Rawson v Studholme

19 May 2017

1. On 19 May 2017, the plaintiffs' solicitors put the following proposal to the defendant: 1. That all the parties agree to a jointly appointed surveyor to survey the laneway and its position in relation to the boundaries of the adjoining properties. To that end, we intend proposing three independent surveyors and you could choose one of those surveyors to carry out the survey. The survey would be carried out at our clients' expense. 2. That a valuation would be obtained to assist in determining adequate compensation for any loss or other disadvantage arising from imposition of the right of carriageway, - that is the area of the laneway encroaching upon your land. 3. That an engineering report be obtained as to whether the laneway and any structure supporting the laneway or the concrete path has caused or will cause damage to your property, either structural or rising damp. If it is proven either is the case, then remediation work be undertaken to remedy or prevent any such damage. 4. Our clients would consider installing any bollards or speed bumps limiting speed of vehicles or restricting the usage of the laneway. 5. Our clients would consider installing a sign at the entrance to the laneway making it clear to any potential users the maximum height, width and weight of any vehicles using the lane. 6. Our clients pay all the legal costs with respect to drawing the appropriate documents and having them registered.

27 June 2017

1. On 27 June 2017 the plaintiffs each signed and hand delivered a personal letter to the defendant. The letter stated in part: We would dearly like to reach a fair and reasonable agreement to resolve this matter. The dispute has caused a great deal of anxiety and distress and has already involved considerable cost. If we can manage to reach a settlement now, it would avoid further costs for all parties and the ongoing stress for all concerned. (emphasis added)
2. The letter went on to set out the following proposed terms: 1. You agree to grant a right of carriageway over that part of your property currently the subject of the informal access way. 2. In return we agree to compensate you and offer you the following: 3. In order to compensate you for the placing of a right of carriageway over your land where the laneway now extends over your property we would pay you compensation of $46,000. This is more than double the valuation of the proposed easement made by the expert valuer. 4. We will pay all your legal costs to date and all the reasonable costs associated with establishing the right of carriageway over your property. 5. We will cut away the concrete area where it adjoins the side wall of your house to align with the rest of the lane alongside your property and will replace the removed concrete with drainage aggregate. 6. We will erect a sign to say that the lane is a private driveway. The proposed wording is 'Private driveway vehicle limit 3 tonnes and 2.3m height'. 7. We will install speed bumps at strategic places along the lane to ensure that vehicles can not speed. 8. If you install windows into your side wall within the next 6 months we will meet the reasonable additional costs of using double glazing over ordinary window glass to reduce any possible noise nuisance. 9. We would be prepared to discuss the above points and any other reasonable requirements.

27 July 2017

1. On 27 July, the plaintiffs' solicitors wrote again, this time offering the defendant $300,000. The offer contained the following elements: 1. The plaintiffs agree to pay the defendant the sum of $300,000.00; 2. The defendant agrees to grant a right of carriageway to the plaintiffs over that part of her property currently the subject of the informal access way; 3. The plaintiffs agree to pay the defendant's legal costs in the sum of $45,000.00; notwithstanding the advice set out in your email dated 25 July 2017 that the costs were $40,370.00; 4. The plaintiffs will pay all reasonable costs associated with establishing the right of carriageway over the defendant's property; 5. The plaintiffs will cut away the concrete area where it adjoins the side wall of the defendant's house to align with the rest of the lane alongside her property and will replace the removed concrete with drainage aggregate; 6. The plaintiffs will erect a sign to advise that the lane is a private driveway. The proposed wording is 'Private driveway vehicle limit 3 tonnes and 2.3m height'; 7. The plaintiffs will install speed bumps at strategic places along the lane to ensure that vehicles can not speed; 8. If the defendant decides to install windows into her side wall within the next 6 months the plaintiffs will meet the reasonable additional costs of using double glazing over ordinary window glass to reduce any possible noise nuisance.

