Solicitors:
Juris Cor Legal (Applicant)
Whitehead Cooper Williams (Respondent)
File Number(s): 2016/00199993
[2]
Background
The respondent to these Class 2 proceedings seeks an order in her favour following dismissal of the application by Acting Commissioner Fakes on 2 November 2016: Song v Hackney [2016] NSWLEC 1512.
The facts of that case were summarised by Acting Commissioner Fakes in her judgment (at [1]) as follows:
The applicant, Ms Song, has applied under s 7 Part 2 of the Trees (Disputes Between Neighbours) Act 2006 (Trees Act) for orders seeking the removal of two Liquidambar trees and the payment of $63,729.20 for losses arising from, or incidental to, damage to her property allegedly caused by the trees. The damage is said to be damage to the applicant's sewer pipes. Ms Song is also concerned that if the trees are not removed, then it is very likely that roots from the trees will infiltrate the pipes and cause them to burst again.
In her judgment dismissing the application, Acting Commissioner Fakes traced, at some length ([2] - [22]), the history of the dispute and attempts to resolve it. She then made the following findings in her judgment at [26] - [34]:
26 I concur with [Hackney's consulting arborist Mark] Hartley that roots from the two Liquidambars may have entered the applicant's sewer and contributed to the blockages. As the trees are aprobable cause of damage, the jurisdictional test in s 10(2) is satisfied and the Court's powers under s 9 of the Trees Act to consider what if any orders should be made are engaged.
27 Before making orders, the Court must consider relevant matters under s 12 of the Act. In this matter, s 12(h) is most relevant - that is, anything other than the tree that may have contributed to the damage, any acts or omissions by the applicant, and steps taken by either party to rectify or prevent the damage.
28 I am prepared to accept that roots from one or more of the other plants growing on each of the parties' properties may also have grown into the pipes. I am not persuaded by [Song's arborist Jim] McArdle's evidence that the woody roots found in the trenches he dug, or in the trenches dug by the plumbers, were the same as the roots within the sewer. It seems self-evident that if a trench is dug close to a large tree then the roots found in that trench are likely to be from that tree. Mr Hartley's report provides a cogent explanation of interactions between roots and sewer pipes and other possible causes of damage to pipes which may have provided access for root incursion. The fact remains that the actual roots within the sewer were not, and have not been, identified.
29 There is competing opinion as to when Ms Song notified Ms Hackney of the problems with the sewer. While Ms Song contends that in 2014 she told Ms Hackney that she'd had problems with tree roots in her sewer, which the plumber informed Ms Song had come from the respondent's trees, Ms Song provided no corroboratory material, such as invoices, to explain the problem. Similarly, if it is true that in 2013 Ms Song was not made aware of the downstream incursions, then the respondent could not have been aware of the problem. On this basis, I am not satisfied that the respondent should make any contribution to the works carried out in 2015. I consider the starting point for consideration of any possible contribution should be post the 2015 surcharge event as this appears to have initiated the mediation.
30 The question remains as to whether the respondent should make any contribution towards the works quoted by [Song's plumber Jackson] Shields in 2016.
31 From Mr Shields' evidence given on site, it appears as though the extent of the 2013 blockage was such that Mr Shields considered the blockage to have occurred over a 5-10 year period; that is before the applicant purchased the property. It also seems that some repairs had been carried out prior to Ms Song's purchase of the property, evidenced by a section of PVC pipe removed from near the site of the 2013 blockage. Further, the clearing and repair of the 2013 blockage involved replacing a small section of old pipe and connecting the new pipe upstream into two existing terracotta pipes and downstream into the existing terracotta pipe. While there is nothing to suggest that the new joins have failed, there is no evidence that the upstream pipes, the subject of the 2016 claim, were free from roots at that time. It could therefore be argued that insufficient action was undertaken in 2013 to rectify a pre-existing problem. As previously stated, the roots in the remaining section of sewer have not been identified. If they are from Tree 2, the closest Liquidambar, that tree has been removed and cannot cause future blockages.
