Davey v Tweed Shire Council
[1999] NSWLEC 281
•17/12/1999
Reported Decision: 105 LGERA 312
Land and Environment Court
of New South Wales
CITATION:
Davey V Tweed Shire Council and Anor. [1999] NSWLEC 281
PARTIES
APPLICANT
DaveyRESPONDENT
Tweed Shire Council and Anor.
NUMBER:
40117 of 1999
CORAM:
Bignold J
KEY ISSUES:
Practice & Procedure :- Practice and Procedure - costs in discontinued class 4 procedures.- security for costs against Defendant.
LEGISLATION CITED:
Land and Environment Court Act s 69
DATES OF HEARING:
12/10/1999
DATE OF JUDGMENT DELIVERY:
12/17/1999
LEGAL REPRESENTATIVES:
APPLICANT:
Mr P Tomasetti, BarristerSOLICITOR
Lang Gellert and NoonanREPONDENT:
SOLICITORS
Mr T Robertson, Barrister
Woolf Associates
JUDGMENT:
TABLE OF CONTENTS
A. INTRODUCTION 1-5
B. THE LITIGATION HISTORY CULMINATING IN THE DISCONTINUANCE OF THE PROCEEDINGS 6-39
C. ORDERS 40
IN THE LAND AND Matter No . 40117 of 1999
ENVIRONMENT COURT OF Coram : Bignold J.
NEW SOUTH WALES 17 December 1999
CALDERA ENVIRONMENT CENTRE INC.
Second Respondent
JUDGMENT ON COSTS
Bignold J:
A. INTRODUCTION
1. This is an application for costs brought by the second Respondent against the Applicant in class 4 proceedings in consequence of the latter’s discontinuance of the proceedings by Notice of Discontinuance filed on 15 December 1999 without any endorsement of the second Respondent’s consent.
2. The costs application is principally founded upon the provisions of Pt 11 r 5 of the Rules of Court which provides as follows:
5. (1) If a party to any proceedings discontinues them in whole or in part, the Court may, on the application of another party, order the discontinuing party to pay the costs of any party against whom the discontinued claim was brought and who does not consent to the discontinuance.
(2)The costs payable to a party under any order made under this rule are to be the costs of the party occasioned by the discontinued claim and reasonably incurred before service on the party of notice of the discontinuance.
(3) Nothing in this rule limits the Court’s power to order costs if proceedings are withdrawn under rule 2.
3. The Applicant opposes any costs order, principally upon the ground that the second Respondent became a party to the proceedings on its own initiative, pursuant to its application for joinder, filed on 5 November 1999, which application was not ultimately opposed by the Applicant and was granted by the Court on 15 November 1999.
4. A further reason advanced by the Applicant in opposing the second Respondent’s costs application is based upon the fact that the second Respondent, following its joinder, moved summarily to have struck out, as being beyond the jurisdiction of the Court, the Applicant’s application that the second Respondent give security for the Applicant’s costs in the proceedings. In consequence of that strike out Motion, the Applicant says that the parties have incurred costs in the proceedings and that the outcome of the strike out Motion should be regarded as being largely determinative of the disputed costs application made by the second Respondent. In this respect, the Applicant urges the Court to determine the strike out Motion, notwithstanding that it is now only of academic interest in view of the Applicant’s decision to discontinue the proceedings (apparently because the Applicant has recently sold the land, the subject of the class 4 proceedings, and has no interest in pursuing the claims to declaratory relief in respect of that land).
5. In my opinion, the appropriate manner of determining the disputed costs application made by the second Respondent is to first consider the case, having regard to the litigation history culminating in the discontinuance of the proceedings. If the outcome of that consideration is a disposition to make a costs order, the Court should next consider the strike out Motion on the basis that the costs of that Motion would follow the event and should be the subject of a separate costs award which ought be reflected overall in any costs awarded in the proceedings.
