Bayside Community Recreation Club Inc v Bayside Council

[2024] NSWSC 960

Supreme Court

New South Wales

Medium Neutral Citation:

Bayside Community Recreation Club Inc v Bayside Council [2024] NSWSC 960

Hearing dates:

On the papers, last written submissions received 26 July 2024

Date of orders:

06 August 2024

Decision date:

06 August 2024

Jurisdiction:

Equity

Before:

Pike J

Decision:

(1)   Summons dismissed; and

(2)   There be no order as to costs, with the intent that each party bear their own costs of the proceedings.

Catchwords:

COSTS – appropriate costs order where interlocutory order resolves substantive dispute – order that each party bear their own costs – no question of principle

Legislation Cited:

Civil Procedure Act 2005 (NSW) s 98

Uniform Civil Procedure Rules 2005 (NSW) r 42.1

Cases Cited:

Nil

Texts Cited:

Nil

Category:

Costs

Parties:

Bayside Community Recreation Club Inc (Plaintiff)
Bayside Council (Defendant)

Representation:

Counsel:
J Mack (Plaintiff)
B Le Plastrier (Defendant)
Solicitors:
Denison Toyer (Plaintiff)
Bartier Perry (Defendant)

File Number(s):

2024/00219780

Publication restriction:

Nil

JUDGMENT

1. The plaintiff, Bayside Community Recreation Club Inc (the Bayside Club) is a volunteer community recreation club incorporated under the AssociationsIncorporation Act 2009 (NSW) which, for approximately 70 years, in one form or another, has conducted fishing and boating activities from a location, namely 100 Bestic Street, Kyeemagh, New South Wales (Premises).

2. The defendant (the Bayside Council) granted licences to the Bayside Club to enable the Bayside Club and its members to access the Premises in order to conduct their activities.

3. On 14 June 2024, the Bayside Club commenced these proceedings before the Duty Judge seeking, in broad terms, access to the Premises for its officers and members, the Bayside Council having padlocked the gates to the Premises on 13 June 2024.

4. Orders were made, essentially on an interlocutory basis, by the Duty Judge on 14 June 2024, which in effect provided the Bayside Club and its members with access to the Premises for a four-week period ending at 5pm on 12 July 2024 to allow the Bayside Club and its members to remove items from the Premises, so as to provide vacant possession to the Bayside Council.

5. It is now agreed that the summons should be dismissed. The parties have been unable to agree as to costs. These reasons determine the appropriate costs order.

6. This issue has been determined on the papers, with each of the parties providing written submissions dated 26 July 2024.

Overview of the facts

7. A determination of the appropriate costs order requires an understanding of the dealings between the parties in recent times leading up to the commencement of these proceedings.

8. The members of the Bayside Club are boating and fishing enthusiasts from the Botany Bay area. The Bayside Council has granted licences or rights to the Bayside Club to enable its members to fish and boat. Apparently, the Bayside Club has approximately 1,500 involved members and provides, from the Premises, a slipway for boats, a fisherman’s club as well as mooring services to its members under mooring agreements.

9. In about March 2020, the Bayside Club and the Bayside Council entered into a licence agreement in relation to the Premises covering the period 13 November 2018 to 14 November 2020 (Licence Agreement).

10. On 3 November 2020, the Bayside Council sent a letter to the Bayside Club, formally advising that “pursuant to clause 12.1 of the [Licence Agreement] at the expiration of the term, namely 14 November 2020, the [Licence Agreement] will come to an end. For avoidance of doubt, upon the expiration of the [Licence Agreement] no monthly tenancy will be created pursuant to clause 3.2 of the [Licence Agreement] and the Club are to provide vacant possession.”

11. On 12 November 2020, a further letter was sent by the Bayside Council to the Bayside Club reconfirming that “as of 14 November 2020 the existing agreement between the parties will come to an end requiring vacant possession of the” Premises. The letter also set out that the Bayside Council, at their meeting of 11 November 2020, awarded the demolition tender of the building, which includes the Premises, to a demolition contractor who would be taking possession on 1 December 2020.

