Devereaux v Kyriazis (No 2)

[2020] NSWLEC 17

Land and Environment Court

New South Wales

Medium Neutral Citation:	Devereaux v Kyriazis (No 2) [2020] NSWLEC 17
Hearing dates:	26 February 2020
Date of orders:	26 February 2020
Decision date:	26 February 2020
Jurisdiction:	Class 3
Before:	Moore J
Decision:	See orders at [23]
Catchwords:	COSTS - application for indemnity costs - principal proceedings settled by consent with costs reserved - costs application based on letters said to be Calderbank offers - process of exchange of offers and counter offers - offers included terms not capable of resulting in orders of the court to be effected - no proper basis for making costs order on basis of refusal of offers - costs application dismissed COSTS OF COSTS APPLICATION - ordinarily costs of costs application will follow the event unless otherwise ordered - failure of solicitor for costs Respondents to address alleged Calderbank offers - costs application dismissed on basis not dealt with by costs Respondents’ solicitor - appropriate to “otherwise order” pursuant to r 42.1 of the Uniform Civil Procedure Rules 2005 - no order for costs of the costs application
Legislation Cited:	Civil Procedure Act 2005, s 98 Encroachment of Buildings Act 1922, s 14 Uniform Civil Procedure Rules 2005, r 42.1
Cases Cited:	Calderbank v Calderbank (1975) 3 All ER 333 Devereaux v Kyriazis [2020] NSWLEC 1048 Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6, 186 CLR 622
Category:	Costs
Parties:	Mr C Devereaux (First Applicant) Ms B Devereaux (Second Applicant) Mr J Kyriazis (First Respondent) Ms S Kyriazis (Second Respondent)
Representation:	Counsel: Applicants in person   Solicitors: Mr J Chapman, solicitor (Respondents)
File Number(s):	225628 of 2019
Publication restriction:	No

EXTEMPORE JUDGMENT

1. HIS HONOUR: The Notice of Motion that is before me today is an application made by the Applicants in Class 3 proceedings under the Encroachment of Buildings Act 1922 (the Encroachment of Buildings Act). Those proceedings concerned a number of encroachments onto Mr and Ms Devereaux’s (the Applicants) property in Marrickville from the adjoining property owned by Mr and Ms Kyriazis (the Respondents). The application came before Acting Commissioner Clay to be dealt with in January 2020, some six months after the commencement of the proceedings.

2. At the commencement of the proceedings, it appeared to the learned Commissioner that the matter was capable of resolution and, as a consequence of that and the resolution of the question of permitting the Respondents’ son to act as their agent, the Commissioner undertook a process that resulted in the making of consent orders resolving the substantive issues of the encroachments. That was set out in a short decision made by the learned Commissioner (to which an addendum was subsequently added). That decision is published as Devereaux v Kyriazis [2020] NSWLEC 1048.

3. In the orders that were made by the learned Commissioner, the question of costs (capable of being addressed pursuant to s 14 of the Encroachment of Buildings Act) was reserved.

4. Mr and Ms Devereaux have subsequently filed a Notice of Motion seeking costs on an indemnity basis for the proceedings. That application has come before me this morning, when Mr and Ms Devereaux have been self‑represented and Mr and Ms Kyriazis have been represented by Mr Chapman, solicitor.

5. The application for costs is said to be based on a series of letters that constitute Exhibits AE, AF, AG and AH of the appendices to the affidavit of Mr Christopher Devereaux of 4 February 2020 read on the Notice of Motion before me this morning. Also read on behalf of the Respondents was an affidavit of their then agent Mr Tony Kyriazis sworn 20 February 2020. As I had occasion to mention early in the proceedings, a good deal of the material contained in both affidavits goes to matters of past history and matters that are entirely irrelevant to my consideration of these costs proceedings.

6. The question of costs in proceedings under the Encroachment of Buildings Act is one that is governed by the Civil Procedure Act 2005 and the Uniform Civil Procedure Rules 2005. They include a presumption that costs will follow the event.

7. Mr Chapman, solicitor for the Respondents, correctly draws to my attention the decision of McHugh J in the High Court in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6, (1997) 186 CLR 622 that when matters are resolved by consent, conventionally matters of costs will not arise to be dealt with because there is no way of the tribunal addressing the merits or otherwise of the case involved. That is a correct proposition for the purposes of that with which I am dealing.

8. That certainly enables me to conclude that there is no basis prior to the issuing of the offers of compromise - as said by Mr and Ms Devereaux to constitute Calderbank (Calderbank v Calderbank (1975) 3 All ER 333) offers - as set out in the four annexures to Mr Devereaux's affidavit as giving rise to any liability for costs.

