Fordyce v Fordham

[2006] NSWCA 274

Reported Decision: 67 NSWLR 497

Court of Appeal

CITATION:	Fordyce v Fordham & Anor [2006] NSWCA 274 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	30 August 2006
JUDGMENT DATE:	5 October 2006
JUDGMENT OF:	Beazley JA at 1; Santow JA at 2; McColl JA at 4
DECISION:	1.Grant leave to appeal. 2.Claimant to file a Notice of Appeal in the form of the draft Notice in the White Book within seven days of judgment. 3.Appeal allowed. 4.Set aside the orders made by Justice Nicholas on 22 December 2005 and in lieu thereof order each party to pay their own costs of Supreme Court proceedings No 4290 of 2005. 5.Each party to pay their own costs of the Appeal. 6.The opponents to have leave to file and serve written submissions, limited to 2 pages, concerning the costs of 23 November 2005 within 7 days of judgment with the claimant to file and serve any submissions, limited to 2 pages, in response within a further 7 days.
CATCHWORDS:	PRACTICE AND PROCEDURE - COSTS - interlocutory proceedings – appropriate costs orders where proceedings dismissed without proceeding to final determination - Civil Procedure Act 2005 s98 - Uniform Civil Procedure Rules 42.19 and 42.20 (D)
LEGISLATION CITED:	Access to Neighbouring Land Act 2000 Civil Procedure Act 2005 Land and Environment Court Act 1979 Supreme Court Act 1970 District Court Rules 1973 Federal Court Rules High Court Rules 1952 (Cth) Supreme Court Rules 1970 Supreme Court Rules (Qld) 1981 Uniform Civil Procedure Rules 2005
CASES CITED:	Abigroup Contracts Pty Ltd v ABB Service Pty Ltd (formerly ABB Engineering Construction Pty Ltd) [2004] NSWCA 181; (2005) 21 BCL 12 Austcorp Finance and Leasing Pty Ltd v Thomas (Supreme Court of Queensland, unreported, 23 August 1991) Australian Coal & Shale Employees' Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621 Australian Security Commission v Aust-Home Investments Ltd & Ors (1993) 44 FCR 194 Corporation of Burford v Lenthall (1743) 2 Atk 551; 26 ER 731 Edwards Madigan Torzillo Briggs Pty Ltd v Gloria Stack & Ors [2003] NSWCA 302 Furber v Stacey & Anor [2005] NSWCA 242 Grundy v Lewis (Federal Court of Australia, unreported, 28 May 1998) House v The King [1936] HCA 40; (1936) 55 CLR 499 Leicester v Walton (Supreme Court of New South Wales, Court of Appeal, unreported, 22 November 1995) Newcastle Wallsend Coal Company Pty Ltd v Industrial Relations Commission of New South Wales & Anor [2006] NSWCA 129 O’Neill v Mann [2000] FCA 1680 Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia & Anor; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 Richmond River Council v Oshlack (1996) 39 NSWLR 622 South-East Queensland Electricity Board v Australian Telecommunications Commission (Federal Court of Australia, unreported, 10 February 1989) J T Stratford & Sun Ltd v Lindley (No 2) [1969] 1 WLR 1547 Wentworth v Attorney-General (NSW) (1984) 154 CLR 518 Wentworth v Wentworth [2000] NSWCA 350; (2000) 52 NSWLR 602
PARTIES:	Louise Aileen Fordyce - Claimant Gary Shaun Fordham - 1st Opponent Narelle Jane Fordham - 2nd Opponent
FILE NUMBER(S):	CA 40044 of 2006
COUNSEL:	Mr M Holmes QC/Mr C Bova - Claimant Mr J Simpkins SC/Mr J Johnson - Opponents
SOLICITORS:	PMF Legal - Claimant Woolf Associates - Opponents
LOWER COURT JURISDICTION:	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S):	4290/05
LOWER COURT JUDICIAL OFFICER:	Nicholas J
LOWER COURT DATE OF DECISION:	22 December 2005

- 1 -

CA 40044/06
SC 4290/05

BEAZLEY JA
SANTOW JA
McCOLL JA

Thursday 5 October 2006

FORDYCE v FORDHAM & ANOR

Judgment

1 BEAZLEY JA: I agree with McColl JA.

2 SANTOW JA: I agree with McColl JA both as to the result and, subject to what follows, her reasons.

3 I would wish to add this observation on one aspect of the reasons on UCPR 42.19 and 42.20. I consider the fact of discontinuance is likely to be a factor of some weight in exercising the discretion to determine whether the discontinuing party should be ordered to pay the other party’s costs. While it is true the Court may otherwise order, the onus remains on the discontinuing party to justify such an order by reference to the circumstances said to justify exception to the normal cost outcome in such event. That the Court retains a discretion to accommodate such circumstances does not alter their character as being by way of exception nor the consequence in terms of onus. That said, the discretion remains to otherwise order.

4 McCOLL JA: Louise Aileen Fordyce, the claimant, seeks leave to appeal from a decision of Nicholas J in which he ordered her to pay the costs of proceedings brought in the Equity Division of this Court by the opponents, Garry Shaun Fordham and Narelle Jane Fordham (the “Equity Division proceedings”): Gary Shaun Fordham & Anor v Louise Aileen Fordyce, 22 December 2005 [the judgment does not appear to have been given a media neutral citation]. The opponents commenced the Equity Division proceedings on 2 August 2005 on an ex parte basis and, on that day, obtained an order from the primary judge, subject to the usual undertaking as to damages, that until 6pm on 3 August 2005 the claimant, her servants and agents be restrained forthwith from damaging or removing any trees on the opponents’ land.

5 The issue raised on the application is the appropriate costs orders of the Equity Division proceedings which did not proceed to final determination. The primary judge dismissed the proceedings and ordered the claimant to pay the costs.

Statement of the Case

6 This is a tale of two umbrella trees (schefflera actinophylla) which should never have got to this stage.

7 The controversy arises from the claimant’s desire to access part of the opponents’ neighbouring property to enable work to be carried out to stabilise land by, in part, the replacement of an existing retaining wall between the parties’ properties. The work involved the removal of an umbrella tree or trees from an access strip of land on the opponents’ property along the dividing boundary. The controversy became the subject of proceedings pursuant to the Access to Neighbouring Land Act 2000 (the “Access Act”) in the Local Court (the “Local Court Proceedings”). Those proceedings were listed to be heard for five days in May 2005. Each party engaged counsel, the claimant procuring the services of senior counsel. Negotiations took place over two days culminating in Consent Orders which purported (inter alia) to identify an umbrella tree or trees the claimant could remove from the opponents’ land, for which she was to pay the opponents $1200 replacement costs. The orders included the following term:

“12. Liberty to apply on seven days’ notice regarding these terms or otherwise under the Access to Neighbouring Land Act 2000.”

