Coulter v Bush; Coulter v Domain Residential Northern Beaches Pty Ltd (Costs)

[2024] NSWSC 351

Supreme Court

New South Wales

Medium Neutral Citation:

Coulter v Bush; Coulter v Domain Residential Northern Beaches Pty Ltd (Costs) [2024] NSWSC 351

Hearing dates:

On the Papers

Date of orders:

4 April 2024

Decision date:

04 April 2024

Jurisdiction:

Common Law

Before:

Hammerschlag CJ in Eq

Decision:

(1) The Second Defendant is to pay the First and Second Plaintiffs’ costs on the ordinary basis as agreed or assessed.

(2) The First Cross-Defendant is to pay the First Cross-Claimant’s costs of the proceedings on the:

(a) ordinary basis as agreed or assessed up to and including 3 March 2024; and

(b) indemnity basis on and from 4 March 2024.

(3) The First and Second Plaintiffs are to pay the First Defendant’s costs, if any, attributable exclusively to his defence of the Statement of Claim, on the ordinary basis as agreed or assessed.

Catchwords:

COSTS – Where real estate agent employed by the owner of a property negligently causes it to be burnt down – Where tenants of the owner and the owner sue the agent in tort and succeed – Where in addition the tenants bring an unmaintainable claim against the owner for alleged breach of their tenancy agreement which is successfully defended by the owner – Whether the real estate agent should pay the owner’s costs of resisting the tenants’ contractual claim – HELD that justice does not dictate that the real estate agent bear the owner’s costs of defeating a manifestly untenable claim even though the litigation as a whole was caused by the conduct of the real estate agent – The tenants should pay the owner’s costs, if any, attributable exclusively to his defence of the contractual claim on the ordinary basis as agreed or assessed.

Category:

Costs

Parties:

2021/00268164:
Elise Louise Coulter (First Plaintiff)
Joshua Reginald Songaila (Second Plaintiff)
Peter Alan Bush (First Defendant, First Cross-Claimant)
Domain Residential Northern Beaches Pty Limited (Second Defendant, First Cross-Defendant)

2021/00348199:
Lauren Linda Coulter (First Plaintiff)
Ella Rae Eagle (Second Plaintiff)
Domain Residential Northern Beaches Pty Ltd (Defendant)

Representation:

Counsel:
2021/00268164:
C Alexander (First and Second Plaintiffs)
D Priestley SC (First Defendant, First Cross-Claimant)
S Sykes (Second Defendant, First Cross-Defendant)

2021/00348199
A Power (First and Second Plaintiffs)
S Sykes (Defendant)

Solicitors:
2021/00268164
Dunstan Lawyers (First and Second Plaintiffs)
Ligeti Partners (First Defendant, First Cross-Claimant)
Barry Nilsson Lawyers (Second Defendant, First Cross-Defendant)

2021/00348199
Dunstan Lawyers (First and Second Plaintiffs)
Barry Nilsson Lawyers (Defendant)

File Number(s):

2021/00268164
2021/00348199

Publication restriction:

Nil

JUDGMENT

1. HIS HONOUR: On 19 March 2024, I delivered judgment in the principal proceedings: Coulter v Bush; Coulter v Domain Residential Northern Beaches Pty Ltd [2024] NSWSC 267 (principal judgment). Defined terms in the principal judgment are used here.

2. The plaintiffs and Bush succeeded against Domain.

3. I made provisional orders as to costs: see principal judgment [73]-[75]. I gave the parties the opportunity to make submissions on costs if different costs orders were sought.

4. In proceedings 2021/00348199, the following costs orders were made by consent:

The Defendant (Domain) to pay the First and Second Plaintiffs’ (Lauren’s and Ella’s) costs on the:

a. ordinary basis as agreed or assessed up to and including 8 November 2022; and

b. indemnity basis on and from 9 November 2022.

5. In proceedings 2021/00268164, I received written submissions on behalf of Elise and Reggie, Bush, and Domain.

6. Paragraph [1] of Bush’s submissions states:

The Defendant consents to the making of the following costs orders in respect of the First Cross Claim:

First Cross Defendant to pay the First Cross Claimant’s costs on the:

(a) ordinary basis as agreed or assessed up to and including 3 March 2024; and

(b) indemnity basis on and from 4 March 2024.

(emphasis added)

7. I have taken the reference to the “Defendant” to be a typographical error and that it was intended to be a reference the First Cross-Defendant (Domain). I will make the consent order accordingly.

