Cromwell's Auctioneers and Appraisers Pty Limited v First East Auction Holdings Pty Limited t/as Goodmans Auctioneers and Valuers

[2004] NSWLEC 552

Land and Environment Court

of New South Wales

CITATION:

Cromwell's Auctioneers & Appraisers Pty Limited v First East Auction Holdings Pty Limited t/as Goodmans Auctioneers & Valuers [2004] NSWLEC 552

PARTIES:

APPLICANT
Cromwell's Auctioneers & Appraisers Pty Limited

RESPONDENT
First East Auction Holdings Pty Limited t/as Goodmans Auctioneers & Valuers

FILE NUMBER(S):

41167 of 2003

CORAM:

Cowdroy J

KEY ISSUES:

Costs :- application for injunctive relief - development consent granted - applicant seeking to discontinue subject to order for costs - respondent's claim for costs

LEGISLATION CITED:

Environmental Planning and Assessment Act 1979, s 96, s 124(3)
Land and Environment Court Act 1979, s 69(2)

CASES CITED:

Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex Parte Lai Qin (1997) 186 CLR 622

DATES OF HEARING:

23/03/2004

EX TEMPORE
JUDGMENT DATE :

03/23/2004

LEGAL REPRESENTATIVES:

APPLICANT
Mr A. Galasso (Barrister)

SOLICITORS
Landerer & Co

RESPONDENT
Mr M. Wright (Barrister)

SOLICITORS
Minter Ellison

JUDGMENT:

IN THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

COWDROY J

23 March 2004

41167 of 2003

CROMWELL’S AUCTIONEERS & APPRAISERS PTY LIMITED v FIRST EAST AUCTION HOLDINGS PTY LIMITED T/AS GOODMANS AUCTIONEERS & VALUERS

Judgment

1 By application filed 22 September 2003 the applicant (“Cromwells”) sought to restrain the respondent (“Goodmans”) from conducting auction sales in premises at 3-7 Anderson Street, Double Bay (“the premises”). This application is confined to the issue of costs.

2 The applicant’s claim was based upon the allegation that Goodmans would be operating in breach of the provisions of development consent 95/017 (“the consent”) issued by Woollahra Municipal Council (“the council”) on 21 March 1995. The consent contained conditions which regulated and limited auction sales conducted on the premises. Condition 1 of the consent provided as follows:-

1. That no more than 14 auctions to be conducted per year, with at least one being conducted per calendar month.

3 The affidavit of James Warren Byrnes sworn 22 September 2003 established that by the date of filing the application, 14 auctions had been held in the year 2003 and that further auctions were proposed for the remaining months of 2003.

4 On 19 September 2003 Mr Byrnes forwarded a letter to Goodmans which was received on that day. The letter, inter alia, demanded an undertaking by the close of business that day from Goodmans that no more auctions be conducted in the premises in 2003. At 9.10 am on the following day, namely 20 September 2003 Mr Byrnes forwarded a message by email entitled “bye bye double bay” to Goodmans in which Mr Byrnes stated the reasons for his proposed litigation.

5 On 22 September 2003 Cromwells applied to the Court for an ex parte injunction to restrain Goodmans conducting further auction sales on the premises. In the absence of evidence of any loss or damage, or of any environmental harm the Court refused such relief. The proceedings were adjourned to 3 October 2003 before the duty judge.

6 On 3 October 2003 Talbot J set the proceedings down for hearing on 8 October 2003. On the preceding day namely 2 October 2003 Goodmans lodged an application with the council to modify the consent pursuant to s 96 of the Environmental Planning and Assessment Act 1979 (“the EP&A Act”).

7 On 8 October 2003 Cromwells sought to obtain a declaration and consequential restraining orders. However Goodmans made an application for an adjournment pursuant to s 124(3) of the EP&A Act to allow sufficient time for the council to consider the s 96 application. The Court granted such adjournment, noting that such application had been made to the council and that Goodmans had undertaken to lodge a fresh development application within 14 days in respect of their use of the premises.

8 On or about 3 February 2004 a report was issued by the council which recommended that consent be granted subject to conditions. Such proposed conditions would limit the frequency of auction sales to one per week.

9 On 3 February 2004 Cromwells’ solicitor advised Goodmans’ solicitor of the council report and proposed that the proceedings be terminated upon the payment of Cromwells’ costs. The letter stated, inter alia:-

In anticipation of costs orders being made in favour of our client, we advise that our client would be prepared to accept on a without prejudice basis the sum of $35,000 on account of its costs.

10 Goodmans’ solicitors responded by letter dated 6 February 2004. They stated that because a notice of determination had not been issued by the council the proceedings could not be finally resolved. The letter also stated that it was premature for the issue of costs to be discussed.

11 By notice of determination dated 17 February 2004 the council granted consent to application number 908/2003/1 for the use of the premises for the purpose of conducting auction sales which included the conditions recommended by the report of 3 February 2004.

