Anderson v PWM (Lyndhurst) Pty Ltd (Costs Ruling)
[2024] VSC 516
•30 August 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
MAJOR TORTS LIST
S CI 2022 01121
| FLORENCE WINSOME ANDERSON & ORS (according to the Schedule attached) | Plaintiffs |
| v | |
| PWM (LYNDHURST) PTY LTD (ACN 005 470 584) | First Defendant |
| and | |
| VEOLIA RECYCLING & RECOVERY PTY LTD (ACN 002 902 650) | Second Defendant |
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JUDGE: | McDonald J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | On the papers |
DATE OF RULING: | 30 August 2024 |
CASE MAY BE CITED AS: | Anderson v PWM (Lyndhurst) Pty Ltd & Anor (Costs Ruling) |
MEDIUM NEUTRAL CITATION: | [2024] VSC 516 |
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COSTS – Indemnity costs – Finding that second defendant engaged in serious misconduct during trial – Finding that second defendant failed to comply with discovery obligations – Misconduct and failure to comply with discovery obligations constitute special circumstances justifying an order for indemnity costs – Whether defendants should be required to pay all of plaintiffs’ costs on an indemnity basis – Whether defendants’ liability to pay costs should be apportioned to reflect plaintiffs’ withdrawal of claims and partial success in respect of claims pursued.
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HIS HONOUR:
On 18 July 2024 the Court delivered judgment in Anderson v PWM (Lyndhurst) Pty Ltd & Anor [2024] VSC 417 (‘Principal Judgment’). The Court upheld the plaintiffs’ claim for relief under s 309 of the Environment Protection Act 2017 (‘the Act’). The Court held that the second defendant (Veolia) had breached clause 5 of its operating licence by failing to take all practicable measures to prevent emissions of landfill gas (‘LFG’) from exceeding the prescribed levels in the sub-surface geology at the eastern boundary of the landfill site. The Court also held that Veolia had breached the general environmental duty (‘GED’) under s 25 of the Act by reason of its failure to comply with ss 25(4)(a) and (b) of the Act. Veolia’s failure to ensure that its LFG extraction system operated at optimal efficiency between 1 July 2022 and 30 October 2023 breached s 25(4)(a). Veolia’s failure to prepare and implement a remediation action plan between 1 July 2022 and 30 October 2023 breached s 25(4)(b). The Court dismissed the plaintiffs’ claim that the migration of LFG on to their land from Veolia’s land constituted an actionable nuisance.
This ruling deals with the costs of the proceeding. The plaintiffs seek an order for their costs of the proceeding in the following terms: The defendants pay the plaintiffs’ costs of and incidental to the proceeding (including reserved costs): (a) on an indemnity basis for all costs and disbursements incurred by the plaintiffs during the period commencing 29 November 2023 and ending on 21 February 2024 (both dates inclusive); and (b) otherwise on a standard basis. The defendants contend that they should be ordered to pay 70% of the plaintiffs’ costs on a standard basis.
The plaintiffs submit that an order for indemnity costs is warranted by reason of the failure of the defendants to have complied with their discovery obligations. They submit that but for the defendants’ failure to comply with their discovery obligations, the evidence in the proceeding would have concluded on 28 November 2023 with the parties making closing submissions to the Court on 20 and 21 December 2023.
An order for indemnity costs may be made where special or unusual circumstances have been demonstrated, such as misconduct in the proceeding.[1] In the Principal Judgment I concluded that Veolia briefed Mr Lane, an expert witness it had retained, with out of date data regarding the performance of the LFG extraction system at Veolia’s Hallam Road landfill site. The data provided to Mr Lane provided the basis for his conclusion in an expert report dated 5 June 2023 that the LFG extraction system was operating at 89% efficiency in July 2020. I made a finding that when the trial commenced on 15 November 2023 Veolia knew that Mr Lane’s evidence regarding the efficiency of the LFG extraction system was based on out of date data and did not reflect the performance of the system as at December 2022 and thereafter. Veolia considered it to be in its interests to allow Mr Lane to give evidence that the LFG extraction system was operating at 89% efficiency because it believed the evidence would aid its defence of the plaintiffs’ claim that it had breached the GED and clause 5 of the operating licence.[2] I concluded that the briefing of Mr Lane with out of date data had seriously prejudiced the conduct of the proceeding.[3]
[1]Chen v Chan & Ors (No 2) [2009] VSCA 233 at 4 [10(7)] (Maxwell P, Redlich JA and Forrest AJA); Sunland Waterfront (BVI) Ltd & Anor v Prudentia Investments Pty Ltd & Ors [2013] VSCA 237 at 187-188 [542]–[544] (Warren CJ, Osborn JA and Macaulay AJA).
