Bird v Anambah Land Pty Ltd (No 2)

[2016] NSWSC 1552

Supreme Court

New South Wales

Medium Neutral Citation:	Bird v Anambah Land Pty Ltd (No 2) [2016] NSWSC 1552
Hearing dates:	2 November 2016
Decision date:	02 November 2016
Jurisdiction:	Equity
Before:	Stevenson J
Decision:	Declare that the costs order of 9 February 2016 does not include the costs of the mediation and expert determination. Order that the defendant pay the plaintiff’s costs of this application
Catchwords:	PRACTICE AND PROCEDURE – judgments and orders - whether Court should make declaration as to the proper construction of an order made earlier in the proceedings; COSTS – earlier order that plaintiff pay the costs of the proceedings – where agreement between parties required expert determination of disputed issues – whether costs of the proceedings includes costs of such expert determination and an earlier unsuccessful mediation
Legislation Cited:	Civil Procedure Act 2005 (NSW) Legal Profession Uniform Law Application Act 2014 (NSW)
Cases Cited:	Bird v Anambah Land Pty Ltd [2016] NSWSC 1548 Blanch v British American Tobacco Australia Services Limited (2005) 62 NSWLR 653; NSWSC 241 Cawood v Green (Supreme Court (NSW), Hardie JA, 26 June 1974, unrep) DJL v The Central Authority (2000) 201 CLR 226; HCA 17 Fletcher Construction Australia Ltd v MPN Group Pty Ltd (Supreme Court (NSW), Rolfe J, 14 July 1997, unrep) Hall Chadwick Pty Ltd v Doyle [2006] NSWSC 1195 Newcastle City Council v Wieland (2009) 74 NSWLR 173; NSWCA 113 Newmont Yandal Operations Pty Ltd v The J Aron Corporation and the Goldman Sachs Group Inc (2007) 70 NSWLR 411; NSWCA 195 Triarno Pty Ltd v Triden Contractors Ltd (Supreme Court (NSW), Cole J, 22 July 1992, unrep)
Category:	Procedural and other rulings
Parties:	Deborah Michelle Bird (Plaintiff) Anambah Land Pty Ltd (Defendant)
Representation:	Counsel: N Kabilafkas with D Habashy (Plaintiff) G A Laughton SC (Defendant)   Solicitors: Nolan Commercial Law Practice (Plaintiff) Mullane & Lindsay Solicitors (Defendant)
File Number(s):	SC 2015/265567

Judgment

1. On 9 February 2016, I published a judgment dealing with the costs of these proceedings: Bird v Anambah Land Pty Ltd [2016] NSWSC 1548. These reasons assume familiarity with that judgment.

2. I ordered that the plaintiff, Ms Bird, pay the costs of the defendant, Anambah Land Pty Ltd, of the proceedings, but that Ms Bird and Anambah share equally the costs of the two experts, Mr Lindgren QC and Mr Dick (this being something the parties had agreed to, in terms, in the Call Option Agreement of 28 May 2007).

3. A dispute has now emerged as to whether, on its proper construction, my costs order includes the parties’ costs of the expert determination, the parties’ costs of the unsuccessful mediation to which I referred at [7] of my judgment, as well as the costs of an earlier “Parties’ Meeting” (also required by the dispute resolution provisions of the Call Option Agreement).

4. If those costs are included, Anambah’s costs as claimed will be in the order of $157,000. If those costs are excluded, the figure will be more like $19,000: a difference of some $138,000.

Jurisdiction

5. Although Mr Laughton SC, who appeared for Anambah, submitted that I should dismiss this application as incompetent, I am satisfied that I have jurisdiction to resolve this dispute.

6. That is because, as Mr Kabilafkas, who appeared with Mr Habashy for Ms Bird submitted, it is an accepted procedure of the Court that the Court may, by declaratory relief, provide clarification as to the construction of an order previously made.

