Muriniti v King

[2019] NSWCA 153

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:	Muriniti v King [2019] NSWCA 153
Hearing dates:	30 April 2019
Date of orders:	27 June 2019
Decision date:	27 June 2019
Before:	Gleeson JA at [1]; Emmett AJA at [2]
Decision:	1. Summons seeking leave to appeal filed on 24 December 2018 be dismissed. 2. The Respondents’ costs of the application for leave be paid by the applicants for leave.
Catchwords:	APPEAL – leave to appeal from costs orders made by the Land and Environment Court – whether leave should be granted under s 58 of the Land and Environment Court Act 1979 (NSW). APPEAL - whether the primary judge applied the correct test for the making of an order under s 99 of the Civil Procedure Act 2005 (NSW) – whether the primary judge based his conclusions on findings that were not open on the evidence – whether there was bias on the part of the primary judge – whether there was a denial of procedural fairness – whether the primary judge erred in considering that he had previously made a relevant finding that there was no evidence of conspiracy.
Legislation Cited:	Civil Procedure Act 2005 (NSW) Land and Environment Court Act 1979 (NSW) Supreme Court Act 1970 (NSW)
Cases Cited:	Flinn v Flinn (1999) VSCA 134 Kendirjian v Ayoub [2008] NSWCA 194 King v Muriniti [2018] NSWCA 98 Mitry Lawyers v Barnden [2014] FCA 918 Re Felicity: FM v Secretary, Department of Family and Community Services (No 4) [2015] NSWCA 19 Ridehalgh v Horsefield & Anor [1994] Ch 205 White Industries (Qld) Pty Ltd v Flower & Hart (1998) 156 ALR 169 Young v King [2004] NSWLEC 93 Young v King [2016] NSWCA 282 Young v King (No. 2) [2009] NSWLEC 125 Young v King (No 6) [2015] NSWLEC 111 Young v King (No 9) [2016] NSWLEC 4 Young v King (No 12) [2017] NSWLEC 150 Young v King (No 13) [2018] NSWLEC 150
Category:	Procedural and other rulings
Parties:	Leonardo Carlo Muriniti (First Applicant) Robert Duane Newell (Second Applicant) Brendan King (First Opponent) Kristina King (Second Opponent)
Representation:	Counsel: R D Newell, Solicitor (Applicants) M Wright SC (Opponents)   Solicitors: L C Muriniti & Associates (Applicants) Terrence Stern Solicitor & Attorney (Opponents)
File Number(s):	2018/309605
Decision under appeal	Court or tribunal: Land and Environment Court Jurisdiction: Class 4 Citation: [2018] NSWLEC 150 Date of Decision: 26 September 2018 Before: Sheahan J File Number(s): 2016/160767 and 2016/160933

Judgment

1. GLEESON JA: I agree with Emmett AJA.

2. EMMETT JA:

Introduction

By summons filed on 24 December 2018, the applicants, Mr Leonardo Muriniti and Mr Robert Newell (together the Lawyers), seek leave to appeal from costs orders made by the Land and Environment Court (the L&E Court) on 26 September 2018 (the Impugned Costs Orders )[1] . Leave is required by reason of the operation of s 58 of the Land and Environment Court Act 1979 (NSW). Under s 58(1), where a party to proceedings in Class 4 of the Court’s jurisdiction is dissatisfied with an order or decision (including an interlocutory order or decision) of the L&E Court, the party may appeal to the Supreme Court against the order or decision. The Costs Orders were made in proceedings in Class 4 of the L&E Court’s jurisdiction. However, s 58(3)(c) relevantly provides that an appeal does not lie to the Supreme Court against an order or decision as to costs, except by leave of the Supreme Court.

1. See Young v King (No 13) [2018] NSWLEC 150.

3. By the Impugned Costs Orders, a judge of the L&E Court (the primary judge) ordered the Lawyers to indemnify Brendan King and Kristina King (together the Kings) against legal fees and disbursements that were the subject of indemnity costs orders (the Indemnity Orders) made by the L&E Court on 19 February 2016[2] against Ms Margo Young (Ms Young) in favour of the Kings. The Indemnity Orders were made in proceedings (the Reinstatement Applications) brought by Ms Young against the Kings seeking to have set aside orders made by consent on 19 February 2004 (the Original Orders) by the then Chief Judge of the L&E Court (the Chief Judge). On 9 July 2015, the primary judge ordered that the Reinstatement Applications be dismissed[3] .

   2. See Young v King (No 9) [2016] NSWLEC 4.

   3. See Young v King (No 6) [2015] NSWLEC 111.

4. On 6 October 2015, the Kings filed a notice of motion in the L&E Court seeking orders that the Lawyers pay to them the costs incurred by them in defending the Reinstatement Applications, which Ms Young had been ordered, by the Indemnity Orders, to pay to them. That motion was subsequently amended. On 23 May 2017, the Kings filed points of claim in support of their amended motion. Mr Newell filed points of defence on 13 June 2017 and Mr Muriniti filed points of defence on 7 July 2017.

5. On 17 August 2017, each of the Lawyers filed notices of motion seeking orders that the primary judge recuse himself from further hearing or deliberating in those motions. On 17 November 2017, the primary judge dismissed the Lawyers’ motions and reserved the Kings’ costs in relation to the Lawyers’ motions.

6. On 18 December 2017, the Kings filed a further amended notice of motion seeking costs orders against the Lawyers. After hearing the further amended motion on the basis of the issues raised by the points of claim and the points of defence, the primary judge made the Impugned Costs Orders,[4] which are the subject of the present application for leave to appeal. In order to put in context the questions that would be raised by the appeal if leave were to be granted, it is necessary to say something more about the history of the litigation between Ms Young and the Kings.

   4. See Young v King (No 13) [2018] NSWLEC 150.

The Litigation between Ms Young and the Kings

7. The dispute between the Kings and Ms Young arose out of work carried out by the Kings on property owned by them in Forestville (the King Property). The work involved excavation on the boundary between the King Property and the adjoining property owned by Ms Young (the Young Property). The King Property is lower than the Young Property, such that the natural flow of water is from the Young Property to the King Property. The Young Property slopes to the rear, such that the natural flow of water is from the front of the King Property to the rear. The work carried out by the Kings disturbed the land between the houses built on the King Property and the Young Property.

8. On 14 April 2003, Ms Young commenced proceedings in the L&E Court (the Original Proceedings), alleging that the Kings had carried out or permitted to be carried out various unlawful works on the King Property, including the construction of a footing, construction of a retaining wall and underpinning of existing footings to the house erected on the King Property. Allegations were made concerning the legal status of decisions made by Warringah Shire Council (the Council), which had given consent to certain works on the King Property in February 2002. The Council was not a party to the Original Proceedings.

9. The Original Proceedings were fixed for hearing on 16 February 2004 before the Chief Judge. After an opening by counsel, the parties undertook negotiations that led to the resolution of the Original Proceedings, except in relation to costs (the Settlement Agreement). Because the parties could not agree on costs, it was necessary for the Chief Judge to receive and consider the evidence to the extent that it related to the appropriate order for costs.

