Hunt Leather Pty Ltd v Transport for NSW (No 5)

[2024] NSWSC 776

Supreme Court

New South Wales

Medium Neutral Citation:

Hunt Leather Pty Ltd v Transport for NSW (No 5) [2024] NSWSC 776

Hearing dates:

13 June 2024

Date of orders:

24 June 2024

Decision date:

24 June 2024

Jurisdiction:

Common Law

Before:

Cavanagh J

Decision:

See [33]-[35]

Catchwords:

COSTS – apportionment of costs where there has been mixed success in proceedings – class action brought by individual and corporate plaintiffs for public and private nuisance arising from Sydney Light Rail construction – individual plaintiffs failed to establish a claim in public nuisance – plaintiffs unsuccessful with respect to common questions 10 and 11, which were subject to separate hearing – appropriate basis for apportioning costs

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 98

Uniform Civil Procedure Rules 2005 (NSW), r 42

Cases Cited:

Australian Receivables Ltd v Tekitu Pty Ltd [2011] NSWSC 1425

Avopiling Pty Ltd v Bosevski (2018) 98 NSLWR 171

Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322

Oshlack v Richmond River Council (1998) 193 CLR 72

Category:

Costs

Parties:

Hunt Leather Pty Ltd (First Plaintiff)
Sophie Hunt (Second Plaintiff)
Ancio Investments Pty Ltd (Third Plaintiff)
Nicholas Zisti (Fourth Plaintiff)
Transport for NSW (Defendant)

Representation:

Counsel:
A Hochroth (Plaintiffs)
R Thrift (Defendant)

Solicitors:
Banton Group (Plaintiffs)
Lander & Rogers (Defendant)

File Number(s):

2018/263841

Publication restriction:

Nil

JUDGMENT

1. This is the judgment in respect of costs arising from the issues determined thus far in these proceedings. The issues determined thus far include:

1. the liability of the defendant to the first and third plaintiffs (“the corporate plaintiffs”) with respect to the cause of action in nuisance;

2. the liability of the defendant to the second and fourth plaintiffs (“the individual plaintiffs”) in public nuisance;

3. a number of common questions; and

4. common questions 10 and 11 relating to what is described as a litigation funding issue.

2. The individual plaintiffs were the owners and principals of the corporate plaintiffs. They have always been jointly represented.

3. As set out in my judgments of 19 July 2023^[1] and 22 February 2024,^[2] the corporate plaintiffs succeeded in their claim for damages for private nuisance. The individual plaintiffs failed in their claim for damages for public nuisance. Further, I rejected the plaintiff's contention that the amount of the litigation funding commission should be included as a head of damages (common questions 10 and 11).

   1. Hunt Leather Pty Ltd v Transport for NSW [2023] NSWSC 840.

   2. Hunt Leather Pty Ltd v Transport for NSW (No 4) [2024] NSWSC 140.

4. Having succeeded, the corporate plaintiffs are entitled to costs in their favour against the defendant. I have already indicated that but also stated that this order was subject to any variation arising out of the issues on which the plaintiffs did not succeed.

5. In accordance with my earlier directions, the parties exchanged written submissions on the further costs orders they sought. At the request of the plaintiffs, the matter was listed for a further short hearing before me by AVL (as I was in Bathurst) on 13 June 2024.

6. I understand that the appeal arising from the primary judgment is listed for hearing for three days commencing 1 July 2024. This judgment brings to an end the issues between the parties that I have been required to determine at this stage of the proceedings. What happens with the balance of the proceedings must await the outcome of the appeal.

The defendant's position

7. The defendant submits that there should be a variation of the costs order made in favour of the plaintiffs, because the plaintiffs did not succeed on a number of issues and or claims, specifically:

1. I rejected the claim in public nuisance. Two of the four plaintiffs thus did not succeed at all.

2. Hunt Leather only succeeded in respect of one of its stores.

3. I rejected the plaintiffs’ claim that the litigation funding commission (40%) is recoverable by the plaintiffs as damages. The plaintiffs were entirely unsuccessful in respect of the issues arising under common questions 10 and 11. Those questions were not considered or dealt with at the main hearing and were subject to separate submissions and a separate hearing after I published my primary judgment.