12. As events turned out, there has been no demolition of the Premises and the Bayside Club has continued to occupy the Premises on a casual basis. It would appear that no licence fees or any outgoings have been paid by the Bayside Club in the past couple of years.

13. On 24 April 2024, the Bayside Council passed a number of resolutions in relation to the redevelopment of the site containing the Premises. These resolutions included accepting a proposal from Volunteer Marine Rescue NSW and rejecting proposals from, inter alia, the Bayside Club. It was also resolved that “arrangements be made with the Bayside Community Recreation Club for the orderly vacation and make good of the waterfront area.”

14. On 2 May 2024, the Bayside Council sent an email to the Bayside Club, advising the Bayside Club of the resolutions passed by the Bayside Council at its meeting on 24 April 2024 and seeking a meeting as soon as possible in relation to the orderly vacation and make good of the waterfront area. Thereafter, there ensued some email communication and a meeting was arranged.

15. On 21 May 2024, the solicitors for the Bayside Council wrote to the Bayside Club, contending that the Bayside Club remained on the Premises without any legal right to be there, preventing the Bayside Council from properly managing the Premises as it ordinarily would. The letter contained a demand for “immediate vacant possession of the Premises by no later than 5pm on 11 June 2024”. The letter strongly recommended that the Bayside Club “obtain independent legal advice and instruct its representatives to contact the writers as a matter of urgency.”

16. A further letter was sent by the solicitors for the Bayside Council to the Bayside Club on 6 June 2024, although it was not in evidence before me. It would appear that the Bayside Club then engaged solicitors who wrote to the solicitors for the Bayside Council by letter dated 6 June 2024.

17. The letter from the solicitors for the Bayside Club dated 6 June 2024 sought that “the Council takes no action until 30 June 2024 to allow us to take complete instructions and to provide our client with full advice as to its rights with respect to”, in substance, the present situation having regard to the past licences and the tender process. The letter concluded:

Given that our client and its predecessor organisations have occupied the premises for in excess of 70 years, we consider that this request is not unnecessarily unreasonable and are happy to liaise with you to discuss the above should you require.

18. On 7 June 2024, the solicitors for the Bayside Council responded to the solicitors for the Bayside Club in the following terms:

We refer to your letter dated 6 June 2024.

Bearing in mind the history of this matter and the fact that your client has no valid basis to remain in occupation of the Premises, Council has instructed that it is not prepared to allow your client with further time beyond 5pm on 11 June to comply with Council’s demands as set out in our letter dated 21 May 2024 and reiterated in our letter dated 6 June 2024.

Accordingly, Council reserves its rights to take steps to secure the Premises without further notice to you or your client in the event that Council’s demands are not complied with by the nominated time.

If your client is in the process of complying with Council’s demands, and demonstrating a genuine intention to comply by 5pm on 11 June 2024, then we are instructed that Council will entertain a short extension of a specified period of time to enable your client to complete removal of specific non-fixture items that may need to be attended to after the nominated deadline.

If this becomes necessary then Council will secure the Premises as foreshadowed at 5pm on 11 June 2024 subject to agreed supervised access to complete removal of the specific non-fixture item or items in respect of which Council may have allowed further time.

19. On 11 June 2024, the solicitors for the Bayside Club responded to the solicitors for the Bayside Council, indicating that they were instructed to approach the Duty Judge to seek urgent relief in the matter. The letter indicated that the Bayside Club intended “to file”, by 14 June 2024 and that they would seek an urgent hearing, not on an ex parte basis, at a mutually convenient time. To facilitate this, an undertaking was sought from the Bayside Council that it would take no further action that restricts the Bayside Club’s access to the Premises until 14 June 2024. The letter set out detailed reasons as to why the Bayside Club contended that it was entitled to continue to occupy the Premises including that the Bayside Club was at least entitled to a monthly licence pursuant to clauses 3.1 and 3.2 of the Licence Agreement.

20. A response was provided by the solicitors for the Bayside Council later that day – 11 June 2024. The letter contains a detailed response to the matters set out in the letter from earlier that day and declines to give any undertaking.

