Howard Finance Pty Ltd v Yarra City Council (No 2)

[2020] VSC 742

IN THE SUPREME COURT OF VICTORIA Not Restricted

AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST  S CI  2018 00480

HOWARD FINANCE PTY LTD (ACN 122 783 804)	First Plaintiff
and
ROTUNDA HOLDINGS PTY LTD (ACN 005 671 527)	Second Plaintiff
v
YARRA CITY COUNCIL	First Defendant
and
THE REGISTRAR OF TITLES	Second Defendant
and
BUBBULL PTY LTD (ACN 117 363 658)	Third Defendant

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JUDGE:	Kennedy J
WHERE HELD:	Melbourne
DATE OF HEARING:	Determined on the papers; submissions received on 12 October 2020, 15 October 2020, 22 October 2020 and 26 October 2020
DATE OF RULING:	11 November 2020
CASE MAY BE CITED AS:	Howard Finance Pty Ltd v Yarra City Council (No 2)
MEDIUM NEUTRAL CITATION:	[2020] VSC 742

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PRACTICE AND PROCEDURE – Costs – Whether costs should be apportioned according to issues – Supreme Court (General Civil Procedure) Rules 2015 r 63.04 – No apportionment – Costs to follow the event.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr T Sowden	Nicholas O’Donohue and Co Lawyers
For the First Defendant	Mr P Chiappi	Maddocks

HER HONOUR:

1. By reasons delivered in this matter on 25 September 2020 I determined that the proceeding should be dismissed (‘the Reasons’).[1]

   [1]Howard Finance Pty Ltd v Yarra City Council [2020] VSC 610 (‘the Reasons’).

1. Following delivery of the Reasons, submissions were filed on the question of costs.[2]

   [2]The plaintiffs relied upon submissions dated 12 October 2020 and 21 October 2020. The first defendant (‘the Council’) relied upon submissions dated 15 October 2020 and 26 October 2020.

1. The issue that now arises is whether costs should follow the event or whether, as alleged by the plaintiffs, there should be some apportionment of costs under r 63.04 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic). In particular, whether the plaintiffs should be ordered to pay only 50% of the first defendant’s costs of the proceeding on a standard basis.[3] 

   [3]The second defendant (the Registrar of Titles) advised on 12 February 2018 that it did not intend to appear in the action and did not intend to claim costs. The third defendant (Bubbull Pty Ltd) also took no active role in the proceeding and advised the Court on 12 October 2020 that it did not wish to make any written submissions on costs, on the basis that neither the plaintiffs nor the Council would seek any costs orders against it.

Submissions

1. The plaintiffs submitted that costs should be apportioned because of two discrete matters on which they succeeded:  first, in relation to contesting long user between 1851 and 1954;  and secondly, in relation to contesting long user after 1989. 

1. The plaintiffs focused on their success in showing that the lane was closed to the public after 1989, emphasising that the lay witnesses called by the plaintiffs gave evidence only on this issue, and that the first defendant (‘the Council’) could have proceeded successfully without challenging this lay evidence. They also highlighted the Council’s failure to call Mr Kachami, who had deposed to having free passage through the lane in the period from 2000 to 2006.

1. The plaintiffs submitted that there were a number of ‘unusual features’ in this case being:

·the plaintiffs had reached an in principle agreement with the executive arm of the Council to purchase the lane, thereby inducing an expectation that the lane would be converted for private use;

·the Council further chose to challenge the plaintiffs’ use of the lane post-1989 despite receiving earlier advice that the lane had been closed off from public use ‘for a number of decades’;

·unlike the case of Anderson v City of Stonnington,[4] the Council had induced an assumption on the part of the plaintiffs that they had no interest or use for the lane in circumstances where they had never maintained the lane or insisted that it remain open for the public.

[4](2017) 227 LGERA 176.

1. In response the Council submitted that the issues identified were not sufficiently separate or discrete. 

1. In relation to the use prior to 1954, the Council also submitted that the findings about this period nevertheless provided a factual foundation in which to assess the evidence of later use (citing paragraph [206] of the Reasons). 

1. In terms of the matters post-1989, the Council submitted that what occurred from 1989 was part of a continuum that cannot, and should not, be artificially divided in segments of time and likened to separate issues. 

1. In relation to the ‘in principle agreement’, the Council accepted that there had been a recommendation from the Council’s executive arm to discontinue and sell the lane but that this was ultimately rejected by the councillors.  From that point onwards the Council’s executive arm acted consistently with this resolution and took action designed to have the plaintiffs remove the unlawful obstruction to the lane.  

Legal framework

1. Rule 63.04(1) provides that the Court may make an order for costs in relation to a particular question in, or a particular part of, a proceeding.   Where the Court makes such an order it must fix the proportion of the total costs which is attributable to the particular question in, or the particular part of, the proceeding.[5]

   [5]Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 63.04(2).

1. In the Court of Appeal decision in Chen v Chan, J Forrest AJA identified the relevant principles as follows:[6]

(1) The general rule is that costs should follow the event. Absent disqualifying conduct, the successful party should recover its costs even where it has not succeeded on all heads of claim.

(2) The Rules of Court permit significant flexibility in determining questions of costs. In particular, the Court is entitled to examine the realities of the case and will attempt to do ‘substantial justice’ as between the parties on matters of costs.