14 October 2018

1. On 14 October 2018, when the evidence for the hearing was complete and the parties' valuers had prepared a joint report, the plaintiffs' solicitors tried once more. They wrote to the defendant's solicitors and observed that the valuers agreed that the freehold value of the defendant's land to be burdened by the easement was $76,500 but that its market value was $38,250. Notwithstanding the valuers' conclusion as to the market value, the plaintiffs' solicitors made the following offer: 1. Pay to the defendant within 28 days the sum of $76,500.00 by way of compromise in compensation for the easement; 2. Pay the costs of and incidental to the registration of the easement; 3. Pay to the defendant the defendant's costs as agreed or assessed up to the date of this offer [UCPR r20.26(3)(b)]; 4. Without admission, in 28 days: a. Saw cut the existing concrete slab along the southern edge of the proposed easement and remove from the defendant's land that portion of the concrete slab which extends beyond the boundaries of the proposed easement; b. Install along the full length of the southern edge of the easement upon the defendant's land (but wholly within the easement upon the existing concrete driveway) a 100mm x 100mm galvanised steel angle [to serve as a vehicle wheel barrier and as a means of containing within the area of the existing concrete driveway the excessive surface waters generated during high intensity storm events].

The Defendant

1. The defendant gave evidence and was cross-examined. She was the only witness of fact to do so. I formed an adverse view of the defendant and did not think her evidence was credible on important issues. She frequently denied the obvious and asserted the improbable. She is 79 years of age but is sprightly and in apparent good health. She has had tribulations in her life but they do not excuse or justify her unreasonable behaviour. She denied that she was 'difficult'; denied knowledge at material times of the true legal position in relation to the laneway; and blamed others - her son, her builder, her architect. She said that she had been let down by each of them. She said that she was preoccupied by her daughter's health and sought to distance herself from, or deny any suggestion that she had knowingly acquiesced in, the long history of use of the laneway (including the 800mm strip that encroached on her land) by the plaintiffs and their predecessors in title.
2. Even before the defendant purchased her land in 1998, its effective practical northern boundary seems always to have taken into account the location of the laneway (including the encroaching portion) and been set back from the legal boundary. It seems likely that at all relevant times, all of the affected parties were aware of the true legal position of the laneway, including the defendant and her agents. Those agents included the defendant's solicitors, surveyors and architects. No doubt they also included her builders and her son - to whom she said she deputed responsibility for certain alterations and building works until she fell into dispute with him.
3. The laneway originally comprised a hard dirt surface. In 1985, a gravel road base and bitumen seal were added. In 1999, after the defendant acquired her property, the laneway was re-surfaced with red asphalt. In late 2002 or early 2003, it was re-surfaced with a terracotta coloured concrete. The cost of this re-surfacing was paid by six of the neighbours for whom vehicular access along the laneway was essential. Along part of the first 38.1m of the laneway, the terracotta coloured concrete surface abuts the wall of the defendant's home and garden.
4. In 2001 the defendant proposed to carry out building works to her property. On 8 March 2001, her surveyors, Garvin Morgan & Company prepared a survey report. The defendant was noted as the 'client'. The survey plan shows the 1.83m right of way, alongside which is marked a 'gravel driveway' adjacent to the fence and northern wall of the defendant's residence. On 20 April 2001, the defendant's architects, James E White & Hardie, prepared architectural plans. Their plans identified the 38.1m section of the laneway running alongside the defendant's property; marked the formal northern boundary of her land on the laneway; and identified with a dash line the division along the laneway between the formal right of way and the encroaching land.
5. The architect's plans contained elevations and a floor plan for what was a substantial re-design of the house for the purpose of the defendant's retirement. When questioned about her knowledge, she insisted implausibly that she 'wanted nothing to do with it', never saw the plans and had 'nothing to do with this renovation'. Later, she conceded that her son showed her the plans, that she discussed them with him, and that she would have seen 'the line forming the physical boundary of your land'. For some reason however - and it probably does not matter precisely why - she contended that she was not aware 'that 3 foot was on my property' until mid-January 2004.
6. There were objections to the defendant's development application. On 14 October 2002, the defendant's architect wrote to the Council responding to the objections. He noted that one of the neighbours is 'concerned about interference with the 'private lane' running to he [sic] and his neighbour's back yards'. The architect enclosed a copy of the original subdivision plan and referred to a recent survey submitted with the development application. There was no confusion whatsoever about the legal status of the laneway. His letter stated accurately: These drawings clearly show a right of way about 6 feet over the properties to the north of No 2 Heights Crescent as the only titled access available. There is no 'private lane' as such and the current driveway that Mr Rawson refers to is partially constructed on the northern metre or so of our property. According to the Land Titles Office this land belongs to Ms Elizabeth Studholme and there are no encumbrances or restrictions on the title, i.e. no easements or rights of way.
7. The architect concluded with this reassuring and apparently conclusive statement: Ms Studholme [the defendant] appreciates that the neighbours do use her property to access their rear yards and in the spirit of good neighbourliness does not wish to put a stop to it or inconvenience anyone.
8. When asked about this statement, the defendant maintained that her architect 'wrote that letter without my authority. I did not know'. Regrettably for her, I do not believe her evidence. It does not accord with the probabilities. In my view, the defendant was trying to minimise her knowledge and disavow her previous willingness to co-operate because she thought the evidence of her doing so was damaging to her case.

