Clough v Breen (No.5)

[2024] NSWSC 337

Supreme Court

New South Wales

Medium Neutral Citation:

Clough v Breen (No.5) [2024] NSWSC 337

Hearing dates:

12 February 2024

Date of orders:

9 April 2024

Decision date:

09 April 2024

Jurisdiction:

Equity

Before:

Slattery J

Decision:

The first defendant is ordered to pay a total of $28,000 in aggravated and exemplary damages in respect of three incidents. The defendants are ordered to pay 60% of the plaintiff’s costs of the proceedings to date.

Catchwords:

LAND LAW – easements – substantial interference with rights under easements – neighbouring properties have reciprocal benefits and burdens under easements to enable shared use of an inclinator and rights of foot access – previous judgment determines that the first defendant has engaged in excessive use of easements and has trespassed beyond the boundaries of the designated easement and obstructed or interfered with use of the easement, occasioning nuisance to the plaintiff in four out of eight alleged incidents – conduct of the first defendant found to amount to a substantial interference with the rights of the plaintiff under the easement and a trespass upon a servient tenement – whether damages should be awarded and whether aggravated or exemplary damages should be awarded – assessment of the quantum of damages.

COSTS – Party/Party – Court’s discretion – proceeding not complete – whether a costs order should be made at this stage- plaintiff is successful in respect of four out of eight incidents at final hearing and in respect of some issues at earlier hearings – what overall costs orders should be made in the circumstances – what costs orders should be made in respect to a decision of a judge to grant restraining orders with respect to the conduct of the first defendant on one occasion – whether costs orders should be made now or at the conclusion of the proceedings.

Cases Cited:

Clough v Breen & Anor [2022] NSWSC 1026

Clough v Breen (No. 4) [2023] NSWSC 1155

Day v The Ocean Beach Hotel Shellharbour Ltd (2013) 85 NSWLR 335

Lamb v Cotogno (1987) 164 CLR 1

State of New South Wales v Ibbert (2005) 65 NSWLR 168

Tilden v Gregg [2015] NSWCA 164

Category:

Principal judgment

Parties:

Plaintiff/Cross-Defendant: Christine May Clough
First Defendant/Cross-Claimant: Douglas Martin Breen
Second Defendant/Cross-Claimant: Tracey Jane Dillon

Representation:

Counsel:
Plaintiff/Cross-Defendant: Mr D. O’Connor; Ms C. Langford
Defendant/Cross Claimants: Mr F. Maghami;
Mr M. McGirr

Solicitors:

Plaintiff/Cross-Defendant: Michael Sommerville, Redmond Hale Simpson Solicitors & Barristers
Defendant/Cross-Claimants: Charlotte Morson, Morson Law Litigation Lawyers

File Number(s):

2020/130704

Publication restriction:

No

Judgment

1. The Court gave judgment on the final hearing of this matter on 22 September 2023: Clough v Breen (No. 4) [2023] NSWSC 1155 (“the September 2023 judgment”). This judgment deals with two issues consequent upon the giving of the September 2023 judgment: (1) whether any damages should be awarded for the torts established against Mr Breen, and if so, in what quantum; and (2) costs.

2. This judgment should be read with the Court’s September 2023 judgment. Events, matters and persons are referred to in both judgments in the same way.

3. The Court had the benefit of written submissions from the parties and heard short oral submissions on 12 February 2024. The parties continued to engage the same lawyers as they did at the main hearing.

4. Mr D. O’Connor and Ms C. Langford of counsel, instructed by Michael Sommerville of Redmond Hale Simpson Solicitors & Barristers, appeared for the plaintiff/cross-defendant, Ms Clough. Mr F. Maghami and Mr M. McGirr of counsel, instructed by Charlotte Morson, of Morson Law Litigation Lawyers appeared for the defendants/cross-claimants, Mr Breen, and Ms Dillon.

5. These reasons first deal with the damages issues then the costs issues. On the pleadings, some issues remain to be considered. These relate to whether the inclinator can be replaced in the circumstances that now exist given the terms of Easement A. In the September 2023 judgment (at [213]), the Court also noted that the form of final relief including any permanent injunction needed to be finalised. In the interim, the parties continue to operate under the interlocutory orders made in August 2022 (Clough v Breen & Anor [2022] NSWSC 1026).

Damages in Tort

6. The first question is whether Mr Breen should pay damages to Ms Clough in relation to the incidents in which the Court has found that torts of nuisance or trespass have been established against him.

7. Ms Clough claims damages for four incidents that were the subject of adverse findings against Mr Breen in the September 2023 judgment. These incidents were:

1. Incident (2) - renovating a swimming pool on Lot 118 – January to April 2020;

2. Incident (3) – disabling the landing 5 door open with Epoxy glue;

3. Incident (4) – conduct in relation to Mr Drew, the locksmith; and

4. Incident (8) – conduct after Ball J’s decision.

8. These reasons will deal with each of these incidents in turn. In each incident, Ms Clough claims damages on the basis that the interference to her rights consists of a disturbance with the amenities of her living at her property without the need on her part to prove any actual financial loss or physical injury. She submits that annoyance or discomfort alone can be sufficient to support a claim for general damages. She also seeks exemplary or aggravated damages for the trespasses to her land. She contends that all the incidents would attract an award of exemplary damages.

