Ninkov v McKail
[2025] WASC 257 (S)
•24 JULY 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: NINKOV -v- MCKAIL [2025] WASC 257 (S)
CORAM: GETHING J
HEARD: ON THE PAPERS
DELIVERED : 24 JULY 2025
FILE NO/S: CIV 2284 of 2024
BETWEEN: MLADEN NINKOV as trustee of the FRICK TRUST
Plaintiff
AND
ALAN IAN MCKAIL
Defendant
Catchwords:
Costs - Plaintiff and defendant equally successful at trial
Legislation:
Rules of the Supreme Court (WA) O 66 r 1
Supreme Court Act 1935 (WA) s 37
Result:
No order as to costs
Some apportionment of disbursements
Category: B
Representation:
Counsel:
| Plaintiff | : | No appearance |
| Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | Bennett |
| Defendant | : | McLeod Fisher & Hamdorf |
Case(s) referred to in decision(s):
Carbone v Lamers (as Trustee for Ben and Debra Lamers Family Trust) [2025] WASCA 24
Frigger v Professional Services of Australia Pty Ltd (No 2) [2011] WASCA 103 (S)
Godden v Alford [1960] WAR 235
Harding and Anor v Essey and Anor [2005] WASCA 30
Hughes v St Barbara Ltd [2011] WASCA 234 (S)
Kalx Capital Securities Pty Ltd v Richardson 1 Pty Ltd [No 2] [2021] WASC 302 (S)
Keet v Ward [2011] WASCA 139
Latoudis v Casey (1990) 170 CLR 534
Manton Enterprises Pty Ltd as trustee for GPK No 2 Trust v Lt Market St Pty Ltd [2021] WASC 4 (S)
Ninkov v McKail [2025] WASC 257
Northern Territory v Sangare [2019] HCA 25; (2019) 265 CLR 164
Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72
Samsara Developments Pty Ltd v Public Transport Authority (WA) [2025] WASC 27 (S)
Strzelecki Holdings Pty Ltd v Jorgensen [2019] WASCA 96
GETHING J:
Introduction
The plaintiff, Mladen Ninkov, is the registered proprietor of 165 Waratah Place, Dalkeith (Plaintiff's Land). The defendant, Alan McKail, is the registered proprietor of adjacent land at 165A Waratah Place (Defendant's Land). There is a restrictive covenant on the Defendant's Land, benefitting the Plaintiff's Land, dating back to 18 June 1996 (Restrictive Covenant). Both of their properties overlook the Swan River. The Defendant's Land is situated between the Plaintiff's Land and the Swan River.
The defendant became the registered proprietor of the Defendant's Land on 14 December 2023. Soon afterwards, he commenced construction work in his backyard. The work is incomplete, construction having stopped pending the resolution of this dispute. The work, if permitted to be completed, will comprise:
(a)a louvered pergola (Pergola);
(b)an above ground swimming pool (Pool);
(c)a 2650 mm high wall (Wall); and
(d)a set of steps leading to the Pool (Pool Steps).
(together the Works).
Mr Ninkov asserted that Mr McKail breached the terms of the Restrictive Covenant by undertaking the Works. Mr McKail asserted that the Works fell outside the scope of the Restrictive Covenant.
The action (Action) went to trial. Following trial, I held that:[1]
(a)the Pool, Wall and Pool Steps were not constructed in breach of the Restrictive Covenant;
(b)the Pergola was constructed in breach of the Restrictive Covenant; and
(c)a mandatory injunction should be made requiring the removal of the Pergola.
[1] Ninkov v McKail [2025] WASC 257 (Trial Judgment).
On 30 June 2025, after making the substantive orders, I reserved the issue of costs to be determined on the papers after the filing of written submissions from the parties. The parties were given until 21 July 2025 to file submissions.
Mr Ninkov filed submissions on 21 July 2025 (Plaintiff Submissions). Mr McKail filed submissions on 22 July 2025 (Defendant Submissions) (with my leave).
For the reasons which follow, the appropriate costs order is that there be no orders as to the costs of the Action, with some apportionment of disbursements.
