Chong v Blairgrove Pty Limited

[2016] NSWSC 1799

Supreme Court

New South Wales

Medium Neutral Citation:	Chong v Blairgrove Pty Limited [2016] NSWSC 1799
Hearing dates:	9 December 2016
Date of orders:	13 December 2016
Decision date:	13 December 2016
Jurisdiction:	Equity
Before:	Darke J
Decision:	Plaintiff granted leave to discontinue on the basis that the plaintiff pays the defendant’s costs of proceedings.
Catchwords:	COSTS – discontinuance of proceedings – whether circumstances warrant departure from usual position that discontinuing party pay other party’s costs – UCPR r 42.19(2)
Legislation Cited:	Uniform Civil Procedure Rules 2005 (NSW), r 42.19(2)
Cases Cited:	Bitannia Pty Limited v Parkline Constructions Pty Limited [2009] NSWCA 32 Fordyce v Fordham (2006) 67 NSWLR 497; [2006] NSWCA 274
Category:	Costs
Parties:	Peter Chong (Plaintiff) Blairgrove Pty Limited (Defendant)
Representation:	Solicitors: Paul Marsh and Associates (Plaintiff) Boyd House and Partners (Defendant)
File Number(s):	2016/00221845
Publication restriction:	None

Judgment

1. The plaintiff, Mr Peter Chong, is the owner of a property in Burwood Road, Burwood. By Summons filed on 22 July 2016 the plaintiff commenced these proceedings against the defendant, Blairgrove Pty Limited, which is the owner of a property in Belmore Street, Burwood. The plaintiff sought orders to enforce his rights pursuant to a right of way that was then registered over the defendant’s property.

2. The plaintiff seeks leave to discontinue the proceedings in circumstances where the Registrar-General, following the making of an application by the defendant, has given notice of intention to cancel the right of way as an abandoned easement pursuant to s 49 of the Real Property Act 1900 (NSW), and where the plaintiff has come to accept that the easement has not been used since the early 1990s.

3. There remains a dispute about the terms as to costs upon which leave to discontinue should be given. Each party seeks an order for costs in its favour.

4. In this situation, Uniform Civil Procedure Rules r 42.19(2) applies. The sub-rule relevantly provides that unless the Court orders otherwise, the plaintiff must pay such of the defendant’s costs as had been incurred by the defendant in relation to the discontinued claims as at the date on which the notice of discontinuance was filed.

5. As explained by McColl JA in Fordyce v Fordham (2006) 67 NSWLR 497; [2006] NSWCA 274 at [78] and [84], the sub-rule does not create a presumption that the discontinuing party pay the costs. Rather, it creates a default position and the Court retains its discretion in respect of the making of the appropriate order for costs. Nevertheless, there is an onus on a discontinuing party who seeks a departure from the default position to show that there is a sound positive ground or good reason for the departure (see Bitannia Pty Limited v Parkline Constructions Pty Limited [2009] NSWCA 32 at [54] per Hodgson JA; see also at [70] per Basten JA).

6. The plaintiff submitted that he acted reasonably and properly in commencing the proceedings. He further submits that the proceedings were commenced after the defendant was given notice of the plaintiff’s intention to do so (see the letter from the plaintiff’s solicitors of 3 May 2016) and in circumstances where the defendant did not inform him that it was about to apply to have the Registrar-General cancel the right of way. It was pointed out that the defendant had obtained evidence in June 2016 in support of its claim that the right of way had been abandoned, and that it made its application to the Registrar-General on 29 July 2016.

7. The defendant submitted that the plaintiff was at all times aware that there was an issue as to whether the right of way had been abandoned or was obsolete. In that regard, reference was made to communications from solicitors for a former owner of the defendant’s property in March 2015, and from the defendant’s solicitors on 20 November 2015 and 2 May 2016.

8. The letter from the plaintiff’s solicitor of 3 May 2016, referred to earlier, stated that the plaintiff disagreed with the view that the easement was obsolete, and that instructions were held that unless certain structures were removed by the defendant within 14 days then proceedings would be commenced.

9. In my opinion the correspondence between the parties clearly establishes that the question whether the right of way had been abandoned or was obsolete was a live issue when these proceedings were commenced. It is true that the plaintiff commenced the proceedings unaware that the defendant was taking its own steps to have the easement extinguished. However, that ought to have occurred to the plaintiff as a possible course of action for the defendant. It is also true that after the plaintiff became aware of the defendant’s application (and the evidence in support of it) the plaintiff conducted his own investigations and ultimately concluded that the defendant’s application was well-founded. Nonetheless, the plaintiff does not depose that, had the defendant informed him of its intended application, he would have been prepared to defer commencing proceedings. Further, there is no suggestion that the enquiries were only able to be undertaken once details of the defendant’s application became known.

10. It seems to me that the plaintiff chose to commence the proceedings in the knowledge that the continued existence of the right of way was challenged, and without first undertaking enquiries that would have revealed to him that the easement had not been in use for more than 20 years.

11. I do not consider that the circumstances of this case reveal a sound positive ground or good reason to depart from the default position that the discontinuing party pay the other party’s costs of the proceedings.

12. The Court will therefore grant leave to the plaintiff to discontinue the proceedings on the basis that the plaintiff pay the defendant’s costs of the proceedings in accordance with UCPR r 42.19(2).

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Decision last updated: 13 December 2016