Robert John Downing v WIN Television

Supreme Court of NSW|2011-10-24|Before: Ball J

EX TEMPORE Judgment 1On 18 August 2011 I gave judgment in the matter in favour of the plaintiff for approximately $242,000. The only outstanding issue now is one of costs. The parties raised a number of issues to justify a departure in one way or another from the normal rule that the plaintiff should recover his costs, having been successful in the proceedings: see UCPR r 42.1. Those issues were: (a) whether the plaintiff should obtain an order for costs having regard to UCPR r 42.34; (b) whether, because of the way in which the plaintiff has conducted the case and, in particular, the attitude he took to offers made by the defendants in 1999, some special order for costs should be made; (c) whether the plaintiff should obtain part of his costs on an indemnity basis from the dates on which he made offers of compromise, those dates being 17 March 2011 and 27 May 2011, on the basis that he did better than those offers; (d) whether the plaintiff's costs should be reduced because: (i) he failed in his claim for exemplary damages; (ii) he failed to retain title to the television transmission tower which the first defendant had erected on his land (iii) he only recovered nominal damages in respect of the defendants' trespass on his land from 1 May 2008; (iv) of the way in which the damages hearing was conducted; 2The plaintiff also raised the following questions: (a) whether the costs of a mediation should be treated as costs of the proceedings; and (b) whether there should be an order for interest on costs.

Plaintiff's conduct of the proceedings 6The second issue raised by the defendants was the way in which the plaintiff conducted the proceedings and, in particular, the fact that the plaintiff did not accept reasonable offers made by the first defendant in 1999 which would have permitted the defendants to remain on the plaintiff's land and pay rent. As events have turned out, if the plaintiff had accepted the first defendant's last offer, he would have received more than he has recovered as a result of the judgment that he has obtained. 7Mr Stack does not say that the first defendant's offers should be treated as if they were offers of compromise to which the principles stated in Calderbank v Calderbank [1975] 3 All ER 333 apply. Rather, he submits that the plaintiff's failure to accept those offers, and the plaintiff's general conduct in seeking to recover more than it was apparent he could ever recover, are matters that the court should take into account as a matter of fairness in considering what costs order should be made. In making that submission, Mr Stack relied on the following statement of Hodgson JA (with whom Beazley and McColl JJA agreed) in Turkmani v Visvalingam (No 2) [2009] NSWSC 279 at [13]: The question of whether a departure from the ordinary rule might be justified on this basis should, in my opinion, be approached having regard to the idea of fairness underlying the making of costs orders, which I expressed as follows in Commonwealth of Australia v Gretton [2008] NSWCA 117 at [121]: [121] In my opinion, underlying both the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the court considers to be the responsibility of each party for the incurring of the costs. Costs follow the event generally because, if a plaintiff wins, the incurring of costs was the defendant's responsibility because the plaintiff was caused to incur costs by the defendant's failure otherwise to accord to the plaintiff that to which the plaintiff was entitled; while if a defendant wins, the defendant was caused to incur costs in resisting a claim for something to which the plaintiff was not entitled: cf Ohn v Walton (1995) 36 NSWLR 77 at 79 per Gleeson CJ. Departures from the general rule that costs follow the event are broadly based on a similar approach. 8In my opinion, little weight can be placed on what happened in 1999. It was always open to the plaintiff to insist that the defendants leave his land and that is ultimately what he did. The approach taken by the plaintiff may appear to be commercially unreasonable, but all he was doing was exercising a right that he was entitled to exercise. That is not a reason for reducing the costs to which he is otherwise entitled. Nor do I think it can be said that he took a wholly unrealistic approach to the damages that he was entitled to recover.

Plaintiff's offers of compromise 9The next matter, raised by the plaintiff, was that he had made offers of compromise on 17 March 2011 and 27 May 2011. The plaintiff claims that he did better than those offers and that consequently he should be entitled to indemnity costs from the time the offers were made: UCPR r 42.14. It is important, however, to understand the context of the offers and to look at the substance of what happened. 10On 17 March 2011, the plaintiff made separate offers to settle with the first defendant for $200,000, the second defendant for $100,000 and the third defendant for $70,000. Similarly, on 27 May 2011, the plaintiff made separate offers to settle with the first defendant for $160,000, the second defendant for $80,000 and the third defendant for $60,000. 11The judgment I gave in this matter for approximately $242,000 was a judgment against the first defendant. However, that amount represented the damages that I considered were recoverable by the plaintiff from all defendants. During the hearing in relation to damages, I indicated that it seemed to me appropriate to give judgment against the first defendant alone since the second and third defendants were sublicensees who had been indemnified by the first defendant and I calculated damages by reference to the rent payable under a lease which gave the first defendant exclusive possession. I raised with counsel the question whether there was any reason why I should not adopt that approach. Although Mr Elliott, who appeared for the plaintiff, submitted that it would not be appropriate to give judgment for the total amount against the first defendant in circumstances where the first defendant did not or could not satisfy that judgment, he did not suggest that there would be cost consequences if I gave judgment in the form I proposed. 12Taking those matters into account, in my opinion, the only fair way of assessing the question whether the plaintiff did better than the offer he made is to look at the total amount of the offers and compare that with the judgment which was intended to cover the total damages payable by the defendants. Looked at in that way, the plaintiff did not do better than the offers that he made. 13For that reason, I have concluded that this is a case in which the court should not permit the plaintiff to recover costs on an indemnity basis from the time the offers were made even if, technically, it could be said that, as against the first defendant, he did better0 than the offer he made to that defendant.

