Ayad v Hurstville City Council

[2009] NSWLEC 173

Land and Environment Court

of New South Wales

CITATION:

Ayad v Hurstville City Council [2009] NSWLEC 173

PARTIES:

APPLICANT
Sam Ayad

RESPONDENT
Hurstville City Council

FILE NUMBER(S):

10467 of 2009

CORAM:

Pepper J

KEY ISSUES:

PRACTICE AND PROCEDURE :- application for costs arising from discontinuance of proceedings by applicant - applicant to pay respondent's reasonable costs of discontinuance

DATES OF HEARING:

2 and 7 October 2009

EX TEMPORE JUDGMENT DATE:

7 October 2009

LEGAL REPRESENTATIVES:

APPLICANT
Mr S Ayad (in person)
SOLICITORS
N/A

RESPONDENT
Ms D Le Breton (solicitor)
SOLICITORS
HWL Ebsworth Lawyers

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

PEPPER J

7 October 2009

10467 of 2009 Sam Ayad v Hurstville City Council

EX TEMPORE JUDGMENT

Introduction

1 HER HONOUR: This is a notice of motion brought by Hurstville City Council (“the council”) for the payment of its reasonable costs of the proceedings arising out of the discontinuance of those proceedings by the applicant, Mr Ayad. The council seeks its costs as agreed or assessed.

2 Mr Ayad does not consent to the payment of these costs.

3 The notice of discontinuance, filed on 16 September 2009, discontinues the whole of the class 1 proceedings. These proceedings were commenced on 13 July 2009.

4 For the reasons given below, I order that the applicant is to pay the respondent’s reasonable costs arising out of the discontinuance of the proceedings by the applicant up to and including 2 October 2009, but not 7 October 2009.

Events of 2 October 2009

Evidence of the Council

5 In support of its application the council initially relied on an affidavit of Ms Danielle Le Breton sworn 30 September 2009. Ms Le Breton is a solicitor with HWL Ebsworth who were instructed by the respondent to act on its behalf in the proceedings.

6 Ms Le Breton deposed that upon filing the discontinuance costs that were incurred by the council crystallised, particularly in relation to the drafting of a statement of facts and contentions and the engagement of experts, pursuant to a timetable imposed by the Court for the preparation of the matter.

7 Ms Le Breton also deposed that on or about 1 September 2009, the council was put on notice that the applicant was likely to discontinue the proceedings. As a consequence, instructions were given to its principal expert, Mr Fryar (who was tasked with preparing the statement of facts and contentions), to cease work until otherwise advised.

8 On 2 September 2009, Ms Le Breton appeared at the second directions hearing of the matter. There was no appearance by the applicant. Ms Le Breton advised the Court that the respondent did not consent to the discontinuance by the applicant until the issue of its costs had been resolved. The Court therefore adjourned the proceedings for a further directions hearing on 16 September 2009.

9 On 4 September 2009, Ms Le Breton emailed a letter dated 2 September 2009 to the applicant regarding the respondent’s costs in the proceedings. The substance of this letter was that the council’s legal costs as at 2 September 2009 were estimated to be $4,000, but that council was willing to accept the lesser amount of $3,000 in full and final settlement of its claim for costs. That same day the applicant telephoned Ms Le Breton and stated that he could not pay these costs.

10 When the matter came back before the Court on 16 September 2009, Mr Ayad appeared and was granted leave by the Court to discontinue the proceedings.

11 The matter came before me on a referral from the acting Assistant Registrar. During the course of argument before the Court, Ms Le Breton stated that costs were being sought as agreed or assessed because in her estimate the costs of the council were now approximately $7,000 to $8,000.

12 I queried the increase in the council’s costs from 2 September 2009 (the date of the letter emailed to the applicant on 4 September 2009) given that work had effectively ceased on or about 1 September 2009. Ms Le Breton said she would clarify this amount.

13 I also queried the utility of making an order in this form given that the assessment process would only add to the overall costs of the discontinuance. I asked whether the council had considered an order that costs be fixed in a particular sum. Again, Ms Le Breton said that she would seek instructions in this regard.

Evidence of Mr Ayad

14 Mr Ayad handed up an unsigned two page letter addressed to “To whom it may concern” and stated that this was his evidence. Ms Le Breton stated that she had received a copy of this letter on or about 26 September 2009.

15 In the letter Mr Ayad said that he objected to the council charging him the amount of “$3,000 legal fees”. Mr Ayad effectively stated that he had discontinued the proceedings because he could not afford to continue with them.

16 Significantly, Mr Ayad stated in the letter that he had spoken to “Mrs Loura” at the council and that “she advised me to withdraw the appeal as she stated that it will be of the council best interest so will be no charge for me” (emphasis added).

17 Mr Ayad also stated that he was a disabled aged pensioner whose wife was on social security payments and whose house was mortgaged to the amount of $1.2 million, which his children were helping him to repay. In short, Mr Ayad stated that “I am sorry I cannot pay anything anymore as I have no money”.

18 I raised with Ms Le Breton whether or not the allegation that “Mrs Loura” at the council had stated to Mr Ayad that if he withdrew the appeal there would be “no charge” was true or accurate (the allegation not having been met in her affidavit sworn 30 September 2009). Ms Le Breton responded that she did not have instructions in this regard.