10. The Settlement Agreement entailed the giving of an undertaking by the Kings to the L&E Court to carry out certain works on the King Property, in consideration for which Ms Young agreed to the dismissal of the Original Proceedings. The Chief Judge was satisfied that the works that the Kings had agreed to undertake were made necessary by reason of the construction of the retaining wall, which the Kings conceded had been constructed without consent. His Honour accepted that the retaining wall operated to interrupt the flow of sub-surface water and, accordingly, unless adequately drained, certain problems identified by one of the experts who gave evidence were likely to occur. His Honour therefore concluded that Ms Young had succeeded in the Original Proceedings and that the Kings should pay her costs.

11. On 19 February 2004, the Chief Judge noted the undertaking given to the L&E Court on behalf of the Kings, ordered that the Original Proceedings be dismissed and ordered that the Kings pay Ms Young’s costs. His Honour reserved liberty generally for any party to apply. [5] In due course, the Kings paid Ms Young’s costs in accordance with that order.

    5. See Young v King [2004] NSWLEC 93.

12. On 8 March 2004, the undertaking given by the Kings was varied. The undertaking, as varied, was to carry out, within 21 days of granting of development consent by the Council or by the Court, the works identified in a document marked as Exhibit A in the Original Proceedings (Exhibit A) and to lodge, within 21 days of the date of the undertaking, a development application to the Council for the erection of a retaining wall on the boundary between the Young Property and the King Property. The Kings also undertook to make all reasonable endeavours to progress the development application through the Council and complete the retaining wall works within 21 days of the granting of development consent by the Council or by the Court. [6]

    6. See Young v King (No. 2) [2009] NSWLEC 125.

13. The Kings subsequently lodged a development application with the Council, seeking approval of the works identified in Exhibit A. There appears to have been a contention that the works contemplated by Exhibit A involved some work on the Young Property. However, Ms Young declined to give her consent for work to be done on the Young Property. That was one of the reasons for refusal of the development application by the Council on 30 June 2006. The work that Exhibit A contemplated has never been carried out.

14. On 23 May 2008, Ms Young commenced the first of the Reinstatement Applications by filing a notice of motion (the 2008 Motion) seeking orders compelling compliance by the Kings with the undertakings given to the L&E Court and declarations as to the effect of the Original Orders. In the alternative, the 2008 Motion sought that the order dismissing the Original Proceedings be vacated and that the Original Proceedings be reinstated.

15. On 19 October 2012, the primary judge ordered that the 2008 Motion, as amended, be dismissed. On 22 August 2013, this Court granted Ms Young leave to appeal from those orders of the primary judge and on 31 October 2013, the Court allowed the appeal by consent and ordered that the 2008 Motion be remitted to the L&E Court for redetermination.

16. In the meantime, Ms Young commenced another of the Reinstatement Applications by seeking judicial review under s 69 of the Supreme Court Act 1970 (NSW) in the Common Law Division of the Supreme Court in relation to the Original Orders. On 5 November 2013, the Court of Appeal ordered that those judicial review proceedings be transferred to the L&E Court. On transfer to the L&E Court, the judicial review proceedings were allocated a separate proceeding number in the L&E Court in which Ms Young filed a summons seeking a declaration that the Settlement Agreement was void or, in the alternative, an order voiding the Settlement Agreement, together with an order that the Original Orders be set aside and that the Original Proceedings be restored to the list for hearing.

17. In pleadings filed in support of the Reinstatement Applications, Ms Young alleged that the Kings had represented to the L&E Court and to her that they had adequate drainage arrangements on the King Property generally to support drainage of water via the rear of the King Property, including for the purpose of such drainage, a legal, viable discharge point at the rear of the King Property (the Exhibit A Representation). Ms Young also alleged that the Kings gave the undertaking to the L&E Court and made the Exhibit A Representation knowing that they did not have adequate drainage on the King Property and did not have a legal or viable discharge point for drainage at the rear of the King Property. Therefore, she alleged, the Kings knew that the Exhibit A Representation was false.

18. In the alternative, Ms Young alleged that the Settlement Agreement was made or entered into by common mistake. She alleged that she and the Kings wrongly understood that the Settlement Agreement stipulated for a discharge point at the rear of the King Property for the drainage of the retaining wall that was the subject of the works contemplated by Exhibit A. She alleged that, contrary to the understanding of both parties, the Settlement Agreement did not contain a term determining such a discharge point.

19. The primary judge summarised the grounds upon which Ms Young relied to have the Original Orders set aside as follows[7] :

    7. See Young v King (No 6) [2015] NSWLEC 111 at [183].

• the undertaking given to the Chief Judge was uncertain as to the stipulation of the discharge point;

• the parties suffered from a common mistake as to the stipulation of the discharge point;

• Ms Young was mistaken as to the stipulation of a discharge point;

• the Kings made fraudulent representations to the Chief Judge in respect of the undertaking; and

• the L&E Court had no power to make orders reflecting the undertakings.

20. In his reasons of 9 July 2015[8] , after dealing with the allegations of uncertainty and mistake and the fact that Ms Young was represented by senior counsel and solicitors, the primary judge dealt with the allegations of fraud. His Honour concluded that it would be entirely inappropriate to make a finding of fraud against anyone involved in the matter. His Honour was not satisfied that the Kings or their representatives had made any fraudulent representations to the L&E Court. Accordingly, his Honour concluded, no basis had been found upon which the Original Orders should be set aside. His Honour made orders on 9 July 2015 that the Reinstatement Applications be dismissed and ordered that Ms Young pay the Kings’ costs of the Original Proceedings as from 8 March 2004.

    8. Ibid at [237].

21. The grounds of appeal to this Court from the orders made by the primary judge on 9 July 2015, as presently relevant, may be summarised as follows:[9]

    9. See Young v King [2016] NSWCA 282 at [88].

1. The primary judge failed or omitted to give adequate reasons for rejecting Ms Young’s fraud allegations;

2. The Original Orders were obtained by reason of fraudulent representations made by the Kings, by Mr Griffiths (the Kings’ solicitor), and by Mr Springett (an expert retained for the Kings);

3. The finding or determination by the primary judge that fraud could not be established against anyone involved in the matter, in the absence of reasons to displace the prima facie inference of fraud, was unsafe and the occasion of a miscarriage of justice;

4. The primary judge erred in excluding evidence of the former solicitor and senior counsel for Ms Young, the exclusion of which was productive of a miscarriage of justice;

5. the primary judge erred in excluding the evidence of two engineers retained on behalf Ms Young, the exclusion of which was productive of a miscarriage of justice; and

6. the cumulative effect of the primary judge’s reasons disclosed a reasonable apprehension of bias against Ms Young.

22. The entire thrust of the complaints made by Ms Young, through her counsel, was directed at the conduct of her legal advisors and witnesses in 2004, hinting at a conspiracy involving:

• the Kings and their advisors;

• Ms Young’s former advisors; and

• the Council.

Despite the very extensive and unnecessarily complex allegations of fraud made on behalf of Ms Young, there was no evidence to link those advising Ms Young with either the Kings and their advisors, or with the Council. Any allegation of a conspiracy involving Ms Young’s advisors was completely without foundation in the evidence and should never have been made. The primary judge said as much in his reasons. His Honour was not directed to any evidence of conspiracy involving Ms Young’s advisors. There was simply assertion after assertion without reference to any evidentiary support.