Should the plaintiff's costs be reduced? 14The next issue is whether the plaintiff's costs should be reduced to take into account the matters I have referred to. Those matters can be divided into two categories . The first is the failure of the plaintiff to obtain exemplary damages, to retain title to the tower and to recover more than nominal damages from 1 May 2008. The second is the way in which the plaintiff approached the hearing in relation to damages. 15In relation to the matters falling into the first group, Mr Stack submits that each of those matters should be seen as separate events for the purposes of the general principle that costs should follow the event and, since the plaintiff failed on those matters, the defendants should have their costs of those events. 16I do not accept that submission. In my opinion, the facts relating to the questions whether the plaintiff was entitled to recover exemplary damages, or to keep the tower, or recover more than nominal damages from 1 May 2008, were inextricably linked to the facts that were relevant to the question whether the plaintiff was entitled to claim damages from the defendants on the basis that the defendants were trespassers on his land. The plaintiff succeeded in relation to that issue and should have his costs concerning it. Those costs necessarily include the costs which were also relevant to the other issues that I have referred to. 17That leaves the costs of the damages hearing. I find this a more difficult issue. The damages hearing did not occur until several months after the hearing in relation to liability. The reason for the delay was that the plaintiff wanted to undertake what turned out to be detailed investigations in relation to comparable sites in order to determine what damages he should recover arising from the defendants' trespass. That was in circumstances where, as a consequence of what happened, the first defendant entered into a lease of land adjacent to the plaintiff's land to be used for the same purpose as it had used the plaintiff's land - that is, the erection of a television transmission tower. 18On the face of it, the lease of the adjacent land, assuming it was an arm's length one, was the best means by which to measure the plaintiff's damages. I think that the plaintiff was entitled to investigate the question whether the lease was truly an arm' s length one and that, as part of that investigation, to look at some comparables to see whether those comparables suggested the amount that the first defendant was paying to the owner of the land next door was an arm's length amount. However, I am not satisfied that the plaintiff was entitled to undertake anything like the investigation that he did undertake. In addition, the plaintiff called expert evidence from Mr Paris, who gave evidence by reference to a large number of comparables, but more or less ignored the evidence relating to the lease that the first defendant had actually entered into of the adjacent land, although there was no suggestion that that lease was not at arm's length. 19In my opinion, that was an unreasonable approach for the plaintiff to take and he must bear some costs consequences as a result of taking that approach. I think it is appropriate to reduce the plaintiff's costs relating to the damages hearing by 40 percent to take account of those matters. In addition, the plaintiff should not be entitled to recover the costs of Mr Paris's report.

Costs of the mediation 20The next issue which was raised by the plaintiff is whether he should be entitled as part of his costs to recover the costs of a failed mediation. That mediation was ordered by the court. Having regard to the decision of the Court of Appeal in Newcastle City Council v Wieland [2009] NSWCA 113, I think it is appropriate that the plaintiff's costs include the costs of the mediation.

Interest on costs 21The last question is whether the plaintiff should be entitled to interest on costs. I cannot see any reason in this case why the plaintiff should not recover interest on costs. In my view, that interest should run from 28 days after the date on which the costs were actually paid.

Orders 22The orders of the court are: (1) Subject to order 2, the defendants pay the plaintiff's costs of the proceedings (including all reserved costs and the costs of the mediation) on the ordinary basis. (2) In relation to the costs of the hearing on 6 and 7 June 2011, together with work done in preparation for that hearing, the defendants pay 60 percent of the plaintiff's costs other than the costs of Mr Paris's report (which are to be borne by the plaintiff). (3) The defendants pay interest on the plaintiff's costs calculated from 28 days after that date on which those costs were actually paid.

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: 22 November 2011

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