Attard v Canal [No 2]

[2005] NSWLEC 325

Land and Environment Court

of New South Wales

CITATION:	Attard & Anor v Canal & Anor [No 2] [2005] NSWLEC 325
PARTIES:	APPLICANTS: Frank Attard and Sylvia Attard RESPONDENTS: Luigino Antonio Canal and Guiseppina Maria Canal
FILE NUMBER(S):	31227 of 2004
CORAM:	Pain J
KEY ISSUES:	Costs :- exercise of discretion to award costs
LEGISLATION CITED:	Encroachment of Buildings Act 1922 s 14 Land and Environment Court Act 1979 s 69
CASES CITED:	Droga v Proprietors of Strata Plan No 51722 (Bignold J, NSWLEC, 28 November 1997, unreported); Hofer v Howell (2001) 113 LGERA 391; Kell & Anor v Szelid & Anor (Stein J, NSWLEC, 30 May 1994, unreported); Morris v Thomas (1991) 73 LGRA 164; Wherry v Trustees of the Sisters of Charity of Australia [2001] NSWLEC 210
DATES OF HEARING:	16/06/2005
DATE OF JUDGMENT:	06/17/2005
LEGAL REPRESENTATIVES:	APPLICANTS: Mr A Pickles (barrister) SOLICITORS: Robilliard & Robilliard RESPONDENTS: Mr A Thompson (barrister) SOLICITORS: G Cerin

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Pain J

17 June 2005

31227 of 2004 Frank Attard & Anor v Luigino Antonio Canal & Anor [No 2]

JUDGMENT

1 Her Honour: These proceedings are an application for costs brought by the Applicants. On 12 May 2005, I handed down judgment in Attard & Anor v Canal & Anor [2005] NSWLEC 222 and held that the Applicants were entitled to a transfer of the encroaching land from the Respondents. On 3 June 2005, I made the following orders:

1. The Respondents transfer to the Applicants, that land currently forming part of lot 119 DP 31359 between the existing post and wire fence and Colorbond fence located on lot 119 DP 31359 and the existing boundary of lot 118 DP 31359, as shown in Attachment 1 (“the boundary adjustment);
2. The Applicants arrange for the preparation for lodgement and registration at the Land Titles Office, of a deposited plan showing the boundary adjustment in Order 1;
3. The Applicants submit to the Respondent a transfer for the land the subject of the boundary adjustment;
4. The Respondents to execute any Deposited Plan and transfer submitted by the Respondents pursuant to Order 3;
5. Upon signing of the transfer and return by the Respondents the Applicants pay the Respondents $77,500 as compensation for the transfer of land referred to in Order 1;
6. The Applicants to meet all costs in respect of the registration of the deposited plan and transfer referred to in Orders 2, 3, and 4;
7. Costs reserved.

2 At [10] – [14] of my judgment I set out the circumstances giving rise to the proceedings. These disclose the Applicants’ shed encroachment in 1999 was inadvertent and neither party was aware until 28 September 2003 that the encroachment had occurred. In [56] of my judgment I held the Applicants’ had not been negligent in causing the encroachment.

3 The Applicants submitted that costs should follow the event and that they should be entitled to costs on the basis that they were successful in obtaining the orders they sought. Relying on s 14 of the Encroachment of Buildings Act 1922 (“the Act”), the Applicants argued that in determining an award of costs offers made before the commencement of proceedings should also be taken into account. The Applicants relied on correspondence between the parties and their respective solicitors that showed numerous offers between the parties were made from 3 December 2003 to 10 March 2005. The last letter sent before the commencement of proceedings in October 2004 was sent by the Applicants’ solicitor to the Respondents’ solicitor on 17 August 2004. In that letter, the Applicants offered to pay the Respondents $77,500.00 in return for a transfer of the encroaching land plus survey costs and legal fees. Proceedings were commenced in October 2004. In a letter dated 10 March 2005, the Applicants offered to pay the Respondents $77,500.00 in return for transfer of the encroaching land, legal and expert fees, any disbursements incurred in the registration of the transfer and $3,000.00 for disturbance.

4 The Respondents argued that it is not automatic that costs follow the event and submitted that an order should be made that each party pay its own costs. In these proceedings, the Respondents, relying on the decisions of Bignold J in Morris v Thomas (1991) 73 LGRA 164 and Stein J in Kell & Anor v Szelid & Anor (Stein J, NSWLEC, 30 May 1994), argued that costs should not follow the event in these proceedings because both parties acted under a mistaken belief as to the incorrect boundary. Where there has not been unreasonable behaviour the losing party should not have to pay the costs of the successful party. The Respondents pointed to the Second Reading Speech of the Encroachment of Buildings Act which suggests that the aim of the Act is to encourage neighbours to resolve their boundary disputes through the legislation.

Finding

5 Section 69 of the Land and Environment Court Act 1979 provides a wide discretion to judges of this Court in relation to the award of costs. It is accepted practice in this Court that the usual order in matters of this type is that costs follow the event, they being compensatory not punitive, but subject always to the Court’s discretion not to take that approach in a particular case (see Droga v Proprietors of Strata Plan No 51722 (Bignold J, NSWLEC, 28 November 1997, unreported), Hofer v Howell (2001) 113 LGERA 391 at [14], [15] and Wherry v Trustees of the Sisters of Charity of Australia [2001] NSWLEC 210).

6 In this case the Applicants sought an order that compensation be paid in addition to the transfer of a small portion of the Respondents’ land to them. While the Respondents argued they had been successful in their cross-claim in that compensation was payable that was an order also sought by the Applicants. The Respondents’ cross claim also alleged that the encroachment arose from the Applicants’ negligence and sought an order that the Applicants remove the encroaching shed. That part of the cross-claim was unsuccessful. The claim for compensation was in the alternative. The Applicants were successful in obtaining the orders they sought.

7 As contemplated by s 14 of the Act, offers made before the proceedings can be considered in relation to costs. The final orders made by the Court on 3 June 2005 were very similar to the offers made by the Applicants in their letters of 17 August 2004 and 10 March 2005. While the offer made on 10 March 2005 was made after the commencement of proceedings, given the final result, I consider that the offer made by the Applicants was a reasonable offer. Further, I consider that the Applicants’ offers to settle were entirely genuine given that as part of the negotiations before the proceedings the Applicants provided the Respondents with evidence of the valuers’ report and quantity surveyors’ report on which they relied. I consider these offers should be take into account as provided for by s 14 of the Encroachment of Buildings Act.

8 As emphasised in Kell however it is necessary for the Court to consider all the circumstances in assessing costs. Arguably the nature of these proceedings which involve neighbours in an unfortunate situation not necessarily of their own choosing, as is the case here, need to be considered. It also involved the Court in the exercise of its discretion to a considerable degree. I further consider that the Respondents did not act unreasonably in refusing the offers made by the Applicants as it was their understandable wish that they enjoy the full measure of their property. Taking into account all the circumstances I consider that it is appropriate that the Respondents pay half the costs of the Applicants.

Orders

9 The Court orders that:

1. The Respondents are to pay half the costs of the Applicants in these proceedings; and

2. Each party is to pay their own costs of the costs application heard on 16 June 2005.