9. The applicable legal principles in relation to the availability of the torts of trespass and nuisance in relation to easements were discussed in the September 2023 judgment, at [209] – [211]. The applicable legal principles in relation to the assessment of damages for trespass and for obstruction to a right of way may be shortly stated.

10. General damages are available for the torts of nuisance and trespass to compensate for the loss of amenity and enjoyment of the property occasioned by the tort. The Court may also award aggravated or exemplary damages for these torts. It is not uncommon in the authorities for compensatory and exemplary damages to be awarded in one lump sum.

11. Aggravated damages are a form of compensatory damages, being awarded for injury to the plaintiff’s feelings caused by insult, humiliation and the like; but exemplary damages are awarded as a form of punishment to deter repetition of reprehensible conduct by the defendant or others, or to mark the Court’s disapproval of that conduct and are punitive and are deterrent in nature: Lamb v Cotogno (1987) 164 CLR 1. Aggravated damages are assessed from the point of view of the plaintiff and with exemplary damages the focus is on the conduct of the defendant, but it is necessary to determine heads of compensatory damages before deciding whether or not the quantum is such that a further award is necessary to serve the objectives of punishment or deterrence or condemnation: State of New South Wales v Ibbert (2005) 65 NSWLR 168 at [83]. The award of exemplary and aggravated damages is discretionary, and caution is required to ensure that the circumstances in which they are awarded are appropriate and bear proper proportion to the circumstances of the case: Day v The Ocean Beach Hotel Shellharbour Ltd (2013) 85 NSWLR 335. Provocation is relevant to determining whether exemplary damages should be awarded, and if so, how much: Tilden v Gregg [2015] NSWCA 164.

12. One general observation may be made at the outset. All four incidents occurred after Darke J’s judgment in 2017. A theme of Darke J’s judgment was the need for cooperation between the parties and that theme was repeated in the September 2023 judgment.

Incident (2) - Renovating a swimming pool on Lot 118 – January to April 2020.

13. The Court’s findings in relation to this incident are set out in the September 2023 judgment at [88] – [106]. The findings are not reproduced here. The Court’s present analysis is based on those findings.

14. The parties each advanced written submissions in relation to this incident. Ms Clough’s submissions were as follows.

“30.   Renovating a swimming pool on Lot 118 -January to April 2020 - incident (2) warrants an order for exemplary damages;

(i) The Court found that Mr Breen's conduct had been highhanded at [99]. The Court used language to described Mr Breen's behaviour that was very similar to the Court's findings in TCN Channel Nine Pty Ltd v lvariy Pty Ltd (2008) Aust Torts Reporter 81-931 when it described conduct as having the necessary high-handed behaviour, at [19], that would justify an order for exemplary damages.

(ii) Mr Breen simply ignored Ms Clough and by doing so "increased her inconvenience and aggravated her immensely" at [99].

(iii) The Court accepted that Mr Breen's conduct caused "her anxiety, nervousness and apprehension daily every time she was aware she would need to use the inclinator" at [101].

(iv)   The conduct occurred after the decision of Darke J, and therefore in defiance of the Court's finding that the proper use of the easement required a measure of cooperation between the parties. Mr Breen knew that his obnoxious, high-handed approach was the exact opposite of what the Court had found to be the correct approach to the use of the inclinator easement sites.

31.   The above conduct was significantly worse than the conduct for which Darke J awarded Mr Breen $6,000 in the original proceedings on a non-exemplary basis. The conduct also continued over a longer period. The Court should award $12,000 in exemplary damages, being double that which Darke J ordered.”

15. Mr Breen and Ms Dillon said the following in chief about this incident:

“Swimming pool renovations in 2020: in relation to the incident involving the renovation of the swimming pool, the Court found that the retiling works (which the Court has found occurred between January and April 2020) “amounted at times” to an excessive use of Easement A and a trespass. Having regard to the circumstances, including that “Ms Clough at times reacted too strongly to this use of the inclinator”⁹ and the absence of alternative practical measures to transport goods to the defendants’ property, the defendants say that only nominal damages should be awarded for this trespass;”

16. Mr Breen and Ms Dillon replied to Ms Clough’s submissions as follows.

“22.   The Court found that Mr Breen, in relation to the swimming pool retiling, "amounted at tiles to an excessive use of Easement A and therefore a trespass". However, there is no evidence of wantonness or malice. Moreover, the Court found - at [102] - that Ms Clough, at times, reacted too strongly to Mr Breen's use of the inclinator.

23.   In the circumstances, there is no legitimate basis to suggest that Mr Breen's conduct met the standard of an "outrageous" disregard of the plaintiff's rights. Mr Breen was, by all accounts, attempting to carry out works to his pool. While Mr Breen, as indicated by Slattery J, should have communicated with Ms Clough to ensure the inclinator was available when required, his conduct in using the inclinator fell far short of wantonness or malice.”

