Reimer v The Recorder of Titles Tasmania

[2004] TASSC 123

[2004] TASSC 123

CITATION:              Reimer v The Recorder of Titles Tasmania [2004] TASSC 123

PARTIES:  REIMER, Andrew Frederick
  REIMER, Ann Hilles
  v

RECORDER OF TITLES TASMANIA (THE)

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  M25/2004
DELIVERED ON:  8 November 2004
DELIVERED AT:  Hobart
HEARING DATES:  26 October 2004
JUDGMENT OF:  Underwood J

CATCHWORDS:

Procedure – Costs – Departing from the general rule – Other cases – Other cases – Respondent discharging statutory duties – Persons with interest in application not wishing to oppose – Opposition by respondent abandoned.

Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex Parte Lai Qin (1997) 186 CLR 622, distinguished.
Judicial Review Act2000 (Tas), s17(1).
Aust Dig Procedure [601]

REPRESENTATION:

Counsel:
             Applicants:  S B McElwaine
             Respondent:  T J Ellis SC
Solicitors:
             Applicants:  S B McElwaine
             Respondent:  Director of Public Prosecutions

Judgment Number:  [2004] TASSC 123
Number of Paragraphs:  24

Serial No 123/2004
File No M25/2004

ANDREW FREDERICK REIMER and ANN HILLES REIMER
v THE RECORDER OF TITLES, TASMANIA

REASONS FOR JUDGMENT  UNDERWOOD J

8 November 2004

1. The only issue left in dispute on this application is the appropriate order (if any) for costs. 

The circumstances giving rise to the application

1. The applicants live at 9 Stowell Avenue, Battery Point in Hobart.  In September 2002, the applicants bought the property next door, 11 Stowell Avenue, for $425,000.  It was an arms length transaction.  The applicants proposed to demolish the existing house at No 11 Stowell Avenue and erect two houses in its place.  The title to portion of the land on which it was proposed to build one of the two houses was acquired by adverse possession in 1996 upon an application by the applicants' predecessor in title. 

1. Land adjoining 11 Stowell Avenue used to belong to the Commonwealth of Australia.  There was a hospital or other health facility on that site but that use ceased some time ago.  In recent times the site was developed by the construction of a number of flats or units, so the title to the land was divided into a number of stratum titles.

1. The applicants persuaded the Hobart City Council to rezone 11 Stowell Avenue so they could apply for a permit to proceed with their project.  After an appeal to the Resource Management and Planning Appeal Tribunal, they obtained the requisite permit.  The existing house was demolished.  The applicants were poised to proceed further, but received a letter from the respondent Recorder of Titles.  It was dated 16 February 2004.  The letter advised the applicants:

"… it has been brought to the Recorder's attention that [part of the land had been acquired by adverse possession] is subject to easements, not noted on your title, acquired by the Commonwealth of Australia under the Land Acquisition Act 1906–1936 (A Commonwealth Act) and gazetted in the Commonwealth Gazette No 4 on the 10^th January 1946 as required under that Act."

Copies of titles and plans were attached to the letter which concluded:

"This being the case, the Recorder of Titles is considering using her powers under Sections 139 and 40 (3) (c) (i) of the Land Titles Act 1980 to supply the said easements to your title to burden the portion of your said Certificate of Title affected by the easements ('A B C D E F A').

If this is to be achieved, you may be requested to produce your Certificate of Title to this Office for cancellation and issue of new edition showing the same to be burdened by the said easements.

You may wish to discuss this letter with your solicitor or you may wish to telephone the writer, if so please feel free to do so."

1. The letter stated that the easements were for the benefit of the Commonwealth of Australia and that they were rights to pass over the land, to lay sewer and drainage pipes and to erect an electric transmission line.  Affidavit material filed on this application suggests that the land in respect of which the easements were said to exist used to be a private lane or road leading to Stowell House which was constructed in the 1830s.  In 1946, the Commonwealth acquired this land and adjoining land.  The claimed easements appear to have been unused for many years.  In 1957, a predecessor in title of the applicants erected a car port and planted a garden on the land said to be the subservient tenement and this eventually led to the grant of a title by adverse possession.

