This judgment deals with a costs application which follows a judgment which I delivered in May: Piety Developments Pty Ltd v Cumberland City Council [2023] NSWSC 480. This judgment assumes familiarity with that judgment, paragraphs of which I will refer to as "J1".
My May judgment arose out of a separate hearing of the defendant's claims for declaratory relief in its Cross-Summons. I dismissed those claims. The plaintiff seeks an order that the defendant pay its costs of the Cross-Summons on the ordinary basis as agreed or assessed. The defendant seeks an order that the costs of the separate determination of the claims for relief in the Cross-Summons be costs in the cause.
[2]
Background
I described the facts and background to the proceedings in more detail at [1]-[23] of my May judgment. For present purposes, the following summary is sufficient.
The plaintiff, Piety Developments Pty Ltd ("PD") claims to have entered into a specifically enforceable contract with the defendant, Cumberland City Council ("the Council"), for the purchase of land owned by the Council: J1 [1]. The Council is the successor to Auburn Municipal Council which acquired the land in 1965. In response to a 2020 tender issued by the Council, PD made a written offer to purchase the land. The Council resolved to accept this offer on 3 November 2021. Later that month, two Councillors gave notice of a motion to rescind that resolution. The rescission motion was adjourned because of Council elections being held in December. Preparations were made for the motion to come before a differently constituted Council after the election.
PD commenced proceedings in February 2022, seeking specific performance. PD obtained interlocutory injunctive relief on an ex parte basis on 9 February. The injunction restrained the Council from proceeding with the rescission motion until PD's claim was determined.
The Council responded by filing a Cross-Summons on 14 February 2022. The Council contended that it was prohibited from selling the land by the Local Government Act 1993, because the land was "community land" for the purposes of that Act. The first and second prayers for relief sought declarations to that effect, in the following terms:
1. Declare that on the commencement of the Local Government Act 1993 Act ("the Act") the land the subject of these proceedings was classified as community land, being "land subject to a trust for a public purpose" within the meaning of that phrase in cl 6(2)(b) of Sched 7 of the Act.
2. Declare that the cross claimant ("the Council") is unable to sell the land, unless and until reclassified as operational land in accordance with the restrictions imposed by the Act upon the use and management of community land.
The balance of the prayers for relief in the Cross-Summons were:
3. Vacate the ex parte injunctive order made by Rein J. on 9 February 2022.
4. Dismiss the Summons herein.
5. Order the plaintiff cross defendant to pay the costs of these proceedings.
The matter came before me in the Expedition List on 24 February. PD sought a preliminary hearing on specified questions, but this was opposed by the Council. I indicated that I was prepared to grant expedition of the Council's claims for declaratory relief. The parties agreed that this was acceptable. I made an order for the separate hearing of those claims for relief on 27 February. The hearing occurred on 13 April.
In my May judgment, I rejected the Council's contention that the land was "community land" for the purposes of the Local Government Act 1993. Accordingly, I dismissed the first two prayers for relief in the Council's Cross-Summons.
On 19 May, I made orders for the further progress of the proceedings, in accordance with an agreed minute of order. The minute provided for the present costs dispute to be determined on the papers. I also made orders setting a timetable for the Council to file and serve any Notice of Motion and any evidence in support seeking to modify the injunction in place. The timetable made provision for the subsequent filing of evidence by the parties, and the hearing of any Notice of Motion on 4 August.
[3]
Submissions
PD seeks an order that the Council pay its costs of the Cross-Summons. PD's submissions can be summarised as follows.
First, the order sought follows from the general rule that costs follow the event. PD was wholly successful at the separate hearing concerning the first two prayers for relief in the Council's Cross-Summons. Second, there is no reason to depart from the general rule. Third, the Council made its own forensic decision to file a Cross-Summons, shortly after the proceedings were commenced, instead of merely proceeding by way of defence. That forensic decision resulted in PD incurring costs. Fourth, the declaratory relief sought by the Council went beyond the present proceedings. In pursuing the declaratory relief, the Council took a position inconsistent with that taken by it since 1994. It can be inferred that the claims for declaratory relief were an effort to vary the status of the land as "operational land". The declaratory relief would have affected future dealings with the land beyond those with PD, regardless of the Council's future composition.
The Council's solicitors, in their written submissions, submitted that the costs of the separate determination of the first two prayers for relief in its Cross-Summons should be costs in the cause.
The Council accepted the breadth of the Court's discretion as to costs, and that successful parties are ordinarily entitled to have their costs paid by the unsuccessful party. Nonetheless, the Council submitted that it was premature to award the costs of the separate determination to any party, because it was not presently clear which party would ultimately be successful in the proceedings. The Council's solicitors emphasised that the separate determination only concerned one of the Council's defences. They also pointed to the fact that PD's claims have not yet been determined.
[4]
Conclusions
I do not understand the relevant principles to be in dispute. As the parties acknowledged, the Court has a broad discretion as to costs, and the general rule is that costs should follow the event. It is also agreed that PD was wholly successful at the separate hearing. What is in dispute is whether a costs order should be made at this stage of the proceedings.
I take the Council's point that it is not clear at this stage which party will ultimately prove successful in the proceedings (although it would have been if the Council had prevailed on the separate hearing). But I do not accept that this necessarily means that costs should not be awarded now.
The declaratory relief sought by the Council raised a discrete legal issue: whether the land in question was "community land" for the purposes of the Local Government Act 1993, on the basis that it was, as at 1 July 1993, "subject to a trust for a public purpose" for the purposes of cl 6(2)(b) of Sch 7 to that Act: see J1 [103]. There was no dispute about the facts, and the evidence was essentially documentary. There appears to be no substantial overlap between the separate hearing and the hearing of the remaining issues for determination in the proceedings.
In these circumstances, I see no reason why PD should not be entitled to be compensated for its costs of defending the Council's claims for declaratory relief. It would be unjust for PD, having been put to the costs of defending a discrete issue raised by a cross-claim, to be denied those costs. That is particularly so in circumstances where, as PD submitted, the declaratory relief would have had consequences beyond these proceedings. It is not premature to make that determination at this point.
PD sought an order framed in terms of the Cross-Summons as a whole. Strictly speaking, the separate hearing was confined to the prayers for declaratory relief in the Cross-Summons, and, in form, the dismissal only extends to those prayers for relief. But as a matter of substance, it seems to me that there is nothing else left in the cross-claim proceedings. Accordingly, I will provide in my orders for the Council to pay the costs of the cross-claim proceedings as a whole (which will of course include the costs of the separate hearing). If the Council wishes to contend that there is some other substantive claim for relief remaining for determination in the cross-claim that I have missed, it may apply under the Rules to vary the order.
Having succeeded on this application, PD is also entitled to have the Council pay their costs of this application.
[5]
Orders
The orders of the Court are:
1. Order that the defendant pay the plaintiff's costs of the defendant's Cross-Summons filed 14 February 2022 on the ordinary basis, as agreed or assessed.
2. Order that the defendant pay the plaintiff's costs of this costs application.
[6]
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Decision last updated: 05 July 2023