An order for costs is not fair and reasonable
42Without intending disservice to the very detailed submissions made on behalf of the applicant, there are essentially four bases upon which the applicant claims to be entitled to an order for costs arising from the actions of the Council. It submits that the giving of the Order was unreasonable in three respects. First as to the time it imposed for compliance, second as to the fact that the wall was not the wall of the applicant and third that it required work on land not owned by it. It is true that the First Order sought to limit the time within which the work required to be undertaken to a period of seven days. That having been said, a circumstance that is relevant to be noticed is that notwithstanding the time limitation, the Council, by the exchange of correspondence to which I have earlier referred, had indicated that it was not insistent upon the seven day period. Indeed the time for compliance was properly the subject of consideration in the context of the appeal.
43I accept that under the provisions of the legislation, the lodging of the appeal did not, itself, constitute a stay but left open the time for compliance to be determined by the Court. However, the fact remains that at no time did the Council indicate that it intended to rely upon the time stated in the Order either for the purpose of arguing the appeal or for the purpose of taking some other proceeding. Its concern was to have the unsafe wall addressed in a timely manner.
44The survey revealed that the subject wall was located within No. 66 to the extent that I have already described. That survey was provided to the Council by the proprietors of No. 17. Its correctness was not challenged by the applicant. Once the Council became aware that there was disagreement between the applicant and No. 17, the orders that it gave, so the evidence reveals, were given to both landowners and to each of them in the same terms. Being aware of the dispute, one asks rhetorically, was the Council required to ignore the unsafe condition of the wall while the dispute between owners took its stately course, either by negotiation or perhaps ultimately through litigation? The answer must surely be no.
45The Council required that action be taken, no doubt contemplating by the giving of orders to both that there would be some reciprocal accommodation reached between the respective landowners in order to achieve the result that was in their mutual interests to achieve. Indeed, on hearing the appeal, had that been necessary, it would have been open to the Court to make appropriate orders in accordance with the broad powers earlier described, requiring that each take action, including the accommodation of entry to one upon the property of the other, in order to undertake the works required.
46It is also noteworthy for this and other grounds advanced by the applicant that the extent of danger occasioned by this wall was most graphically described in the reports prepared by Mr Joannides. The initial report, as I have said, was not disclosed to the Council when it first came to hand but rather held back by the applicant until the conference that was appointed by the Court to take place in December. Had that report come to hand sooner, it may well have led to a more speedy resolution of the dispute that existed between the present parties. Indeed, the inference is that the report probably did have an impact on the ultimate course that was taken by the Council.
47The second broad basis upon which the applicant claims that it was fair and reasonable that an order for costs should be made in its favour was the perceived need to engage an engineer. However it must be remembered that Mr Joannides was engaged before an appeal was filed. The engagement of Mr Joannides to express a view upon the condition of the wall was something which was clearly intended by the action that the Council proceeded to take in order to secure the safety of this dangerous wall. Why the report was held back until the conference on 15 December 2011 was not adequately explained. I do not regard the fact that an engineer was required to be engaged as a matter which weighs in favour of the discretion which the applicant seeks to have exercised in its favour.
48The need to engage such an engineer seems to me to be the inevitable consequence of the identification of a dangerous wall likely to collapse and which would have a direct impact upon the applicant's property. Whether it could seek to recover the cost of that engineer's services or who was liable to pay for the wall to be stabilised, demolished and reconstructed was a matter to be determined as between the two landholders and not by the Council.
49The third matter that was raised on behalf of the applicant was that in the Class 1 proceedings the Council's position amounted to a surrender. That is to say, there was a surrender by the Council of the applicant's primary claim in the appeal, namely that the appeal should be upheld and that the first Order should be dismissed.