B. THE LITIGATION HISTORY CULMINATING IN THE DISCONTINUANCE OF THE PROCEEDINGS
6. The proceedings were commenced by class 4 application filed on 18 June 1999, brought against the Tweed Shire Council claiming a declaration that a nominated development consent granted by the Council to the Applicant on 24 December 1991 commenced on 28 February 1995 and will not lapse until 28 February 2000.
7. On 29 September 1999, the hearing was fixed for 30 November 1999. On 5 November 1999 what was to become the second Respondent, filed its joinder application.
8. On 10 November 1999, the class 4 application was amended by the inclusion of a claim for an alternative declaration that the development consent has been actually commenced and has not lapsed.
9. When the second Respondent’s joinder application came before me on 12 November 1999, the first Respondent appeared by Counsel to inform the Court that it did not propose to participate in the proceedings which had been fixed for hearing some 18 days later.
10. By consent, the joinder application was adjourned for a day.
11. On 15 November 1999, I ordered that the second Respondent be joined as a party respondent. The Applicant did not oppose the order. However, it obtained leave for short service of a Motion for security of costs against the second Respondent and directions were given for the filing and service of affidavits for the hearing of the proceedings in two weeks’ time.
12. On 19 November 1999, by consent, the hearing date was vacated. It was on this occasion that the second Respondent moved for the summary strike out of the Applicant’s Motion for security of costs against the second Respondent. Directions were given for that matter to be dealt with by written submissions.
13. The matter finally came before me on 10 December 1999 when the Applicant informed the Court that it had disposed of its interest in the property and undertook to file a notice of discontinuance.
14. In anticipation of the discontinuance, the second Respondent sought an order for costs in the proceedings by virtue of the discontinuance and I directed that the parties file written submissions in respect of their rival contentions.
15. I should add that in the affidavit of Paul Hopkins, sworn 6 November 1999 supporting the second Respondent’s joinder application, it is stated that in previous litigation brought by the second Respondent (claiming declarations that the development consent, the subject of the present proceedings, was void) which was settled, the second Respondent was granted a caveatable interest in the land, the subject of these proceedings and that a caveat was lodged. It was also stated that until 20 October 1999, the second Respondent had been aware of the Council’s decision to oppose the proceedings but on that date it became aware that the Council had resolved not to oppose the proceedings and that it was because of this fact that the second Respondent (an environmental lobby/watchdog group operating on the north coast) had decided to seek joinder in the proceedings to resist the Applicant’s claims to declaratory relief to the effect that the relevant development consent had not lapsed.
16. Having regard to that litigation history, I am of the clear opinion that the circumstances of the present case entirely justify an award of costs against the discontinuing party in favour of the second Respondent.
17. Such an outcome is entirely consonant with settled principle and authority. Reference to the decided cases is unnecessary.
18. The fact that the second Respondent became a party respondent on its own initiative in the circumstances I have outlined above, does not change the outcome one iota.
19. It had a caveatable interest in the land. It was fully entitled to contest the proceedings in defence of that interest.
20. It was thrust into the role of respondent by the belated decision of the Council not to contest the Applicant’s claims.
21. This conclusion brings me to consider the second Respondent’s strike out Motion in respect of the Applicant’s Motion that the second Respondent give security for the Applicant’s costs. The merits of that application have not been ventilated because of the second Respondent’s strike out Motion and thereafter because of the Applicant’s decision to discontinue the proceedings.
22. The point raised in the strike out Motion is an important point concerning the powers of the Court and it is somewhat unfortunate that the point must be decided in the present case where its only utility is on the question of costs.
23. However, I have been considerably assisted by the detailed written submissions made by each party. Ultimately, I have concluded that the strike out Motion would be successful. I shall state my reasons for this conclusion very briefly.
24. There are three possible sources for the Court’s power to order security for costs, (i) the Land and Environment Court Act 1979 (the Court Act) s 69(3); (ii) the Rules of Court adopting Supreme Court Rules Pt 53; and (iii) the inherent powers vested in the Court as a superior court.