23. In those circumstances, Ms Young was bound by the actions of her advisors. There had never been any suggestion that her former solicitors or engineer consultants acted without her authority. There was no evidence to suggest that either her solicitor or her senior counsel exceeded authority in negotiating the Settlement Agreement and asking the Chief Judge to make the Original Orders. Ms Young had ample opportunity to adduce such evidence as she wished as to any mistake on the part of her legal advisors. There was no evidence that her counsel or solicitor were under any misapprehension as to the existence of a valid discharge point, such as was alleged on the part of Ms Young[10] .

    10. See Young v King [2016] NSWCA 282 at [90] to [98].

The Muriniti Costs Application

24. By notice of motion filed on 31 October 2016 in each of the Four Proceedings, the Kings applied for orders that Mr Muriniti pay to them the amount of the costs that Ms Young had been ordered to pay to them (the Muriniti Costs Application). Ms Young was represented on the hearing of the Four Proceedings by Mr Newell, who was then a solicitor employed by Mr Muriniti. Mr Newell also appeared on behalf on Mr Muriniti on the hearing of the Muriniti Costs Application. Mr Newell had appeared for Ms Young while in practice as a barrister.

25. The Muriniti Costs Application was founded on ss 98 and 99 of the Civil Procedure Act 2005 (NSW) (the Procedure Act). Section 99 applies, relevantly, if it appears to the Court that a solicitor has been responsible for the incurring of costs and that the costs were incurred by the serious neglect, serious incompetence or serious misconduct of that solicitor. Section 99(2) relevantly provides that, after giving the solicitor a reasonable opportunity to be heard, the Court may direct the solicitor to pay to the client the whole or any part of any costs the client has been ordered to pay to any other person. In addition, the Court may also direct the solicitor to indemnify a party other than the solicitor’s client against costs payable by that party. The relevant effect is that, if it appears to the Court that a party to proceedings has incurred costs to a lawyer acting for that party and that the costs were incurred by the serious neglect, serious incompetence or serious misconduct of a solicitor, other than the lawyer acting for that party, the Court may direct that solicitor to indemnify that party against the costs payable by that party to that party’s lawyer[11] .

    11. See Re Felicity; FM v Secretary, Department of Family and Community Services (No 4) [2015] NSWCA 19 at [16] and [52]; and King v Muriniti [2018] NSWCA 98 at [57].

26. What constituted the conduct of proceedings without reasonable cause in circumstances in which a legal practitioner is responsible must be understood in the context of the obligations imposed on legal practitioners by s 56(4) of the Procedure Act [12] . The making of misconceived allegations wholly unsupported by any evidence constitutes incompetent and unreasonable conduct by a practitioner, even if the practitioner makes the allegations on the express instructions of a client [13] .

    12. See Kendirjianv Ayoub [2008] NSWCA 194 at [209].

    13. See Re Felicity at [23] and [37] – [38].

27. On the hearing of the Muriniti Costs Application, Mr Newell sought to develop the conspiracy and fraud case alleged by Ms Young. He asserted that Ms Young was induced, by representations made by various people, to believe that she was receiving a “drain and retain solution” to the problems created by the work carried out by the Kings in 2001. [14] It was asserted that knowingly false representations were made by the lawyers for the Kings and the lawyers for Ms Young, as well as by the expert witnesses called by the Kings and Ms Young. Some 47 pages of additional submissions were relied upon by Mr Muriniti in support of a finding that there was in truth a conspiracy involving the lawyers for the Kings, the lawyers for Ms Young, the expert witnesses called by both of them and officers of the Council.

    14. See King v Muriniti [2018] NSWCA 98 at [86].

24. Mr Newell contended, on behalf of Mr Muriniti, that the motive for the alleged conspiracy was that the Council needed a solution for a drainage problem from the street fronted by the Young Property and the King Property, and that the lawyers and the engineers sought to assist the Council in deceiving Ms Young into accepting a proposal that would have given the Council a solution to its drainage problem. However, this Court concluded that there was simply no evidence to enable an inference to be drawn or a conclusion to be reached that any of those alleged to have been participants in the alleged conspiracy had in fact been guilty of conspiracy or knowingly making false representations. [15]

    15. See King v Muriniti [2018] NSWCA 98 at [93].

25. This Court accepted that it was not sufficient to attract s 99 simply to demonstrate that a case is hopeless. The conduct of the legal practitioner must go beyond that. In circumstances where there was no material available to Mr Muriniti that would have justified making the allegations that were made before the primary judge in the Reinstatement Applications, on the hearing of the Four Proceedings or on the hearing of the Muriniti Costs Application, the position of Mr Muriniti went beyond merely conducting a hopeless case. The Court concluded that Mr Muriniti was responsible for the incurring of the Kings’ costs in the Four Proceedings and that the costs were incurred by serious incompetence and serious neglect on his part and on the part of those employed by him. The Court therefore concluded that it was appropriate to make an order under s 99 against Mr Muriniti in favour of the Kings[16] .

    16. Ibid at [98] to [100].

The Primary Judge’s Reasons for making the Impugned Costs Orders

30. In his reasons for making the Impugned Costs Orders, the primary judge observed[17] that the costs claims, “like the proceedings themselves, have all involved allegations by Ms Young and the Lawyers that the Kings, the local Council, and many other persons, were engaged in a conspiracy against Young’s interests” [18] . His Honour then observed that, in the Reinstatement Applications, he had found “no probative evidence of such conspiracy” and that that conclusion had been endorsed by the Court of Appeal in its reasons for dismissing the Four Proceedings. However, his Honour said, Ms Young and the Lawyers had continued “to argue against that conclusion” and “in favour of their conspiracy allegations” despite the lack of any new evidence being advanced since his Honour had ruled on Ms Young’s claim in 2014. His Honour then recited several paragraphs from the reasons of the Court of Appeal in the Four Proceedings.

    17. Young v King (No. 13) [2018] NSWLEC 150 at [7].

    18. Emphasis has been added in this and following quotations from the reasons of the primary judge.

31. The primary judge then referred to the orders made in 2016 that Ms Young paid the Kings’ costs of the Reinstatement Applications. His Honour then stated the relief sought by the Kings in the further amended motion of 18 December 2017 and the reformulation of that relief by counsel for the Kings in the course of the argument on the basis of the orders made by this Court against Mr Muriniti in relation to the Muriniti Costs Application.

32. The primary judge recounted the history of the litigation between Ms Young and the Kings and related litigation in the Federal Court of Australia[19] (Young v Hughes). The primary judge quoted at length from the decision of the Federal Court in Young v Hughes, to address the articulation “of the conspiracy” on the application for costs against the Lawyers. Many of the conspiracy arguments in Young v Hughes were repeated in the subsequent King v Muriniti proceedings. The primary judge recorded that the Federal Court had indicated to Mr Newell that Mr Newell would need to satisfy the Federal Court that there was a proper factual foundation for alleging that there was “an agreement between conspirators and that such an agreement was executed in whole or part”. [20] The Federal Court then set out particulars that emerged when the “alleged conspiracy” was described in oral submissions before his Honour.

