This is an application relating to the costs of the proceedings in Waverley Council v Ash Samadi and Ors [2020] NSWLEC 67 (Samadi (No 1)). I adopt the facts and circumstances as set out in that judgment without repeating them here. I adopt the same defined terms as were used in Samadi (No 1).
The Council seeks the following orders against the First Respondent:
1. The Respondent is to pay 40% of the Applicant's costs of the proceedings on an indemnity basis; and
2. The Respondent is to pay 60% of the Applicant's costs of the proceedings (as assessed or agreed) on the ordinary basis.
Whilst the orders sought refer to "the Respondent", I understand the Council to only be seeking an order for costs against the First Respondent and not against the Second or Third Respondents.
The First Respondent does not oppose an order that he pay the Council's costs of the proceedings on the ordinary basis. He does oppose the making of an order for indemnity costs as sought by the Council at all, or in the alternative, submits that the proportion of an indemnity order, if made, should be for specified parts of the proceedings but not on a percentage basis, or if on a percentage basis, should be no more than ten percent of the costs of the proceedings.
[2]
Council's submissions
The Council submitted that an order for indemnity costs should be made in these proceedings for the reasons set out at [7]-[9] of its written submissions which express the claim in the following way:
7. First, the Council is the public authority responsible for the administration of planning laws within its local government area and brought these proceedings to uphold the integrity of the planning system, rather than to enforce any private interest.
8. Second, Mr Samadi's conduct which was the subject of the proceedings was "delinquent" in the relevant sense. Mr Samadi's breaches of the Stop Work Order were contumacious, defiant, deliberate, flagrant, and sustained (continuing after these proceedings were commenced and Mr Samadi had given an undertaking in lieu of interlocutory relief). It was that conduct which necessitated the entire exercise of these Class 4 proceedings.
9. Third, Mr Samadi's conduct of these proceedings was "delinquent" in the relevant sense, including prolonging the proceedings by maintaining defences and positive factual assertions which, on the Court's findings, he must have known were false; and by bringing interlocutory applications in order to complete the roof of the premises, or in fact simply completing or progressing that part of the structure, in defiance of the Stop Work Order, and contrary the [sic] Council's ongoing proceedings to enforce it.
During the course of submissions made by Senior Counsel for the Council it was clarified that the first and second grounds articulated above should be considered together in that these proceedings were not "ordinary enforcement proceedings" as the conduct of the First Respondent during the course of the proceedings prevented the Council from undertaking necessary inspections as required and "concealed" work done by the installation of a fixed tarpaulin such that the Council and its experts were unable to consider whether the work was done in accordance with the Joint Report in the proceedings. Senior Counsel confirmed that "a pseudo-contempt" claim was no part of the Council's case on costs, that is, that it did not submit that the Court would find that Mr Samadi had breached his undertaking given to the Court as a matter relied upon in this costs application.
The Council submitted that the appropriate principle to apply in the determination of whether an order for indemnity costs should be made is set out in the often-cited judgment of Justices Gaudron and Gummow in Oshlack v Richmond River Council (1998) 193 CLR 72 at [44] (citations omitted):
It may be true in a general sense that costs orders are not made to punish an unsuccessful party. However, in the particular circumstance of a case involving some relevant delinquency on the part of the unsuccessful party, an order is made not for party and party costs but for costs on a "solicitor and client" basis or on an indemnity basis. The result is more fully or adequately to compensate the successful party to the disadvantage of what otherwise would have been the position of the unsuccessful party in the absence of such delinquency on its part.
In this case, the Council submitted that the relevant delinquency of the First Respondent was:
1. Pleading and adducing evidence on the positive defence that the Stop Work Order and the relevant access notices had not been served as he had notified the Council of an address for service which was not the address to which service was effected. The findings in Samadi (No 1) at [131] were that such evidence was false and that the First Respondent, when putting the positive defence forward, would have known that fact;
2. The interlocutory component of the proceedings required the Council to attend numerous hearings that were either withdrawn late or were brought by the Council to enable the proper conduct of the proceedings where Mr Samadi deliberately sought to thwart the proper conduct of the proceedings by installing a tarpaulin that prevented inspection of the work. Such attendances were not "usual" in the conduct of proceedings of this type and demonstrated a belligerency on the Frist Respondent's part; and
3. The First Respondent made assertions in his evidence relating to the delivery of a copy of the Complying Development Certificate to the Council which was also found to be false, putting the Council to greater expense and effort in the proceedings.
At the very least such conduct encompasses 40% of the litigation costs of the proceedings.
The Council also submitted that a percentage order was appropriate in the circumstances for the Court to adopt a "broad-axe" approach to the costs order and that (written submissions in reply at [25]):
25. Indeed, such orders are routinely made so as [sic] minimise the potential for further satellite litigation, reviews and appeals in costs assessment proceedings and on the basis that it is efficient that the exercise is conducted by, or under the supervision of, a judge already familiar with the proceedings: In the matter of Optimisation Australia Pty Ltd (Costs) [2018] NSWSC 280 at [29]-[30].