Principles
The costs of and incidental to the Action are in the discretion of the court.[2] The discretion is wide.[3] The discretion is unfettered or unconfined in the sense that it contains 'no positive indication of the considerations upon which the court is to determine by whom and to what extent costs are to be paid'.[4] However, it must be exercised judicially, that is, in accordance with established principles and factors directly connected with the litigation, and not arbitrarily, capriciously or so as to frustrate the legislative intent.[5] It must be exercised so as to achieve what is fair and just between the parties according to the circumstances of the particular case.[6] The court 'should carefully examine the realities of the case in hand, and should so frame its order that justice shall, so far as costs are concerned, be nearly as possible done between the parties'.[7]
[2] Supreme Court Act 1935 (WA) s 37(1).
[3] Strzelecki Holdings Pty Ltd v Jorgensen[2019] WASCA 96 [48] (judgment of the court) (Strzelecki); Carbone v Lamers (as Trustee for Ben and Debra Lamers Family Trust) [2025] WASCA 24 [28] (Quinlan CJ) (Carbone).
[4] Hughes v St Barbara Ltd [2011] WASCA 234 (S) [5] (reasons of the court); Strzelecki [48].
[5] Northern Territory v Sangare[2019] HCA 25; (2019) 265 CLR 164 [24] (Kiefel CJ, Bell, Gageler, Keane and Nettle JJ); Strzelecki [48].
[6] Latoudis v Casey (1990) 170 CLR 534, 558 (Dawson J); Carbone [28]; Manton Enterprises Pty Ltd as trustee for GPK No 2 Trust v Lt Market St Pty Ltd [2021] WASC 4 (S) [7] (Strk AM).
[7] Godden v Alford[1960] WAR 235, 237 (judgment of the court); cited in Harding and Anor v Essey and Anor [2005] WASCA 30 [29] (Pullin J).
The Rules of the Supreme Court 1971 (WA) (RSC) provide guidance about the sound exercise of the discretion.[8] RSC O 66 r 1(1) provides that subject to the express provisions of any statute and of the rules of court, and without limiting the generality of the discretion to make a costs order, the court will generally order that the successful party to any action or matter recovers its costs.
[8] Kalx Capital Securities Pty Ltd v Richardson 1 Pty Ltd [No 2] [2021] WASC 302 (S) [8] (Allanson J) (Kalx); Keet v Ward [2011] WASCA 139 [18] (reasons of the court).
Whether a party is successful is to be determined by the reality of the circumstances involved in the case, by which party has succeeded in the underlying real contest.[9] In relation to this principle, in Strzelecki the Court of Appeal observed:[10]
Under O 66 r 1(3) RSC, where a party, though generally successful in an action, has, by the introduction of some issue or issues on which it has failed, increased the costs, the Court may order such party to pay the costs of such issue or issues. It is well-recognised that an order that a successful party recover only a portion of its costs, where it has not been wholly successful, should not be made as a matter of course, for at least two reasons. First, it is often the case that a successful party will not succeed on every issue raised. Secondly, to attempt, in every case, an analysis of which party was successful on which issue would add uncertainty and complexity to the outcome of litigation, and add to the time and cost of costs arguments…Consequently, the power to apportion costs in this way should only be exercised where there are discrete and severable issues on which the generally successful party failed, and which added to the cost of the proceedings in a significant and readily discernible way… Furthermore, while parties should be encouraged to consider carefully what matters they put in issue, justice may not be served if, by too ready a resort to deciding questions of costs according to success on particular issues, parties are dissuaded by the risk of costs from canvassing all issues which might be material to the decision in the case…
Where the Court decides, in the exercise of its discretion, to modify the usual costs orders to reflect the limited success of the successful party, that power will be exercised broadly, and as a matter of impression, and without any attempt at mathematical precision (which is likely to prove illusory in any event)… That approach reflects the fact that it may be difficult to separate the factual and evidentiary substratum of different issues, … the fact that some issues are more important than others, and the fact that some issues are subsidiary to others.
[9] Oshlack v Richmond River Council[1998] HCA 11; (1998) 193 CLR 72 [70] (McHugh J); Strzelecki [50]; Frigger v Professional Services of Australia Pty Ltd (No 2)[2011] WASCA 103 (S) [12] (reasons of the court); Kalx [10].
[10] Strzelecki [51] - [53] (references omitted).
Where a party does not succeed on all issues, costs may be apportioned to reflect 'the time and resources allocated' to certain issues raised.[11]
[11] Samsara Developments Pty Ltd v Public Transport Authority (WA) [2025] WASC 27 (S) [30] (Russell M).