Terms of Easement - Section 88K(3)

1. The only issues requiring determination are the terms of the easement, the amount of compensation and costs. The argument and submissions in relation to what terms I should impose as a condition of the easement devolved into an issue as to whether the defendant was entitled to have the works known as 'Option 1' carried out at the plaintiffs' expense. As I have mentioned, the plaintiffs offered, almost from the outset, to 'cut away the concrete area where it adjoins the side wall of your house to align with the rest of the lane alongside your property and will replace the removed concrete with drainage aggregate'.
2. Option 1 incorporated this proposal (among other things) and was in these terms: (a) Cutting of the driveway slab along the legal boundary (survey to confirm exact location), (b) Excavate down to foundation level to expose the edge of the property, (c) The experts agree that the location of a DPC should be determined at this time, if one is not encountered, one shall be installed, (d) Install 3 - 300 x 300 square stormwater pits with grated cover along the driveway slab, (e) The pits shall be connected using a 150 diameter PVC stormwater pipe at 1:100 minimum, (f) The external leaf of the north wall shall be waterproofed to prevent horizontal moisture movement, (g) A kerb shall be formed along the entire length measuring 250 mm wide x 150 mm high, (h) A DPC and weep holes shall be placed along the length of the northern wall of the property to capture and convey any possible water entering the cavity to the external face of the building, (i) A perforated subsurface drainage pipes(s) shall be placed to capture and convey any stormwater away from the property, (j) Both the pipes shall be connected to the council stormwater system.
3. It is appropriate that the defendant should be entitled as a condition of the easement to some regularisation of the concrete surface of the laneway. The concrete should be cut back and removed from its current position where it abuts her home and garden wall. And drainage gravel, including a perforated sub-surface drainage pipe, should be installed to capture and convey any stormwater away from her residence. I have formed the view that this is reasonable and appropriate. Any more is neither necessary nor justified.
4. I am not satisfied on the evidence that the various complaints relied upon by the defendant to justify other works being carried out as a condition of the easement have a sound foundation or are causally connected to the laneway or otherwise are 'appropriate' within the meaning of Section 88K(3). In general, they constituted matters of home maintenance or arose from the design of the house or from possible defects in building works carried out for the defendant. There are no scrape marks due to vehicle impact on the northern wall of the defendant's property; the damage to a construction joint mid-way along the northern wall is due to an inadequate movement joint in the render; chipping at the corner of the boundary wall is minor; and a few drummy tiles and some damp stains on the plywood floor of a pantry cupboard are de minimus.
5. To the extent that there is dampness on the northern wall of the defendant's residence, it was submitted that the dampness was attributable to the concrete surface of the laneway. However, I am satisfied that, irrespective of the construction of the concrete pavement, 'the existing ground/gravel level would still have caused capillary action through the render'. In any event, there was no full investigation by the defendant. In particular, there was no certainty even about the existence let alone the effectiveness of a damp-proof course in the northern wall of the defendant's residence. The defendant did not call a damp specialist despite informing the plaintiffs' solicitors in August 2017 that she was in the process of obtaining an opinion from a damp specialist; and her engineering witness did not endeavour to establish the position.
6. I have concluded that the deleterious effects of dampness to the defendant's property and the extent to which they are attributable to the concrete surface of the laneway have been overstated. However, there should be some remedial work. The concrete should not have been laid against the defendant's brickwork. The plaintiffs recognised this early on when they offered to cut away the concrete and install drainage aggregate. This should be done, including the installation of a sub-surface drainage pipe connected to the council stormwater system. Whether stormwater pits are also necessary over a length of 38.1m is a matter on which the plaintiffs should be guided by those installing the drainage. The evidence did not assist me.
7. The other components of Option 1, including in particular, investigation as to whether a damp proof course was or was not incorporated by the defendant's builders and the possible installation of a damp proof course on the defendant's property, together with weep holes and some other issues, are matters of choice for the defendant. They are neither necessary nor justified as an obligation to be imposed on the plaintiffs. I do not think that I should exercise the power under Section 88K(3) to require these additional matters to be carried out at the plaintiffs' expense as a term of the easement.