[2]Anderson v PWM (Lyndhurst) Pty Ltd & Anor [2024] VSC 417 at 123-127 [240]–[249] (‘Principal Judgment’).
[3]Ibid at 123 [239].
Veolia engaged in serious misconduct by allowing Mr Lane to give evidence on the basis of data which it knew was out of date and which did not accurately reflect the performance of the LFG extraction system. Veolia attempted to neutralise a key issue in the case. Veolia’s misconduct is a special circumstance which warrants the making of an order that it pay costs on an indemnity basis. This conclusion is reinforced by, but not dependent upon, the Court’s conclusion that Veolia breached its obligations to make discovery in accordance with the Court’s discovery orders of 5 August 2022.[4]
[4]Ibid at 132 [262].
The plaintiffs do not seek an order for indemnity costs for the entire proceeding. Rather, they seek an order that the defendants pay indemnity costs in respect of the period 29 November 2023 to 21 February 2024, but otherwise costs be paid on a standard basis. The plaintiffs submit that they incurred additional costs as a result of the 323 documents discovered by the defendants on 4 December 2023 and additional documents discovered in January 2024. The plaintiffs submit that this further discovery was the catalyst for their application to recall the LFG experts, the filing of supplementary reports and the further oral evidence of the experts on 20 and 21 February 2024. The plaintiffs submit that by not seeking indemnity costs for the entire proceeding they are taking a practical and pragmatic approach in order to achieve substantial justice between the parties.
Section 24 of the Supreme Court Act 1986 provides that the costs of and incidental to all matters in the Court is in the discretion of the Court. In exercising this discretion the Court is not bound to endorse one or the other of the competing contentions of the parties as to the appropriate form of costs order. Nevertheless, it is necessary, as I have done, to give careful consideration to the parties’ competing contentions.
As set out in the Principal Judgment, the briefing of Mr Lane with out of date data seriously prejudiced the conduct of the proceeding. The prejudicial effect was demonstrated by the significant change in Mr Pump’s evidence in relation to the efficiency of the LFG extraction system once he was provided with up to date data, which was included in the documents discovered by the defendants on 4 December 2023. Mr Pump’s revised evidence was a significant factor underpinning the Court’s conclusion that Veolia had breached the GED and clause 5 of the operating licence. Additional costs attributable to the briefing of Mr Lane with out of date data and Veolia’s failure to comply with its discovery obligations were incurred by the plaintiffs during the period 29 November 2023 and 21 February 2024. I shall order the defendants to pay the plaintiffs’ costs referrable to this period on an indemnity basis. I consider that this order will achieve substantial justice between the parties.
There remains the question of whether all of the remaining costs should be paid on a standard basis. The general rule is that costs should follow the event. Absent disqualifying conduct, the successful party should recover its costs even where it has not succeeded on all heads of its claim.[5] Where there is a multiplicity of issues and the parties have enjoyed mixed success the Court may frame an order for costs taking into account the success of the parties on an issues basis. Where a Court determines to make an order apportioning costs, it does so primarily as a matter of impression and evaluation.[6] The plaintiffs have succeeded in establishing that Veolia breached the GED and clause 5 of the operating licence. Subject to apportioning costs on an issues basis, the plaintiffs are entitled to an order for their costs.
[5]Chen v Chan & Ors (No 2) [2009] VSCA 233 at 3 [10(1)] (Maxwell P, Redlich JA and Forrest AJA); see also Vision Australia Ltd v Adam Elisha (No 2) [2023] VSCA 288.
[6]Chen v Chan & Ors (No 2) [2009] VSCA 233 at 3 [10(5)] (Maxwell P, Redlich JA and Forrest AJA).