9. The question then arises for my consideration as to whether or not anything that arises out of those offers should be regarded as giving effect to any liability for costs on behalf of the Respondents in these proceedings. Although the attachments to Mr Devereaux's affidavit did not originally include responses from the solicitors then acting for the Respondents to the proceedings, Mr Devereaux has tendered this morning a bundle of material, included in which is correspondence responsive to the various letters written by the Devereauxs’ then solicitors in response to a number of the letters written on behalf of them proposing various offers.

10. As a consequence, I have regard to that correspondence as a continuum of discussion between the legal representatives of the parties. It is clear that, reading them together, the four letters that are relied upon by Mr and Mrs Devereaux formed part of what was an ultimately unsuccessful prehearing attempt to resolve all issues that were in dispute between the parties.

11. Although various of the letters are said to be offers made in response to the principles laid down in Calderbank v Calderbank, it is clear that there were no absolute rejections of offers made during that period of time and that there was an exchange on the substantive issues which would appear to have indicated that, except with respect to the question of costs, there were genuine attempts being made by the lawyers between the parties to resolve the issues prior to hearing as eventually happened.

12. However, when the final letter was written, dated 22 January 2020 and addressed to Mr Tony Kyriazis and Mr Jim Kyriazis directly rather than to their lawyers, their lawyers having ceased to act in the matter, it is clear that resolution was not possible until it was able to be effected during the course of the hearing.

13. I am not satisfied that the failure to reach complete resolution on behalf of Kyriazis during the original phase of correspondence from mid-November onwards in light of the history of the relationship between the parties (one which, although not strictly relevant to questions I need to deal with as matters of law on costs, demonstrates from the affidavit evidence a deal of ill will between the parties) was unreasonable. However I am satisfied that it is an appropriate context to which to have regard as to the reasonableness of the Kyriazises not to accept and resolve matters during and after that phase of the exchange between the lawyers.

14. I now turn to the final offer made by the Devereauxs’ solicitor on 22 January 2020 - it being the final and unaccepted offer. I am satisfied that several of the matters that are contained in that offer are not ones capable of founding an offer of compromise in a court as, in two express respects, they are matters which are incapable of being given effect as orders of the Court. They are contained in (5) and (6) of the document that is described as a Calderbank offer but which cannot in any possible way be so regarded because of their inclusion.

15. The first of those, in (5), reads as follows:

Boundary line. Our client requests you to issue a written declaration of your acceptance of C and A survey report to avoid future conflicts on the same matter.

16. The second of those, in (6), reads as follows:

Formal apology: our clients request you (Jim and Tony) to apologise for your irresponsible conduct and abusive behaviour towards my client and their dog face to face within five days.”

17. Neither of those matters is capable of being given effect by an order of the Court. They cannot possibly be seen as a proper Calderbank offer despite the next paragraph which reads:

My client has instructed me to continue to prepare for the hearing at the Land and Environment Court and seek costs on an indemnity basis if you do not accept this offer. The current legal proceedings will be dropped upon your written acceptance of this offer.

18. It is described as being an offer open for acceptance until 10.00 am on the date that is seven days from its date and it purports to be made in pursuant to the principles for a Calderbank offer. It does not satisfy those principles. It is incapable of founding an application for costs on an indemnity or indeed any other basis.

19. As a consequence of all of that, I am satisfied that the costs application before me this morning should be dismissed.

20. I now turn to the question of the costs of the costs application. As I observed to Mr Chapman at the commencement of the proceedings, his written submissions addressed the question of whether ordinary costs were available but did not, in any substantive fashion, address matters of the indemnity costs application said to arise as a consequence of the so-called Calderbank offers.

21. The two affidavits that are in evidence in this regard, particularly the affidavit of Mr Kyriazis which would fall within the costs that would be incurred by Mr and Ms Kyriazis in these proceedings, address a wide range of matters that are simply irrelevant to the matters that are before me today.

22. Although in the ordinary course of events in the case of a costs application, costs are usually awarded in favour of the party that succeeds in having a costs application determined in their favour, I am satisfied that it is reasonable under the circumstances exercising the discretion under s 98 of the Civil Procedure Act 2005 that in this matter the application should be dismissed and that there be no order for costs of the costs application.

Orders

23. The orders of the Court are:

1. Costs application is dismissed; and

2. No costs order made for the costs application.

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Decision last updated: 06 March 2020