Compensation - Section 88K(4)

1. On the issue of statutory compensation, the expert evidence directed to the value of the land was helpful but not decisive. For the purpose of a joint report, and after each had made concessions, both valuers agreed that the market value of the small parcel of the defendant's land that will become subject to the proposed easement (30.6m2) is $38,250. They also agreed that, depending on the extent of the work, some allowance may need to be made for the possibility that the defendant may need to vacate her property while remedial work was carried out to the laneway. I doubt that will be necessary given my findings.
2. It is important to emphasise that this is an unusual case in one important respect. The proposed easement will do no more than formalise a long-standing state of affairs; the defendant and her predecessors in title have long accepted the existence (and full informal width) of the laneway encroaching on their land; the northern boundary fence and northern wall of the residence on the defendant's property have been set back from the legal boundary since at least 1954; and since that time - probably since the 1947 subdivision - the effective practical northern boundary of the defendant's land has been 800mm to the south of its legal boundary.
3. In those circumstances, the proposed easement will result in no practical change to the defendant's amenity or enjoyment of her land. That is why senior counsel for the plaintiffs submitted that any compensation should be nominal. When the defendant purchased the land in 1998, she did so subject to those features and no doubt for a price that reflected all their attendant inconvenience. The inconvenience included the movement along the laneway of her neighbours' vehicles, some noise and fumes, some limitation on privacy on the northern side of her property and some limitation on windows on that side resulting in a consequential reduction of light, sun, warmth and airflow. These factors are not new; and they weigh against the defendant. Furthermore, the defendant sought to exaggerate their supposedly injurious effect.
4. The point was made compellingly by Mr & Mrs Robertson when they wrote to the defendant on 7 May 2017: We find the timing of your letter very opportunistic as we have recently started to market our property for sale. We note you would have received marketing material from our agent McGrath early AM on the 2nd May 2017. The right of carriageway and laneway, as far as I'm aware, dates back 69 years or more. I appreciate that approximately a 900mm wide strip of your lot that is affected by the laneway and does not contain a registered right of carriageway over it, that said, you purchased the land fully aware of the laneway, it's history and the implied right of carriageway, you even completed house modifications with the laneway in mind.
5. I share some of the cynicism expressed by Mr & Mrs Robertson. I was troubled at times by the defendant's apparent motive. She did not even engage her own valuer until March 2018. I thought she was horse-trading; gilding the lily; seeking to take advantage of the situation to maximise the benefit to her, rather than behaving reasonably and fairly.
6. For those reasons, a compensation amount equivalent to the agreed market value of $38,250 may well be generous to the defendant. Given the matters to which I have referred, and the possibility in the unique circumstances of this case that the plaintiffs have equitable rights against the defendant, Mr Lunney's candid view was that 'I would be hard-pressed to measure any diminution in the marketability or value of the property. If anything, it would be a nominal sum.' There is force in that view, but I do not regard it as determinative. The exercise of the statutory power to award compensation under Section 88K(4) is unrestricted except by its own language. It does not necessarily involve a formal valuation exercise, although a valuation may well be useful. See Evans v Cornish Nominees Pty Limited [2009] NSWSC 1295 at [110]; (2009) 14 BPR 27257; referred to in Moorebank Recyclers Pty Ltd v Tanlane Pty Ltd [2012] NSWCA 445 at [248].
7. Indeed, Section 88K(4) expressly recognises that in 'special circumstances' no compensation may be payable. I have concluded however, notwithstanding Mr Lunney's opinion, that it is appropriate - not to mention fair and reasonable - that the defendant receive at least the amount for the agreed market value of the small parcel of her land that will become subject to a formal easement.
8. I am not bound to adopt the methodology or reasoning of the valuers but I have found it useful to follow the piecemeal valuation method, of which market value is one of the components. Mr Lunney stated that the piecemeal valuation method is a preferable approach given the facts of this case. The defendant's valuer also agreed that the piecemeal valuation method is 'a more adequate reflection of the compensation that should be paid'. cf. Gosford Shire Council v Green 48 LGRA 201; Mir Bros Unit Constructions v Roads & Traffic Authority of New South Wales [2006] NSWCA 314 at [67]. Mr Lunney explained: • usually the before and after [valuation method] is preferred where there is a significant difference in value; • in circumstances where there is a very minor impact on the value, the piecemeal method of valuation [is preferred] because the before and after method cannot accurately capture the diminution in value; • the overriding principle is to ensure that the land owner is adequately compensated; • that is why one often jumps to the piecemeal method - to have a more forensic look at it.
9. The three elements of the piecemeal valuation method were said to be market value, injurious affectation and sometimes, although not always, what was described in the valuation jargon as a 'blot on title'. There is, in my opinion, on the facts of this case, given the remedial work that will be ordered pursuant to Section 88K(3), and my findings in paragraphs [27]-[30] above, no credible factual foundation for any separate amount for injurious affectation.
10. The defendant may wish to have more windows, light and airflow on the northern side of her residence but the absence of those features is a function of the design of her home, its location close to her northern boundary and the existence since 1947 of the right of way on that boundary. The defendant's desire to improve the amenity of her living space should not be visited on the plaintiffs. I repeat what I said in paragraphs [33]-[35] above. Further, although the easement will reduce the 'developable area' of her property by 7.8%, I am quite satisfied that the reduction will not have any significant or detrimental impact on the development potential of her land for the reasons explained in the report of Mr Burrell, who was not cross-examined. Finally, there cannot logically be any separate amount for 'blot on title'. It is subsumed by my findings on injurious affectation and my assessment of the market value of the land, not to mention the remedial work that will be required as a term of the easement.
11. For those reasons, I have reached the view that an appropriate amount of compensation for the purpose of Section 88K(4) is $45,000 after allowing for contingencies, rounding out and erring marginally on the side of generosity. This is incidentally almost the same amount that the plaintiffs offered on 27 June 2017. I do not think that I should treat the value of the parcel as merely nominal for the purpose of Section 88K(4). It has a value to the defendant; and it probably has another value to the plaintiffs. In my view, in the circumstances of this case, the primary component of the compensation should be measured by an objective yardstick namely, the agreed market value of the land calculated by the formula: $2,500