The Local Court noted the Consent Orders on 24 May 2005.

8 On 27 July 2005 the opponents wrote to the Registrar of the Local Court referring to order 12 and stating, inter alia:

“It appears that after taking further advice, the plaintiff [the claimant] will not need access to our land to carry out works on the retaining wall and there is no need to remove any trees.
Further, a significant dispute has arisen as to the terms of the Consent Orders …
We ask that the matter be relisted on 4 August 2005 to at least set a process and timetable for resolution of the interpretation of the issues raised”.

9 The opponents sent a copy of the letter to the claimant’s husband, Mr Fordyce, a solicitor at PMF Legal, who was acting on her behalf.

10 The events which then ensued were described in the second opponent’s affidavit of 2 August 2005, read on the application for the ex parte injunction:

“4. This morning a tree-lopper engaged by the defendant [the claimant] has arrived and commenced to chop down some of the trees which are in our backyard. The police have refused to take any action to stop the trees being removed unless an injunction is obtained. When I left my home this morning my husband was occupying one of the trees to prevent any further destruction.”

11 It is common ground that the claimant had not advised the opponents of her intention to commence lopping their trees on 2 August 2005. Mr Holmes QC, who appeared for the claimant on the application for leave to appeal but not below with Mr C Bova, accepted that the claimant had ignored the 27 July letter and had not advised the opponents of her intention to have the umbrella trees removed on 2 August.

12 During the ex parte hearing, counsel for the opponents said the claimant’s contractors had “advised two independent experts appointed under [the] Consent Orders that no access is required to the [opponents’] land for the purpose of carrying out … the retaining wall works” and:

“With that in mind, my clients say that if there is no need for access there is no need to remove any trees. That is their primary position. I cannot say whether that argument will win or fail in the Local Court when it is next listed for determination…. but that is the [opponents’] primary position. ….”

13 He also informed his Honour there was a dispute concerning the interpretation of the Consent Orders as to the identification of umbrella trees earmarked for removal.

Further proceedings in the Local Court

14 The Local Court proceedings were relisted before Magistrate R Abood on 4 August 2005 apparently at the opponents’ request.

15 Mr J Johnson, who appeared for the opponents, informed the Magistrate there were three issues to be canvassed. The first concerned the meaning of the clauses of the Consent Orders concerning umbrella trees. The second concerned the proposition that the retaining wall works had been varied since the Consent Orders had been agreed so that, it was contended, access to the opponents’ land would no longer be needed and, accordingly, the question arose whether any trees on the opponents’ land needed to be removed. Mr Johnson explained that the proposition that the retaining wall work could be carried out without accessing the opponents’ land was derived from a draft report of a tree expert engaged in accordance with the Consent Orders. He asserted that after that draft report was circulated Mr Fordyce wrote to the expert confirming his assumption, in substance, that no access to the opponents’ land would be required but reserving the claimant’s right to exercise access if it became necessary. Based on that correspondence he argued the factual substratum of the Consent Orders had been removed, as cl 3 specified that those orders were made in order to permit the claimant’s contractors to carry out the retaining wall work. Finally, Mr Johnson asked the Magistrate to suspend the Consent Orders until the issues the opponents had identified had been resolved.

16 Mr Fordyce, who appeared for the claimant in the Local Court proceedings on 4 August 2005, submitted that the identity of the umbrella trees to be removed was clear from the Consent Orders. He resisted the opponents’ application for the suspension of the Consent Orders.

17 Although the Magistrate said at one stage in the proceedings on 4 August 2005 that he was not conducting a formal hearing, he delivered what he described as a “decision”. He concluded, in substance, that the claimant’s interpretation of the Consent Orders as to the umbrella trees to be removed was correct. As to the second matter he directed that the expert’s report be served on the opponents within 24 hours of it coming into the claimant’s possession and suspended the operation of the Consent Orders (save as to a matter relating to a silt barrier installation) for three working days after service of that report. He ordered the parties to pay their own costs of the day.

The Equity Division proceedings

18 The Equity Division proceedings were comparatively short-lived. The grant of the ex parte injunction was accompanied by an order standing the matter over before the Duty Judge at 2pm on 3 August 2005. On that day directions were made for filing of affidavits, leave was given to the claimant to file a notice of motion seeking orders restraining the opponents from preventing her from removing specified umbrella trees from their property and the proceedings were stood over by consent before the Duty Judge at 10am on 5 August 2005.

19 By Notice of Motion filed on 10 August 2005, but apparently foreshadowed by earlier delivery to the opponents’ solicitor, the claimant sought orders, described by Mr Holmes as in the nature of a counter-claim, restraining the opponents from interfering with the performance of the matters contained in the Consent Orders, damages and ancillary relief.

20 On 5 August 2005 it was noted, by consent, that any restraining order upon the claimant was dissolved, directions were made for the filing of any additional evidence and the proceedings were, again, stood over before the Duty Judge at 10am on 10 August 2005. In fact the injunction had expired with the effluxion of time, having been granted only up to and including 6 pm on 3 August 2005 and not having been continued on that date.

21 On 9 August 2005 the opponents’ solicitors, Messrs Woolf and Associates, wrote to the claimant’s solicitors advising their clients had “no further need of relief, having obtained their hearing in the Local Court and having obtained and considered the Final Tree Report required by the Consent Orders in the Local Court proceedings.” The letter further advised that the opponents would seek leave to discontinue the proceedings the next day and seek their costs of the proceedings. It also stated the opponents had no intention of interfering with the removal of the umbrella trees or other works to do with the retaining wall if they were carried out “in accordance with the Consent Orders, the Tree Report and with the law” and invited the claimant to discontinue her Notice of Motion on the basis that each party pay their own costs. The reference to the claimant’s Notice of Motion was plainly a reference to the Notice of Motion which, although not filed until 10 August, must have been served on the opponents by 9 August.