    19. See Young v Hughes Trueman Pty Ltd (No. 4) [2017] FCA 456.

    20. Young v King (No. 13) [2018] NSWLEC 150 at [44] to [47].

33. The Federal Court said that, when pressed for “the objective evidentiary material upon which that conspiracy was based”, Mr Newell’s response was, in essence, to point to the fact that it should have been clear that the consent to the orders was a sham and it was “screamingly obvious” that what was contained in Exhibit A was not a real or available “drain and retain” solution as was alleged to have been represented. Mr Newell agreed that the burden of his submission was that, because of the obvious difficulties with what the engineers should have perceived with exhibit A, the only rational explanation for putting that up to the L&E Court and to Ms Young was “conscious, knowing untruth” and that that was a conscious knowing untruth in concert with others in order to further the malign purposes of the Council.

34. The Federal Court observed that as with earlier argument before another judge of the Federal Court, Mr Newell “came back” to the notion that the L&E Court and Ms Young had been misled by a number of persons and there could be no basis upon which that could be attributed to anything other than a conspiracy. His Honour then stated that many of the same arguments “conspiracy, ‘sham consent’, etc”, were repeated before this Court in the Four Proceedings and in the Muriniti Costs Application and in the hearing before his Honour “in a constant effort by the Lawyers to justify their conduct of all the proceedings” that they had run on behalf of Ms Young and themselves. [21]

    21. Ibid at [48].

35. In response to the case advanced on behalf of the Kings, the Lawyers relied on affidavits sworn by Ms Young and by Mr Muriniti. The primary judge upheld objections that his Honour characterised as “extensive well-founded” objections, his Honour holding the affidavits “flew squarely in the face of [the L&E Court’s] primary relevant judgments … both of which were upheld by the Court of Appeal …”.

36. In his affidavit, Mr Muriniti posed the question as to why the Lawyers were still confronted with costs applications against them in circumstances where all that they had done was to discharge their duty as officers of the L&E Court “as courageously and as honestly as they possibl[y] could” in extremely difficult circumstances where experts retained to advise “colluded to deceive them, provide misinformation and create[d] confusion” and all indications were that the Kings together with all the other parties were complicit in a scheme to defraud Ms Young. The affidavit then “moved on to a critique” of the primary judge’s judgment in relation to the Reinstatement Applications.

37. After referring to those parts of Mr Muriniti’s affidavit, the primary judge referred to assertions made by Mr Muriniti that hundreds of professional hours had been spent trying to unravel “an immense and very complex matter”. Mr Muriniti asserted that the Lawyers had had to undertake that task confronted with:

“the numerous instances of misinformation which were deliberately planted in various expert reports as well as written and oral advices which were provided to myself by the various experts to whom we had turned for expert advice and assistance.”

He then said:

“The task of deconstructing what the various parties involved in the conspiracy did to aid and abet the conspiracy and how various comments, documents and plans can then be interpreted either in isolation or jointly to unmask the real dishonest agenda of the parties involved, fell mainly on the shoulders of [Mr Newell].”

38. After dealing with the cross-examination of Mr Muriniti, the primary judge cited extensively from the reasons of this Court in the Muriniti Costs Application. After referring to the reformulation of the relief sought by the Kings[22] and observations made in the Federal Court[23] , his Honour referred to the oral submissions made on behalf of the Kings and the Lawyers. His Honour characterised the oral submissions of the Lawyers as being a restatement of “all the old arguments [the Lawyers] have made about the parallel watercourse or drainage system, the disputed absorption pit, the Courts’ inadequate reasons, and so on”, which his Honour observed had regularly been said “to prove the conspiracy which now embraces all the people nominated by Mr Muriniti”. His Honour said that the Court and others had “heard all this before and decisively ruled against it”. [24]

    22. See Re Felicity; FM v Secretary, Department of Family and Community Services (No 4) [2015] NSWCA 19.

    23. See Mitry Lawyers v Barnden [2014] FCA 918 at [42].

    24. See Young v King (No. 13) [2018] NSWLEC 150 at [152].

39. The primary judge then referred to Mr Newell’s response that the Court should not “take the next logical step of making the personal costs orders” because the Lawyers had been prepared to assist Ms Young despite the conspiratorial unhelpfulness of all the experts they retained. His Honour referred to the submission by Mr Newell that the difficulties encountered with those experts could “hardly be put at the feet of” the Lawyers.

40. The primary judge concluded that the Lawyers had been guilty of serious incompetence and serious misconduct on at least the following grounds:[25]

    25. Ibid at [161].

• they made, without evidence, allegations of fraud and/or conspiracy against the Kings;

• they commenced, pursued and later abandoned completely misconceived contempt proceedings against the Kings;

• they pleaded and pursued mutually inconsistent allegations of mistake;

• Mr Newell drafted prolix pleadings and Mr Muriniti certified, without any real basis, that the pleaded allegations had reasonable prospects of success on provable facts and a reasonably arguable view of the law, and

• they bombarded the Court, and all those they have dragged into the proceedings, with vast quantities of irrelevant affidavits and other documentary evidence.

His Honour concluded that the Lawyers had been, and remained, jointly and equally responsible “for a most egregious abuse of process which damaged not only their own client but caused great harm and expense to the Kings whom have consistently been found blameless”.

41. The primary judge said that Mr Newell was the principal author of “the ever-evolving conspiracy theory” but that it was embraced by Mr Muriniti and, “under pressure from them”, by Ms Young. His Honour said that the Lawyers were each liable in their own right, professionally, until the end of June 2014, when Mr Newell left the bar. Thereafter, his Honour said, Mr Muriniti, as Ms Young’s solicitor, the principal of the firm, and the employer of Mr Newell as a solicitor advocate, must be held wholly responsible for the conduct of Ms Young’s proceedings. Having concluded that the Kings had been entirely successful in the application, his Honour made orders as follows:

1. [Mr Muriniti] indemnify [the Kings] against the costs payable to them on account of legal fees and disbursements in relation to the proceedings brought against them in this Court by [Ms Young] pursuant to the indemnity costs orders of this Court set out in … the Court’s judgment … dated 19 February 2016;

2. [Mr Newell] indemnify [the Kings] against the costs payable to them on account of legal fees and disbursements in relation to the proceedings brought against them in this Court by [Ms Young] pursuant to the indemnity costs orders of this Court set out in … the Court’s judgment … dated 19 February 2016;

3. [Mr Muriniti] pay the costs of his notice of motion … seeking judicial recusal on an indemnity basis;

4. [Mr Newell] pay the costs of his notice of motion … seeking judicial recusal on an indemnity basis;

5. [The Lawyers] pay the costs of the Kings’ further amended notices of motion dated 10 December 2017 on an indemnity basis.

The Lawyers’ Challenges to the Impugned Costs Orders

42. The terms of the Impugned Costs Orders are anomalous in one sense. His Honour ordered that the Lawyers indemnify the Kings against “the costs payable to them on account of the legal fees and disbursements in relation to the proceedings brought against them … by Ms Young”. The order made by this Court in the Muriniti Costs Application was that Mr Muriniti indemnify the Kings against the costs payable by them on account of legal fees and disbursements in relation to the proceedings brought against them by Ms Young. That appears to have been the intent of the Impugned Costs Orders as made by the primary judge.