8. The defendant's position is that there should be an apportioning of the costs. The defendant submits (rather ambitiously) that the appropriate apportionment would be that the plaintiffs would only be entitled to an order for costs of one third of their costs.

The plaintiffs’ position

9. The plaintiffs say that it is not appropriate to apportion costs on an issue-by-issue basis. Further, in respect of the public nuisance claim there should be no order as to costs against the second and fourth plaintiffs on the basis that the defendant is only entitled to the additional costs occasioned by the joinder of those plaintiffs and those costs are de minimis.

10. As to the funding commission, the plaintiffs submit (again rather ambitiously) that the costs of the funding commission argument are not severable. The plaintiffs acknowledge that, if they are severable, the plaintiffs should pay the costs of the funding commission issue.

The nature of the proceedings

11. The plaintiffs pursue damages arising from the nuisance they allege they suffered during the construction of the Sydney Light Rail. The four plaintiffs were the lead plaintiffs and were funded through a litigation funding agreement. The plaintiffs sought to raise in these proceedings (perhaps for the first time) the proposition that the funding commission payable by the plaintiffs (in this case 40%) should be considered a separate head of damages and added to the damages which I have already assessed in favour of the corporate plaintiffs. I rejected that contention.

12. The main proceedings were heard over a six-week period and involved many witnesses, expert and lay, and many thousands of documents. There was a separate hearing in respect of common questions 10 and 11.

13. As Mr Hochroth submitted during the recent hearing, the costs to date will run into the millions.

Apportioning costs

14. The Court has a broad discretion to award costs under s 98(1) of the Civil Procedure Act 2005 (NSW) (Oshlack v Richmond River Council (1998) 193 CLR 72 at [22], [35]; Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 322 at [96]). Rule 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) provides that costs will follow the event unless it appears that some other order should be made as to the whole or any part of the costs.

15. “The event” is not a defined term but would generally mean the event that led to success in the action, for example a judgment for damages in favour of the plaintiffs. That is, the event is success in the proceedings (Australian Receivables Ltd v Tekitu Pty Ltd [2011] NSWSC 1425 at [24]-[26], [54]-[55]).

16. Looking, at least generally, at the outcome of this case, it must be that the corporate plaintiffs have won. They succeeded in nuisance and recovered substantial damages. The fact that one of the corporate plaintiffs, Hunt Leather, did not succeed in respect of one of the two stores for which it sought damages does not mean that Hunt Leather did not succeed.

17. Having said that, the matter cannot be looked at as if the plaintiffs have merely not recovered all of the damages they sought.

18. Perhaps generally, in a case as complex as this which has interwoven issues, the Court will not apportion costs between successful and failed issues, particularly if it cannot be said that the issue on which the successful party failed took up a significant portion of the hearing time (Avopiling Pty Ltd v Bosevski (2018) 98 NSLWR 171 at [173] per Payne JA, McColl and White JJA agreeing). Further, if the issues are not in some way severable, it may be difficult to make different costs orders for different issues. Yet, the Court has a general discretion to determine costs and it does not seem to me that there is anything inherently inappropriate or contrary to the interests of justice that there be some apportioning of costs where it is feasible and practical to do so.

19. Costs are not punitive and a party should not be discouraged from pursuing all issues at the same time but, when there is some clear identification of matters on which the otherwise successful party has not succeeded, it may be appropriate to vary the usual costs order. I must exercise the discretion in respect of costs fairly, reflecting not only the overall result but also the nature of the proceedings and of the issues.

20. The defendant contends for the approach of equating the individual plaintiffs’ claims in public nuisance with the corporate plaintiffs’ claims in private nuisance and then assessing what costs order should be made based on the number of stores involved. That is, the plaintiffs only won on two of the three stores. This leads to a rather generous assessment in favour of the defendant that the defendant should only pay one third of the plaintiffs’ costs.

21. The plaintiffs go to the other extreme, suggesting that the costs involved in the issues on which the plaintiff did not succeed would be de minimis.