Plaintiff's submissions
The plaintiff submits that the appropriate costs order is that the defendant pays the plaintiff's costs (including reserved costs) of the Action, to be assessed if not agreed. In the alternative, if contrary to the plaintiff's position apportionment is applied, it seeks and order that the defendant pay 80% of the plaintiff's costs (including reserved costs) of the proceedings, to be assessed if not agreed.
The plaintiff says that he was successful on the 'key issue' in that:
(a)he succeeded in establishing that the Pergola breached the Restrictive Covenant and obtained a mandatory injunction requiring its removal;
(b)a finding was made that the Pergola interfered with the visual corridor from the Plaintiff's Land to the Swan River, a primary purpose of the Restrictive Covenant;[12] and
(c)the relief granted is substantial and directly addresses the plaintiff's primary concern regarding the preservation of his property's amenity.
[12] Trial Judgment [177], [269].
The plaintiff also says that he:
(a)sought legal advice promptly upon noticing the construction Works, contacting his lawyers on 9 April 2024;[13]
(b)engaged a surveyor to verify the location and height of the structures;[14] and
(c)progressed litigation diligently, with no unreasonable delay.[15]
[13] Trial Judgment [47].
[14] Trial Judgment [51].
[15] Trial Judgment [286].
The plaintiff submits that, based on the findings of the court, neither party have acted unreasonably either before or after the litigation commenced. The plaintiff notes the court's finding that it would have been prudent for the defendant to have approached the plaintiff and to engage into discussions as to whether or not the planned Works would breach the Restrictive Covenant.[16] However, this finding can be contrasted with the court's finding that had the plaintiff raised a complaint earlier the defendant would have stopped work.[17]
[16] Trial Judgment [283].
[17] Trial Judgment [106].
The plaintiff further submits that apportionment is inappropriate as:
(a)the issues in the proceedings were not discrete or severable in a manner that justifies apportionment of costs;
(b)the plaintiff's claims regarding the Pool, Wall, Pool Steps, and Pergola all arose from the same legal and factual matrix, namely the interpretation of cl 1(c) of the Restrictive Covenant and its application to uncontested facts;
(c)the evidence, including survey reports and expert testimony, was relevant to all structures, and the legal arguments concerning the covenant's application were interconnected;
(d)it cannot be said that the unsuccessful issues significantly increased the costs and were clearly separable;
(e)the interconnected nature of the issues means that apportioning costs would be artificial and contrary to the broad, impressionistic approach to the exercise of costs discretion; and
(f)attempting to isolate costs for the unsuccessful claims would add unnecessary complexity and uncertainty.
In the alternative, if the court is minded to apportion costs, the plaintiff submits that he should be awarded at least 80% of his costs of the proceedings. This is because the proceedings, as a whole, can properly be regarded as having three components, namely:
(a)the construction of the Restrictive Covenant;
(b)the claim for relief for the defendant be enjoined to remove any buildings or other structures in breach of the Restrictive Covenant; and
(c)the unsuccessful defences - award of nominal damages, laches, delay and acquiescence.
The mandatory injunction was granted, thereby rejecting the defences of nominal damages, laches, delay and acquiescence. This, says the plaintiff, represents a significant outcome, justifying a substantial costs award.
Given the commonality of evidence across all claims, a reduction of no more than 20% would balance the plaintiff's substantial success with the interconnected nature of the issues litigated. This would reflect the reality of the circumstances and the relative success of the parties.
Defendant's submissions
The defendant submits that the appropriate costs order is that:
(a)the plaintiff pays 75% of the defendant's costs, to be taxed if not agreed; and
(b)the defendant pays 25% of the plaintiff's costs (including reserved costs), to be taxed if not agreed.
The defendant submits that the way the proceedings were conducted and assessed clearly separated the matter into six discrete and severable issues.
The first was the proper interpretation of cl 1(c) of the Restrictive Covenant. The defendant's submission is to the effect that my interpretation was more consistent with the defendant's interpretation that the plaintiff's interpretation.
The second to fifth issues was a consideration of whether each of the Pergola, Pool, Pool Steps and Wall were in breach of cl 1(c). The defendant says that each structure was different and was to be interpreted differently under the Restrictive Covenant. Each item was considered separately and the facts associated with each structure required unique and separate analysis against the Restrictive Covenant. The defendant was successful on three of these four issues.