17. The Court analyses these submissions as follows. The Court found in relation to this incident that Mr Breen engaged in excessive use of Easement A and thereby committed a trespass upon Lot 116: September 2023 judgment at [103]. This was a serious incident as the Court’s findings show. The incident involved excessive use, indeed monopolisation, of the inclinator for a not insubstantial period occasioning serious disruption and inconvenience to Ms Clough. In it, Mr Breen was dismissive of Ms Clough’s concerns at her rights to use the inclinator, when he must have known she would be seriously inconvenienced. He well understood that giving advance notice to Ms Clough would have allowed some timeslots to be fixed for her to use the inclinator, but he high-handedly ignored her and showed unacceptable indifference to her exercise of her legitimate rights. Although the Court has found that she reacted too strongly at times to his conduct, she did not in any sense provoke it in a way that should reduce his responsibility for what occurred. This incident was an identifiable contributor to her anxiety, nervousness and apprehension about use of the inclinator.

18. The Court will award damages, including aggravated damages and exemplary damages, of $6,000 for this incident against Mr Breen. Ms Dillon was not responsible for what occurred in this incident, and damages should not be awarded against her for it.

Incident (3) – Disabling the door with Epoxy glue – March 2020.

19. The Court’s findings in relation to this incident are set out in the September 2023 judgment at [107] – [119]. The findings are not reproduced here. But the Court’s present analysis is based on those findings.

20. The parties each advanced written submissions in relation to this incident. Ms Clough’s submissions were as follows.

“32.   The epoxy of the door incident (3) warrants an order for exemplary damages;

(i)   Mr Breen knew he had no right to block Ms Clough's access.

(ii)   As Rees will J observed, "Not only does the plaintiff have a prima facie right to access through the Door and Gate, including a right to any key needed to operate the Door and Gate, Darke J. has held that the plaintiff has such a right" at [35).

(iii)   Mr Breen blocked Mr Clough's access in direct defiance of what he knew to be Ms Clough's right to access the easement at that point, but also in defiance of the orders of Darke J.

(iv)   The blocking of the gate was not for one day but extended for a significant period. Commencing on 18 March 2020 and not ending until 19 May 2020 when the Court made orders.

(v)   Mr Breen persisted in continuing the proceedings despite knowing he did not have a defence to the relief sought by Ms Clough.

33.   If the Court accepts that the above conduct amounts to aggravated damages the amount the Court orders should be significantly more than the $6,000 awarded in the Darke J decision. The Court should award $12,000 in damages being double that awarded by Darke J on the non-exemplary basis.”

21. Mr Breen and Ms Dillon said the following in chief about this incident:

“Epoxy door incident: Mr Breen admitted that he obstructed access to Easement E and the Court found this an actionable nuisance. However, the Court also accepted Mr Breen’s explanation of the lead-up to this event, including that Mr Breen did this out of a fear for Ms Dillon’s safety.¹⁰ When viewed in its context, including critically that the Court has inferred that by early 2020 Mr Rose or Ms Clough began to lock the gate at landing 5,¹¹ and Mr Rose’s conduct in intimidating Ms Dillon, the defendants say that no damages should be awarded for this trespass;”

22. Mr Breen and Ms Dillon replied to Ms Clough’s submissions as follows.

“24.   These submissions, and the defendants' submissions, along with the remarks of Slattery J in Clough v Breen (No 4), have addressed this matter in detail. This incident occurred in the context of an escalation between the parties and the genuinely held fear Ms Dillon had in being in an enclosed space with Mr Rose. There can be no grounds for exemplary damages having regard to the context of the behaviour, in circumstances that the conduct of, in particular, Mr Rose, and the sincerely held desire held by Mr Breen to prevent Ms Dillon coming into contact with Mr Rose, was the chief motivator. The Court analyses these submissions as follows.”

23. The Court analyses these submissions as follows. The Court has found that the obstruction to Ms Clough’s rights as the dominant tenement owner of Easement E through the events of this incident is an actionable nuisance. This incident was a planned and calculated denial of Ms Clough’s access to the enclosed Easement E on Landing 5. But in the September 2023 judgment (at [109]) the Court emphasised that the context of the nuisance was important, despite the deliberate nature of Mr Breen’s conduct. Either Mr Clough or Ms Rose had begun to lock the Landing 5 gate by early 2020. This conduct on their part was bound to escalate tensions between the occupants of Lot 116 and Lot 118. The Court will not in any way reward provocative conduct by awarding aggravated or exemplary damages for a situation which was at least partly brought about by Ms Clough or Mr Rose.

24. Moreover, as the Court has found in the September 2023 judgment (at [111]) Mr Breen’s somewhat extreme conduct on this occasion was partly prompted by his concern about the safety of Ms Dillon who had expressed well based on genuine fears about Mr Rose’s conduct towards her.

25. For these reasons the Court will not award any compensatory or exemplary damages to Ms Clough in respect of this incident. But the incident that followed a few days later is in a different category. Before confronting Mr Drew, the locksmith, Mr Breen had an opportunity to reflect upon his own conduct, to cool off, and to take advantage of the lapse of time to de-escalate. But what he did widened the dispute so as to cause distress to innocent third parties.