43. The grounds of appeal stated in the summons for leave filed by the Lawyers and in the draft notice of appeal filed with the summons are set out in Appendix 1 to these reasons. The grounds appear to dispute both legal holdings and factual findings made by the Court of Appeal in the Muriniti Costs Application. There are good reasons for concluding that there are estoppels arising from the decision of the Court of Appeal that preclude Mr Muriniti from challenging the holdings and findings made by the Court of Appeal. While there is every reason to conclude that those questions have been resolved as between the Kings, on the one hand, and Mr Muriniti, on the other, there may be a question as to whether Mr Newell is bound by the earlier determinations.

44. The written submissions filed by the Lawyers in support of the application for leave addressed the following questions:

• the proper or correct test for invocation of the costs jurisdiction (pars [10] to [17]);

• correct application of test for jurisdiction to order costs (pars [18] to [29]);

• relying upon findings in the proceedings between the Kings and Ms Young (pars [30] to [38]);

• no evidentiary foundation for fraud/conspiracy allegations (pars [39] to [44]);

• a framework to judge the claimed “lack of evidence” (pars [45] to [49]), and

• bias on the part of the primary judge.

45. The grounds stated in the summons and draft notice of appeal, and the questions formulated in the Lawyers’ written submissions can be grouped under the following topics:

• whether the primary judge applied the correct test for the making of an order under s 99 of the Procedure Act;

• whether the primary judge based his conclusion on findings that were not open on the evidence adduced against the Lawyers;

• bias on the part of the primary judge; and

• denial of procedural fairness.

46. Mr Newell began his oral submissions on behalf of the Lawyers by addressing a proposed new ground that does not appear in the summons, the draft notice of appeal or the written submissions. For that reason, in the course of the oral argument in support of the application for leave, the Lawyers sought to add a further ground as follows:

“His Honour erred in considering that he had previously made a relevant finding that there was no evidence of conspiracy.”

The ground appears to have some connection with the complaints about the evidentiary foundation for fraud and conspiracy allegations.

The Correct Test

47. The Lawyers accept that, in referring to statements made by the Federal Court of Australia[26] that were based on English authority[27] , his Honour stated the relevant principles correctly. Thus, his Honour observed that instituting or maintaining a proceeding on behalf of a client that has no, or substantially no, prospect of success, will not, without more, invoke the jurisdiction to make a costs order against a lawyer, and that something that involves “unreasonable conduct” is required. His Honour said that the element of acting unreasonably involves some deliberate or conscious decision taken by reference to circumstances unrelated to the prospects of success, with either a recognition that there is no chance of success, an intention to use the proceeding for an ulterior purpose, to abuse the processes of the Court, or with a disregard of any proper consideration of the prospects of success. [28] His Honour said that the circumstances must involve or result in a serious dereliction of duty owed to the Court or serious misconduct in promoting the course of, and the proper administration of, justice but that an ulterior purpose or an abuse of process cannot be assumed simply because the case is hopeless. [29]

    26. See Mitry Lawyers v Barnden [2014] FCA 918 at [42].

    27. See Ridehalgh v Horsefield [1994] Ch 205.

    28. Young v King (No. 13) [2018] NSWLEC 150 at [143] citing Mitry Lawyers v Barnden [2014] FCA 918 at [42] per Wigney J.

    29. Ibid.

48. The primary judge said that the reason that the mere pursuit of an unmeritorious case was not so sufficient to invoke the jurisdiction to make a costs order against a lawyer is that a party is entitled to have a practitioner act for him or her in an unmeritorious case and the Court is concerned to avoid the risks of lawyers endeavouring to browbeat their opponents into abandoning clients, or particular issues or arguments, for fear of personal costs orders being made against them. His Honour had previously accepted[30] that, while it is not entirely easy to distinguish between the hopeless case and the case that amounts to an abuse of process, in practice it is not hard to say which is which and, if there is doubt, the lawyer is entitled to the benefit of the doubt[31] .

    30. See Young v King (No. 11) [2017] NSWLEC 34 at [179].

    31. Citing Ridehalgh v Horsefield [1994] Ch 205 at 233-234.

49. Nevertheless, the Lawyers contend that the primary judge did not apply the correct test for the invocation of the jurisdiction conferred by s 99 of the Procedure Act. They say that the primary judge erred in relying on authority of this Court[32] , which, they contend, should not be followed because it does not propound an explicit test but “argues directly from a statement of relevant policy, leaving the application of s 99 … uncertain”. They say that, in so far as this Court propounded a test for the invocation of s 99, that test is incompatible with the principles outlined above. In that regard, the Lawyers complain about the reliance placed by this Court on the interaction between s 56 of the Procedure Act and s 99. They assert that s 56 invokes “a very different standard” from s 99 and if s 56 is applicable in determining whether s 99 has application, it is difficult to see what role s 56 can be given in the application of s 99. In any event, the Lawyers say, the decision of this Court that they seek to impugn could have been arrived at without reference to s 56. The decision in question was cited with approval by this Court in the decision in the Muriniti Costs Application[33] .

    32. See Re Felicity; FM v Secretary, Department of Family and Community Services (No 4) [2015] NSWCA 19.

    33. See King v Muriniti [2018] NSWCA 98 at [8] and [60].

50. In this Court’s reasons in the Muriniti Costs Application, the Court accepted that it is not sufficient to attract s 99 to demonstrate that a case is hopeless and, that to do so, the conduct of the legal practitioner must go beyond that [34] . The Court concluded that there was no material available to Mr Muriniti that would have justified making the allegations that were made before the primary judge, either on the hearing of the Four Proceedings or on the hearing of the Muriniti Costs Applications. The Court was satisfied that Mr Muriniti was responsible for the incurring of the Kings’ costs in the Four Proceedings and that the costs were incurred by serious incompetence and serious neglect on his part and on the part of those employed by him. For that reason, the Court made an order under s 99 against Mr Muriniti in favour of the Kings. Curiously, the Lawyers did not refer to this Court’s decision in the Muriniti Costs Application. It is difficult to see, in circumstances where Mr Newell acted as advocate for Mr Muriniti in those proceedings, why he and Mr Muriniti should not be regarded as bound by any determination of legal questions made in the Muriniti Costs Application.

    34. Ibid at [99].

47. The primary judge applied the test adopted by this Court in the proceedings to which Mr Muriniti was himself a party and Mr Newell acted as counsel for him. There is no substance in the ground that the primary judge did not apply the correct test for the application of s 99.

Evidentiary Questions and the Proposed New Ground

52. The argument in relation to these issues was difficult to follow. The thrust of the complaint appears to be that the primary judge failed to make a finding of some deliberate or conscious decision taken by reference to circumstances unrelated to the prospects of success or failed to take such decisions with either a recognition that there was no chance of success, or an intention to use the proceedings for an ulterior purpose, or to abuse the processes of the Court, or with disregard of any proper consideration of the prospects of success. They assert that there was no suggestion to his Honour that the initiation of the Reinstatement Applications by the Lawyers was to be explained by reference to a deliberate or conscious decision unrelated to the prospects of success and that his Honour made no finding as to that matter. Further, they say, his Honour’s reasons contain no finding that could support such an ultimate finding. They refer to unchallenged evidence by Mr Muriniti that he genuinely believed in the merits of the claims “based on detailed consideration and much reflection under difficult circumstances”.