19 A short adjournment followed in order for Ms Le Breton to obtain these instructions. However, when the matter resumed before me Ms Le Breton told the Court that while there was a Ms Laura Locke employed at the council, this person was on holiday and would not be back at work until next week. Moreover, the council did not have a contact telephone number for her.

20 Because Mr Ayad had raised a prima facie allegation that there was a representation made by someone at the council, possibly with the authority to make it, that if he withdrew the appeal he would not suffer any financial detriment (which would presumably include the payment of the council’s legal costs), I adjourned the notice of motion until 7 October 2009 so that the council could obtain instructions.

21 The adjournment also had the advantage of affording Mr Ayad further time to digest the affidavit of Ms Le Breton which was served on him late (it was to have been served by 25 September 2009).

Events of 7 October 2009

Further Evidence of the Council

22 When the matter resumed before me on 7 October 2009, Ms Le Breton read two further affidavits filed and served on 6 October 2009. These were as follows:

(a) first, an affidavit of Ms Laura Locke, Team Leader – Development Assessment with the council, sworn 6 October 2009. In this affidavit Ms Locke stated that she had had a telephone conversation with Mr Ayad on or about 1 September 2009. Mr Ayad had telephoned her and asked her how to discontinue the Court proceedings. Ms Locke responded that she would call the solicitors first and obtain the necessary information and then call him back. She did as indicated and when Ms Locke telephoned Mr Ayad later that day, she said to him words to the following effect:
I have spoken to our solicitor and you will need to file a Notice of Discontinuance, but you will need to contact her about that. If you are going to discontinue it would be in the best interest of all involved for you to do it sooner rather than later, as it would save money for all parties.
(b) an affidavit of Ms Jane Hewitt sworn 6 October 2009, a solicitor employed by HWL Ebsworth Lawyers for the respondent. In her affidavit Ms Hewitt deposed that on 1 September 2009 she received a telephone call from Ms Locke where she told Ms Locke that Mr Ayad would contact her to discuss what he needed to do in order to file a notice of discontinuance. Ms Hewitt said to Ms Locke “we’ve spent a bit of money on this, so I’ll also need to get instructions on costs”. Later that day Mr Ayad called Ms Hewitt and she said to him words to the following effect, “I have heard from the council that you want to discontinue. You will need to file a Notice of Discontinuance with the Court. I will also have to get Council’s instructions on their costs”. Attached to Ms Hewitt’s affidavit was an email from Ms Tina Christy of the council regarding a conversation she had had with Ms Locke. The effect of that email was that Ms Locke denied ever advising Mr Ayad that if he withdrew the appeal he would not have to pay the council’s legal costs. Ms Locke advised Ms Christy that this was not something that she would say to anyone as she was aware of the money that council had outlaid for consultants relating to the proceedings.

23 Ms Le Breton also confirmed the previously given estimate that as at 2 October 2009 the council’s costs were approximately $8,000.

Further Evidence of Mr Ayad

24 Mr Ayad handed up a statutory declaration dated 6 October 2009, wherein he stated that on 1 September 2009 he rang the council and spoke to Ms Locke asking her about costs if he withdrew the proceedings because he had been advised by his lawyer to discontinue. In the statutory declaration Mr Ayad stated that Ms Locke had told him that “it would be in the best interests of the council to withdraw the appeal” and that there would be “no charge for [him]”. Mr Ayad said that he believed that this amounted to a verbal contract with Ms Locke and the council that they would not pursue their legal costs.

Consideration

25 Having regard to all the evidence, I do not accept that Ms Locke specifically advised Mr Ayad that if he discontinued the appeal that the council would forego its legal costs.

26 In any event, at least as at 4 September 2009, Mr Ayad had been put on notice by email (attaching the letter from HWL Ebsworth dated 2 September 2009) that the council was seeking its legal costs pursuant to any discontinuance. It was with this knowledge that Mr Ayad discontinued the proceedings on 16 September 2009.

27 In these circumstances, and absent any evidence of any disentitling conduct by the council, the council is entitled to its reasonable costs of the discontinuance.

28 In relation to whether or not these costs should be paid on a fixed sum basis or as agreed or assessed, Ms Le Breton indicated to the Court that she did not have instructions to ask for costs to be fixed in a particular amount. She pressed her application that the costs be payable as agreed or assessed.

29 This is therefore the order that I propose to make. However, in light of the evidence from Mr Ayad as to his financial circumstances I have urged upon Ms Le Breton that the council give serious consideration to agreeing with Mr Ayad as to the payment of a fixed sum in relation to its outstanding legal costs. This has the advantage of certainty and has the advantage of minimising any further costs to the parties in the proceedings.

30 I also indicated to Ms Le Breton that I would be disinclined to award the council costs for its appearance before the Court today, including any incidental cost (namely, the preparation of the two further affidavits) because these costs were necessitated by the failure of the council to meet the allegation raised by Mr Ayad as to the representation purportedly made to him by Ms Locke.

31 This allegation ought to have been dealt with in the affidavit of Ms Le Breton filed 30 September 2009 given that the council was on notice of it prior to the filing of her affidavit. Had it been dealt with at that stage there would have been no need for the matter to come back before the Court again. Ms Le Breton did not oppose this course.

Orders

32 The formal orders of the Court are therefore:

(1) the applicant is to pay the respondent’s reasonable costs arising out of the discontinuance of the proceedings by the applicant up to and including 2 October 2009; and

(2) each party is to bear their own costs of the appearance before the Court on 7 October 2009 and any incidental costs relating thereto.
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