Westfield Management Limited & Ors v Direct Factory Outlets Homebush Pty Limited Ors

SECOND RESPONDENT Mr C J Leggat with Mr Mr T To SOLICITOR Watkins Tapsell

FOURTH RESPONDENT LEGAL REPRESENTATIVES: Mr D J Hammerschlag SC with Mr J E Robson SOLICITOR Deacons FIRST RESPONDENT Mr S D Rares SC with Mr R P L Lancaster SOLICITOR Gilbert and Tobin

SECOND RESPONDENT Mr C J Leggat with Mr Mr T To SOLICITOR Watkins Tapsell

FOURTH RESPONDENT Mr D J Hammerschlag SC with Mr J E Robson SOLICITOR Deacons

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

COLORADO GROUP LIMITED T/AS MATHERS SHOES Fourth Respondent

JUDGMENT ON COSTS 1 Her Honour: On 25 June 2004 I made an order that, inter alia, the Applicants are to pay the First, Second and Fourth Respondents' costs of their strike out application commencing from p 26 of the Court transcript for Thursday 17 June 2004. I reserved the question of whether the costs awarded should be assessable immediately rather than awaiting the final disposition of the proceedings. 2 The Respondents argued that this matter was of a similar level of complexity and involved similar parties to those which appear in the commercial list in the Supreme Court of New South Wales and so should be considered as analogous to a large commercial cause matter such as appears in that list. Practice Note 100 in that Court applies to the Commercial List and specifies that the parties who prosecute cases there and have a costs order made against them will generally have that costs order assessable immediately. The Respondents argued that a similar practice ought to be applied in relation to the costs order made by me in these proceedings. The Respondents stressed that by asking for costs to be assessable immediately they are not asking me to directly apply the Supreme Court Practice Note 100, but rather to exercise my discretion under s 69(2)(a) of the Land and Environment Court Act 1979 to that effect. Section 69(2)(a) of the Land and Environment Court Act 1979 provides that "subject to the rules and subject to any other Act … costs are at the discretion of the Court." 3 The Respondents argued that the effect of the order to strike out made by me on 25 June 2004 is that the current phase of the proceedings is at an end and the Applicants have the opportunity to replead their case. The Respondents argued that this essentially represents a new beginning for the matter and, accordingly, that it is appropriate that the costs ordered in relation to the current phase of the proceedings be assessable forthwith. 4 The Applicants argued that the Respondents had not succeeded in establishing any basis to support their argument that the usual practice of this Court in relation to costs, that costs awarded are assessable after the final determination of the proceedings, should be abandoned in favour of the different practice followed in the Supreme Court. The Applicants argued that the open standing provisions contained in the Environmental Planning and Assessment Act 1979, which permit any person to bring proceedings to restrain a breach of that Act, suggest that I should not depart from the usual practice in this Court in relation to costs. 5 Further, the Applicants noted that it is Pt 52A of the Supreme Court Rules which permits the Supreme Court to order costs to be assessable immediately in certain circumstances. The Applicants argued that Pt 16 r 3 of the Land and Environment Court Rules, which only authorises "the Registrar or Assistant Registrar" to act in accordance with Pt 52A of the Supreme Court Rules "in assessing and allowing costs payable … under an order of the Court … so far as those Parts can apply" does not fully adopt Pt 52A of the Supreme Court Rules.

6 The parties referred me to the following cases in the Supreme Court which considered whether costs awarded should by payable forthwith: (a) Fiduciary Limited v Morning Star Research Pty Limited [2002] NSWSC 432; (b) ASIC v Rich [2003] NSWSC 297; (c) Kyabram Property Investments Pty Ltd v Murray; Murray v Duddy [2003] NSWSC 286; and (d) Linfox Transport (Aust) Pty Limited v Ellul & Ors [2003] NSWSC 396. The parties were unable to refer me to any decisions of this Court regarding this issue.

Finding 7 I note that Pt 52A is not fully adopted by Pt 6 of the Land and Environment Court Rules and the Rules do not make specific provision regarding the time at which costs are to be assessable. While I accept the Applicants' argument that there is some doubt as to whether the Land and Environment Court Rules fully adopt Pt 52A of the Supreme Court Rules, I consider that the discretion given to me in relation to costs by s 69(2)(a) of the Land and Environment Court Act 1979 is sufficiently broad to encompass an order that the costs ordered payable by a party be assessable immediately. Before I consider whether I should make such an order in these proceedings it is appropriate that I first consider the judgments of the Supreme Court in relation to the circumstances in which such an order should be made. 8 In Morning Star Research Pty Limited Barrett J held that it was appropriate, in the circumstances of that case, to order that costs awarded in relation to an unsucessful application made by the plaintiffs for various interlocutory injunctions be assessable immediately. Barrett J identified at [11] to [13] the three circumstances which would indicate that the discretion to order costs assessable forthwith should be exercised: (a) where the application or aspect in respect of which the particular costs order is made before conclusion of the proceedings represents the determination of a separately identifiable matter or may be viewed as the completion of a discrete aspect; (b) some unreasonable conduct on the part of the party against whom costs have been ordered; and (c) the fact that the remainder of the proceedings may continue for some extended time before being finally disposed of. 9 In ordering that costs be assessable immediately, Barrett J was influenced by the fact that following the orders made in the interlocutory proceedings, an order was made authorising the filing of new pleadings with the result that it was likely that the final determination of the matter would occur more than a year after the costs order in the interlocutory hearing. Accordingly, "the interlocutory hearing may be regarded as a separate and completed phase of the proceedings". Barrett J held at [18] that these factors in combination plus the fact that the plaintiffs had served on the defendants volumes of material which was not relied on at the interlocutory hearing, presented "sufficient reason, in the interests of justice, for departing from the general rule reflected by Part 52A rule 9(1)." 10 ASIC v Rich concerned an application made by certain of the defendants for orders against the plaintiff in relation to discovery. The matter was ultimately resolved by consent orders, leaving only the question of an application made by the defendants for costs, to be assessable forthwith. Austin J held that, while the usual rule was that costs were not awarded in relation to consent orders, the consent orders eventually agreed to by the plaintiff were inconsistent with the approach that it had previously adopted and the defendants were substantially successful in obtaining, by consent orders, the relief they sought in their application, making them entitled to an order for costs. In relation to the application that the costs be assessable forthwith Austin J noted at [86] to [88] that: … the unavoidable fact is that the issues to be resolved at the final hearing are likely to require consideration of a great volume of complex evidence over an extended hearing time.