8. The principal judgment records at [9] that Elise and Reggie abandoned a manifestly untenable claim against Bush in contract for the loss of their chattels, based on Bush’s failure to give quiet enjoyment of the house as a result of Bundock’s actions. This was articulated in their Statement of Claim. The bringing of this claim caused Bush to include in his Amended Statement of Cross-Claim against Domain, a prayer for relief that he be indemnified by Domain for any liability to Elise and Reggie in the proceedings, including costs, although the basis of this claim was not pleaded.

9. Bush seeks an order that Domain pay his costs of defending the Statement of Claim or alternatively that Elise and Reggie pay those costs. Elise and Reggie seek an order that Domain pay their costs of the whole proceedings generally and an order that Domain pay Bush’s costs, including his costs of defending the Statement of Claim or alternatively that Domain indemnify them if they are ordered to pay any part of Bush’s costs. Domain opposes any order that it bear any of Bush’s costs of defending the Statement of Claim and submits that Elise and Reggie should be ordered to pay those costs.

10. It is to be observed that the order that Domain pay Bush’s costs includes any costs attributable to his claim against Domain for indemnity.

11. It is also to be observed that the fundamental issues upon which the case was fought were what or who caused the fire and if it was Bundock, whether she was negligent. The contractual claim against Bush occupied only a small proportion of the hearing and the hearing was not, in any appreciable way, lengthened by its inclusion. The trial was always going to go into a second day. Nevertheless, on assessment, some (no doubt modest) amount may be identifiable as having been incurred by Bush solely in defence of the Statement of Claim.

12. In exercising my discretion as to costs, I have come to the conclusion that justice does not warrant the making of an order that Domain pay, or give an indemnity in respect of the costs, if any, incurred by Bush solely in defending the Statement of Claim.

13. On 9 October 2019, a solicitor, then acting for Elise and Reggie, wrote to Domain notifying it of their claim. This spawned a regrettably stringent negative response from Domain’s insurer denying liability. The letter contained the following two sentences:

Should your client issue proceedings further to that demand, any such proceedings will be vigorously defended and costs will be sought on an Indemnity basis when Domain successfully defends same. Domain also reserves its right to join any other party to such proceedings, including the owner and managing agent, and to defend the claim on the basis of contributory negligence on the part of your client.

14. Despite the fact that Domain (or perhaps its insurer) is responsible for the whole of this litigation because of its wrong denial of liability to both Elise and Reggie as well as Bush (and for that matter to Lauren and Ella), I do not consider that the ends of justice will be served by mulcting it with Bush’s costs of defending the Statement of Claim. My reasons follow.

15. Despite Domain’s obdurate attitude, the contractual claim was manifestly untenable for at least two reasons, and this should have been recognised. Justice does not dictate that Domain should pay for the defence of such a claim.

16. The contractual claim was that Bush was, by reason of Bundock’s actions, in breach of the Residential Tenancy Agreement by interfering with Elise and Reggie’s right to quiet enjoyment. Ultimately, they relied only on clause 14.2 of that instrument which provides:

14 The landlord agrees:

…

14.2 that the landlord or the landlord’s agent will not interfere with, or cause or permit any Interference with, the reasonable peace, comfort or privacy of the tenant in using the residential premises…

17. The claim was premised on Domain being the landlord’s agent within the meaning of the clause. However, the Residential Tenancy Agreement contained the following definition of landlord’s agent (which was apparently overlooked by both protagonists and was raised by the Court):

Landlord’s agent means a person who acts as the agent of the landlord and who (whether or not the person carries on any other business) carries on business as an agent for:

(a) the letting of residential premises; or

(b) the collection of rents payable for any tenancy of residential premises.

18. On no footing did Domain fall within that definition.

19. Further, the loss claimed was not the value of undisturbed possession said to have been lost, but rather the value of chattels lost in the fire. The value of those chattels was plainly not damages suffered as a consequence of the alleged contractual breach. The real case was in tort against Domain, not against Bush in contract.

20. Finally, after the plain shortcomings of the contractual claim were revealed, Counsel for Elise and Reggie nevertheless fully pressed the case (see T 167) and only abandoned it after the Court invited him to consider not arguing the unarguable.

21. In proceedings 2021/00268164, I make the following orders:

1. The Second Defendant is to pay the First and Second Plaintiffs’ costs on the ordinary basis as agreed or assessed.

2. The First Cross-Defendant is to pay the First Cross-Claimant’s costs of the proceedings on the:

1. ordinary basis as agreed or assessed up to and including 3 March 2024; and

2. indemnity basis on and from 4 March 2024.

3. The First and Second Plaintiffs are to pay the First Defendant’s costs, if any, attributable exclusively to his defence of the Statement of Claim, on the ordinary basis as agreed or assessed.

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Decision last updated: 04 April 2024