50There is no doubt, as the cases decided in this Court make clear, that if in fact conduct by one party to proceedings does constitute a surrender, that is, conduct which ultimately acknowledges, without significant qualification, the claim which the successful party makes, then in such circumstances an order for costs may be justified. That does not seem to me to describe the events that occurred prior to or following the conciliation conference of 19 December 2011. It is true that when the Second Order came to be served the Council indicated in an accompanying letter that the First Order was, in effect, redundant and that the Second Order replaced the First. I cannot ignore the circumstance that service of the Second Order followed closely upon the conciliation conference which was not terminated but rather adjourned. An inference to be drawn from the fact that it was adjourned is that the position of the parties in seeking to conciliate upon the issues which existed between them was a process that was ongoing. If the position was otherwise, the Commissioner would have been required to terminate the conference. That did not occur until 31 January 2012.
51I acknowledge that s 34(11) of the Court Act has the potential to create difficulties when determining questions of costs where there has not been any final determination at a conciliation conference and the conference has not been terminated. As was observed by Pain J in ROI Properties Pty Ltd v Council of the City of Sydney [2010] NSWLEC 22, determining questions of costs where the events that occurred at or as an immediate consequence of a conciliation conference require the question of costs to be determined in a partial vacuum. That circumstance cannot avoid the possibility of inferences being drawn from the fact that there was a conciliation conference and that it was not terminated as would be required if, in fact, the parties had nothing further to discuss.
52In the present case it is relevant to notice that subsequent to the conference Mr Joannides' report of 19 December 2011 was received from the applicant. Following receipt of that report the Second Order issued. This occurred in circumstances in which some, but not all, of the steps necessary to secure the safety of people from the collapse of the wall had been taken by the applicant. The ultimate resolution of wall safety seems to follow from the steps taken during January 2012 in which bracing of the wall was undertaken conformably with one of the requirements of the Order which is the subject of the Class 2 proceedings. Ultimately, as I have recorded, those proceedings were resolved by agreement.
53The Council accepted that the giving of the Second Order rendered the Class 1 proceedings futile. However, the circumstance in which that occurred cannot be ignored. Those circumstances fall way short of a suggestion that they amounted to a surrender.
54The fourth matter upon which the applicant sought to rely to sustain their application for costs is an assertion that its Class 1 appeal was "compelled", to use the word used in submissions. So it was, but in circumstances where work was incomplete to meet any of the requirements of the Order. It seems to me that the failure to communicate with the Council about those steps to be taken and the provision of the engineering evidence that ultimately came from the applicant's engineer are factors that need to be considered in response to the submission of "compulsion".
55For all these reasons I have reached the view that the evidence adduced and the arguments advanced on behalf of the applicant in order to seek to rebut the presumption created by subrule (2) of r 3.7 of the LECR have not been sufficiently made out to justify the exercise of the exceptional discretion that is afforded by that rule. That leaves then the question of what should occur in relation to the Class 2 proceedings.
56First to be noticed is that the Council pressed its claim for costs in relation to the Class 2 proceedings only in the event that the applicant's claim for costs in the Class 1 was successful. Second, it should be recorded that in the context of the arguments presented to me, the focus of both the evidence and the submissions was almost wholly upon what should occur in respect of the Class 1 proceedings. In the totality of the argument, little time was directed to the Class 2 proceedings and why the applicant should not be ordered to pay the costs of the latter. Indeed, for much of the submissions made by the applicant in that regard, it seemed almost to be advancing an argument that the applicant should also have its costs of the Class 2 proceedings paid by the Council. Ultimately, when my impression of the argument was put to the applicant's counsel, it was acknowledged that no order for costs was sought by the applicant in the latter proceedings.
57However, I take into account that the Council did seek costs in the Class 2 proceedings, albeit as an alternative. That fact has a consequence for the order that I am about to make in respect of the costs in that matter.
58For the reasons that I have indicated the orders that I make are these:
- The applicant's notice of motion is dismissed.
- The respondent's notice of motion is dismissed.
- The applicant is to pay the respondent's costs of the applicant's notice of motion.
- The exhibits may be returned.