22. I do not accept either of those positions. Dealing with common questions 10 and 11 firstly, the issues arising under common questions 10 and 11 (the litigation funding issue) were dealt with quite separately from the rest of the case. Mr Bannon SC for the plaintiffs announced at the commencement of the hearing that those issues would not be dealt with as part of the main hearing. They were subsequently listed for a separate hearing date and separate submissions were made. Evidence was only prepared after the plaintiffs achieved some success on the main issues.

23. Subject to some more general apportioning exercise, the plaintiffs should be ordered to pay the defendant's costs in respect of and relating to common questions 10 and 11.

24. The separation of the other issues is more difficult. This is because there was substantial overlap in the evidence adduced in support of the private nuisance claim and the evidence adduced in respect of the public nuisance claim. Further, there was also substantial overlap in respect of the evidence adduced in respect of Fee Zone 5 (covering the Hunt Leather Strand Arcade store) and Fee Zone 6 (covering the Hunter Leather QVB store).

25. Importantly, these proceedings are representative proceedings. The lead plaintiffs agreed to be lead plaintiffs no doubt to recover damages themselves but also for the purpose of establishing a liability on the part of the defendant for the benefit of members of the class and to determine the parameters of the class action. If the plaintiffs had succeeded in the claim in public nuisance, that would have opened up the possibility of a large number of similar claims.

26. If Hunt Leather had succeeded in respect of its claim arising out of the QVB store, then it would follow that that might have opened the potential for claims of business owners along the route who suffered different types of interference than that suffered by Hunt Leather in the Strand Arcade and Ancio on Anzac Parade.

27. As costs are compensatory, in my view, it is fair that some allowance be made in favour of the defendant for the costs in defending these potentially significant claims. I accept that there was substantial overlap in the evidence, but I do not accept the plaintiffs' position that the issue should be approached with reference to only identifying additional or extra costs incurred by the defendant in respect of the public nuisance and QVB stores. That seems to me to be an impractical approach.

28. Further, it rather ignores the fact that the claims brought by two of the plaintiffs failed altogether, such that conventionally the defendant should be entitled to an order for costs against those two plaintiffs as the defendant won against those plaintiffs completely.

29. Assessing or apportioning costs in these circumstances is very much a matter of impression. Although I accept that the plaintiffs succeeded on the major issue, that is the general entitlement to damages based on private nuisance, I am entitled to have regard to the fact that this is a case pursued by lead plaintiffs, supported by a litigation funder, with the intent of establishing guidelines for any members of the class who seek damages as a result of the interference from the Sydney Light Rail.

30. The plaintiffs chose to expand the claim to include a claim in public nuisance. Hunt Leather chose to seek damages not only in respect of the Strand Arcade store but also the QVB store where the basis of the claim was a much less direct interference, at best for the plaintiffs. Two of the named plaintiffs did not succeed at all. Again, this is significant because the variation in the costs order involves not just the successful plaintiffs not succeeding on some limited issues but two of the plaintiffs not succeeding at all. Any cost order should reflect that two plaintiffs did not succeed at all on a separate issue. Yet there was a substantial overlap in the evidence between that relied on by the corporate plaintiffs and the individual plaintiffs.

31. In my view, the just and practical way to deal with the particular costs issues arising is to simply reduce the costs payable by the defendant to the plaintiffs.

32. The appropriate order is that there be a reduction in the costs payable by the defendant to the plaintiffs of 35%. I do not intend by this order to be revoking any orders that might have been made in respect of costs prior to the hearing (if any such orders were made).

33. I thus revoke the orders I made for costs on 12 March 2024 and make the following orders:

1. the plaintiffs are to pay the defendant's costs as agreed or assessed as arising in respect of common questions 10 and 11;

2. except in respect of the costs arising in respect of common questions 10 and 11, the defendant is to pay 65% of the plaintiffs’ (that is all of the plaintiffs) costs as agreed or assessed.

34. If these orders require any clarification, I grant liberty to the parties to approach my chambers.

35. I grant liberty to apply on 2 days’ notice.

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Endnotes

Decision last updated: 24 June 2024