21. There was then a further letter from the solicitors for the Bayside Club on 12 June 2024, again debating the merits of the underlying legal position. The letter sought confirmation by 12pm on 13 June 2024 that the Bayside Council would not seek to prevent the Bayside Club from exercising its occupancy rights without three days’ notice.

22. An immediate response was received from the solicitors for the Bayside Council dated 12 June 2024 rejecting the request for confirmation that the Bayside Council would not seek to prevent the Bayside Club from exercising its occupancy rights. The letter also notified that the Bayside Council intended to change the locks at the Premises on 13 June 2024 to protect its proprietary interest.

23. True to its word, the Bayside Council padlocked the gates to the Premises on 13 June 2024.

24. When the proceedings were commenced before the Duty Judge on 14 June 2024, counsel for the Bayside Council was present.

25. The summons filed in Court on 14 June 2024 sought, as interim relief:

An order that the defendant be restrained by themselves or by their employees or agents from preventing the plaintiffs access to and occupation of, [the Premises].

26. The summons also sought declaratory final relief as follows:

6. A declaration:

(a) that the Licence Agreement remains on foot.

(b) that the defendant is estopped from enforcing any rights under the Licence Agreement which would permit the defendant to deny the plaintiff a reasonable opportunity to vacate the Premises in a timely, orderly and reasonable manner.

7. In the alternative, a declaration the plaintiff has a right to vacate the Premises in a timely, orderly and reasonable manner.

27. Order 8 of the summons also sought, as final relief, an order that the Bayside Council be restrained from preventing the Bayside Club’s access to and occupation of the Premises.

28. At the commencement of the hearing before the Duty Judge, counsel for the Bayside Council made an open offer which, in effect, allowed the Bayside Club access to the Premises for a three-week period ending 5pm on 5 July 2024, to enable it to remove its items and provide vacant possession.

29. There was then a hearing of sorts before the Duty Judge. Counsel for the Bayside Club made it clear that it was not contended that the Bayside Club had any ongoing right to occupy the Premises, rather the dispute was as to the time which it should be allowed to vacate the Premises. The outcome of the hearing before the Duty Judge on 14 June 2024 was that Hmelnitsky J made certain orders, on an interlocutory basis, in effect providing the Bayside Club and its members until 5pm on 12 July 2024, access to the Premises to enable them to remove items so as to provide vacant possession to the Bayside Council. The two significant changes from the open offer were that the three-week period initially offered was extended to four weeks, it being conceded that there was no prejudice to the Bayside Council, as it was at the planning stage, and members were also permitted access.

30. It is against this background that there is now no longer any utility in further prosecuting the proceedings, such that the parties appear to be agreed that they should be dismissed. The parties disagree as to the appropriate cost orders.

Overview of the parties’ contentions

31. The Bayside Club seeks the following orders:

1. that the summons be dismissed;

2. that the Bayside Council pay its costs of the proceedings on the ordinary basis; and

3. in the alternative, that each party bear their own costs.

32. The essence of the position advanced by the Bayside Club was that all that it was ever seeking to achieve was a reasonable time to vacate, that it was necessary to commence the proceedings because of the unreasonable and aggressive position taken by the Bayside Council in its correspondence, and that the result in fact achieved at the conclusion of the hearing on 14 June 2024 was substantially the same relief that the Bayside Club could have realistically achieved on the summons – namely a period of four weeks to vacate. It was contended that this was the event, and that costs should follow the event.

33. Not unsurprisingly, given the history of the matter, the Bayside Council sought the following costs order:

1. The Bayside Club to pay the Bayside Council’s costs of the Bayside Club’s application on the ordinary basis in an amount to be agreed or assessed;

2. The Bayside Club to pay the Bayside Council’s costs of the Bayside Council’s application on the ordinary basis in an amount to be agreed or assessed; and

3. In the alternative to orders (1) and (2) above, the Bayside Club to pay the Bayside Council’s costs of the proceedings on the ordinary basis in an amount to be agreed or assessed.