22 Mr Fordyce responded by facsimile the same day advising that the claimant required the opponents to consent to the injunctions sought in the Notice of Motion and also required an indemnity costs order in relation to the proceedings. The facsimile asserted that, on the basis of the claimant’s affidavits, the opponents’ application was an abuse of process, they had never had a genuine belief in the matters brought before the court and that the claimant’s injunctive relief was essential to keep the opponents out of the access strip “having regard to your client’s lawless behaviour on Tuesday 2 August 2005.”

23 On 10 August 2005 Consent Orders were made in accordance with Short Minutes, pursuant to which, without admission, the claimant undertook not to enter the opponents’ land save for limited purposes, one of which was to remove the two umbrella trees referred to under the heading Item 4(a)(i) in the Final Tree Report and in cl 4(a)(i) of the Consent Orders, the second opponent undertook not to enter the access area as defined in the Consent Orders and the opponents confirmed the advice given in Messrs Woolf and Associates’ letter of 9 August 2005 as to the circumstances in which they would not interfere with the removal of the umbrella trees.

24 The proceedings were stood over for further directions before the Registrar on 30 August 2005 with liberty to apply on two days notice. All questions of costs were reserved. Apparently it was anticipated that the retaining wall works would have been completed by 30 August, but they were not and, the proceedings were again stood over by consent until 27 September 2005. On that date the Court was advised that the opponents wished to seek leave to discontinue: primary judgment at [22].

25 By Notice of Motion (erroneously entitled Short Minutes of Order) dated 17 November 2005 the claimant sought orders dismissing the summons and her Notice of Motion of 10 August 2005 and an order that the opponents pay her costs of the summons and the Notice of Motion on an indemnity basis.

26 By Notice of Motion filed 23 November 2005 the opponents sought leave to discontinue the proceedings and an order that the claimant pay their costs, alternatively that each party pay their own. The parties’ respective applications for costs led to the only substantive hearing at first instance on 23 November 2005.

The judgment below

27 The question posed for the primary judge was how to deal with the costs of interlocutory hearings where the substantive proceedings did not proceed to final determination.

28 His Honour referred (at [24]) to the principles concerning the discretion as to costs of interlocutory proceedings as explained by McHugh J in Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia & Anor; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 at 624–625(“Lai Qin”):

“In most jurisdictions today, the power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.

In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. …

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.” (emphasis added)

29 He noted (at [26]) the preamble to the Access Act and observed that s 24, which enables a Local Court to vary or revoke an access order, was of relevance to the effect of the Consent Orders, particularly cl 12.

30 His Honour said (at [27]) that the parties accepted the question of costs turned on whether, in all the circumstances, the opponents had acted reasonably in instituting the Equity Division proceedings. The claimant contests that she accepted that proposition, as I shall explain.

31 He recorded (at [28]) the claimant’s submission that the “proceedings should never have been begun and that the opponents’ conduct in maintaining them was so unreasonable as to entitle her to orders for indemnity costs from and including 5 August 2005, and for dismissal of the summons.”

32 The claimant accepted that cl 12 had given the parties a right to return to the Local Court, but argued that right was irrelevant because the effect of the Consent Orders was that the opponents had surrendered whatever proprietary interest they had in the umbrella trees for the sum of $1200 and, therefore, had no lawful basis for seeking injunctive relief: judgment (at [29], [33]). She argued she was entitled to costs on an indemnity basis because damages would have been an adequate remedy. She acknowledged she had not responded to the opponents’ 27 July 2005 letter and, according to the primary judge, while conceding that her attempt to destroy the trees on the morning of 2 August 2005 was provocative, argued nothing turned on that: judgment at [34].

33 The primary judge concluded (at [37]) that the opponents had acted reasonably in approaching the Equity Division for injunctive relief in circumstances where the claimant’s right to remove the trees was “rooted in orders which at all relevant times were subject to variation or revocation on application by the [opponents]”. He observed that had the claimant not been restrained the trees would have been destroyed and the underlying purposes of the Access Act and cl 12 frustrated and added (at [38]):

“Furthermore, by their letter of 27 July 2005 to Mr Fordyce the [opponents] put the [claimant] on notice of their application under s 24 and in accordance with cl 12. It is scarcely imaginable that her solicitor/husband did not understand its potential significance and relevance to her continuing rights of access and removal. Prudence justified a reply if any doubt existed. It is a matter for wonder that her only response six days later was by way of a man with a chainsaw. Her counsel rightly accepted the conduct was provocative.”

The claimant challenges the last sentence, saying, accurately, that her counsel’s concession was only that her conduct was “a tiny bit provocative”.

34 The primary judge accepted that the opponents acted bona fide in relying on their concerns as to the proper interpretation of the Consent Orders, and as to the existence of a dispute, in support of the ex parte application. He also observed (at [40]) that insofar as the progress of the proceedings on 3, 5 and 10 August was concerned:

“At any time it was open to the defendant [the claimant] to move for the dismissal of the summons on grounds, inter alia, that the claims were an abuse of process and/or not bona fide. It was also open to her at any time to proceed on the Notice of Motion filed 3 August 2005. That no such course was taken strongly suggests to me that at all material times the defendant [claimant] accepted the bona fides of the plaintiffs [the opponents] in moving the Court when they did.”

35 His Honour concluded (at [41]) that it was the claimant “who precipitated the litigation and left the [opponents] with no reasonable alternative but to commence it as a matter of urgency”. In such circumstances he was not persuaded that the opponents’ conduct justified the costs orders she sought.

36 His Honour accepted the opponents’ submission that the claimant should pay their costs of the Equity Division proceedings on the ground that her conduct was unreasonable and provocative, saying (at [43]):

“Reasonable conduct on the [claimant’s] part required postponement of action in relation to the tree(s) until after the hearing of the [opponents’] application to the Local Court. Proceeding as she did necessitated the commencement of this litigation. As already found by me I am satisfied that the opponents were left with no alternative but to move the Court in order to protect their position. The circumstances required that they act promptly and they did so. In the exercise of discretion with regard to the interests of justice in this case I hold that the [opponents] should have the costs of these proceedings and, accordingly, I propose to order the [claimant] pay them.”

37 His Honour then dismissed the Summons and ordered the claimant to pay the opponents’ costs. It is common ground that he made it clear in the course of argument that the manner in which he disposed of the proceedings, whether by granting leave to discontinue or by dismissing the Summons, did not reflect his view of the proper costs order.