25. I shall consider the case in respect of each of the three possible sources of power.
26. Section 69(3) of the Court Act provides:
- (3) The Court may order a party instituting proceedings in the Court to give security for the payment of costs that may be awarded against that party.
27. In my judgment, this section clearly provides no support to the Applicant’s Motion for security for costs because it is simply not possible to regard the second Respondent as “ a party instituting proceedings in the Court ”.
28. Accordingly, by reference to the Court Act s 69(3), the second Respondent’s strike out Motion must succeed.
29. The second source of power is the Rules of Court which in Pt 6 r 1(1) and r (2) apply to class 4 proceedings in this Court, Part 53 of the Supreme Court Rules (Part 53). In this respect, the Court Act s 69(7) provides:
- (7) The provisions of this section relating to security do not affect the operation of any provision made by or under any other Act or by the rules for or in relation to the furnishing of security.
30. Rule 2 of Pt 53 sets out the circumstances pertaining to a “ plaintiff ” where the Court, on the application of the “ defendant ” may order the plaintiff to give security for the costs of the defendant.
31. Rule 1 defines the terms “plaintiff” and “defendant”, the former term extending “to any person who makes a claim for relief in the proceedings”.
32. In my judgment, Part 53 provides no support for the Applicant’s Motion for security for costs to be ordered against the second Respondent, since the second Respondent is clearly only a defendant in the proceedings which has made no claim, either defensively or otherwise in the limited life of the litigation.
33. This brings me finally to the inherent jurisdiction or power of the Court in respect of security.
34. It is at this point that the parties’ competing submissions significantly collide. The second Respondent particularly relies upon the decision of Olney J in the Federal Court of Australia in Thunderdome Racetiming and Scoring Pty Ltd v Dorian Industries Pty Ltd (1992) 109 ALR 196 where his Honour interpreting provisions of the Federal Court Act 1976 upon which the provisions of s 69(3) and (7) of the Court Act are clearly based, held at 206, that the existence of those provisions “left no scope for any inherent power in this field”.
35. He went on to hold that the rule making power in the Federal Court Act in respect of provision of security for costs would not expand the Court’s powers conferred by the Act.
36. The views of Olney J are persuasively expressed and I intend no disrespect when I say that in the present case, I do not find it necessary to conclude that the provisions of the Court Act s 69(3) and (7) necessarily leave no room for any inherent power that may be vested in the Court as a superior court.
37. I so conclude because I am satisfied that in the present case, a proper consideration of the nature of the litigation and the litigation history that I have earlier set forth, leads to the conclusion that any relevant inherent power vested in the Court would not conceivably justify the order for security sought by the Applicant against the second Respondent, as a defendant (who in the litigation had not raised even any defensive claim). In so concluding, I have found highly persuasive on this point, the reasoning in support of decision of the English Court of Appeal C T Bowring and Co (Insurance) Ltd v Corsi Partners Ltd (1994) 2 Lloyds Law Reports 567 which elevated to an established rule of practice (and not merely a matter going to discretion) the principle that a defendant is at liberty to defend himself and is not to be called upon to give security. In that case, Millett LJ, speaking of the rule said at 579:
- The rule which represents a settled practice of the Court for over 200 years, is made explicit by the terms of s 726 (of the Companies Act) and Order 23. In my view it must now be regarded as going to the jurisdiction of the Court.
38. Later, at 580, speaking of Order 23 (which is very similar to Part 53 of the Supreme Court Rules) Millett LJ said:
- In my judgment 0.23 must be regarded as a complete and exhaustive code. I agree with Lord Justice Dillon that if there should emerge a need for a new category of case in which it is desirable that the Court should have power to order security for costs, that will have to be dealt with by Parliament or the Rules Committee.
39. For all the foregoing reasons, the inherent power vested in the Court provides no support for the Applicant’s Motion.
C. ORDERS
40. For all the foregoing reasons, I order the Applicant to pay the second Respondent’s costs of the proceedings (including the costs of the application for costs) in the sum agreed, or failing agreement, as assessed.
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