Costs - Section 88K(5)

1. This brings me to the question of costs. Section 88K(5) provides that the costs of the proceedings are payable by the applicant for the order 'subject to any order of the Court to the contrary'. Subject to what follows, a defendant's costs entitlement 'will only be lost if and insofar as [the defendant] has engaged in unreasonable conduct, such as making the proceedings more expensive': Rainbowforce Pty Ltd v Skyton Holdings Pty Ltd [2010] NSWLEC 2; 117 York Street Pty Ltd v Proprietors of Strata Plan No 16123 (1998) at 523; 43 NSWLR 504; Mitchell v Boutagy [2001] NSWSC 1045 at [60]; King v Carr-Gregg [2002] NSWSC 379 at [71]; Khattar v Wiese [2005] NSWSC 1014 at [77]; Ross Bilton v Giorgia Ligdas [2016] NSWSC 1585 at [17]-[18]; Shi v ABI-K Pty Ltd [2014] NSWCA 293 at [98].
2. I have already said enough to indicate that, in my view, the defendant's behaviour has been unreasonable and has caused the plaintiffs to incur undue expense and endure unnecessary stress. I well understand that proceedings for an order pursuant to Section 88K(1) are in a special category. They are not conventional adversarial proceedings. An applicant for such an order has no 'right' to the grant of an easement and must satisfy the Court of certain things. This is the point that Basten JA sought to emphasise in Shi v ABI-K Pty Ltd at [98]. However, in the particular circumstances of this case, the defendant's stance in relation to reasonable necessity, public interest and the other issues required to be proved by Section 88K(1) and (2), was never justified. There was no reasonable prospect of her ever succeeding on those questions - or persuading a court that they could not be satisfied. It was irresponsible of her to maintain her position in relation to those issues for over fifteen months until she abandoned them on 25 October 2018. She kept alive her position with knowledge that the plaintiffs were incurring considerable expense in responding to it. Her abandonment was not brought about by fresh evidence from the plaintiffs. It occurred following an informal directions hearing at which I queried why those matters were being put in issue.
3. I have concluded that the stance taken by the defendant for so long was inconsistent with the statutory obligation of parties to civil proceedings in this Court pursuant to Section 56(3) of the Civil Procedure Act, 2005. That statutory obligation consists of a 'duty to assist the Court to further the overriding purpose'. The overriding purpose is to 'facilitate the just quick and cheap resolution of the real issues in the proceedings': Section 56(1). A failure to comply with subsection (3) may be taken into account in exercising a discretion with respect to costs.
4. At its simplest, the defendant caused the Court to list, and the plaintiffs to prepare for, a five-day hearing when the real issues in dispute required only a two-day hearing. She caused the plaintiffs to prepare evidence on multiple issues when the real issues in dispute were far fewer. She caused the plaintiffs' solicitors to retain experts who were unnecessary and the plaintiffs to apprehend that they were required to give evidence and be cross-examined, when there should have been no necessity for them to do so. She caused unnecessary stress, anxiety and discomfort to ordinary people, unaccustomed to the business of litigation, who were forced to come to this Court because the defendant chose to ignore an understanding that had persisted satisfactorily for over 60 years. And she failed to accept reasonable offers and practical solutions proposed by the plaintiffs, or to engage with them on a sensible and co-operative basis.
5. Further, if this had been a conventional case with pleadings, the amendment by the defendant to abandon part of her 'defence' on 25 October, would ordinarily have resulted in the 'usual order' - namely that the defendant pay the plaintiffs' costs of and occasioned by the amendment. If the amendment were late, as it was in this case, it may have resulted in an order for indemnity costs: Huntsman Chemical v International Pools Australia Ltd (1995) 36 NSWLR 242 at 250C (Mahoney JA) and 273 F (Rolfe A-JA). I do not need to spell out the exorbitant and wasteful expense to which the defendant put the plaintiffs. Many hundreds of pages of affidavits and expert reports were rendered superfluous. And the collective work undertaken over countless hours in drafting, conferring, discussing, analysing and preparing those affidavits and reports was squandered.