Submissions

38 The principal argument advanced by Mr Holmes on the application for leave to appeal is that the primary judge did not consider the claimant’s argument that she ought be awarded her costs of the Equity Division proceedings as she was a successful party, albeit in the Local Court proceedings, that the summons ought therefore be dismissed and costs should follow the event: Civil Procedure Act 2005, s 98; Uniform Civil Procedure Rules 2005 (“UCPR”) 42.1. He argued that the Local Court proceedings had involved the “same claim” and had been “dismissed”. He contended that Lai Qin was distinguishable, as the claimant had been entitled to rely upon her “victory” in the Local Court proceedings to found her entitlement to costs on an indemnity basis. He submitted that the proposition that the outcome of a case in other proceedings could be relied upon to demonstrate that the claimant was the “victor” and thus entitled to a favourable costs order was supported by Newcastle Wallsend Coal Company Pty Ltd v Industrial Relations Commission of New South Wales & Anor [2006] NSWCA 129 at [39] per Basten JA (with whom Mason P agreed).

39 Mr Holmes also argued that the Equity Division proceedings could never have succeeded. While he conceded the opponents had a right to approach the Local Court in relation to the Consent Orders, whether pursuant to cl 12 or s 24 of the Access Act, he contended the claimant was not constrained by a negative stipulation not to exercise her rights during a period when the opponents were exercising their liberty to apply. He also argued that even if the Consent Orders should be construed as subject to a negative stipulation, the ex parte injunction had not been obtained on the basis of any such argument and, accordingly, it was irrelevant to the costs issue. He submitted the suspension of the Consent Orders pending receipt of the Final Tree Report was irrelevant as that Report was not intended to deal with the umbrella trees the subject of the interpretation dispute.

40 Mr Holmes submitted that although the opponents’ injunction preserved the status quo, it did so on the basis of two untenable arguments which were “dismissed” in the Local Court on 4 August 2005. Notwithstanding that, the opponents unreasonably persisted with the Equity Division proceedings until the retaining wall work was finished and only then turned their attention to discontinuing the proceedings and the appropriate costs orders. Accordingly, he argued, the opponents had unreasonably maintained the proceedings after the Magistrate had determined the interpretation point against them. He contended that this submission had been advanced before the primary judge, as well as submissions that Lai Qin was distinguishable, but had not been addressed or taken into consideration by his Honour.

41 Mr Simpkins of Senior Counsel, who appeared for the opponents with Mr J Johnson, submitted that the issue on the application for leave to appeal was not whether the outcome of the Local Court proceedings was relevant and how its relevance should have been addressed, but whether the primary judge’s costs discretion miscarried. He emphasised that the question was whether the primary judge fell into manifest material error, so as to attract appellate intervention (House v The King [1936] HCA 40; (1936) 55 CLR 499, 504–505; Australian Coal & Shale Employees’ Federation v Commonwealth [1953] HCA 25; (1953) 94 CLR 621 at 627 and that the primary judge’s decision ought be affirmed unless it was clearly wrong.

42 Mr Simpkins submitted that the claimant had not argued before the primary judge that she was the victor in the Local Court with the consequence that the costs should follow that event. He contended that it was not open to the claimant to challenge the primary judge’s discretionary judgment on a basis different to that argued before his Honour.

43 He also argued that the claimant’s counsel had conceded, even after reading Lai Qin, that the issue before the primary judge was the reasonableness of the commencement of the Equity Division proceedings, and that his submissions had focussed on that issue.

44 Mr Simpkins submitted that the primary judge was plainly conscious of the outcome of the Local Court application, having regard to para [29] of his judgment. He argued that there was nothing in Lai Qin that required the primary judge to treat the Local Court proceedings as determinative as the outcome of the appearance before the Magistrate on 4 August 2005 had not disposed of any issue in the Supreme Court proceedings. The Equity Division proceedings had been necessary to preserve the subject matter of the dispute pending the relisting of the Local Court proceedings, in circumstances where the Local Court had no jurisdiction to grant injunctive relief. All the opponents had needed to get injunctive relief was an arguable claim, which they clearly had in the light of the cl 12 right to apply. He contended that the Consent Orders were subject to an implied negative stipulation that the claimant could not remove trees where their interpretation was subject to a dispute which the opponents were seeking to resolve by exercising the cl 12 liberty to apply.

45 Mr Simpkins sought to distinguish Newcastle Wallsend Coal Pty Ltd v IRC on the basis that that was a case where the decision in case B determined the outcome in case A, whereas the present case concerned only interlocutory relief.

46 Mr Simpkins also submitted that if the primary judge had fallen into error in not treating the Local Court outcome as determinative, the opponents had had a measure of success in those proceedings because they had argued that there was no Final Tree Report and that such report was necessary before works could commence, had sought a suspension of the access order for a period of three days after the final report was received and that suspension had been ordered.

UCPR 42

47 The claimant’s motion for leave to discontinue the proceedings was brought pursuant to UCPR 12.1. UCPR 42.1 (costs follow the event) on which the claimant relied below operates subject to UCPR 42. In the course of the hearing the Court raised with the parties the significance of UCPR 42.19, which relevantly provides:

“(1) This rule applies to proceedings that are discontinued by the plaintiff, as referred to in rule 12.1.
(2) Unless the court orders otherwise … the plaintiff must pay such of the defendant’s costs as, at the date on which the notice of discontinuance was filed, had been incurred by the defendant in relation to each claim in respect of which the proceedings have been discontinued.”

48 The Court also drew the parties’ attention to UCPR 42.20(1) which provides:

“(1) If the court makes an order for the dismissal of proceedings, either generally or in relation to a particular cause of action or in relation to the whole or part of any claim, then, unless the court orders otherwise, the plaintiff must pay the defendant’s costs of the proceedings to the extent to which they have been dismissed.”

49 Neither rule had been drawn to the primary judge’s attention. The question arose whether they established a presumption in favour of ordering the discontinuing party, or the party whose proceedings were dismissed, to pay the costs of the discontinued or dismissed proceedings, notwithstanding that each power was subject to the ability of a court to “otherwise order”.

50 In written submissions filed with leave after the hearing, Mr Simpkins resisted the proposition that UCPR 42.19 created a presumption as to the way in which the costs discretion on discontinuance was to be exercised, relying upon O’Neill v Mann [2000] FCA 1680. He submitted that the primary judge’s approach was consistent with what he contended was the Court’s “practice” of applying Lai Qin to determine the costs consequences of the disposition of “spent” proceedings without reference to either UCPR 42.19 or 42.20 (or their predecessors).