Incident (4) – Conduct in relation to Mr Drew, the Locksmith

26. The Court’s findings in relation to this incident are set out in the September 2023 judgment at [120] – [138]. The findings are not reproduced here. But the Court’s present analysis is based on those findings.

27. The parties each advanced written submissions in relation to this incident. Ms Clough’s submissions were as follows.

“34.   The locksmith incident (4) is the most extreme of all the conduct of Mr Breen's. It warrants an award of exemplary damages because;

(i)   Mr Breen lied to Mr Drew when he advised him he had a Supreme Court order to the effect that he could change the locks and block Ms Clough's access.

(ii)   Threatened Mr Drew with the possibility of him being "charged with break and enter".

(iii)   Sought to subvert the relationship between Mr Drew and Ms Clough.

(iv)   Mr Breen's conduct was such that Mr Drew remained fearful and concerned for his family that "this man" (Mr Breen) might be "turning up on his doorstep" again.

(v) Mr Breen's conduct in intercepting Mr Drew had the effect of imposing a cost on Ms Clough of exercising her right to access landing 5, namely having to persuade Mr Drew to perform work to enable her access, which she was entitled to have performed at [135].

35.   If the Court accepts that the above conduct warrants an order for exemplary damages that amount should be higher than the amount ordered for incident (3). That is because the conduct complained of in this incident is clearly the most serious and involved serious attempts to intimidate innocent third parties and lying about the effect of certain orders of the Court. The Court should make an award of $20,000 in damages to reflect the seriousness of Mr Breen's behaviour and to ensure it is not repeated. A more significant award of damages is warranted to ensure Mr Breen does not continue to ignore the orders of the Court.”

28. Mr Breen and Ms Dillon said the following in chief about this incident:

“the Locksmith Incident: the Court found that Mr Breen’s conduct “had the effect of imposing a cost on Ms Clough of exercising” her rights by making her fearful of calling tradespeople to her property.¹² The defendants submit that that an award of $2,000 in damages is appropriate to compensate the plaintiff for this nuisance;”

29. Mr Breen and Ms Dillon replied to Ms Clough’s submissions as follows.

“25.   This incident, again, needs to be seen in the context of the hostility of the parties, and particularly Mr Breen's desire to protect Ms Dillon, in view of Ms Dillon's genuinely held fear of finding herself in an enclosed space with Mr Rose. In this context, there is no justification for exemplary damages.”

30. The Court analyses these submissions as follows. The Court has found that this incident amounted to a substantial interference with Ms Clough’s rights to access Landing 5 through Easement E. The Court accepts Ms Clough’s submissions in relation to this incident. Conduct such as this must be deterred and condemned. An award of aggravated and exemplary damages against Mr Breen is appropriate for this incident because of its special features.

30. Mr Breen’s false statement to Mr Drew that he had a Supreme Court order entitling him to change the locks when he must have known that he did not have the benefit of such an order is particularly disturbing. Leaving aside whether it is a contempt of Court, Mr Breen’s conduct in this incident was a deliberate misuse of the authority of the Court to intimidate Mr Drew. Persons who falsely cloak themselves in the Court’s authority undermine and discredit that authority and exhibit a contumelious disregard for the rights of the people who are adversely affected by such intimidation, as Ms Clough was on this occasion. Mr Breen’s misuse of the Court’s authority in this incident was powerful and effective and Mr Breen’s scheme caused great discomfort to Mr Drew and his girlfriend and directly and indirectly to Ms Clough.

31. The Court does not accept Mr Breen’s submission that this incident was just about imposing a cost on Ms Clough bringing tradespeople to the property. Nor was Mr Breen’s concern for Ms Dillon’s welfare a mitigating factor, because of the lapse of time for reflection. The Court will impose aggravated and exemplary damages of $18,000 for this incident. This figure is selected to show appropriate condemnation of Mr Breen’s conduct and to deter any repetition of it. Ms Dillon was not responsible for what occurred in this incident, and damages should not be awarded against her for it.

Incident (8) – Conduct after Ball J’s Decision

33. The Court’s findings in relation to this incident are set out in the September 2023 judgment at [165] – [173]. The findings are not reproduced here. But the Court’s present analysis is based on those findings.

34. The parties each advanced written submissions in relation to this incident. Ms Clough’s submissions were as follows.

“36.   The incident after Ball J.'s decision (8). This conduct warrants an award of exemplary damages because;

(i)   It is in direct defiance of an order of the Court.

(ii) Rather than observe the Orders of the Court, "the Court's orders seem to have been treated as a platform to gain entry to Lot 116, and once there to carry out the work however they wanted" at [173].

37.   The above trespass is of particular concern to the plaintiff. Throughout these proceedings the plaintiff has complained that Mr Breen has little if any concern for the orders of the Court and has often acted in direct defiance of those orders. The fact that all the above trespasses have occurred since the detailed judgment of Darke J, and the fact that Mr Breen has lied about the effect of the various Orders of the Court previously, have increased the plaintiff's anxiety that future Orders will be ignored.