7. Thus, Young CJ in Eq (as his Honour then was) said in Blanch v British American Tobacco Australia Services Ltd (2005) 62 NSWLR 653; NSWSC 241 at [4]:

“The procedure adopted in the instant case is not a usual one, but is one which flows from the judgment of Hardie JA in this Court in Cawood v Green (Hardie JA, 26 June 1974, unreported). Where there is a bona fide question as to whether conduct does or does not constitute a breach of injunction, the proper procedure is for a declaration rather than moving for attachment. Since 1974 there have been a number of situations where declaratory relief to construe court orders has come before the court… The procedure thus adopted is the accepted procedure, and it is also now accepted that it is usually best for the original judge to hear the declaratory proceedings, even though the judge must keep out of his or her mind what might have been intended and construe only the words that were used in the order.”

8. Although, typically, applications for a declaration of the meaning of an order have been made in a context of avoiding unintentional contempt, I see no reason why I should not follow that course in this case.

9. The Court has inherent jurisdiction to engage in this procedure. Even where, as here, the order has been entered, the Court has inherent jurisdiction to correct “the records of the court to make certain that they truly represented what the court had pronounced or had intended to pronounce”: DJL v The Central Authority (2000) 201 CLR 226; HCA 17 at [34] per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ. Such intention is, in my opinion, to be ascertained objectively, and in the context of all the surrounding circumstances.

10. Further, where, as in this case, the orders were made in chambers (the parties agreed I could deal with the question of costs on the papers) “those orders may [be] open to review by motion in the action, even if they were final orders”: DJL also at [34].

11. It is probable that I also have jurisdiction to deal with the question under the Court’s inherent jurisdiction to deal with an “accidental slip or omission” consistently with the Court’s obligation to resolve the real issues in the proceedings in a just, quick and cheap fashion in accordance with the familiar dictates of s 56 of the Civil Procedure Act 2005 (NSW): see for example Newmont Yandal Operations Pty Ltd v The J Aron Corporation and the Goldman Sachs Group Inc (2007) 70 NSWLR 411; NSWCA 195 per Spigelman CJ at [18], [19] and [26].

12. I do not see this as a “revival” of the proceedings, or a violation of the principals of functus officio.

13. It is convenient that I deal with the matter this way. Otherwise, the evidence suggests, the costs assessor will feel compelled to make a decision as to the proper construction of my order. It seems unlikely the costs assessor has power to do this: see for example Hall Chadwick Pty Ltd v Doyle [2006] NSWSC 1195 per Rothman J at [72]ff. And even if he did, such a decision raises the possibility, indeed the likelihood (when the history of this matter is considered) of subsequent appeals under the Legal Profession Uniform Law Application Act 2014 (NSW).

Background

14. Ms Bird commenced these proceedings on 9 September 2015, seeking a declaration as to the proper construction of the relevant clause of the Call Option Agreement. At the same time, she filed a notice of motion seeking an order that the proceedings be expedited.

15. A short time later, on 23 September 2015, at the “Parties’ Meeting” of 23 September 2015 to which I have referred, the parties agreed to mediate that dispute.

16. The relevant mediation agreement stated that the mediation was in respect of the “dispute the subject of” these proceedings. But the mediation did not occur as a result of any order made in the proceedings.

17. Indeed, in the proceedings, it was Anambah’s position that, by reason of the dispute resolution provisions in the Call Option Agreement, Ms Bird was not entitled to bring these proceedings. Hence, on 17 September 2015, shortly after the proceedings were commenced, Anambah filed a notice of motion seeking an order that the proceedings be dismissed or stayed. That motion was due to be heard on 16 October 2015.

18. The mediation took place on 13 and 14 October 2015. It was not successful.

19. During the mediation, and as required by the dispute resolution provisions of the Call Option Agreement, and not as a result of any order made in the proceedings, the parties agreed to submit their dispute to expert determination.

20. On 14 October 2015, at the request of the parties, Sackar J (before whom the matter was listed as Expedition List Judge) made an order in chambers staying the proceedings until 14 December 2015.

21. On 24 November 2015, Mr Lindgren resolved the matter in Anambah’s favour, effectively bringing the dispute to an end.