[3]
First Respondent's submissions
The First Respondent accepted that in accordance with the usual rule an order in the ordinary terms should be made requiring him to pay the Council's costs of the proceedings on a party-party basis.
It was submitted that the Court would not make an indemnity costs order as the First Respondent had not been relevantly delinquent but rather the costs that the Council refers to are merely matters that are a normal incident of proceedings. The fact that the First Respondent was unsuccessful in some of his arguments does not render the raising of such defences or require the Council to be put to proof of its case, such that it would warrant costs other than in the ordinary course.
If the Court did determine that an indemnity costs order should be made it should relate to specified aspects of the conduct of the proceedings and not a percentage of the costs of the proceedings as the aspects of the proceedings to which the Council refers are not sufficiently dominant or separable such that the Court could make a percentage costs order.
If such a percentage costs order was made, contrary to the First Respondent's submissions, the quantum should only be ten percent as the part of the proceedings to which the Council's complaint relates is far less than ten percent of the total hearing.
[4]
Findings
The First Respondent relied upon a specific pleading in his points of defence that he had notified the Council by mail of an address for service of notices. This assertion went directly to the essence of the Council's case in that it challenged the validity of the Stop Work Order and the Notices for Inspection which were the subject matter of the proceedings. This evidence was found to be false. In order to support the submissions that I should find the evidence to be false the Council was required to search its records, adduce evidence as to the manner it kept those records and cross examine the First Respondent at length on this and other matters that would lead to such a finding. This matter, being raised as a positive defence, did not arise in the usual course of the Council's conduct of the enforcement proceedings but was required for the sole purpose of meeting the defence as pleaded. In circumstances where such defence was not open to be sustained as the letter was not, on my findings in Samadi (No 1), in fact posted, such conduct is, for that reason, sufficiently delinquent such that in the exercise of the discretion relating to costs the conduct is such as to warrant an order that those costs be awarded to the Council on an indemnity basis.
The conduct of the First Respondent in agreeing to carry out work described in the Joint Report and then preventing the Council from inspecting such work by the installation of a tarpaulin and declining requests for its removal to enable inspection is inexplicable as normal conduct in litigation. Whilst I make no findings as to his motives for this conduct, the conduct itself was sufficiently delinquent in that it prevented the normal inspection process anticipated by the permission to carry out work (notwithstanding that it would be in breach of the Stop Work Order) to accommodate the First Respondent's concerns to make his building weatherproof pending determination of the substantive proceedings. This conduct incurred costs that should not have had to be incurred, namely the need to undertake the actions referred to in [28]-[32] of Samadi (No 1). The First Respondent should also be required to pay the costs of those actions. In the exercise of the discretion relating to costs, the conduct is such that those costs should be awarded to the Council on an indemnity basis.
The other factors upon which the Council relied were matters that were not the consequence of a positive defence put by the First Respondent but rather arose as a part of the dispute between the parties as to the Council's entitlement for the orders sought or relating to the discretion of the Court to make the orders in the event that the breach was established. Whilst the First Respondent was to some extent unsuccessful in opposing the making of the orders either as a matter of liability or discretion, I consider that these factors were incidental to the usual conduct of the proceedings and do not warrant an order for costs other than on the ordinary basis.
I accept that at least in relation to that aspect of the proceedings referred to at [15] above, the Court is sufficiently able to determine what has been referred to as a broad-axe approach and apportion a percentage figure. The time taken in the oral evidence, the number of affidavits and the documentary evidence were all before the Court such that it permits a determination of the relative time and expense taken in responding to the pleaded defence. I determine that the appropriate percentage of the total costs that would represent this ground is 30 percent of the costs of the proceedings.
I accept that the interlocutory costs which are identified at [16] above were matters where the actual cost and expenses that would have been incurred were not as fully before me in the hearing such that it is unlikely that a percentage figure could comfortably be determined. Accordingly, I will make a special order identifying this work as being on an indemnity basis, the quantum of which will be determined either by agreement or the assessment process.
[5]
Conclusion and Orders
For the reasons outlined herein, it is appropriate that the Council be awarded 30 percent of its costs of the proceedings, and the costs for the actions referred to at [29]-[32] of Samadi (No 1) on an indemnity basis with the balance of the costs to be paid on an ordinary basis.
The Court orders that:
1. The First Respondent is to pay 30 percent of the Applicant's costs of the proceedings on an indemnity basis;
2. The First Respondent is to pay the costs associated with and incidental to the conduct of the actions referred to at paragraphs [29]-[32] of the judgment in Waverley Council v Ash Samadi and Ors [2020] NSWLEC 67 on an indemnity basis; and
3. The First Respondent is to pay the Applicant's costs, including the costs of this Notice of Motion, other than the costs referred to in orders (1) and (2) hereof, on the ordinary basis.
[6]
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Decision last updated: 25 November 2020