51 In response Mr Holmes argued that UCPR 42.19 and 42.20 established a presumption that the opponents ought to have been ordered to pay the costs of the proceedings whether they were granted leave to discontinue or, as in fact happened, in the event the proceedings were dismissed. He relied upon Leicester v Walton (Supreme Court of New South Wales Court of Appeal, unreported, 22 November 1995) to which I will come. He argued that O’Neill v Mann and other Federal Court authorities upon which the opponents relied were decided in a different legislative context, where there was no default order such as appears in UCPR 42.19 or 42.20. He also relied upon Finn J’s statement in O’Neillv Mann (at [14]) that: “… there is an ‘underlying policy’ in the Rules that the discontinuing party should be liable for the other party’s costs unless the court orders otherwise.”

The Argument before the Primary Judge

52 Having regard to the claimant’s argument, it is necessary to examine the detail of the argument before the primary judge.

53 At the outset Mr Simpkins identified the substance of the dispute as being the appropriate costs consequence whether the Equity Division proceedings were discontinued or dismissed. He identified the basis of the application for ex parte injunctive relief as having been to preserve the status quo to enable the Local Court dispute to proceed.

54 Mr Simpkins informed his Honour of the outcome of the Local Court hearing of 4 August 2005: that the opponents had been unsuccessful on the construction argument, but had effectively secured a suspension of the Consent Orders to enable other matters to be considered. He drew the primary judge’s attention to the fact that each party had been ordered to bear their own costs of that day. He contended that the outcome in the Local Court had been “mixed … in the sense that [the] opponents did get some measure of relief.”

55 Mr Simpkins said the opponents accepted the Lai Qin line of authority. Their ultimate position was that the parties’ costs should lie where they fell.

56 As I have noted, neither party drew the primary judge’s attention to UCPR 42.19 or 42.20 however Mr Bevan, who appeared for the claimant below, argued in his written submissions that the summons should be dismissed in order to give the claimant finality and that, in such circumstances, costs ought follow that event, referring to UCPR 42.1, a rule which is subject to any other order the Court might make. The submission that costs ought follow the event (a proposition it can safely be assumed was well known to his Honour) substantively, if not practically, directed his Honour’s attention to the UCPR 42.19 and 42.20 default orders. Mr Bevan’s written submissions also argued that the opponents ought to pay the claimant’s costs on the basis, inter alia, that there was no prima facie case for injunctive relief as the interpretation issue on which they relied on 2 August 2005 was untenable as demonstrated by their failure on this issue before Magistrate Abood on 4 August 2005.

57 In his oral submissions, Mr Bevan argued that the summons should be dismissed rather than discontinued and the opponents should be ordered to pay the claimant’s costs on an indemnity basis. He contended nothing had turned on the interpretation point in circumstances where the Consent Orders provided a comprehensive regime for the payment of compensation for whatever trees were taken from the opponents’ land. He argued there was no basis for injunctive relief because damages were always an adequate remedy, the parties having agreed on the amount the claimant was to pay the opponents in the event the critical trees were removed. He drew the primary judge’s attention to the fact that that the Magistrate had rejected the opponents’ argument about the interpretation of the Consent Orders. He also disputed the opponents’ entitlement to rely upon the fact the Final Report was suspended by the Magistrate because obtaining such a suspension had not been the basis upon which the ex parte injunction had been sought.

58 During the hearing the primary judge adjourned to enable Mr Bevan to read Lai Qin. When he returned to Court the following exchange occurred:

“HIS HONOUR: …as I see…the relevant issue … - although I am open to persuasion, but it may be what I am about to say is erroneous – but it seems to me that the relevant issue is the reasonableness of the plaintiffs in instituting these proceedings in all of the circumstances from the relevant evidence, the question will be as to the circumstances in which the proceedings in this Court were instituted on the afternoon or during the course of 2 August 2005. That seems to me to be the question that I have to look at.
BEVAN: Yes. We accept that, your Honour.” (emphasis added).

59 Mr Bevan addressed first. He made two submissions about Lai Qin. The first was that it was distinguishable, the second that it contained principles upon which he would rely. To the extent that he sought expressly to distinguish Lai Qin, he said:

“This case is highly distinguishable because here we haven’t capitulated. We have effectively won; in the sense that the injunction was dissolved and it was never made permanent. .... This is a case where, after a couple of months, the plaintiff gives up. That’s exactly the opposite to what occurred in Lai Qin . In that case, it was the defendant Commissioner who gave up. So there is no cause to say to your Honour, ‘I would want your Honour to look at what would have occurred at the final hearing of the injunction.’ My case is it should never have been started in the first place.” (emphasis added).

60 Mr Bevan next asserted that it was unreasonable for the opponents to commence the Equity Division proceedings because they had signed away any proprietary rights to the trees they had sought to protect.

61 He also argued that the opponents had “lost the interpretation point on 4 August” and relied on that date as a reference point as the time from which the claimant’s costs primarily fell. He contended it was unreasonable for the opponents to continue the Equity Division proceedings after the Local Court hearing on 4 August. Accordingly he submitted there should be no order as to the costs of and incidental to the proceedings of 2 August 2005, but that the claimant should have her costs from 5 August 2005 on an indemnity basis.

62 At no stage did Mr Bevan submit that the claimant ought have her costs of the Equity Division proceedings because she had been the “victor” before the Magistrate.

Consideration

63 His Honour’s exercise of his discretion as to costs could be challenged only on one of the grounds identified in House v The King at 505; Richmond River Council v Oshlack (1996) 39 NSWLR 622 at 625 per Clarke JA.

64 Recognising these constraints the claimant seeks to attract appellate intervention by arguing the primary judge failed to take into account two material considerations: “her victory” in the Local Court proceedings on 4 August 2005 and whether the opponents had unreasonably maintained the proceedings after the 4 August determination in the Local Court proceedings.