The defendant says that had the plaintiff brought the Action only in relation to the Pergola, the defendant's costs would have been significantly less by way of not having to:
(a)analyse the compliance of those structures against the Restrictive Covenant;
(b)consider expert evidence related to the Pool, Pool Steps and Wall;
(c)include written submissions on those structures;
(d)lead evidence at trial as to the plaintiff's knowledge of the construction of those structures; and
(e)lead evidence as to the costs associated with construction and removal of the other structures.
The sixth issue was the injunction. The defendant contends that whilst the plaintiff was ultimately successful in arguing that an injunction should be granted for the removal of the Pergola, the parties had to prepare their respective cases on the basis that all of the Works could be subject to an injunction. Evidence was led by the defendant in support of his position that no injunction should be granted for any of the Works. This included evidence as to the costs of construction and removal of the Pool, Pool Steps and the Wall. The defendant submits that whilst the plaintiff successfully argued for the granting of an injunction to remove the Pergola, he should not be awarded all his costs associated with that issue.
In summary, the defendant submits that he was substantially successful in defending the Action and therefore should not be penalised for costs on issues on which he failed. This is particularly relevant considering the plaintiff elected to sue the defendant, who ultimately had to defend the Action or risk having to remove all the Works. Whilst the defendant did not make attempts to settle the litigation, he was given little option other than to defend the Action, or risk being ordered to remove all the Works from his property.
The defendant submits that the court's discretion should be exercised broadly and as matter of impression having considered the case. If that is the case, the defendant says he should be awarded most of his costs and the plaintiff only be entitled to a small percentage of his costs.
Determination
As will be apparent from my descriptions of the Works in the Trial Judgment and the photographs annexed to the Trial Judgment, the Pool, the Wall and the Pool Steps are part of the same structure (which I will refer to together as the Pool Structure). Once this is appreciated, the effect of the Trial Judgment is that, in my assessment, the plaintiff and the defendant were equally successful. The plaintiff was successful in establishing that the Pergola was constructed in breach of the Restrictive Covenant and that a mandatory injunction should be made requiring the removal of the Pergola. The defendant was successful in its argument that the Pool Structure was not constructed in breach of the Restrictive Covenant.
I agree with the plaintiff's submission that neither party have acted unreasonably either before or after the litigation commenced. So this factor is neutral to the assessment of costs.
This is not a case in which the issues regarding the Pergola and the Pool Structure were discrete and severable. For example, much time and effort was spent on the proper construction of the Restrictive Covenant, an issue impacting on both the Pergola and the Pool Structure.
A purist approach where parties are equally successful would lead to an order that each party receive half its taxed costs from the other. However, this would mean each party would have to go through the taxation process. In my broad assessment, with one caveat, the taxed costs and disbursements of each party would be more or less the same. So, the two costs orders would practically net each other out. The costs of going through the taxation process would be wasted. The same substantive result is more cost effectively achieved by making no order as to costs.
The caveat is in relation to the significant disbursements incurred by the plaintiff, but not by the defendant. The plaintiff bore the cost of obtaining the reports from Mr Booth and Mr Simons and their attendance at trial. He should be reimbursed by the defendant for 50% of these disbursements. Payment should be made within 7 days of the plaintiff providing the defendant with copies of the supporting invoices. In the (unlikely) event of a dispute as to the amount, there will be liberty to apply so that no further cost or delay is incurred by a taxation process. The defendant should also pay 50% of the filing fee ($1,911) and trial listing fee ($4,462), being $3,186.
With that caveat, in this case, where both parties were equally successful, no order as to costs would, in my view, be fair and just as between the parties in the particular circumstances of this case. It would ensure that, so far as costs are concerned, as nearly as possible justice has been done between the parties. The appropriate costs order is:
1.Subject to Order 2 and Order 5, there be no order as to the costs and disbursements of the Action (including reserved costs).
2.The defendant pay 50% of the plaintiff's disbursements for Shane Simons and Andrew Booth relating to this matter.
3.Payment of the amount in Order 2 be made within 7 days of service of the invoices supporting the plaintiff's claim.
4.There be liberty to apply in the event of a dispute as to the amount claimed in Order 2.
5.The defendant pay 50% of the filing fee and trial listing fee paid by the plaintiff, fixed in the amount of $3,186, within 7 days of the date of this order.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
OS
Associate to the Honourable Justice Gething
24 JULY 2025
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