Michales v Dimoski (No 2)

[2007] NSWLEC 591

Land and Environment Court

of New South Wales

CITATION:	Michales v Dimoski and Ors (No 2) [2007] NSWLEC 591
PARTIES:	APPLICANT Paul Michales FIRST RESPONDENT Sash Dimoski SECOND RESPONDENT Hurstville City Council THIRD RESPONDENT Bernard Cohen FOURTH RESPONDENT Shifa Li
FILE NUMBER(S):	40253 of 2006
CORAM:	Pain J
KEY ISSUES:	Costs :- exercise of discretion to award costs to successful party in Class 4 proceedings
LEGISLATION CITED:	Land and Environment Court Act 1979 s69 Land and Environment Court Rules 1996 Pt 15 r 9
CASES CITED:	Duncan v Moore (2000) 107 LGERA 430; Latoudis v Casey (1990) 170 CLR 534; Michales v Dimoski and Ors [2007] NSWLEC 443
DATES OF HEARING:	11 September 2007 (written submissions) 14 September 2007 (written submissions)
DATE OF JUDGMENT:	21 September 2007
LEGAL REPRESENTATIVES:	APPLICANT Mr B Stavropoulos (solicitor) SOLICITOR Stavropoulos Solicitors FIRST and THIRD RESPONDENTS Ms S Kluss SOLICITOR Hancock Alldis & Roskov SECOND RESPONDENT Mr M Fraser SOLICITOR Home Wilkinson Lowry FOURTH RESPONDENT No appearance

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Pain J

21 September 2007

40253 of 2006 Michales v Dimoski and Ors (No 2)

JUDGMENT ON COSTS

1 Her Honour: I handed down my judgment dismissing the Applicant’s Notice of Motion to reopen completed Class 4 proceedings on 4 September 2007 in Michales v Dimoski and Ors [2007] NSWLEC 443 . As identified at [56] of that judgment the usual rule in Class 4 proceedings is that costs follow the event so that an unsuccessful applicant would be ordered to pay the Respondents’ costs in the absence of disentitling conduct by the Respondents. I have allowed written submissions on costs to be filed by the Applicant’s solicitor and written submissions in reply before making final orders. I note that only the First and Second Respondents participated in the argument on the Applicant’s Notice of Motion.

Applicant’s submissions

2 The Applicant’s solicitor submitted that one basis for the decision of the Court was the failure by the Applicant to prove fraud. One reason for this was that the affidavit of the Applicant sworn 13 March 2007 was not formally read. As the Applicant was unrepresented at the hearing and the Applicant’s solicitor was not instructed until after the hearing was completed and was not therefore aware of all that had occurred at the hearing, he was at a disadvantage in making the written submissions which assumed that the affidavit had been formally read. The Applicant was at a disadvantage as a result. The Applicant did not act unreasonably in seeking to reopen proceedings in which, if the Applicant’s allegations of fraud were true, the judgment would be flawed. (I note that the proceedings that were sought to be reopened were dismissed by consent of both the parties so that there is no judgment of the Court on the merits of the matter).

3 A costs order against the Applicant at this stage may work an injustice as it is unlikely that the Applicant, if he commences fresh proceedings, would be able to recover in future proceedings the costs he would be liable to pay under any order made by the Court in these proceedings.

4 Although no evidence of the Applicant’s financial situation is in evidence the Applicant’s solicitor submitted that it should be taken into account. He is an accountant with a small business and limited means and the Applicant’s family depends solely on his income. A costs order may impose significant hardship on his family.

First Respondent’s submissions

5 The First Respondent submitted at the hearing of the motion that its costs should be paid as he was successful. He did not file any additional submissions on costs.

Second Respondent/the Council’s submissions

6 The Council’s counsel submitted that costs should follow the event unless there is disentitling conduct. The Council was entirely successful on all the points raised in its Notice of Motion. There is no disentitling conduct by its conduct of the proceedings.

7 Costs are compensatory, Latoudis v Casey (1990) 170 CLR 534. The Applicant’s financial situation is not a relevant consideration in awarding costs. There is no evidence to support a hardship submission in any event.

Finding

8 Section 69 of the Land and Environment Court Act 1979 states that:

(2) Subject to the rules and subject to any other Act:
(a) costs are in the discretion of the Court,
(b) the Court may determine by whom and to what extent costs are to be paid, and
…

9 The Court’s discretion to award costs is wide and must be exercised judicially. The usual costs in order Class 4 proceedings is that costs follow the event and is the order I indicated I was likely to make when judgment was handed down.

10 The Respondents have been successful on their respective Notices of Motion. I dismissed the Applicant’s Notice of Motion to reopen completed proceedings. My decision not to allow the reopening of proceedings is set out at [23] – [41] of my previous judgment. There were a number of issues to consider in reaching that decision. In [29] of my judgment I proceeded on the basis of accepting the Applicant’s affidavit evidence referred to at the hearing, although not formally read, and held that I did not consider I should infer that there had been fraud on the part of the Council. I refer in that paragraph to the necessity of proving fraud to a certain standard in civil cases. I did not infer there was fraud on the basis of the uncontradicted evidence the Applicant relied on before me. At [39] I held that there were no exceptional circumstances which suggested I should allow completed proceedings to be reopened in the absence of any section in Pt 15 r 9 applying and, additionally, if the Court indeed has inherent power to reopen proceedings and set aside final orders.

11 I also considered, but did not rule on finally, arguments that if the Applicant’s Notice of Motion was considered as fresh proceedings, these should be summarily dismissed. At [55] I did not rule out that fresh proceedings based on allegations of fraud could be commenced because, in part, of the state of the evidence on this issue (see [55] of judgment).

12 It is necessary to consider the conduct of this litigation in determining whether costs should be awarded. There is no disentitling conduct by the Respondents.

13 It is irrelevant to consider that if the Applicant commences fresh proceedings he could not recover these costs if awarded against him. I assume this submission was made on the basis that fresh proceedings would be successful. It is these proceedings that the award of costs must be made in relation to.

14 The Applicant’s solicitor argued that his client was disadvantaged by not being represented by a solicitor until after the hearing and by the failure to formally read the evidence he relied on to submit there were grounds based on fraud. I have already stated that I did take into account the Applicant’s evidence which was relied on to argue there was fraud. I do not consider the Applicant was disadvantaged in this regard.

15 The Applicant’s solicitor also submitted that the Applicant would suffer hardship if a costs order were made. No evidence was provided in support of that submission. There are numerous authorities to the effect that means to pay are irrelevant when determining if a costs order ought be made; see Duncan v Moore (2000) 107 LGERA 430 at [71] where Sheahan J states:

The means of the parties is not a relevant consideration. See Talbot J in Director-General of the Department of Land & Water Conservation v Ramke (unreported, Land and Environment Court, NSW, Talbot J, 50071 of 1998, 16 February 1999) at 44 and Bignold J in Tzavellas v Canterbury City Council (1999) 105 LGERA 262.

16 I do not consider there are grounds put forward by the Applicant which suggest that I should not exercise my discretion to make an order on the basis that costs follow the event. I can now make final orders in this matter in accordance with my previous judgment.

Orders

17 The Court makes the following orders:

1. The Applicant’s Notice of Motion filed 11 May 2007 is dismissed.
2. The Applicant is to pay the First and Second Respondents’ costs.