The plaintiffs succeeded in their claims for breach of the GED and the operating licence, but failed in relation to nuisance. The amount of time taken up with the claim in nuisance was considerably less than the time spent addressing the claims for breach of the operating licence and the GED. The defendants submit that they should be ordered to pay 70% of the plaintiffs’ costs on a standard basis. The defendants submit that such an order will do substantial justice between the parties because the plaintiffs withdrew substantial and key components of their case prior to the conclusion of the trial: a claim for $3 million damages for diminution in the value of their land and a claim for the construction of a vent curtain system at a cost of approximately $14.5 million, in addition to losing on the issue of nuisance.
I do not consider that it is appropriate in the circumstances of the present case to apportion costs by reference to the parties’ success in respect of particular issues. The plaintiffs succeeded on two of the three causes of action which they pursued. The claim in nuisance took up considerably less time than statutory causes of action based on breach of the GED and clause 5 of the operating licence. It is true that the claim for construction of a vent curtain system was abandoned late in the proceeding. In lieu of an order for the construction of a vent curtain system the plaintiff sought orders requiring an assessment be undertaken to determine the feasibility of whether a vent curtain system could be constructed on the eastern boundary of Veolia’s land. Whilst this represented a very significant change in the nature of the relief sought by the plaintiffs, it does not warrant a departure from the general rule that costs follow the event.
When considering the question of costs the Court is entitled to look at the realities of the case.[7] Veolia briefed Mr Lane with out of date data. When the trial commenced on 15 November 2023 Veolia knew that his evidence did not accurately reflect the efficiency of the LFG extraction system as at December 2022 and thereafter. Prior to the disclosure of the up to date data in a tranche of documents discovered by Veolia on 4 December 2023, Mr Pump had taken no issue with Mr Lane’s evidence that the LFG extraction system was operating at 89% efficiency. Mr Lane’s evidence, which Veolia knew to be incorrect, neutralised what was subsequently shown to be a very significant factor in the Court’s finding that Veolia had breached the GED and clause 5 of the operating licence. Veolia’s misconduct in briefing Mr Lane with out of date data and failing to comply with its discovery obligations resulted in wasted costs during the period 29 November 2023 to 21 February 2024. However, Veolia’s misconduct also had the effect that during the first eight days of the trial the parties and the expert witnesses did not properly engage with a critical issue in the proceeding, namely, the efficiency of Veolia’s LFG extraction system.
[7]Ibid at 3 [10(2)].
Veolia’s misconduct had an adverse impact on the entirety of the proceeding. Further, as set out in the Principal Judgment, the Court rejected a number of the submissions advanced by Veolia. Veolia advanced a number of untenable submissions in support of its contention that it was not subject to any obligation to discover documents relating to the efficiency of the LFG extraction system. Further, the Court rejected Veolia’s submission that the plaintiffs did not have standing to seek orders under s 309 of the Act.[8] The Court also rejected Veolia’s submission that clause 5 of the licence imposed no obligation upon Veolia to reduce emissions of LFG once emissions had exceeded 1%.[9] The Court also rejected Veolia’s submission as to the meaning of the phrase ‘at the landfill boundary’ which is incorporated by reference into clause 5 of the operating licence.[10] The Court also rejected Veolia’s submission that the only practicable measure to reduce emissions of LFG set out in the plaintiffs’ pleadings was the construction of a vent curtain system.[11]
[8]Principal Judgment at 82 [155].
[9]Ibid at 88-89 [165]–[169].
[10]Ibid at 92 [182].
[11]Ibid at 93-94 [184].
The reality of the case is that the Court has rejected a number of submissions advanced by both the plaintiffs and the defendants in respect of issues which fell for determination. In these circumstances, it is neither necessary or appropriate in order to achieve substantial justice between the parties to apportion costs to be paid by the defendants. Save for the costs of and incidental to the proceedings during the period 29 November 2023 to 21 February 2024, I shall order the defendants to pay the plaintiffs’ costs on a standard basis to be taxed in default of agreement.
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SCHEDULE OF PARTIES
| FLORENCE WINSOME ANDERSON, LINDSAY CLIFTON ANDERSON, IAN RICHARD ANDERSON AND ROBERT GREGORY ANDERSON | Plaintiffs |
| AND | |
| PWM (LYNDHURST) PTY LTD (ACN 005 470 584) | First Defendant |
| AND | |
| SUEZ RECYCLING & RECOVERY PTY LTD (ACN 002 902 650) | Second Defendant |
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