6. I have reached the view that this is a case in which the discretion pursuant to Section 88K(5) to make 'an order of the Court to the contrary' has been enlivened. I do so, not simply because the defendant refused to accept the offers and proposals summarised in paragraphs [11] to [15] above, but on a broader basis, having regard to the defendant's unreasonable behaviour, her entrenched resistance to reasonable resolution and her maintenance of issues without reasonable cause.
7. The defendant has done far more than 'reject reasonable offers of compensation': Shi v ABI-K Pty Ltd at [98]. She has generated a brew of trouble and mired the plaintiffs in unnecessarily contentious litigation, when a reasonable person, properly advised would have behaved differently - more prepared to engage and collaborate in the resolution of a neighbourly dispute involving practical considerations - considerations that were epitomised in the earliest proposal from the plaintiffs' solicitors summarised in paragraph [11] above.
8. This brings me to the role of the defendant's solicitor. It was not examined in the evidence but I am troubled by it. I do not know in this case who was calling the tune. But the efficient administration of justice in this court depends on 'lawyers taking a sensibly realistic and critical view of the strength of their [client's] case: Ipp, Lawyers Duties to the Court, (1998) 114 LQR 63 at 99. I have made observations to similar effect in several cases. They apply equally to barristers and solicitors, depending on who in fact is advising the client and who must bear responsibility for encouraging or permitting the client to behave unreasonably. A solicitor, just as much as a barrister, is not a mere mouthpiece of the client.
9. It is sufficient if I repeat what I said in Donnelly v Australia & New Zealand Banking Group Limited [2016] NSWSC 263 at [14]-[15], transposing 'solicitor' for 'counsel' as may be appropriate where justified by the particular factual arrangement in this case: 14 I had occasion some years ago to emphasise the need for sensible co-operation and sound judgment by counsel. In Thomas & Ors v SMP (International) Pty Ltd & Ors [2010] NSWSC 822 at [22] I said that: Counsel's duty to the court requires them, where necessary, to restrain the enthusiasms of the client… whatever misapprehensions the client may have… The efficient administration of justice depends upon this co-operation and collaboration. Ultimately this is in the client's best interest. It is more likely to ensure that a just result is reached - sooner and with less expense. 15 And again in McLaughlin v Dungowan Manly Pty Ltd (No 3) [2011] NSWSC 717 at [30] I said that: It needs to be emphasised that the efficient conduct of commercial litigation, indeed all litigation, can only be assisted by restraint, moderation, sensible co-operation and sound judgment by counsel. Indeed the due administration of justice demands it… The duty of counsel in this regard is part of the wider duty to the court to which I referred in Thomas v SMP (International) Pty Ltd [2010] NSWSC 822 at paras [19]-[22]. It is also a manifestation of the statutory duty imposed on practitioners by s 56 of the Civil Procedure Act, 2005 (NSW).
10. Responsibility requires the exercise of independent judgment. It should not be overlooked that Section 99 of the Civil Procedure Act permits the Court to disallow the whole or part of the costs in the proceedings between a solicitor and his client. The power to do so arises, among other things, where costs have been incurred without reasonable cause 'in circumstances for which a legal practitioner is responsible'. If a client is foolish, irrational or unreasonable, the solicitor or barrister, as the case may be, has a duty, where possible, and within reason, to correct the client's behaviour; to disabuse him or her of their misapprehensions and false expectations; to ensure that the case is limited to the real issues in dispute; and to act consistently with the 'overriding purpose' of civil litigation in this Court. What the legal practitioner must not do is simply give the client her head, take her money and roll on - knowing that the ordinary rule in these cases is that the applicant for an order pays the costs. Those advising the defendant should be commended for the concessions made on 25 October. But it was too late. It should never have come to that. Most of the damage to the plaintiffs had already been done.