53. The Lawyers contend that it was necessary to establish that the claims formulated by them on behalf of Ms King were made with a “positive disregard” for a proper consideration of the prospects of success. They say that there was no finding that they approached the matter with a conscious disregard for the need for such proper consideration. Further, they say, the unchallenged evidence of Mr Muriniti did not support the possibility of making such an ultimate finding. Rather, they say, the thrust of the evidence discloses a serious belief in the conspiracy allegations and considerable effort on their part to investigate and to consider the allegations. They suggest that it is implicit in his Honour’s finding, that their “position remains intransigent”, that they have a genuine belief in the conspiracy allegations, which, they say, has become more confident through investigation and consideration. Therefore, they say, the relevant test was not satisfied even if, contrary to their assertions, the case was a “hopeless case”.

54. The Lawyers assert that the test is that there be a disregard of the need for proper consideration of the prospects of success. They draw attention to the fact that there is nothing in the points of claim relied on by the Kings or the evidence considered by the primary judge that would support a finding of a conscious element unrelated to the merits or prospects of success. The only possible exception to that observation, they say, is his Honour’s statement that the Lawyers pressured Ms Young into maintaining the conspiracy allegation. They point out that, although his Honour’s reasoning is entirely dependent on that finding, no such allegation of pressure was to be found in the points of claim. No such allegation was made on behalf of the Kings in written or oral submissions. The Lawyers say that such a finding was plainly not open on the evidence. They refer to evidence given by Ms Young about the basis of her views concerning collusion and her independent conclusion about that matter, which was reached well before she contemplated retaining the Lawyers.

55. In relation to the proposed new ground, which was not articulated in the summons, the draft notice of appeal or the written submissions, Mr Newell sought to establish a distinction between allegations of fraud that had been made in the course of the Reinstatement Applications, on the one hand, and the allegations of conspiracy that were advanced in the course of the Four Proceedings and in the Muriniti Costs Application, on the other. Mr Newell contended that “everything else pales into insignificance” in the light of the allegedly mistaken basis upon which the primary judge proceeded, namely, that he had determined, in resolving the Reinstatement Applications, that there had been an allegation of a conspiracy that was rejected.

56. He asserted that, while in the course of the Reinstatement Applications allegations were made of fraudulent misrepresentations on the part of the Kings, there was no allegation of conspiracy. The primary judge summarised the grounds upon which Ms Young relied in seeking to have the Original Orders set aside, [35] including that the Kings had made fraudulent representations to the Chief Judge in respect of the undertaking given by them. Mr Newell contended, however, that there was no allegation at that stage that anyone was a party to that alleged fraud other than the Kings. The conspiracy allegations, he said, were not developed until the hearing of the Four Proceedings impugning the decision of the primary judge in dismissing the Reinstatement Applications.

    35. See [20**] above.

57. Counsel for the Kings summarised the Kings’ case in written submissions to the primary judge. In the course of his reasons for making the Impugned Costs Orders[36] , his Honour set out verbatim several passages from those submissions. Paragraph 80 of the submissions said as follows:

    36. See Young v King (No. 13) [2018] NSWLEC 150 at [158] citing Mr Wright’s written submissions in chief at [80].

“Since 2008, at the hand of the [L]awyers the Kings have been forced to endure a decade of wholly unnecessary further litigation. In that time, the [L]awyers have made extremely serious allegations of fraud and conspiracy against the Kings, and others, with no evidentiary foundation.”

Having quoted that paragraph and some 15 further paragraphs from the submissions of counsel for the Kings, the primary judge then said as follows [37] :

37. At [159], [160] and [161].

“[159]   In response, Newell’s recycled written submissions, running to hundreds of pages, revisited the Lawyers’ conspiracy allegations, all the allegedly unfounded judicial criticisms of their case and their conduct, their failed arguments about inadequacy of reasons, speculation about evidence not called at trial, from alleged conspirators, and so on.

[160]   No real argument was presented in those submissions about the principles I should apply to the Kings’ application, and the tenor of the oral submissions has been set out earlier in this judgment.

[161]   The end result is that I remain satisfied that the Lawyers have been guilty of serious incompetence and serious misconduct, on at least the following grounds:

(a)   they made, without evidence, allegations of fraud and/or conspiracy against the Kings;

(b)   they commenced, pursued and later abandoned completely misconceived contempt proceedings against the Kings;

(c)   they pleaded and pursued mutually inconsistent allegations of mistake;

(d)   Newell drafted prolix pleadings and Muriniti certified, without any real basis, the depleted allegations had “reasonable prospects of success on provable facts and a reasonably arguable view of the law”; and

(e)   they bombarded the Court, and all those they dragged into the proceedings, with vast quantities of irrelevant affidavits and other documentary evidence.”

58. In their written submissions to this Court, the Lawyers complain that his Honour was in error in holding that there was no evidentiary foundation for Ms Young’s case. They characterise paragraph 80 of the Kings’ submissions just quoted as being a statement by his Honour “with no supporting reasoning” and assert that that “statement is a comment almost in passing and could not be referred to as a finding”, saying that it was “lifted word for word” from the King’s submissions as are most of his Honour’s conclusions, “without any sign of independent deliberation”. The Lawyers then complain that no finding in the terms of the Kings’ submissions had been made in the primary judge’s reasons in the Reinstatement Applications[38] and that while, in the course of those reasons, his Honour dealt with the allegation of fraud, the effect of his Honour’s conclusions was only that he was not prepared to find fraud on the balance of probabilities because he was not taken to the evidence that would have caused him to conclude otherwise. The Lawyers assert that that is a long way from a finding that there was no evidence of fraud either in fact or before his Honour. It is apparent that those assertions are quite misconceived and demonstrate a lack of care by the Lawyers in the preparation of their submissions to this Court.

    38. See Young v King (No 6) [2015] NSWLEC 111.

59. The Lawyers assert that there was a great deal of evidence as to conspiracy and that the question that should have been addressed by the primary judge was whether the evidence was consistent or inconsistent with their theory of Ms Young’s case. They contend that the question of whether there was evidence for that case should be judged by reference to a set of propositions that are set out in Appendix 2 to these reasons although, in the course of oral address, Mr Newell indicated that those propositions were not of significance if the Court accepted his primary contention, namely, that the basis upon which the primary judge made the Impugned Costs Orders involved reliance upon allegations of conspiracy that had not been made or determined.

60. The Lawyers assert that, in so far as the primary judge relied upon findings made in the proceedings between Ms Young and the Kings, he erred in so far as he did not also consider the evidence and submissions challenging those findings. They contend that a person is not bound by findings made in litigation to which that person is not a party and that such findings may not be used as evidence of facts found[39] . Thus, they assert, it is not an abuse of process for legal practitioners, seeking the full opportunity of answering an application for costs against them, to challenge findings made in the principal proceedings. They contend that absurd consequences could follow if judicial findings could be overturned on appeal by a party to the proceedings in which those findings were made but would be binding, without any right of challenge, on a legal practitioner acting in the proceedings with no avenue of redress whatsoever.