38.   The Court should award exemplary damages to protect the integrity of its own Orders and reinforce the seriousness of breaching Orders of the Court. The Court should award damages of $12,000.”

35. Mr Breen and Ms Dillon said the following in chief about this incident:

“the incident after Ball J’s orders: the Court found that there was a trespass due to contractors failing to stay within the orders of Ball J made by consent on 21 December 2020. In the absence of a Court order, the defendants submit there is a strong argument that it would be reasonably necessary for the workers to have access to the far side of the inclinator corridor to do the work. Moreover, the trespass was for a relatively limited time period. Having regard to all the circumstances, the defendants say that an award of $5,000 in damages should be awarded to the plaintiff for this trespass;”

36. Mr Breen and Ms Dillon replied to Ms Clough’s submissions as follows.

“26.   There is no justification for exemplary damages. The trespasses complained of were for short periods and there is no suggestion that there was any wantonness or malice by Mr Breen. As Slattery J observes at [173], "the evidence lacks any attempts by Mr Breen to show how he sought to control these contractors, so that they would operate only within the limits of the Court's orders". This finding does not amount to a positive finding that Mr Breen acted deliberately or recklessly. Moreover, it is the plaintiffs’ burden to demonstrate the conduct was "high handed" or an "outrageous disregard for the plaintiff's rights''. The plaintiff, aside from complaining about Mr Breen in the most general terms, has no evidence supporting an award for exemplary damages. For this reason, no order could or should be made.”

37. The Court analyses these submissions as follows. The Court will award aggravated and exemplary damages for this incident in the sum of $4,000. This award is necessary because although the trespass was relatively brief it was in the face of a negotiated Court order designed to regulate their mutual conduct.

38. Parties are not entitled to breach Court orders merely because they realise that their lawyers should have negotiated more flexible terms. Mr Breen’s conduct was high-handed and a cynical disregard of the rights that Ms Clough had secured by engaging lawyers to negotiate a reasonable regime for access on this occasion. Despite the efforts that had been invested into negotiating detailed terms upon which access would be allowed, they were blithely ignored without any demonstrable attempt to guide or control the workmen. Conduct such as this should be condemned and deterred. And Mr Breen should know that whenever he engages in such conduct he is liable attract damages of this kind. Once again Ms Dillon was not responsible for what occurred in this incident, and damages should not be awarded against her for it.

Costs – Whether a Costs Order Should be Made?

39. There are two costs issues: whether a costs order should be made and if so, what should that costs order be. The parties have put their opposing submissions about the appropriate costs’ outcome of these proceedings.

40. On the first costs issue, Mr Breen and Ms Dillon submit as follows.

“13.   Against this backdrop, there is a substantial risk of unfairness should the Court make a costs order at this point in the proceeding. That is because some of the costs incurred by the parties are attributable to questions the subject of the cross claim, and at this stage, in the absence of a final resolution of these the relevant relief sought, it is not clear how these costs would or should be fairly dealt with. In other words, should a costs order be made at this juncture, there is a risk that the successful party will be deprived of the benefit of its success in regards that aspect of the proceedings.

14.   To put the submission another way, in relation to the cross claim, while it is true that several factual disputes were resolved by the Court in Clough v Breen (No 4) [2023] NSWSC 1155 which in theory could allow the Court to craft a suitable costs order, the interconnected nature of the plaintiff’s claims, and the defendants’ cross claims means that the submissions and a good portion of the evidence heard at trial could be relevant to the determination of the cross claim and the remaining issues which are yet to be resolved.

15.   The challenges associated with making orders for costs to follow the event in cases where there are interconnected issues was discussed in Polwood Pty Ltd v Foxworth Pty Ltd (No 2) [2008] FCAFC 168 at [12]. In that case, Finn, Bennett and Greenwood JJ observed (emphasis added):

Both the appellants and the cross-appellants were unsuccessful in their respective appeals. Ordinarily, orders would be made for costs to follow the event in each instance. However, we consider it appropriate in this matter to deal with the costs of the appeals in a composite way acknowledging their interconnectedness. We consider it to be undesirable for there to be, potentially, separate taxation of the costs of the appeal and of the cross-appeal which may well give rise to unnecessary disputes about whether a particular letter, telephone call, or attendance was a cost in the appeal or the cross- appeal.

16.   In this case, it is unarguable that there is an interconnectedness between the plaintiff’s claims, and the cross claims filed by the defendants. Whilst the extent of correlation covers much of the case, at the very least it arise in the following ways:

(a)   evidence relevant to the cross claim has been heard in the Court at the trial and will be relevant for the Court to consider in the cross claim and the relief claimed therein;

(b)   the defendants’ proposed “regime” seeks a structural or systematic answer to the long-running disputes between the parties which emerge from both the evidence heard in this proceeding, and prior proceedings between these parties; and

(c)   the defendants’ proposal to replace the inclinator, again, call for consideration of the difficulties faced by the parties in using the inclinator, including breakdowns of the inclinator (the only outstanding evidence in this regard is the expert material, as well as any updated ‘lay’ evidence);

(d)   The estoppel issue was dealt with at trial as a threshold issue vis a vis the cross claim. However, in the absence of a final determination by the Court on whether the inclinator should be ultimately replaced, a determination in relation to the costs associated with the estoppel issue risks prejudicing the interests of the ultimate victor in terms of their ability to recover costs from the trial in relation to that issue.

