Background
7The class 3 application filed on 4 May 2012 sought the following relief:
Such orders as the Court may deem just with respect to:
1.The removal of the encroachment.
2.Rectification of property damage caused by the encroachment.
3.In the alternative to order 2, payment of compensation for loss and damage that will be incurred by the adjoining owner.
4.Costs.
8At the first directions hearing on 1 June 2012, Pepper J referred the matter, by consent, to a s 34 conciliation conference appointed for 27 July 2012.
9The original contentions, filed in the applicants' Statement of Facts and Contentions ('SFC'), on 25 June 2012, were framed as follows:
The Applicants contend that:
1.As a consequence of the Respondent's negligence, the Applicants have suffered loss and damage in the following form:
a.cracking to their brick boundary wall;
b.seizure of their entry gate;
c.dislodgement of their wrought iron balustrade;
d.cracking to floor tiles
2.The damage to the Applicants' property arises as a direct result of the negligent construction by the Respondents of an encroaching slab without proper survey and without the provision, in accordance with sound building practice, of separation material between concrete and brick surfaces.
3.As a consequence of the chemical bond between concrete and brickwork negligently caused by the Respondent, shrinkage of the slab and settlement of the footing induces rotation and cracking to the Applicants' boundary walls and consequential damage to other property elements.
4.As long as the chemical bond between concrete and brickwork remains, so does the potential for ongoing damage to the Applicants' property remain.
5.The Applicants have acted reasonably in making numerous attempts to resolve the matter in accordance with the pre-litigation requirements of section 18E of the Civil Procedure Act 2005. The Respondent has acted unreasonably in rejecting those attempts.
6.The Applicants contend that such orders as the Court may deem just should be made with respect to:
a.the removal of the encroachment;
b.rectification of property damage caused by the encroachment;
c.in the alternative to (b), payment of compensation for loss and damage that will be incurred by the Applicants;
d.costs.
10The respondent filed its SFC, in reply to the applicants', on 13 July 2012.
11The matter did not resolve at the s 34 conference conducted by Commissioner Hussey, on 27 July, and extensive correspondence followed between solicitors, before the second directions hearing, before Pepper J, on 17 August.
12That correspondence, mostly annexed to Mr Aronstan's affidavit sworn 16 August, with copies of other items handed up to the court today, focussed on legal and jurisdictional issues apparently discussed at the s 34 conference, and the effect of Bignold J's decision in Wherry v Trustees of the Sisters of Charity of Australia [2000] NSWLEC 252; (2000) 111 LGERA 216, and/or Harrison J's March 2012 decision in Hill v Higgins [2012] NSWSC 270.
13After the s 34 conference, the applicants sought counsel's advice, and formulated the original version of the amendments currently before the court. The respondent viewed those proposed amendments favourably, provided (affidavit p6):
... an order is made in our client's favour for costs thrown away by the amendments. In our view, such costs would include not only the preparation of the relevant part of the Statement of Facts and Contentions, but also the costs of appearing at the conciliation conference.
14The applicants' solicitor pointed out in reply that the s 34 conference was required by the court, not by their application, and continued (p8):
We do not agree that it is correct to contend that your client's costs of preparing any part of its Statement have been 'thrown away' by the amendments. With respect, we do not construe your letter as setting out any reasons for this contention, nor have you identified the 'relevant part' of that Statement to which you refer. Please provide the foregoing details, along with itemised details as to the question of costs requested below.
In our view, the appropriate order consequential upon the Court granting our client leave to amend its Application and Statement as indicated (if such leave were granted) would be 'no order as to costs', or at the highest 'an order that costs be costs in the cause'. The outcome of the substantive dispute at hearing would be material to the issue of the exercise of the Court's costs discretion in relation to this amendment.
However, in the interests of the 'just, quick and cheap' resolution of this present issue, we note you have not provided any estimate of your client's costs thrown away either for the s34 conference or drafting the 'relevant part' of the Statement. As a consequence, our client is unable to properly assess your offer. We request an itemised estimate of these costs.
15The respondent's solicitor replied (p9):
For the avoidance of doubt, our client does not oppose your clients' filing the amended documents in the terms provided to us, on the basis that your clients pay our client's costs thrown away by the amendment. We anticipate that the Court will not grant leave to your clients to amend without an order as to costs to that effect.
Clearly our respective clients have a differing view as to what those costs thrown away will be, but that is a matter which can be determined at a later stage and need not interfere with the filing of the amended documents or the smooth progression of the matter.
It is a matter for your clients as to whether or not they file an application in relation to the proposed amendments, but the only matter in issue at the hearing of the motion will be the question of costs thrown away. If your client agrees to pay the costs thrown away as a result of the proposed amendments then in our view no motion is necessary as the necessary orders can be made by consent.
16The applicants responded (p10):
Could you kindly advise as to whether your client will consent to the costs order being 'costs reserved'. This will allow for the matter of costs to be argued at a later date, without, as you say, delaying the progression of the substantive matter.
The order giving the Applicant leave to amend a reserved costs order could then be made as Orders 1 and 2 by consent at the next directions hearing.
17Agreement on costs was not reached, no estimates/particulars of costs have been provided, and the respondent added to the debate (on 14 August, see affidavit p11) by seeking to impose on its consent a condition that it was "provided without prejudice to our entitlement and intention to apply to strike parts of the amendments out".
18In response (pp13-14), the applicants revised their draft amendments, and foreshadowed (1) separate Supreme Court proceedings for trespass, and (2) an application to transfer those proceedings to this court.
19On 10 August 2012, the applicants filed the following materials, all dated 7 August 2012:
1.An affidavit by the first applicant.
2.A report by Quantity Surveyor Ian Berson.
3.A report by Surveyor Mike Morris.
4.A report by Consulting Engineer Alan Wright.
20On 17 August, Pepper J gave the following directions, by consent:
1.Applicant to file and serve notice of motion and affidavit in support seeking leave to rely on Amended Class 3 Application and Amended Statement of Facts and Contentions by 4.00pm on the 20 August 2012.
2.Leave granted to the parties to approach the Registrar forthwith to obtain a hearing date (1/2-1 day).
3.Liberty to restore on 3 days notice.
21The present NOM was filed on 20 August, and the applicants also issued a Supreme Court Statement of Claim in trespass on the same day.
22Tomorrow (4 September 2012), pursuant to a NOM filed by the applicant on 29 August, the Supreme Court will be asked to transfer those proceedings to this court.
23Hence Mr Neggo's suggestion that I might prefer to defer a decision on the present amendments, especially as the respondent says it intends joining in the Supreme Court matter one or more parties who was/were involved in the work that is alleged to have created the encroachment, and caused the alleged damage to the applicants' land.
24Mr Neggo also speculated that the Supreme Court may decide that the current proceedings in this court be transferred to it, rather than the reverse. He contends that it is conceivable that any combination of such eventualities (transfer, joinder of parties, etc) may necessitate further alterations to the applicants' documents. (This suggestion had been made by the respondent's solicitor in his letter of 29 August).