    39. See Flinn v Flinn (1999) VSCA 134 at [4].

61. The Lawyers also assert that the finding by this Court in the Four Proceedings and in the Muriniti Costs Application was unfair because the evidence of Ms Young’s legal representatives and the evidence of Ms Young’s engineers was excluded. They say that the absence of those witnesses compromised in a fundamental way the proof of any conspiracy, in so far as conspiracy was central to the case advanced in the Four Proceedings. They assert that the question of conspiracy played a very limited role in the Four Proceedings and that it was not material to this Court to decide whether there was or was not a conspiracy.

62. The Lawyers complain about the alleged finding made by the primary judge that, since 2008, at the hand of the Lawyers, the Kings “have been forced to endure a decade of wholly unnecessary further litigation”. As indicated above, his Honour made no such finding but was simply citing the written submissions of counsel for the Kings. The Lawyers assert that, if such a finding had been made, it would not be open on the evidence because no such finding was made in his Honour’s reasons in the Reinstatement Applications. For the reasons indicated above, that assertion is based on a misapprehension.

63. The Lawyers’ assertion of a conspiracy involving the Kings, their legal advisors and the experts appears to have been made in order to justify the fraud allegations made in the Reinstatement Applications. The Lawyers appear to have first developed that conspiracy case in the Muriniti Costs Application [40] . They then re-asserted the allegation in the affidavit sworn by Mr Muriniti in the proceedings before the primary Judge. [41]

    40. See paragraph [28]-[29].

    41. See paragraph [37].

64. In his reasons for making the Impugned Costs Orders, the primary Judge refers to the Lawyers making “allegations of fraud and/or conspiracy against the Kings”[42] . That must be understood as a reference to the fraud allegations originally made in the Reinstatement Applications, which were then supplemented by the conspiracy allegations made in the later proceedings in this Court, which were said to justify the fraud allegations and repeated before Sheahan J in the application for costs against the Lawyers.

    42. See Young v King (No 13) [2018] NSWLEC 150 at [161(a)].

65. It is clear enough that the primary Judge found that the Lawyers’ explanation for the fraud allegations, being the existence of subsequently identified alleged conspiracy, did not justify the making of the earlier fraud allegations in the Reinstatement Applications. That finding was bolstered by the fact that the allegations were repeatedly made without evidence. There was no error on the part of his Honour and there is no substance in the proposed new ground.

66. In essence, the Lawyers seek to re-agitate the matters that were the subject of conclusions by this Court in the Four Proceedings and, to a lesser extent, in the Muriniti Costs Application. Having regard to the conclusions reached by this Court in those proceedings, there would be no utility in allowing those matters to be re-agitated by granting leave to appeal in the present proceedings.

Bias and Recusal

67. The Lawyers’ written submissions addressed the question of alleged bias on the part of the primary judge (pars [50] to [52]). In relation to the question of bias, the Lawyers’ written submissions refer to the observation by the primary judge that Mr Newell was the principal author of the “ever-evolving conspiracy theory” and that it was embraced by Mr Muriniti. His Honour observed that the theory was embraced by Ms Young “under pressure” from the Lawyers. The Lawyers accept that a finding that they pressured Ms Young would support a costs order based on an additional element of unreasonableness. However, they assert, the notion that Ms Young was pressured into the allegation had not been determined and was not open on the evidence. Rather, they assert, it was roundly contradicted by Ms Young’s uncontested evidence and it was never pleaded or put to Mr Muriniti in cross-examination. They assert that the fact that such a finding was made supports the conclusion that there is a reasonable apprehension of bias against them.

68. The Lawyers say that the following matters also support a conclusion that there would be a reasonable apprehension of bias:

• the suggestion made by the primary judge, contrary to the fact, that the Lawyers were responsible for Ms Young’s bankruptcy: she was made bankrupt by reason of costs orders made in separate proceedings in which the Supreme Court is alleged to have erred;

• treating Ms Young's bankruptcy as relevant;

• the preparedness of the primary judge to find that the Lawyers had pressured Ms Young into maintaining the conspiracy without evidence in the face of “the evidence plainly to the contrary”;

• the derogatory manner in which the conclusion concerning the Lawyers is framed “without reasoned vindication in the evidence”;

• the reference to, and apparent reliance upon, “juridically irrelevant judgments” that were critical of the Lawyers; and

• the preparedness of the primary judge to conclude that the Lawyers were guilty of serious misconduct or incompetence in pleading common mistake and unilateral mistake in the alternative.

The Lawyers contend that in the light of those matters, the hypothetical reasonable observer would conclude that the primary judge had not or could not bring an impartial and fair mind to the matter that he was considering, namely, whether the Lawyers should be ordered to pay the costs that Ms Young was ordered to pay to the Kings.

69. Those matters may, if made out, constitute grounds of appeal. However, even if they are shown to have constituted error on the part of the primary judge, they do not demonstrate bias on the part of the primary judge. There is no basis for a grant of leave on the ground of bias or apprehended bias in relation to the primary judge. For the same reason, there should be no leave to appeal on the basis that his Honour should have recused himself from hearing the Costs Application against the Lawyers.

Other Proposed Grounds

70. One of the grounds of appeal sought to be relied on by the Lawyers is a denial of procedural fairness. That ground was not addressed in the Lawyers’ written submissions or in the course of oral address. There is no basis for the grant of leave to appear on that ground.

71. Another ground of appeal sought to be relied on by the Lawyers is that his Honour did not identify “reliable or plausible integers” for the costs claimed by the Kings. No written submissions were addressed to that ground and it is therefore not necessary to deal with it.

Conclusion

72. I would refuse leave to the Lawyers to appeal from the Impugned Costs Orders. The Kings’ costs of the application for leave should be paid by the Lawyers.

**********

Appendix 1

Grounds of Appeal

1   The primary judge erred in finding that the Appellants were liable to the Respondents for the costs of Ms Young's proceedings against them.

2   The learned primary judge applied the wrong test or applied the test incorrectly for the invocation of the costs jurisdiction against the Appellants.

3   The learned primary judge erred in that he made findings supporting the conclusion that the Appellants should be subject of a wasted costs order which findings were not open on the evidence.

4   The learned primary judge erred in finding that:

1. The Appellants had maintained fraud allegations with no evidence.

2. The Appellants had pressured Ms Young into maintaining the conspiracy allegation.

3. The Appellants pursued a contempt case that was completely misconceived.

4. The Appellants maintained allegations in the alternative of common mistake and unilateral mistake were entirely misconceived.

5. Mr Newell has engaged in conduct warranting a wasted costs order by reason of prolix pleadings.

6. Mr Muriniti had engaged in conduct warranting a wasted costs order because he certified pleadings as having reasonable prospects bf success.

7. The Appellants' conduct warranted a wasted costs order because they bombarded the court with vast quantities of irrelevant affidavit and other material.

5   The learned primary judge erred in that he denied the Appellants procedural fairness.

6   The learned primary judge erred in that he did not identify reliable or plausible integers for the wasted costs claimed by the Respondents.

7   The learned primary judge erred in that his decision supports a reasonable apprehension of bias.

8   The learned primary judge erred in dismissing the Claimants' application for him to recuse himself.

9   The learned primary judge erred in ordering the Appellants to pay the costs of their recusal application.

Appendix 2

Conspiracy propositions

1   The Kings excavated on the boundary changing the levels on that boundary and made necessary a retaining wall in 2001 to support Ms Young’s land. They concomitantly created basement rooms where there was previously a 1.5 metre sub-floor space in the path of the overland flow of water and a sub-surface watercourse. The basement rooms dammed the watercourse which flowed across the boundary between no. 35 and no. 37 and under the Kings’ house. This created a circumstance in which the house could never obtain an occupation certificate, and by implication, could not be sold - its value necessarily to be achieved in the context of a demolition.