(3) Where there is a multiplicity of issues and mixed success has been enjoyed by the parties, a Court may take a pragmatic approach in framing the order for costs, taking into consideration the success (or lack of success) of the parties on an issues basis. Generally, if such an order is made, it is reflected in the successful party being awarded a proportion of its costs but not the full amount.

(4) A Court may, when fixing costs in a claim where there has been mixed success, take into account complications which it considers will arise in the taxation of costs, as part of its consideration of the overall interests of justice.

(5) Where a Court determines to make an order apportioning costs, then it does so primarily as ‘a matter of impression and evaluation,’ rather than with arithmetical precision, having considered the importance of the matters upon which the parties have been successful or unsuccessful, the time occupied and the ambit of the submissions made, as well as any other relevant matter.

[6][2009] VSCA 233, [10].

1. The rule extends to an issue even if it does not amount to a precise issue in the technical pleading sense, but rather any disputed question of fact or of law.[7]   However, it is relevant to consider whether the disputed question may be regarded as discrete.[8]

   [7]GT Corporation Pty Ltd v Amare Safety Pty Ltd (No 3) [2008] VSC 296, [38], citing Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748.

   [8]GT Corporation Pty Ltd v Amare Safety Pty Ltd (No 3) [2008] VSC 296, [31].

Analysis

1. First, I am unable to be satisfied that the Council ‘induced any assumption’ that it had no interest in the lane in circumstances where the estoppel claim was not pursued or tested.   In any event, insofar as there may have been an earlier intimation that the lane could be sold and ‘discontinued’ by the Council (which was apparently under consideration between 2015-2017), the Council clearly gave notice of its changed position in time for the plaintiffs to have avoided all/much of the extensive costs of this proceeding had they so wished.  Such notice was given by, inter alia, correspondence from Maddocks dated 25 May 2017 which advised of the Council’s resolution not to discontinue the lane prior to the issue of the current proceeding (in February 2018).  The Council also filed affidavit material in December 2018 which deposed as to the extensive use of the lane between 1954 and 1989.[9]

   [9]The evidence of these witnesses is set out at [77]-[91] of the Reasons.

1. Turning to the question of long user from 1851 to 1954, it is true that I did not consider the historical evidence to be sufficiently unequivocal to find that a presumption of dedication was made out by 1919 (at [205] of the Reasons).  However, as highlighted by the Council, paragraph [206] of the Reasons then reads:

These findings nevertheless provide a factual foundation in which to assess the evidence of later use.  There is also no evidence of any restriction being placed on the public use of the lane between 1919 and 1954 (although a gate may have been installed during the 1940s, there is no evidence that it was ever locked, or even shut).

1. The finding above illustrates that there was a clear factual interrelationship between the period prior to 1954 and the ultimate finding that the presumption arose on the basis of the use from 1954 to 1989 (at [210] of the Reasons).  The Reasons also go on to expressly state that the presumption was ‘further strengthened when taken in conjunction with the reputation the lane already enjoyed as a ‘public lane’’ (at [210] of the Reasons).

1. In the light of this examination of the Reasons I am therefore not satisfied that it is appropriate to apportion on the basis of the plaintiffs’ limited success in relation to the period prior to 1954.  

1. In terms of the period post-1989, it is true that the plaintiffs were successful in showing that the lane was enclosed, and hence inaccessible to the public from about 1989/1990 (at paragraph [121] of the Reasons). 

1. However, I am unable to be satisfied that it is appropriate to apportion on the basis of this limited success for the following reasons: 

(a)   First, given that the plaintiffs’ estoppel claim was only abandoned on 30 July 2020, the evidence relating to the enclosure of the lane (including the grant of permits and inspections during 1989 to 1990) remained relevant such that it necessitated the calling of lay evidence from the plaintiffs.[10]  Lay evidence was also relevant to other matters such as the physical characteristics of the lane.

(b)  Secondly, there were other witnesses (not just Mr Kachami) who suggested that the lane was open after 1989.[11]  Although I ultimately rejected their evidence on this aspect, it was not unreasonable for the Council to take the view that their evidence ought to be tested.  This was particularly so in circumstances where the plaintiffs only adduced extra evidence in relation to the installation of a gate at the western end on the first day of the trial.[12]

(c)   Thirdly, I do not consider that the time spent on the issue was greatly significant.  Consistent with this view, the issue takes up only some six out of a total of 244 paragraphs (at paragraphs [116] to [121] of the Reasons).

[10]And see Further Amended Statement of Claim, 4 June 2020, [10], [18]-[21].

[11]See, eg, evidence of Bronwyn Paltoglou and Michael Glynatsis cited at [88], [89] and [91] of the Reasons

[12]See ex tempore ruling made on 27 July 2020, which permitted the plaintiffs to adduce evidence from Anastasia Mountjoy and John Dwyer.

1. Taking all of the above matters into account , I am therefore not satisfied that it is appropriate for there to be any apportionment of costs in the interests of justice.  Rather, I am satisfied that the general rule applies and that costs should follow the event.

Conclusion

1. The following orders will be made:

1         The proceeding is dismissed.

2         The plaintiffs are to pay the first defendant’s costs of the proceeding, including any reserved costs, on a standard basis to be taxed in default of agreement.