It is relevant to note that according to Practice Note 100 (Commercial List and Technology and Construction List), paragraph 23, where an order for costs is made on an interlocutory application in that List, the normal rule is that the party benefiting from the order may proceed to assessment forthwith. It seems to me that the present case is much more akin to the kinds of cases litigated in the Commercial List than to the more typical Equity Division cases.

I have decided, therefore, that this is an appropriate case in which to order that costs be assessed and paid forthwith. In reaching this conclusion, I have decided that it is unnecessary and inappropriate to attach any significance to any aspect of the conduct of the plaintiff or its officers in the course of the litigation. 11 Kyabram Property Investments was an ex tempore judgment of Shaw J regarding an application brought by the defendants on the first day of the trial, seeking an adjournment in order to amend their pleadings so as to raise a new defence. Shaw J granted the defendants leave to file an amended cross claim. The defendant did not dispute that it was liable for a costs order against it in relation to its application, however the defendants did dispute the plaintiff's claim that such costs should be assessable forthwith. One of the parties made submissions that unless costs were payable forthwith, the financial strain on him was such that he may not be able to afford continued representation in the proceedings. Shaw J held at [15] that:

Sympathetic as I am to those who must be burdened by what have been lengthy proceedings, and who are additionally burdened by this belated application for amendment and adjournment, I do not think that there are sufficient grounds for leave to be granted or for the unusual order sought being made. Campbell J, sitting in the Equity division of this Court, said in Equityloan Limited v Windy Dropdown Pty Limited (Unreported, NSWSC, 12 March 2003) that the principle underlying the Rules is one designed to ensure that: There are not applications for taxation or assessment of costs which are made repeatedly in the course of a matter coming to trial. In these circumstances the usual rule for the payment of costs ought to be made. 12 In Linfox Transport the plaintiff brought an appeal in relation to certain directions made by the Registrar for the case management of the proceedings. The Plaintiff was successful and applied to the Court for its costs, arguing that those costs should be assessable forthwith. Shaw J held that it was appropriate that the question of costs be reserved until the final determination of the proceedings. In relation to the application that the costs be assessable immediately, Shaw J held at [25] that "both the Rules and principle mean that such an order is exceptional rather than the norm." 13 Having considered the principles enunciated in the above cases I am not satisfied that the usual rule followed in this Court that costs awarded are to be assessed after the final disposition of proceedings should be departed from. 14 I accept the Respondents' arguments that the orders made by me on 25 June 2004 represent a new beginning for the proceedings and that, if the Applicants choose to file new pleadings, it is likely that these proceedings will not be finally determined for some time but I do not accept that these factors in themselves justify a departure from the usual practice of this Court which is that costs are not assessable immediately. 15 The Respondents submitted that the nature of these proceedings is such that the matter can be considered analogous to a large commercial matter in the commercial list of the Supreme Court. While I note that this approach was followed in ASIC v Rich I do not think that such an analogy can be drawn in the context of this Court's unique jurisdiction. The Respondents' submission ignores the true nature of these proceedings which are brought by the Applicants under the open standing provisions of the Environmental Planning and Assessment Act 1979 to restrain what the Applicants allege is a breach of that Act. While the parties to these proceedings are undeniably large commercial entities I do not think it appropriate to determine the nature of the proceedings by reference to the identity of the parties who are involved in those proceedings. Thus an analogy to the Supreme Court's Commercial List and the practices followed there is of little assistance in relation to these proceedings. 16 In my view, Kyabram Property Investments and Linfox Transport make it clear that an order that costs are to be assessable immediately is only made by the Supreme Court, apart from the commercial list, in exceptional circumstances. I am not satisfied that such exceptional circumstances exist here. In this regard I note that in Morning Star Research Pty Limited and ASIC v Rich the court appeared to be influenced the fact the party against whom costs were ordered had engaged in some form of unresonable conduct in relation to the proceedings. I do not regard the Applicants' conduct in relation to these proceedings as unreasonable and accordingly, I do not consider it appropriate to order that costs be assessable immediately. It follows that the costs order I made in the First, Second and Fourth Respondents' favour on 25 June 2004 is unchanged.

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