34. The first two orders sought to distinguish between the Bayside Club’s application for injunctive relief before the Duty Judge on 14 June 2024 and the Bayside Council’s offer made at the hearing on 14 June 2024, which was sought to be characterised as a de facto application to secure the Premises on an ongoing basis subject to a regime for the Bayside Club to remove its non-fixtures from the Premises. The Bayside Council’s contention was that the injunctive relief sought by the Bayside Club was refused and the application by the Bayside Council to secure the Premises with a limited right of access was “wholly successful”. It was contended that the Bayside Council’s victory was “absolute”.

Determination

35. The Court has a broad discretion when dealing with costs: Civil Procedure Act 2005 (NSW) s 98; Uniform Civil Procedure Rules 2005 (NSW) r 42.1.

36. The appropriate costs order in the present case emerges from an understanding and characterisation of the relevant events.

37. The facts, described in more detail above, can conveniently be summarised as follows:

1. the Licence Agreement came to an end on 14 November 2020;

2. notwithstanding an initial requirement that vacant possession be immediately provided, this was not insisted on and the Bayside Club continued to occupy the Premises on a casual basis. I infer that in the ensuing three and half years the Bayside Council sought expressions of interest as to future occupation of the Premises or what was to be built in place of it, including from the Bayside Club;

3. on 24 April 2024, the Bayside Council resolved not to accept the proposal of the Bayside Club and for arrangements to be made for the orderly vacation of the Premises and surrounding area;

4. correspondence was then issued in early May 2024 to begin the process;

5. external solicitors were engaged by the Bayside Council who wrote to the Bayside Club on 21 May 2024 no doubt seeking to move the process along – demanding vacant possession by 11 June 2024. There does not appear to have been any particular reason for this deadline, other than wanting the Bayside Club out. As was candidly admitted at the hearing on 14 June 2024, the Bayside Council was at the planning stage;

6. there thereafter ensued correspondence between the parties’ respective solicitors, with the Bayside Club seeking more time and the Bayside Council remaining firm, threatening to take steps to enforce its rights to lock the Bayside Club out of the Premises;

7. the Bayside Club foreshadowed commencing proceedings and sought undertakings;

8. no undertakings were provided, and the Bayside Council padlocked the gates on the morning of 13 June 2024, preventing access, save for supervised access, to remove items;

9. proceedings were commenced before the Duty Judge on 14 June 2024. Properly characterised, the Bayside Club’s case was that the Bayside Club and its members should be allowed to resume access to the Premises to allow an orderly vacation of the Premises – a period of four weeks – with continued use in the interim. I do not accept that order 8 of the summons should be construed as the Bayside Club seeking a perpetual final injunction against the Bayside Council evicting it. In the context of the other final relief sought, it was only so as to allow the Bayside Club to vacate the Premises in an orderly and reasonable manner; and

10. at the start of the hearing the Bayside Council offered to allow the Bayside Club access to the Premises for a period of three weeks to allow items to be removed to provide vacant possession. The Bayside Club sought a longer period and continued full use of the Premises in the interim. The end result was access for four weeks to remove items and provide vacant possession in circumstances where counsel for the Bayside Council accepted there was no prejudice to a period of four weeks being provided, as opposed to three weeks, given that the Bayside Council was “at the planning stage” (T 12.36 14 June 2024).

38. So characterised, and without in any way seeking to attribute any blame on either party, it seems to me that the Bayside Club could perhaps have been clearer and more responsive as to the period it required to vacate. On the other hand, there does not appear to have been any need for the Bayside Council to have padlocked the gates on 13 June 2024.

39. The end result was one where the Bayside Club has now vacated the Premises.

40. I do not see any utility in dividing up what occurred on 14 June 2024 into the Bayside Club’s application and the Bayside Council’s application. The events should be looked at in totality. Neither party has had, in my view, a clear victory. The Bayside Club has had a longer period to vacate the Premises than was previously offered but the access in that period was for the purpose of removing items, not ongoing use.

41. In these circumstances the appropriate costs order is that there be no order as to costs, with the intent that each party bear their own costs of the proceedings.

Orders

42. The orders of the Court are:

1. Summons dismissed; and

2. There be no order as to costs, with the intent that each party bear their own costs of the proceedings.

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Decision last updated: 06 August 2024