65 The first submission cannot be sustained. It was not argued before the primary judge. However the claimant’s counsel did argue before the primary judge, in substance, that even if it might be thought the opponents acted reasonably in commencing the proceedings, their conduct in maintaining the proceedings after 4 August 2005 was unreasonable. It is not readily apparent that the primary judge considered that argument. His Honour did refer (at [40]) to the inference he drew from the claimant’s failure to move for dismissal of the summons that she accepted the opponents’ bona fides (a rather benign inference I would respectfully suggest having regard to the fervour with which the claimant had pursued her costs application) an inference he appears to have concluded was supported by the claimant’s failure to proceed on her Notice of Motion.

66 His Honour did not deal with Mr Bevan’s submission that the opponents’ conduct was unreasonable, if not in commencing the proceedings, at least in continuing them after 5 August. Rather, after drawing the inference to which I have referred, his judgment focussed on the reasonableness of the commencement of the proceedings. However Lai Qin made it clear that the issue of the appropriate costs order turned not only on the reasonableness of commencing and defending proceedings, but also whether the conduct of the parties “continued to be reasonable until the litigation was settled or its further prosecution became futile….”.

67 It was necessary to analyse the whole of the proceedings to determine whether the appropriate costs order was that one party should bear all the costs, whether each party should bear their own costs or whether either party should bear some portion of the other party’s costs. His Honour failed to undertake that exercise and, accordingly, he failed to take into account a material consideration. It follows that leave to appeal should be granted, the costs decision must be reviewed and this Court must determine what the appropriate costs order was.

68 Not surprisingly the claimant has not sought to challenge his Honour’s order that the summons be dismissed. However, as I have already pointed out, his Honour indicated that his costs decision did not turn on whether he granted leave to discontinue or dismiss the summons. Accordingly, in re-exercising the costs discretion, this Court should approach the matter on the basis that an equally appropriate outcome would have been to grant the opponents leave to discontinue the proceedings. I would also observe that his Honour did not deal with that part of the claimant’s motion which sought an order dismissing her 10 August Notice of Motion. As I shall explain the necessity to dispose of that Notice of Motion is relevant to the outcome.

69 The claimant submits that whichever course the primary judge adopted in disposing of the proceedings, UCPR 42.19 and 42.20 established a presumption in her favour that the opponents should pay her costs. It is necessary, in the light of this submission, to consider the nature of the Court’s costs powers.

70 Section 98 of the Civil Procedure Act 2005 relevantly provides:

“(1) Subject to rules of court and to this or any other Act:
(a) costs are in the discretion of the court, and

(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and

(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.”

71 The power conferred by s 98 is “… unconfined except insofar as ‘the subject matter and the scope and purpose’ of the legislation may enable an appellate court to pronounce the reasons given by the primary judge to be ‘definitely extraneous to any objects the legislature could have had in view’: Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at 81 per Gaudron and Gummow JJ.

72 Oshlack v Richmond River Council concerned the discretionary power to award costs in s 69(2) of the Land and Environment Court Act 1979 whose provenance was s 76 of the Supreme Court Act 1970: see Gaudron and Gummow JJ (at [32]). Section 98(1) of the Civil Procedure Act is relevantly in the same terms as s76.

73 The historical origin of s 76 could be traced to the Judicature Acts which conferred discretionary powers to award costs in all proceedings in the Supreme Court. This reflected the equity practice in accordance with which costs were awarded “from conscience and arbitrio boni viri, as to the satisfaction on one side or other on account of vexation” (Corporation of Burford v Lenthall (1743) 2 Atk 551 at 552; 26 ER 731 at 732) as opposed to “the brutal simplicities which had attended such matters in the Courts of Common Law”: see generally Oshlack v Richmond River Council per Gaudron and Gummow JJ at [32]-[35]; per McHugh J at [63]-[64]; Kirby J at [134].

74 The majority in Oshlak rejected the proposition that there was any absolute rule with respect to the exercise of the power conferred by a provision such as s 98 that “in the absence of disentitling conduct, a successful party is to be compensated by the unsuccessful party”: see Gaudron and Gummow JJ (at [40]), Kirby J (at [134]). Gaudron and Gummow JJ observed (at [38]) that in the High Court “other modern descendants of the Judicature provisions as to costs have escaped arterial hardening.” They referred approvingly (at [39]) to Wentworth v Attorney-General (NSW) (1984) 154 CLR 518 (at 527–528) where five members of the Court, in their joint judgment, said s 76(1) of the Supreme Court Act should not be given “a narrow interpretation”.

75 Kirby J (at [134]) was more sympathetic to the proposition that appellate courts could afford guidance to those obliged to exercise costs discretions, “by referring in general terms to the considerations which the decision-maker can take into account”. He emphasised, however, that “such considerations …are not intended to confine the decision-maker to a rigidly mechanical approach.” While he accepted “the general purpose of an order for costs in favour of a successful party is to provide compensation in the form of a partial indemnity for the costs incurred” so that “legal costs will usually be ordered in favour of the successful party”, he said that that “compensatory principle cannot be treated as an absolute rule … [o]therwise, the discretion conferred in unqualified terms would indeed be shackled and confined…[and] this would be incompatible with statutory language expressed in such terms.” Accordingly, his Honour said:

“…although there are ‘rules’ or ordinary principles which will guide the donee of power in the exercise of the discretion, they cannot extinguish the element of discretion. They must not be allowed to harden into rigid or inflexible requirements .” (emphasis added)

76 Section 98, like its predecessor s 76, is expressed to be “subject to Rules of Court …”. Leicester v Walton concerned the question whether a solicitor, who had withdrawn his representation from an appellant late and in contravention of the time provision in SCR Pt 66 r 7, should be ordered to pay the costs of the day wasted as a result of the adjournment application necessitated by his withdrawal. Priestley, Sheller and Cole JJA observed, in a passage upon which the claimant relies, that “the Rules of Court dealing with the award of costs in cases governed by s 76 have the effect of reducing the scope of the power conferred by that section.” They referred to s 76C and SCR Pt 52A, r 43 (both repealed with the introduction of the Civil Procedure Act and the UCPR) which dealt with the circumstances in which a solicitor could be ordered to pay costs and concluded that as the solicitor’s conduct did not fall within either provision, there was no factual basis for ordering him to pay the wasted costs.

77 Leicester v Walton was referred to with approval by Heydon JA in Wentworth v Wentworth [2000] NSWCA 350; (2000) 52 NSWLR 602 at [161] in support of the proposition that “[t]he area of operation of s 76(1) necessarily depends on the scope, as it exists from time to time, of the provisions of any other enactments dealing with costs”; see also Fitzgerald JA (at [12]) who observed that “…the introductory words of s 76 of the Supreme Court Act permit the scope of the Court’s power to be confined by the Rules… That has been done”.