17.   In short, the interconnectedness and overlapping nature of issues arising from the claims and cross claims in this matter, lends itself to the desirability of deferring the issue of costs until a hearing on the balance of the proceedings is had and determined.

18.   The undesirable possibility of further disputes could be avoided entirely if the Court deferred the question of the costs of the proceeding until the matter of the cross claim is resolved in its entirety.”

41. In reply on this issue, Ms Clough submitted as follows:

“1.   The defendant accepts that the correct principle of law to be applied is that; generally, costs orders should follow the verdict on the issues unless there are compelling reasons to the contrary, citing Ajkay v Hickey & Co Pty Ltd [2011] NSWSC 822.

2. The compelling reasons to the contrary the defendants give is that as they have yet to argue that the inclinator should be replaced. This they say leads to what is said to be possible unfairness because "some of the costs incurred by the parties are attributable to questions the subject of the cross claim, and at this stage, in the absence of a final resolution of these the relevant final relief sought, it is not clear how these costs would or should be fairly dealt with" at [13].

3.   The above argument is misconceived. The plaintiff has only asked for the costs attributable to the issues it won on. Such an order would not permit the plaintiff to claim court time attributable to another issue yet to be decided. How those costs should be assessed are either a matter for an assessor or for the Court itself, if a gross sum costs order be sought. Contrary to what the defendant argues, final resolution of all issues is plainly not necessary for the Court to make costs orders in favour of the plaintiff for the issues she has been successful on.

4.   The balance of the defendants' submissions on this issue revolve around the "interconnectedness and overlapping nature of issues arising from the claims" making it desirable to defer the issues of costs until the end of the proceedings. This argument goes no higher than stating the obvious fact that there is more than one issue before the Court for determination. That does not prohibit the Court from making costs orders on an issue­ by-issue basis. The fact that the Judgments have been given on an issue-by-issue basis make the matter more suitable rather than less suitable for an accompanying costs order to reflect those judgments.”

42. The Court is not persuaded that it should decline to make a cost order at this stage of the proceedings. In the recent course of the litigation between these parties, the Court has now given five judgments. The Court has resolved all issues other than costs that were raised on Ms Clough's Statement of Claim and most of the issues raised on the Cross-Claim. All that remains to be determined is the Cross-Claim relief relating to whether the inclinator car can be replaced due to any changes in circumstances that have occurred since Darke J’s judgment in December 2017. This is a relatively discrete issue.

43. The Court has case managed these proceedings so that all issues in relation to the past conduct of the parties including damages would be determined first, and then the separate questions of what modifications might take place to the inclinator would be determined. The Court took the view that the case was more logically managed by dealing with the past before trying to fashion a remedy affecting the future state of the inclinator and the future mutual conduct of the parties. The only other issue relating to the future between the parties is the moulding of the form of final injunctive relief. But that issue is interdependent with the issue of what, if any, modifications to, or replacement of, the inclinator permissibly takes place within the terms of the Easement A. The present moment is a logical division in the proceedings where a range of discrete issues have been resolved and the Court is about to embark upon other separate issues between the parties.

44. Moreover, it has been a considerable time since these proceedings commenced. The first judgment in this round of litigation was in August 2022. It is unclear how long it will take to resolve the balance of the proceedings. Considerable legal costs have been incurred on both sides of these proceedings. It is far better for parties to know where they stand in relation to their costs liability in relation to their future financial planning. To leave issues of costs as a matter of uncertainty for much longer is likely to financially disadvantage both parties in these proceedings.

45. The Court does not find Mr Breen and Ms Dillon's arguments against this conclusion to be persuasive. First, the Court is not persuaded there is a "substantial risk of unfairness" should the Court make a costs order at this point in the proceedings. Whilst it is true that some of the costs already incurred by the parties are attributable to questions arising on the Cross-Claim, the Court can readily discern the questions on the Cross-Claim that have been resolved from those that have not been resolved and can take that into account in the costs orders that are now made. There is no danger that making a costs order now will deprive Mr Breen and Ms Dillon of such successes as they have had either on their Cross-Claim so far, or on Ms Clough’s claim against them. The Court can identify the areas of that success and can give it appropriate weight at this stage when making a costs order. Doing this has the advantage of bringing costs up to date and drawing a line for costs determinations in the future.