32 Apart from the matter of compensation, the applicants' concerns go to future damage. In a guidance decision published in Yang v Scerri [2007] NSWLEC 592, as a rule of thumb, the 'near future' is deemed to be a period of 12 months from the date of the determination. In Robson v Leischke [[2008] NSWLEC 152] at [200] the 'near future' is considered in the terms of imminent/ real appreciable probability of irreparable damage.
33 Given that Tree 2 has been removed and the roots poisoned, it cannot cause any future damage to the applicant's sewer. While Tree 1 remains and is close to the large inspection/access point to the Sydney Water sewer main, and may have been a cause of the past damage, the applicant's sewer is new and has been diverted away from the tree. Assuming the sewer has been installed to industry standards and on the basis of the warranty provided by the plumber, there is no reason to believe that the roots from this tree will, in the period of 12 months considered by the Court to be the 'near future' cause damage to the applicant's sewer. Therefore, at this stage, there is insufficient reason to order the removal of that tree on the basis of a hypothetical possibility that future damage may occur.
34 On balance, it would appear that there is insufficient evidence to require Ms Hackney to make any contribution to the replacement of the remaining section of sewer/ waste water pipe.
The respondent Hackney seeks the following orders:
That the Applicant in these proceedings, pay the costs of the Respondent in these proceedings in the sum of $18,030.11
That the Applicant in these proceedings, pay the costs of the Motion [estimated at $3,130.00].
Such other order or orders as the Court deems appropriate.
The amount sought in prayer 1 of the Notice of Motion represents the amounts paid by Ms Hackney to her solicitors and her arborist (Exhibit DPW1 fols 5 - 6) in relation to the substantive proceedings. The amount in prayer 2 appears at par 7.1 of Mr Williams's submissions on Ms Hackney's motion for costs.
[3]
Costs in Class 2 matters
The usual position in Class 2 proceedings in this Court is prescribed by rule 3.7 of the Land and Environment Court Rules 2007 ("Rules"). Aligned with rule 3.7(1), rule 3.7(2) provides that in Class 2 proceedings, the Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances.
Circumstances in which the Court may consider the making of a costs order in such proceedings to be fair and reasonable, as prescribed non-exhaustively by rule 3.7(3), include situations where the Court might find:
…
(c) that a party has acted unreasonably in circumstances leading up to the commencement of the proceedings,
(d) that a party has acted unreasonably in the conduct of the proceedings,
…
(f) that a party has commenced or continued a claim in the proceedings…where:
(i) the claim…did not have reasonable prospects of success, or
(ii) to commence or continue the claim…was otherwise unreasonable.
In Fox v Ginsberg (No 3) ("Fox") [2011] NSWLEC 139, Pain J remarked (at [9] and [13]):
9 Class 2 proceedings are intended to provide a cost effective and efficient means of delivering justice in tree disputes between neighbours within the limits identified by the Act. The presumption is that each party will pay his or her own costs and that is an important presumption in Class 2 proceedings when considering what is fair and reasonable. It is preferable that parties represent themselves rather than engage a lawyer and reduce the need for expert reports wherever possible…
...
13 As stated above, I make no assumption in tree dispute matters that legal representation is essential and I am not satisfied that it was on this occasion. I do not intend any criticism of the Applicant or her solicitor in making this finding but I am emphasising that in matters of this type legal representation is not the norm and will not automatically be compensated.
In Burns & anor v St Clair & anor (No 2) ("Burns") [2015] NSWLEC 115, Biscoe J said (at [9]):
In conventional litigation, costs are generally awarded to the successful party. In contrast, in (inter alia) Class 2 of the Court's jurisdiction, the Court is prohibited from making a costs order unless the Court considers that a costs order is "fair and reasonable in the circumstances": r 3.7(2) of the Land and Environment Court Rules 2007. All rational considerations are relevant to the formulation of the judgment whether a costs order is "fair and reasonable in the circumstances". In the end, the question is whether, in the opinion of the Court, they are of sufficient weight to overcome the presumptive rule that there will be no order as to costs. A no discouragement principle underlies this no costs rule. That is, persons generally should not be discouraged from making an application by the prospect of an adverse costs order if the application fails: ...