78 The difficulty with the claimant’s argument that the UCPR 42.19 and 42.20 default orders create a presumption in her favour is that those rules are not “confined” in the sense referred to in Leicester v Walton and Wentworth v Wentworth. Rather the power to make an order other than one of the default orders preserves the Court’s discretion as to the appropriate costs outcome. While one matter for consideration is the reason the proceedings are being discontinued or dismissed, the fact of discontinuance or dismissal does not fetter the discretionary exercise.

79 This accords with Abigroup Contracts Pty Ltd v ABB Service Pty Ltd(formerly ABB Engineering Construction Pty Ltd) [2004] NSWCA 181; (2005) 21 BCL 12 in which Giles JA (with whom Tobias JA and Cripps AJA agreed) rejected (at [167]–[169]) a submission that a primary judge considering the appropriate costs order in respect of claims abandoned in the course of litigation, ought to have followed “the policy inherent in the [discontinuance] Rules … that a party abandoning claims should pay the costs referable to the claims”. His Honour referred (at [168]) to SCR Pt 52A r 21 (which was relevantly on all fours with UCPR 42.19) and observed that such costs would not have been payable if the Court otherwise ordered. The question of the appropriate costs order consequent upon a discontinuance depended upon the judge looking at the discontinued claims in the “whole landscape comprising the course the proceedings”, including having regard, “among other things, to the abandonment of the claims.”

80 In like vein in Furber v Stacey & Anor [2005] NSWCA 242 Hodgson JA (with whom Einstein J agreed) said that the “prima facie principle …that costs follow the event” expressed in District Court Rules 1973 Pt 39A r 9 and Pt 21 r 8 was “subject to the ability of the Court, referred to in those Rules, to make such orders as it appears to the Court to be made, as the justice of the case may require.”

81 It might also be noted that even though in O’Neill v Mann Finn J referred with apparent approval to an “an ‘underlying policy in the Rules that the discontinuing party should be liable for the other party's costs unless the court orders otherwise”, quoting Cooper J in Grundy v Lewis (Federal Court of Australia, 28 May 1998, unreported), his Honour also observed that “…so various can be the reasons for, and circumstances of, discontinuance that that policy cannot safely be said to have hardened into a ‘usual rule’ where leave is granted such as exists where there has been a determination of a claim on its merits …[t]he conduct of the parties in the matter and the reasons for the discontinuance can bear heavily on the exercise of the discretion as to costs.” He referred with approval to McHugh J’s observations in Lai Qin (at 625) to the effect that no costs order will usually be made where both parties have acted reasonably in commencing, defending and continuing proceedings.

82 Finally I note that Tobias JA applied Lai Qin in Newcastle Wallsend Coal Co Pty Ltd v IRC notwithstanding the discontinuing party’s acceptance (see [13] ) “that the Supreme Court Rules 1970 dictated that liability for the costs of an appeal rested with the party seeking its discontinuance…”. Basten JA (with whom Mason P agreed) did not refer to the discontinuance rules. He distinguished Lai Qin, reaching his conclusion (at [39]) that the discontinuing party should pay the costs because they had effectively “failed” and accordingly, it would appear, costs ought follow that event.

83 In Edwards Madigan Torzillo Briggs Pty Ltd v Gloria Stack & Ors [2003] NSWCA 302 Davies AJA (with whom Mason P and Meagher JA agreed) applied Lai Qin in proceedings where a plaintiff had joined a number of defendants, had received a 100% outcome in her favour from four of the defendants and was prepared to have the matter resolved as against the other defendants on the basis that judgment be entered in their favour with no orders as to costs. Davies AJA observed (at [18]) “there was no prima facie entitlement of the part of EMTB to costs merely because the proceedings were to be dismissed against [it]”.

84 It is apparent from this review of authority that the UCPR 42.19 and 42.20 default orders do not create a presumption that the opponents ought pay the cost of the Equity Division proceedings. They are a relevant, but not determinative, consideration. Other relevant considerations were, as the primary judge concluded, usefully gathered in Lai Qin and Australian Security Commission v Aust-Home Investments Ltd & Ors (1993) 44 FCR 194, notwithstanding, as the discussion below reveals, that they were decided in a different statutory context.

85 Lai Qin turned on the application of Order 71 r 39 of the High Court Rules 1952 (Cth) which dealt with the situation in which “the further prosecution of a proceeding becomes unnecessary, except for the purpose of determining by whom the costs of the proceeding should be paid” and enabled any party to apply to the Court or a Justice to determine the question and “thereupon the Court or Justice must make such order as is just.”

86 Australian Security Commission v Aust-Home Investments Ltd & Ors, upon which McHugh J drew heavily in Lai Qin, turned on O 62 r 3 of the Federal Court Rules which, as Hill J observed at (198-199) did not “lay down [any] criteria to determine how costs should be awarded”, leading him to conclude that “ultimately costs in interlocutory proceedings, like costs in the main proceedings, lie in the discretion of the Court, which discretion must be exercised judicially.” The same Rule was, no doubt, the subject of Pincus J’s decision in South-East Queensland Electricity Board v Australian Telecommunications Commission (unreported, Federal Court of Australia, 10 February 1989) to which Hill J referred (at 199). It was the same situation in the two Queensland cases to which Hill J referred (at 200) both of which were dealt with pursuant to O 91 r 16 of the Supreme Court Rules (Qld) 1981 which was in substantially the same terms as O 71 r 39 of the High Court Rules 1952. In addition O 30 r 2 of the Supreme Court Rules (Qld) which was referred to in Austcorp Finance and Leasing Pty Ltd v Thomas (unreported, Supreme Court of Queensland, 23 August 1991) to which Hill J referred (at 200) dealt with discontinuance, but provided that on discontinuance the Court or Judge should make costs orders “as may be just”. Similarly in J T Stratford & Sun Ltd v Lindley (No 2) [1969] 1 WLR 1547 (to which Hill J referred at 200-201) which dealt with the consequences of an order giving the plaintiffs leave to discontinue, RSC 0 21, r 3(1) left it to the Court to make such order as to costs “as it thinks just.”

87 Once it is recognised, however, that the costs discretion conferred by UCPR 42.19 and 42.20 is unconfined, the matters referred to in the Lai Qin line of authority are plainly pertinent, although, again, not necessarily determinative.