46. Whilst it is true that “the good proportion of the evidence heard at trial could be relevant to the determination of the Cross-Claim” this relevance is limited; it really only provides background to the remaining issues. The issues that were strongly contested at the trial have been determined. These issues related to what incidents took place, who was at fault for them and what are the consequences in damages for those incidents. Also resolved have been contests in relation to the construction of the terms of Easement A and Easement E and other matters. But the relevance of this material to determining the remaining issues on the Cross-Claim is only to illustrate the problems that can occur and that might perhaps be avoided were the inclinator to be upgraded, modified or replaced in the future should that be permitted by the terms of Easement A. None of the factual contests at trial needs to be re-determined or indeed can be re-determined on the remaining Cross-Claim issues.

47. Nor do the various estoppel issues that have been determined by the Court create any special reason why costs orders should not be made now. The estoppels found by the Court in the September 2023 judgment were relatively limited and still left open determination of questions of the modification or replacement of the inclinator in the future in respect of changes that had occurred since Darke J’s judgment in 2017. It is difficult to say that the estoppel issue was a “threshold issue” in relation to the Cross-Claim. Its determination in the September 2023 judgment merely serves to further divide past issues from future issues, which in the Court’s view is also an appropriate dividing point for the Court now to make a costs order.

Costs – What Costs Order Should be Made?

48. Mr Breen and Ms Dillon put alternative submissions if the Court did not defer the question of costs pending the outcome of the balance of the proceedings. Their submission was advanced as follows.

“21.   If the court is not minded to defer the question of costs, pending the outcome of the balance of the proceedings, the defendants submit that fairness dictates that, in all the circumstances of the case, should be no order as to costs, with each party bearing their own costs of the proceedings thus far.

22.   As noted by Finkelstein & Gordon JJ in Bowen Investments Pty Ltd v Tabcorp Holdings Ltd (No 2) [2008] FCAFC 107 at [5] “fairness should dictate how [the costs]..discretion is to.be exercised”.

23.   The defendants submit that the Court in declining to make any order as to costs achieves fairness between the parties, particularly considering the following:

(a)   of the ten allegations of trespass or nuisance made by the plaintiff, the plaintiff has succeeded in only five, representing (broadly speaking) a 50% success rate;

(b)   the unsuccessful trespass and nuisance claims by the plaintiff took up a substantial portion of the trial. These unsuccessful claims undoubtedly (and in our submission, wholly unnecessarily) increased the time taken at the hearing and caused the defendants to incur considerable legal costs and time;

(c)   while the plaintiff was successful on the “CCTV issue”, the plaintiff was not successful in their submissions on the proper construction of Easement A (that is, whether the owner of Lot 118 may enter any part of lot 116);

(d)   the plaintiff has failed to succeed on the estoppel question and to, in effect, prevent the defendants crossclaim in relation to the repair or replacement of the inclinator; and

(e)   the defendants have enjoyed success on an interlocutory basis in relation to the “regime” for the use of the inclinator, which the defendants say should offsets the plaintiff’s success in both the interlocutory injunction obtained before Rees J in Clough v Breen [2020] NSWSC 653, and any permanent injunction granted (see paragraph 213 of Clough v Breen (No 4).

24.   Alternatively, should the Court make a costs order against the defendants, having regard to the dictates of fairness, the multiplicity of issues and the difficulties associated with attribution in this case:

(a)   the Court should make a “percentage” order to enable ease of calculation of apportionment; and

(b)   the defendants be liable for no more than 20% of the plaintiff’s costs of the proceedings thus far on an ordinary basis; and

(c)   costs are payable at the conclusion of the proceedings.”

49. In reply on this issue Ms Clough submitted as follows:

“5.   The plaintiff does not agree with the defendant's assessment of how the issues were decided by the Court;

I.   The defendants did not "win" the interlocutory regime for the use of the inclinator, it was agreed between the parties. The key order, that one party not "steal" the inclinator from the other, once it has been called, was a term sought by the plaintiff not the defendants.

II.    The question of if the installation of the Lan cable down the inclinator easement is a trespass remains to be decided by the Court.

IlI.   All of the other allegations that did not result in a finding of trespass or nuisance nevertheless involved behaviour of Mr Breen the was at best obnoxious;

a.   The power outage incident involved Mr Breen commencing works to the inclinator and shutting it down without any notice to Ms Clough. The Court also concluded that both parties' behaviour was lamentable.

b.   The question of if Mr Breen had been using the inclinator as part of his business had facts that overlapped with other questions of excessive use of the inclinator, which were ultimately accepted to be a trespass by the Court.

c.   The use of the call button on Ms Cloughs front door, although not found to be an actionable nuisance or trespass, nevertheless did involve Mr Breen entering Ms Cloughs land off the easement.

d.   All the conduct complained of involved Mr Breen ignoring Ms Cloughs rights to some degree or another and using the inclinator and her property while "ignoring her" at [99] .

IV. The estoppel argument was not "won" by the defendants. The Court placed limitations on what case they could advance noting that any further arguments must adhere to the interpretation of clause 1(c)(i) as found by Darke J at [227].

6.   The Court should not apportion costs for the nuisance claims on a win/loss basis as suggested by the defendants. The statement of principle as articulated by Hodgson J in Commonwealth of Australia v Gretton [2008] NSWCA 117 at [121] should be applied;

"Underlying both the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the Court considers to be the responsibility of each party for the incurring of the costs."

