Hurstville City Council v Jacobs & Anor (No 4)

[2015] NSWLEC 208

Land and Environment Court

New South Wales

Medium Neutral Citation:	Hurstville City Council v Jacobs & Anor (No 4) [2015] NSWLEC 208
Hearing dates:	14 December 2015
Date of orders:	14 December 2015
Decision date:	14 December 2015
Jurisdiction:	Class 1
Before:	Moore AJ
Decision:	See [20]
Catchwords:	COSTS – basis for payment – gross sum order – deferred liability date
Legislation Cited:	Civil Procedure Act 2005
Cases Cited:	Hurstville City Council v Jacobs (No 3) 2015 NSWLEC 194 Latoudis v Casey (1990) 170 CLR 534 Baulkham Hills Shire Council v Hahn [2008] NSWLEC 184 Newcastle City Council & Anor v Wieland & Anor [2009] NSWCA 113, 74 NSWLR 173
Category:	Costs
Parties:	Hurstville City Council (Applicant) Kevin Roy Jacobs (First Respondent) Estate of Ronald John Jacobs (Second Respondent)
Representation:	Counsel: Mr M Cottom, Solicitor (Applicant) Mr P Baker, Solicitor (First Respondent) Submitting Appearance (Second Respondent)   Solicitors: HWL Ebsworth Lawyers (Applicant) Peter Baker Solicitor (First Respondent)
File Number(s):	40060 of 2015
Publication restriction:	No

Judgment

1. HIS HONOUR: The proceedings between Hurstville City Council (the Council) and Mr Kevin Jacobs (First Respondent) and the Estate of the Late Ronald Jacobs (Second Respondent) have been proceeding for some considerable period of time. The Second Respondent, early in the proceedings, filed a submitting appearance (save as to costs) and has played no active role.

2. The matter has come before several members of the Court: me as the List Judge on several occasions and, most recently, before Craig J who dealt with the substantive issues in Hurstville City Council v Jacobs (No 3) 2015 NSWLEC 194, a decision given on 25 November 2015 after a hearing on that day and the day before. In those proceedings, being the final round of a series of interlocutory proceedings arising out of or in connection with a mediated outcome between the First Respondent and the Council reached some five months or so earlier, the outcome was entirely unsuccessful for the First Respondent, Mr Jacobs.

3. The Council now applies for the Council’s costs in the proceedings. I have discussed with Mr Cottom, solicitor for the Council, and Mr Baker, solicitor for Mr Kevin Jacobs, the two options that are available to me for the making of an order; it being conceded, at least as I understand it, that the concept of the costs following the event as dealt with by the High Court in Latoudis v Casey (1990) 170 CLR 534, is applicable – namely, confirming that the costs follow the event, there being no pleaded disentitling conduct by the Council of any nature.

4. I am satisfied that it is appropriate to make an order for costs in favour of the Council. The options, however, available to me are, first, to make the conventional costs order (that is, that the First Respondent pay the Applicant’s costs in the proceedings as agreed or assessed) or, in the alternative, adopting the process provided for in s 98(4) of the Civil Procedure Act2005 and making a gross sum order.

5. It is, as a result of a proposition that I put to Mr Baker, the circumstances of which I will shortly outline, appropriate to turn to that latter option rather than the earlier.

6. Mr Baker has tendered, on the costs application, documents dated in early 2013 that deal with the capacity or otherwise of Mr Kevin Jacobs to give proper instructions in these proceedings.

7. It is unnecessary for me to canvass (for privacy protection reasons) the detail of the material that has been put to me. It is, however, appropriate for me to make the observation that, on the several occasions when Mr Jacobs appeared before me, he seemed capable of taking part in the proceedings on a lucid and reasonably well-informed lay basis.