88 I turn then to consider the appropriate costs order.

89 I agree with the primary judge that the opponents’ conduct in commencing the proceedings was reasonable. The claimant’s conduct was indubitably provocative. Being on clear notice of the opponents’ desire to exercise their cl 12 right to approach the Local Court, she not only failed to give any indication of her response to that letter but, without warning, sent a man with a chainsaw to commence destroying the opponents’ trees. The primary judge was correct to characterise her conduct, particularly having regard to the fact that her husband was also her solicitor, as “a matter for wonder”.

90 The Access Act was intended to “[build in] … a mechanism to head off conflicts between neighbours, while protecting the rights and interests of all parties”: Second Reading Speech, New South Wales Legislative Assembly, Parliamentary Debates (Hansard) 5 April 2000, p 4160. It was intended to quiet disputes between neighbours which common experience suggests are regrettably capable of escalating out of control. It is fortunate, in this case, that the claimant’s precipitate action did not induce an equal and opposite reaction. It did not because the opponents secured the ex parte injunction and thus preserved the status quo pending the relisting of the matter in the Local Court.

91 The position is less clear, however, after the Local Court “hearing” on 4 August 2005. After that date the opponents appeared to have accepted the Magistrate’s “decision” as to the meaning of the Consent Orders. They appear also to have been mollified by the Magistrate’s decision to suspend the operation of the orders pending receipt of the Final Tree Report. That is apparent from their solicitor’s letter of 9 August 2005 advising that they wished to seek leave to discontinue the proceedings the next day. What appears to have kept the proceedings alive was the fact that the claimant filed her Notice of Motion on 10 August and the parties then agreed to the Consent Orders which operated throughout the completion of the retaining wall works pending which the parties stood the proceedings over by consent to 30 August, and on the 30 August to 27 September.

92 It is necessary at this stage to revisit Mr Holmes’ submission that the claimant ought have her costs because she was the “victor” in the Local Court proceedings. I would not regard the outcome of the 4 August hearing in the Local Court as determinative, or even persuasive, on the exercise of this Court’s costs discretion. First, the Local Court proceedings did not involve the “same claim”, nor were they “dismissed”. The Magistrate said he was not conducting a formal hearing and although he delivered what he described as a “decision”, it is apparent from the transcript before his Honour that the views he expressed concerning the interpretation of the Consent Orders and his decision to suspend the operation of those orders pending receipt of the Final Tree Report, was an exercise of Solomonic wisdom, rather than of jurisdiction.

93 But even if my characterisation of the Local Court proceedings on 4 August 2005 were incorrect I would not regard the outcome there as determinative in circumstances where following that hearing the claimant filed her Notice of Motion and in the clear knowledge that the opponents wished to discontinue the proceedings. The injunctive relief and damages the claimant sought in that Notice of Motion ought properly to have been sought in a summons, as Mr Holmes effectively acknowledged when he described it as a counter-claim. Its substantive significance was recognised by the fact the claimant sought an order dismissing it, an application which appears to have been overlooked by the primary judge and the parties.

94 The Notice of Motion is clearly of significance, however, in determining the costs issue, particularly when seeking to determine the reasonableness issue in relation to the continuation of the Equity Division proceedings after 4 August 2005. This is because it is apparent from the correspondence that the opponents would have sought to discontinue the proceedings on 10 August had the claimant not pressed ahead with the Notice of Motion.

95 In my view the claimant has not demonstrated that the opponents acted unreasonably leaving the Equity Division proceedings on foot in circumstances where they had to deal with her Notice of Motion. Indeed, having regard to the opponents’ solicitor’s letter of 9 August 2005 advising of their intention to discontinue, it is not readily apparent to me why the claimant thought it necessary to file her Notice of Motion on 10 August 2005. It was that action which appears to have had the effect of keeping the proceedings on foot. Be that as it may I would not lay that at the claimant’s feet in the sense of characterising this aspect of her conduct as unreasonable, particularly in circumstances where the Notice of Motion led to another consent regime as to access.

96 I take into consideration the fact that the opponents sought leave to discontinue their proceedings but having regard to my view that they were reasonable in commencing the proceedings and their discontinuance was sought only in circumstances where their further prosecution was unnecessary, do not regard it as appropriate to order them to pay the claimant’s costs of the proceedings.

97 This is a case in which neither party won or lost. Rather, as Mr Simpkins submitted, they became “spent” or futile. The appropriate costs order, in my view, is that each party should pay their own costs.

98 At the end of argument Mr Simpkins raised the question that, if leave was granted and the appeal upheld and this Court did re-exercise the costs discretion, it should not make an order concerning the costs of the argument before the primary judge on 23 November 2005 as the outcome of that day might be affected by correspondence. In his subsequent written submissions he also raised a question concerning an application to reopen apparently made by the claimant but ultimately withdrawn which he suggested also needed to be considered. The claimant disputed the suggestion that there were any further matters which might be raised in relation to the costs of 23 November 2005. In my view the order I propose should extend to the costs of that date but I would grant leave to the opponents should they seek to submit that another order ought be made in respect of that day to make any such application in writing no later than seven days of the date of judgment. I would, however, ask the parties to give serious consideration to whether any more costs ought be incurred in this saga and, even if they are of the view that there is an outstanding issue, to seek to resolve it without further recourse to the Court. If the leave I have granted is exercised, the matter will be dealt with on the papers.

99 I propose the following orders:

1. Grant leave to appeal.

2. Claimant to file a Notice of Appeal in the form of the draft Notice in the White Book within seven days of judgment.

3. Appeal allowed.

4. Set aside the orders made by Justice Nicholas on 22 December 2005 and in lieu thereof order each party to pay their own costs of Supreme Court proceedings No 4290 of 2005.

5. Each party to pay their own costs of the Appeal.

6. The opponents to have leave to file and serve written submissions, limited to 2 pages, concerning the costs of 23 November 2005 within 7 days of judgment with the claimant to file and serve any submissions, limited to 2 pages, in response within a further 7 days.

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05/10/2006	-	correct Civil Procedure Act 2005 s98 - Paragraph(s) catchwords
05/10/2006	-	Civil Procedure Act 2005 s98 - Paragraph(s) catchwords
05/10/2006	-	"not" added to line 1 in para 95 - Paragraph(s) 95