2   The Kings lodged a DA for, inter alia, a retaining wall. The DA was supported by plans. Some plans had the wrong DP number placed on them by the Kings. If those plans which had the wrong DP number on them were removed from the file, the file would speak of a development application in which the Council was never called upon to consider a levels changing excavation.

3 Because of the Water Act there cannot in fact be a retaining wall on the boundary because such a retaining wall would dam a watercourse which crosses the boundary between the two houses and then runs under the Kings' house.

4 A considerable time after Consent was issued, the CC was issued, which did not provide for a retaining wall and claimed reliance on building waste. The CC issued in that form because the Council could not approve a retaining wall on that boundary which would be in conspicuous breach the Water Act.

5   The Council could not approve a retaining wall which meant, by parity of reasoning, that the Council could not acknowledge having been presented with a fact situation which called for a retaining wall by way of remediation.

6   In the premises, the Council connived to create a CC premised on a fabricated account of a build-up of building waste on Ms Young's land - thus denying a duty to perform in connection with an unlawful levels changing excavation on no 37 at or near the boundary.

7   The Kings prepared the CC plans which contended for the false factual premise that they had not undertaken a levels changing excavation on the boundary in the full knowledge that the levels had been the same on both sides of the boundary before they had undertaken their work.

8   The modification of the Consent manifestly required a fresh notification to at least to Ms Young (see Cambridge Credit Corporation Ltd v Partes Developments Pry Ltd (1974) 2 NSWLR 590). However, she was neither formally notified, or in any way informed, of the radical alteration to the Development Application which now proposed to leave her land unsupported.

9   The concealment from Ms Young of the false (and preposterous) account of a building waste build up to obviate the otherwise need to state whether a retaining wall can or cannot be considered by the Council, leaves room for no other conclusion but that neither the Kings nor the Council believed the story or in other words knew it to be a fabrication.

10   Further, as it was a fabrication, and as Ms Young expected a retaining wall, if not primarily reinstatement of the land, the conduct of the Council and the Kings evinced an intention, or special shared knowledge, that Ms Young would not discover that there could never be a retaining wall.

11   Given her necessary anxiety about her land being unsupported, and the obvious inability to conceal from her an obvious physical fact such as her land being supported or not, the ambition that she should not discover that there could never be a retaining wall on the boundary of no. 35 and no. 37 was necessarily supported by an understanding and a devotion to the outcome, that Ms Young would very shortly be caused to sell her home.

12   The passage of 17 years without a retaining wall, and a deafening lack of any honest explanation for that fact, removes any doubt about the forgoing matters if such ingenuous doubt there could be.

13   Jack Davies, an engineer consulted by Ms Young, never informed her that there could not be a retaining wall. This was notwithstanding the fact that in the 2014 hearing before the primary judge he gave unchallenged evidence that the watercourse flowed under the Kings’ house. So much is self-evident from the history of the matter leading to an undertaking to lodge a DA for a retaining wall. Jack Davies referred Ms Young instead to Hones Lawyers about whom Ms Young now complains.

14   Ms Young consulted Hones Lawyers who then briefed Mr Hemmings, a highly experienced planning counsel.

15   Those lawyers conducted the case on the basis that the building waste story was correct - a matter which they did not disclose to Ms Young. They knew that the Council had proceeded on the basis of the same story and that that was the reason that Ms Young did not have the mundane retaining wall. It may be concluded that they were committed to the same deceit as the Council and the Kings. Such knowledge is in any event drawn from the fact that the case was conducted on the basis of a supposed groundwater problem, which presupposed that the question of a retaining wall with associated drainage did not arise.

16   The conduct of the case on that basis allowed for a plausible justification for not joining the Council in the proceedings. That is, the undisclosed premise of the non-joinder was that the fact of building waste on no. 35 precluded a duty in the Council by allowing the Council to pretend that there was no a levels changing excavation and by implication that the occasion to consider a retaining wall did not arise.

17   Ms Young gave instructions multitudinous times to join the Council. Her instructions were rejected on each occasion. The instructions were rejected by her lawyers without disclosing (as they had a duty to do) that the basis of the decision or advice not to join the Council was that they contended that the Council had no apparent duty to have performed in a context where there had not been a levels changing excavation on the boundary. This serious nondisclosure confirms that the lawyers knew and intended that she did not know that the cases being conducted on the basis of the building waste story and intended to conceal that fact from her.

18   Further, the lawyers did not inform M. Young that there could not ever be a retaining wall, and the lawyers did this in circumstances where they had deliberately closed off the remedy of reinstatement by repeatedly refusing to join the Council in the proceedings.

19   The ambition that she should not discover that there could never be a retaining wall on the boundary of no. 35 and no. 37 was necessarily supported by an understanding and a devotion to the outcome Ms Young she would very shortly lose her home.

20   The engineers who worked on tine case as her purported experts did not tell her that there could never be a retaining wall. The engineers conducted the case on the basis that the issue was a groundwater problem which could not exist in a context in which a retaining wall is being contemplated to be constructed with associated drainage. They also did not disclose that that was the purport of their expert work.

21   The fact that as Mr Muriniti says in his evidence, a parallel watercourse was invented, is entirely consistent with a wish to have an independent expert create an obligation in Ms Young which is plausible without disclosing that in fact there can never be a retaining wall.

22   Significantly, the DA lodged in purported compliance with the undertaking was the subject of an agreement to represent to the Court involving her lawyers, her engineers, and the Kings’ lawyers and engineers that a retaining wall was achievable and to be achieved. This was despite the fact that each of the parties knew that there could not ever be a retaining wall and had conducted the case on the fabricated groundwater basis in order to vindicate the Council (At [--] in Young v King No 4 Chief Justice McClellan states that he was told that the problem was water flowing towards the footing and interrupted by it. His judgment makes plain that he was not only told about the parallel watercourse but was offered an account (for which all of the lawyers and experts were necessarily responsible) which would preclude it.)

23   Although a purported justification for the retaining wall was thus constructed on the basis that a parallel watercourse would make it possible, the Council was never told that the parallel watercourse had been purportedly discovered by the experts. This was although the Council had the DA for "a retaining -wall" on foot for more than two years.

24   Plainly, the "plausible" story as to how the retaining wall could exist because of a parallel watercourse was never going to be used to actually justify a retaining wall approval by the Council. In other words, there was never in fact going to be retaining wall. And the experts and lawyers (not to mention the Kings) had to be acting on the premise that Ms Young would not find that out, despite an undertaking to the Court, in which all of the lawyers and experts participated, that a retaining wall would be promptly constructed to address Ms Young's concerns.

25   Without a retaining wall the lots could not exist as separate lots, which indicates that the Council intention was to solve its problems (which included that the Kings had built basement rooms in the path of the watercourse which in fact crossed the boundary through a consolidation of lots and a real estate Development).

Endnotes

Decision last updated: 27 June 2019