Orders

1. It is not possible to make final orders immediately. Subject to the possibility of the parties arriving at their own resolution of the proceedings - which I encourage - they should deliver to my Associate within 6 weeks an agreed form of instrument pursuant to Section 88K(1) of the Conveyancing Act, 1919. The instrument should contain terms within the meaning of Section 88K(3) and an order for compensation within the meaning of Section 88K(4) that reflect these reasons.
2. I will defer making a costs order for the purpose of Section 88K(5) and will only do so, pending any agreement between the parties, when I have received evidence from the parties' solicitors as to the costs involved in the proceedings. The plaintiffs' costs summary should distinguish between the costs incurred up to and including 25 October 2018, and those incurred up to the conclusion of the hearing on 13 November. I propose, subject to receiving that evidence, that a significant proportion of the plaintiffs' costs be paid by the defendant. There may be remaining additional questions as to whether any part of the plaintiffs' costs should be paid on an indemnity basis and whether any orders should be made pursuant to Section 98(4) or 99 of the Civil Procedure Act. If those matters are to be agitated, there will need to be a further hearing.
3. Pending final orders, the injunction against the defendant should continue and the status quo should be maintained. If it is necessary for me to make final orders in relation to costs, there will need to be a set off of the amount of compensation payable to the defendant pursuant to Section 88K(4) and the amount of the plaintiffs' costs payable by the defendant pursuant to Section 88K(5). The amount of the costs will have to be assessed or agreed. There will, I anticipate, be a net balance in favour of the plaintiffs. The parties should consider their respective positions and seek to reach agreement on the outstanding issues. I will list the proceedings before me on 30 January 2019.

Amendments 05 February 2019 - correction to the names of the parties on the coversheet 02 April 2020 - removed system errors 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: 02 April 2020