7.   The short point is that Mr Breen's poor attitude to Ms Cloughs property rights, and her right to use the inclinator, has caused her to bring claims for nuisances and trespass. The Court should have regard to the fact that Mr Breen was the party responsible for causing Ms Clough to incur the costs of perusing her claims for nuisance and trespass. To not award Ms Clough her costs of pursuing her nuisance claim would have made the exercise not worthwhile. The Court should find that the 'event' was Mr Breen committing trespass and nuisance and award the plaintiff the costs or pursuing the nuisance and trespass claims.”

50. The Court is not persuaded that it should make no order as to costs with each party bearing their own costs of the proceedings thus far, as Mr Breen and Ms Dillon submit.

51. The Court is warranted in this case in making a costs order in favour of Ms Clough for several reasons. First, Ms Clough has been successful on some of the most contentious parts of the proceedings which have now been determined. She has been successful in establishing approximately half of the incidents which she alleged took place, and on several other disputes she has been successful in achieving findings that facts for which contended took place, although the cause of action that she claimed was not made out. But it is she clear that she has failed with respect to several other incidents where she has not been believed, or where she or Mr Rose provoked the situation or where her allegations were exaggerated and not believed.

52. But she has nevertheless achieved a substantial measure of success overall in relation to conduct which the Court has found worthy in places of condemnation with aggravated and exemplary damages. It is true that her unsuccessful claims in trespass and nuisance took up a considerable portion of the trial. That is a matter which the Court can and does consider in fixing the percentage of costs that Ms Clough should recover.

53. Second, Mr Breen and Ms Dillon point out that although Ms Clough was successful on the CCTV issue, she was unsuccessful on the construction of Easement A. Whilst this is true. this is a matter that can be taken into account and this relative balance of success in the fixing of an appropriate percentage. The Court acknowledges that the construction of Easement A was a highly contentious issue that occupied time in the parties’ submissions and in Court time. Added to that is Ms Clough failed to make out many of her claims of estoppel on the Cross-Claim, which can also be taken into account.

54. Third, Mr Breen and Ms Dillon’s argument that they had enjoyed success on an interlocutory basis in relation to the regime for the issue of the inclinator somewhat misconceives the nature and purpose of that interlocutory regime. The August 2022 judgment and the regime of orders which were put in place with it stands somewhat apart from the merits of the contest of the parties. The interlocutory regime created the August 2022 judgment should be viewed like many interlocutory injunctions obtained at the commencement of proceedings where it is imperative that stability be brought to our dynamic and unpredictably damaging situation. An initial interlocutory dispute generates legal costs which will usually be borne in the same manner as the other costs in the proceedings, by the party who is unsuccessful at the end of the proceedings. In the Court’s view the interlocutory regime that was imposed in August 2022 is neutral in the Court’s present determination of costs. When some form of interlocutory regime was initially proposed largely at the Court’s initiative, each party opposed parts of it. The final form of interlocutory regime was settled as a result of hearing submissions from both sides, to try and achieve workable live-and-let-live regime for these parties pending determination at a final hearing.

55. If the Court is to make a costs order against Mr Breen and Ms Dillon, it is appropriate to make a percentage costs order rather than one that awards costs by reference to various issues. The latter kind of costs order generates unnecessary costs in calculating the apportionment of costs between issues.

56. Overall, Ms Clough was justified in bringing these proceedings and that should be reflected in an appropriate order for costs. In the Court’s view, weighing all the competing considerations the Court considers that an appropriate order is that Mr Breen and Ms Dillon pay 60 per cent of Ms Clough’s costs of the proceedings on the ordinary basis. It is appropriate that this costs order cover all costs incurred up to the date of this judgment, so there is a clear dividing line between past and future costs, should future costs issues arise in the balance of the proceedings.

57. The Court considered whether a separate costs order should be made against Mr Breen and Ms Dillon because Mr Breen is the subject of the aggravated and exemplary damages orders. But the Court has rejected that idea because overall the conduct of the proceedings on the defendants’ side has been for the benefit of them both. It is appropriate to mark out Mr Breen’s conduct as warranting an award of aggravated and exemplary damages for the three incidents where that has occurred. But that on its own is sufficient to distinguish his conduct from that of Ms Dillon.

Conclusions and Orders

58. The only issues now remaining to be determined in these proceedings relate to whether the inclinator can now be required to be replaced and in light of the outcome of that issue, what should be the final form of any permanent injunction that should be left in place to regulate the conduct of these parties.

59. The Court made directions on 2 April 2024 for the filing of any supplementary evidence relating to the modifying, upgrading, or replacing the inclinator. Otherwise, the Court will make the following orders for the reasons here given:

1. Order that the first defendant pay damages to the plaintiff in the sum of $28,000;

2. Order that the defendants pay 60% of the plaintiff’s costs of these proceedings incurred up to date of this judgment on the ordinary basis;

3. Note that the interlocutory orders made by the Court on 1 August 2022 continue as modified; and

4. Grant liberty to apply.

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Decision last updated: 09 April 2024