12 On 25 February 2004 Cromwells’ solicitors wrote to Goodmans’ solicitor stating, inter alia:-

…we advise that our client would be prepared to discontinue the proceedings upon the payment of its costs assessed in the sum of $35,000 on the strict understanding that this settlement must be effected on or before the call-over.

The letter also advised that if the matter was not settled directions would be sought for the continuation of the “ prosecution ”. The letter continued:-

In addition a copy of this letter will be tendered at the hearing of these proceedings and our client will seek an order that your client pay its costs of the proceedings on an indemnity basis under the principle in Calderbank’s case.

13 By letter dated 25 February 2004 Goodmans’ solicitors responded stating that there was no utility in pursuing the proceedings. They also advised that the proceedings could be discontinued upon the applicant paying the respondent’s costs.

14 By letter dated 12 March 2004 Cromwells’ solicitor advised Goodmans’ solicitors that the applicant would not be pursuing the orders in the class 4 application and that the issue for determination would be limited to costs.

Submissions

15 Goodmans says that the proceedings were instituted by Cromwell’s maliciously and with undue haste. It relies upon the messages forwarded by Mr Byrnes to Goodmans on 19 September 2003 and 20 September 2003 which it claims are demonstrably vindictive and evidence that the real purpose in the institution of the proceedings was for commercial gain for Cromwells. Goodmans also submit that the Court would not have granted relief as claimed due to doubt surrounding the interpretation of the consent. It submits that the proceedings could have been avoided if an opportunity had been provided to it to seek revised conditions.

16 Cromwells submits that Goodmans was conducting its auction sales in flagrant breach of the conditions of the consent and that its proceedings were entirely justified, as evidenced by the fact that Goodmans sought a fresh consent. In the absence of the latter consent, its claim would have succeeded.

Findings

17 The Court has a broad power to award costs granted to it pursuant to s 69(2) of the Land and Environment Court Act 1979. Such power is to be exercised judicially It has been recognised by the High Court of Australia that in an appropriate case a court will make an order for costs even when there has been no hearing of the merits and the moving party no longer wishes to proceed with its claim: see Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex Parte Lai Qin (1997) 186 CLR 622. The Court also observed at p 625 that:-

If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases[7].

[7] See, for example, Australian Securities Commission (1993) 44 FCR 194; 116 ALR 523; Seventh Mingcourt Pty Ltd v The Honourable Carmen Lawrence unreported, Federal Court of Australia, 1 August 1996 per Branson J; Coleman v City of Melville unreported, Supreme Court of Western Australia, 22 September 1994 per Scott J; Compadres Australia Pty Ltd v Waterfront Place No 2 Pty Ltd unreported, Supreme Court of Queensland, 15 August 1995 per MacKenzie J; Inprint Ltd v K & D Media Pty Ltd (Administrator Appointed) unreported, Federal Court of Australia, 22 December 1995 per Einfeld J; Australian Securities Commission v Berona Investments Pty Ltd (1995) 18 ACSR 772.

18 The institution of proceedings demonstrated that Goodmans was operating in prima facie breach of at least one condition of the consent. Accordingly the applicant, based upon Lai Qin is entitled to receive its costs relating to the institution of the proceedings.

19 However the Court is satisfied that there was no need for urgent relief and that the alleged urgency was motivated purely with the object of causing commercial loss to Goodmans by prohibiting further auctions being conducted at the premises in 2003. Accordingly Cromwells is not entitled to any costs relating to the ex parte application heard on 26 September 2003.

20 The callover before Talbot J was an essential part of the proceedings as was the hearing on 8 October 2003. Accordingly Cromwells is entitled to its costs incurred on those two days.

21 It became apparent to the applicant on 3 February 2004 that the council would be granting the fresh consent to Goodmans. However it demanded the arbitrary amount of $35,000 to settle the proceedings. It reiterated such demand by its solicitor’s letter dated 25 February 2004 and on the same day Goodmans responded rejecting such offer and indicated that it required the applicant to pay its costs. The hearing today has been confined to costs, each party seeking an order for costs.

22 The institution of these proceedings motivated Goodmans to apply for the fresh consent. Although Goodmans was notified on 19 September 2003 of the apparent breach, the modification application was not lodged with the council until 2 October 2003 namely 9 working days later. In view of the potential proceedings, Goodmans could have acted more rapidly.

23 Whilst the Court cannot try a hypothetical action the evidence strongly suggests that Goodmans would not have been successful in view of the limitation contained in condition No. 1 to the consent. Accordingly the Court is satisfied that Goodmans had no basis to justify its application that Cromwells pay its costs.

24 The hearing of today has been necessary in view of the fact that both parties have sought costs. Goodmans have been unsuccessful in obtaining the order it seeks but Cromwells have been successful in achieving portions of its costs. In these circumstances the Court will order that the costs of the day be the applicant’s costs.

Orders

25 The Court makes the following order:-

1. ORDER that the respondent pay the applicant’s costs of these proceedings excluding the costs of and incidental to the application for the interlocutory injunction heard on 22 September 2003.