8. Having made that observation, however, it seems to me that it is appropriate for me to adopt the course of action that I outlined to the parties as an option, namely, to make a gross sum costs order but to do so with a sufficient period of time to enable Mr Jacobs to seek further assistance with the matters that have been dealt with in Exhibits 1 and 2 and to permit him, should he give instructions to do so, to seek to reagitate matters by making an application to reopen with respect to costs if there were to be some valid basis upon which to do so.

9. Mr Cottom has advised me that the solicitor‑client costs so far incurred, including an allowance for the finalisation of proceedings today, of the Council are of the order of $64,000. He postulates to me that on a party-party basis that might be three‑quarters of that amount, namely, $48,000.

10. It is clearly anticipated, with respect to gross sum awards of costs, that they are in substitution for assessed costs. Assessed costs are, unless there is some reason for some specific departing order, done on a party‑party assessment basis so it is appropriate that I deal with this matter on that basis.

11. Mr Baker submitted to me that the order for costs that I might make ought expressly exclude (or given that I am making a gross sum order, make allowance for the exclusion of) the costs of the mediation that was undertaken between the parties. He cites to me in support of that proposition a decision of Lloyd J in Baulkham Hills Shire Council v Hahn [2008] NSWLEC 184 in which his Honour, after setting out the nature of the proceedings, reached the conclusion (set out in [19] of that decision) that it was not appropriate to make an order for costs for the mediation element of the proceedings.

12. However, Mr Cottom has taken me to Newcastle City Council& Anor v Wieland & Anor [2009] NSWCA 113, 74 NSWLR 173 where the Court of Appeal held that the costs of the mediation should be included. Indeed, the remarks of Hodgson J (remarks that were adopted by Beasley J, as she then was) observed that unless there was an express agreement between the parties as to how the costs of a mediation conducted pursuant to the Civil Procedure Act are to be paid, they are ordinarily encompassed within the general costs of the proceedings.

13. That decision is one that is subsequent to (and, in my view, expressly sets aside any inference that I should draw from) the decision of Lloyd J in Baulkham Hills Shire Council v Hahn. There is nothing in the decision of the Court of Appeal that would indicate that it was intended to be confined to the civil jurisdiction of the District Court as opposed to the civil jurisdiction of the state generally. I am therefore satisfied that I should make a gross sum order for costs that encompasses the costs of the mediation.

14. I discussed with Mr Cottom and Mr Baker what might be an appropriate date after the commencement of Law Term in 2016 by which the costs order should be satisfied (or, by necessary implication, any further approach made to the Court by Mr Baker). I proposed that it should be sometime sufficiently after the commencement of Law Term and each of them has agreed to Friday, 19 February 2016 being an appropriate date to be set by which either the costs order would be required to be satisfied or some further application made to the Court as to why that should not be the case. I am satisfied that that is an appropriate date for the orders.

15. I now turn to the question of the gross sum to be specified pursuant to s 98(4) of the Civil Procedure Act. First, there is the adjustment proposition (if I could so describe it) that there is ordinarily an allowance made not only to bring the solicitor‑client costs back to a party-party basis but also a further modest discount to be applied as a consequence of there being certainty as to quantum and the removal of the time and (if necessary) for an assessment to be undertaken of those costs.

16. Mr Baker put the proposition to me that the quantum should be 60% rather than 75% as advanced by Mr Cottom.

17. As is not unusually the case, I think the answer lies somewhere between the two amounts.

18. I am satisfied that there should be both an adoption of Mr Cottom’s quantum of $48,000 as being the appropriate party-party amount but I am also satisfied that there should be some further discount allowed to that to compensate for the avoidance of the assessment processes.

19. I am satisfied that, doing as best I can under the circumstances, it would be appropriate to allow $6,000 for that - resulting in a gross sum costs order in favour of the Council for $42,000.

20. Therefore, the order of the Court in these proceedings is that:

1. The First Respondent is to pay the Applicant, Hurstville City Council, the sum of $42,000 by the close of business on Friday, 19 February 2016 as the costs ordered for these proceedings pursuant to s 98(4) of the Civil Procedure Act 2005.

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Decision last updated: 28 January 2016