matter, these defendants and their legal advisers could have thought that the plaintiff's claim raised any real prospect of the Court awarding compensation to these defendants, or raised any other matter which was adverse to their interests so as to call for opposition or active intervention in the litigation. The plaintiffs wanted access into the servient land for light and air through windows; there was also a question of access to a door at ground level. These defendants wanted to continue to use the ground surface for passage. There was no possible conflict. The surveyor gave clear advice before action and said "It is my opinion that there would be no loss of use or enjoyment … by the registration of the aforesaid easements over the land in DP639380." 13 The RSL Club Trustees own a valuable City property and they are quite entitled, according to their own judgment, to bring professional assistance to bear quite intensely on any question which might affect the title to or enjoyment of it, including appurtenant easements. However in an appraisal of what it is just that the Court should require the plaintiff to pay to a party which it was necessary for the plaintiff to join, but which in fact had no reasonable need to oppose the proceedings, I should adopt an altogether different approach. The RSL Club Trustees and their solicitor went into the litigation with the benefit of earlier consideration and advice from the surveyor. They had no occasion to oppose the plaintiffs' claim in any particular and they never did. It was prudent for them to have their solicitor carefully peruse the plaintiffs' summons and affidavits, and to consider those documents and what they said and their possible impact on the RSL Club Trustees' existing rights and the state of their title. The situation called for prudent handling to see whether what the plaintiff asked the Court to do was adverse to the RSL Club Trustees' interest in any way which called for intervention. Professional knowledge and judgment had to be brought to bear on the RSL Club Trustees' title and the plaintiff's claim. However there was in fact no adverse impact to be feared which called for opposition, or for intervention at all. 14 In my view I should assess costs on the basis that the principal of the firm used the time required to consider the matter, to discern that it was sufficient and appropriate for these defendants to take the position of submitting defendants; and on the basis that he conducted the litigation accordingly. Involved in this was the need to obtain the opinion of the surveyor confirming that the position was not significantly different to what he had earlier advised; this was done. In my view the appropriate basis on which to assess costs is that the attendance of the principal was required for five hours, allowance should be made for further attendances by an assistant solicitor for two hours so as to deal with formal business requiring less intense application of professional care and skill, and no attendances by counsel should be allowed for in the assessment. 15 I was asked to conduct a further hearing on the question of costs. I have given the parties a fair opportunity to make their written submissions, and they have used the opportunity fully, with much in the written material submitted to me that was obviously useless. I should not extend the opportunity for this behaviour. 16 I assess costs at $3,036.58 as follows:

Pasade Holdings v Sydney City Council

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Judgment (15 paragraphs)

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