In Patane V Singh and Anor ("Patane") [2016] NSWLEC 13, Moore J said (at [6] - [7]):
There are a number of matters that require to be considered as to whether or not it is fair and reasonable to make a costs order in favour of the Applicant on the motion, because, as is required by the Land and Environment Court Rules 2007, costs orders in Class 2 matters within which Trees Act applications fall (amongst a range of other matters in the Court's jurisdiction), do not have a Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 presumption that costs follow the event, but there is an assumption that each party will bear their own costs unless it is "fair and reasonable" to depart from that position and make some further order.
The nature of the sorts of matters that might be engaged in considering what principles would go to exercising the discretion to make a costs order in such circumstances were set out by Preston CJ in Kiama Council v Grant [2006] NSWLEC 96; 143 LGERA 441. Essentially, in a matter such as this, the position has to be that the application was proceeded without any attempt to either engage in negotiation with the other side or without any proper evidentiary foundation for the application.
These three judgments are consistent, and suggest that the fact that a party brought unsuccessful Class 2 proceedings is no reason, of itself, for the Court to depart from the presumption against an order for costs.
[4]
The costs order applicant's submissions
Mr Williams submitted that this dispute arose from Ms Song's purchase of a property with a pre-existing problem, of which she became aware in 2013, but did not carry out the requisite repair work.
He submitted that this case fits squarely within rule 3.7(3)(f), as it had no reasonable prospects of success from the outset, and those prospects did not improve at any stage during the proceedings: Ms Song has forced Ms Hackney to spend money she was not able to afford on legal costs and arborist's fees, and to cut down a tree unnecessarily, while ignoring persistent requests for evidence to support her entitlement to orders in Class 2, failing to negotiate in a meaningful way, and failing to recognise the fatal flaw in her position on the crucial question.
In Robson v Leischke [2008] NSWLEC 152 (at [176] - [189]), Preston ChJ determined, amongst other things, that a tree the subject of an application need only be a cause of the damage in order to engage the Court's jurisdiction, to which the Applicant suggested "it must be shown to be at least that - not merely a possible cause - of the alleged damage".
The best Ms Song could achieve was a finding that some roots of Ms Hackney's trees may have caused the sewer pipe problems. As the Acting Commissioner concluded in her judgment (at [25]), and as Craig J noted in Smith & Hannaford v Zhang & Zhou [2011] NSWLEC 29 at [26], "something more than a theoretical possibility is required in order to engage the power under [the Trees] Act…".
Unlike Ms Song, Ms Hackney acted co-operatively and reasonably; she willingly attended mediation, sought the relevant information, and offered or agreed to the mediator's suggestion that the parties agree to remove all three trees in dispute (Affidavit of Michelle Hackney at 12 and 16). She applied to the Council for permission to remove two trees, and removed the one she had permission for, whilst Ms Song chose not to respond accordingly by removing her more proximate tree.
[5]
The costs order respondent's submissions
On behalf of Ms Song, Ms McWilliam submitted that, as Song has been legally advised and represented throughout the proceedings, she justifiably relied on advice that she had reasonable prospects of success.
Despite being ultimately unsuccessful, Acting Commissioner Fakes found (subs at 12):
The jurisdiction of the Court was enlivened: Judgment at [25]-[26];
The trees in question were a probable cause of damage: Judgment at [26];
Roots from the plants growing on each property may have grown into the pipes: Judgment at [28];
If the roots from Tree 2 were the source of the bloackage in the remaining section of the sewer, the tree has been removed and cannot cause future blockages: Judgment at [31].
The roots of Tree 1 may have been a cause of past damage: Judgment at [33].