22. The parties then agreed that the proceedings must be dismissed. I made such an order on 5 February 2016. As I have mentioned, the parties agreed that I should deal with the question of costs on the papers.

The proper construction of the costs order

23. The order I made on 9 February 2016 was as to the costs “of the proceedings”. The order made no reference to the extra curial events that occurred concurrently with the proceedings, save to order that, consistently with the agreement of the parties in the Call Option Agreement, the parties share equally the costs of the experts.

24. The context in which I ordered Ms Bird to pay the “costs of the proceedings” included the fact that I ordered that the parties share equally the costs of the experts. As Mr Kabilafkas submitted “the Court was careful to preserve the parties’ costs allocation regime”.

25. The context also included the concurrent, but separate, dispute resolution regime that, following the commencement of the proceedings, Ms Bird belatedly embraced.

26. It also included Mr Laughton’s submissions of 8 February 2016 on the question of costs. Those submissions concluded by contending that Ms Bird “need not have filed this Statement of Claim at all” and that “Anambah has been put to expense in directions hearings, and the filing of its notice of motion”. Mr Laughton did not suggest in his submissions that the costs of the proceedings should include the costs of the mediation or expert determination. The thrust of Mr Laughton’s submission was that, in light of the dispute resolution regime agreed to by the parties in the Call Option Agreement, it was neither necessary nor appropriate for Ms Bird to have commenced these proceedings and that, accordingly, she should pay the costs incurred by Anambah as a result of her taking that step. I accepted that submission and ordered that Ms Bird pay Anambah’s “costs of the proceedings”.

27. And, perhaps most importantly, the context included the agreements made by the parties as to the mediation and as to the expert determination.

28. The mediation agreement provided, in terms that “each party will pay its own costs and expenses of the mediation”. This was not a Court ordered mediation. Even if it were, absent an order to the contrary under s 28(a) of the Civil Procedure Act (and I did not make such an order) the parties’ agreement as to where costs of a mediation should lie will prevail: see Newcastle City Council v Wieland (2009) 74 NSWLR 173; NSWCA 113 per Hodgson JA at [3].

29. The Call Option Agreement provided that each party “bear equally the expert’s costs”. It made no provision for the parties’ costs of participating in the expert determination process. That being so, I can see no room for implication of a term that those costs would follow the event of the determination: see Triarno Pty Ltd v Triden Contractors Ltd (Supreme Court (NSW), Cole J, 22 July 1992, unrep at p 5), and Fletcher Construction Australia Ltd v MPN Group Pty Ltd (Supreme Court (NSW), Rolfe J, 14 July 1997, unrep at p 24). As Cole J said in Triano: “If the parties have not by their deed agreed the procedures to be followed upon an expert determination, that is not a void the court can fill” (at p 5). There being no agreement between the parties as to their costs of participating in the expert determination process, the costs must lie as they fall.

30. In those circumstances, I cannot see how my order could be construed as including the parties’ costs of the mediation or expert determination (or of the “Parties’ Meeting” itself). In my opinion, my order should be construed as applying only to the costs actually incurred in the proceedings; that is the various directions hearings and the motions filed by each party.

31. As Mr Kabilafkas submitted, had the proceedings in this Court not taken place, there could be no question that costs would be borne by the parties otherwise than in accordance with their mediation and expert determination agreements. I do not see how the position could be different because the proceedings were commenced. The consequence of the commencement of the proceedings was that Anambah incurred extra, and as it turned out, unnecessary costs. That matter has been addressed by the costs order I made.

32. In those circumstances, I make the following declaration and order:

1. Declare that, on the proper construction of the order made by the Court on 9 February 2016, the “costs of the proceedings” do not include the costs of and incidental to the “Parties’ Meeting” between the plaintiff and the defendant pursuant to cl 14.1(b) of the Call Option Agreement made between the parties on 28 May 2007, the mediation which took place between the parties on 13 and 14 October 2015, or the expert determination made pursuant to cl 14.2 of the Call Option Agreement.

2. Order that the defendant pay the plaintiff’s costs of this application.

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Decision last updated: 02 November 2016