At this stage, given the applicant's sewer has been diverted away from the tree, there is no reason to believe the tree will, in the period of 12 months considered by the Court to eb the 'near future' cause damage. Accordingly, there is insufficient reason to order the removal of Tree 1: Judgment at [33].
Ms Song failed in the proceedings because (subs 13) the Acting Commissioner preferred the evidence of one expert arborist over another (judgment at [28]), and found, "on balance", that there was insufficient evidence to require the respondent to make any contribution to the replacement of the remaining section of the sewer/waste water piper (judgment at [34]).
As Ms McWilliam submits (par 14):
Those findings are entirely unremarkable in the context of Class 2 litigation and further, are far removed from creating a circumstance that would make it 'fair and reasonable' for the Court to make a costs order on the basis of some unreasonable conduct.
Ms McWilliam further points out (subs 15):
(a) The parties engaged in mediation prior to proceedings being commenced: Judgment at [29];
(b) The applicant achieved a measure of success through the course of the proceedings, as Tree 2 was cut down shortly prior to the hearing. Evidence was given at the hearing that the roots had subsequently also been poisoned: Judgment at [2];
(c) The applicant had engaged a qualified arborist to provide an opinion on causation: Judgment at [13].
Ms Song acted reasonably, sought an extra-curial resolution, and ultimately achieved the removal of an offending tree.
Ms McWilliam, therefore, submits (par 18) that "for the Court to award costs against [Song] would be tantamount to a finding that 'costs follow the event', and would invite an application in every Class 2 proceeding where an applicant failed after a hearing on the merits due" to a decision-maker's preference for the evidence of one expert over another.
Should her primary submissions not succeed, Ms McWilliam asks that Ms Song not be ordered to pay the full $18,030.11, as that quantum would appear to represent indemnity costs, and because of Pain J's comments (Fox, above at [8]) that all legal costs should not normally/automatically be compensated.
[6]
Consideration
Despite the strong arguments put to the Court by Mr Williams on Ms Hackney's behalf, and his complaint that Ms Song did not provide him in advance with the evidence upon which she relied, I am not satisfied that the applicant's conduct is so "unreasonable" that it should displace the presumption that no order for costs should be made in proceedings such as the present.
Ms Song was entitled to take action on her concerns, and the fact that she failed in the proceedings, after maintaining her position, is not a sufficient basis for an order for costs against her.
As noted by the Acting Commissioner in her judgment (at [7]), as a result of the original plumbing work carried out in 2013, the plumber, Mr Jackson Shields, formed the opinion that the original pipes had collapsed and were choked with roots, which may have occurred over a five to ten year period. After clearing the initial blockage, the remaining section was cleared with high pressure water and inspected with CCTV, which indicated roots at every collar of the remaining earthenware pipes. The fact that Ms Song stated at the hearing that she was not informed of these downstream root incursions discovered in 2013 is not the sort of "disentitling" conduct upon which the Court would normally rely to displace the costs presumption.
Nor is a regrettable level of rhetoric, conflict or unpleasantness, even intransigence, between neighbours, before and during proceedings, sufficient to negate the presumption.
For these reasons, I have concluded that the respondent's claim for costs should be dismissed.
It is, therefore, not necessary for me to canvass the arguments about quantum, save to observe that, in all the circumstances, it would appear to be not unreasonable, indeed it was necessary and beneficial to the conduct of the matter, that the parties each engaged an arborist as an expert witness in the proceedings.
On the other hand, it was not unreasonable for the respondent to act on her expectation that the Court might consider her circumstances in the proceedings to be so exceptional that she might achieve an order for costs.
In those circumstances, I do not think it appropriate to order that the costs of the Notice of Motion for costs should "follow the event" of its failure. The claim for costs was certainly arguable, and each party should pay its own costs of that argument.
[7]
Orders
The respondent's Notice of Motion for costs is dismissed.
There will be no order for costs in respect of either the substantive proceedings or the costs Notice of Motion.
All Exhibits are returned.
[8]
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Decision last updated: 09 December 2016