1. The applicants had no knowledge of any claim that their title was subject to easements when they bought it.  They were, of course, alarmed at the contents of the respondent's letter and immediately consulted Mr McElwaine.  Mr McElwaine searched the stratum titles of some of the owners of the former Commonwealth land and found that none of them were expressed to have the benefit of any easement.  On 24 February 2004, Mr McElwaine wrote a 2½ page letter to the respondent.  He set out six detailed and reasoned submissions why the respondent should not burden the applicants' title with the easements.  One of those arguments was that the applicants were bona fide purchasers for value without notice of the alleged burden on their title. 

1. There was a formal acknowledgement of Mr McElwaine's letter, and advice that it would be forwarded to the "office solicitors" for consideration and subsequent response.  Mr McElwaine sent an e-mail on 5 March seeking the respondent's urgent advice.  He received an e-mail the same day which advised that the officer writing the e-mail had "tried to receive further advice as to this matter from the Recorder but unfortunately she is not at work this afternoon …".  The next step was an e-mail from the office of the respondent to Mr McElwaine dated 10 March, which drew attention to a typographical error in Mr McElwaine's long letter.  Mr McElwaine's immediate response was an e-mail to acknowledge the error and to point out it did not affect the substance of the arguments put in his first letter, the principal one of which was that the applicants were bona fide purchasers for value without notice of any easements.  There was no response.  Mr McElwaine sent a further e-mail on 19 March.  An officer of the respondent replied on 20 March to the effect that he had written to the solicitors for the owners of some of the units erected on the former Commonwealth land setting out Mr McElwaine's arguments to the respondent and he was awaiting a response.

1. I infer that by 15 April Mr McElwaine had not heard from the respondent, as he sent an e-mail to the respondent that day requiring advice by 5pm the following day as to what decision the respondent proposed to make.  The e-mail advised that beyond that time it was likely that proceedings in this Court would be issued.  However, nothing transpired until 27 April 2004 when the respondent wrote to Mr McElwaine.  The letter said, in part:

"The Recorder has considered all the facts of this matter, including the opinion, given in your letter of 16^th March last.

Her decision is that the easements acquired for the Commonwealth of Australia, in Commonwealth Gazette No 4, gazetted on 10^th June 1946, will be supplied by this Office to C/t 123632/1, acting under Sections 40 (3)(e)(i) & 139 of the Land Titles Act 1980.

When the Certificate of Title is next produce to this Office it will be cancelled and a new rectified edition will issue in lieu."

1. The next day Mr McElwaine sent an e-mail to the respondent dated 28 April 2004, advising that he had instructions to make an application for a review of the respondent's decision pursuant to the Judicial Review Act 2000, s17(1). He asked whether, in view of those instructions, the respondent intended to implement her decision. The e-mail stated that if she did, it would be necessary for him to apply for an interim injunction to restrain her. The respondent's reply was somewhat enigmatic. It was sent about an hour after receipt of the e-mail from Mr McElwaine, and reads:

"The Recorder will supply the easements to C/T 123632/1 in the normal course of business.

This is presently running at about five business days (by close of business Wednesday 5th May next).

I would appreciate your early advice when application is made to the Supreme Court."

1. This application, together with a lengthy supporting affidavit, was filed on 30 April.  The only other course of action open to the applicants at this stage, was to abandon their project at considerable financial cost to them.  The date upon which the application was served on the respondent is unclear, but at all events, it appears that between 30 April and 3 May, there were discussions about this matter between Mr McElwaine and Mr Ellis SC, for on 3 May 2004, Mr Ellis sent an e-mail to Mr McElwaine with the following advice:

"I have instructions as discussed ie that the Recorder will undertake not to supply the easements to the CT if the applicants undertake not to do order suffer anything to be done which would interfere with the easements were they to be supplied."

There is no evidence of what response, if any, was given by Mr McElwaine to that proposal.  However, no application was made for an interlocutory injunction and the applicants' title has not been burdened with the easements.  I infer that the agreement propounded in Mr Ellis' e-mail was entered into.

The application and subsequent events

1. According to the originating application on the Court file, the Court fixed 3 April 2004 as the date for the return of the application, but that date is clearly erroneous.  On 3 May, Crawford J made an order transferring the application to the Principal Registry.  On 4 May, the Director of Public Prosecutions filed and served a notice of intention to appear.  The same day, Mr Ellis sent an e-mail to Mr McElwaine with some information about the title holders to the land that formerly belonged to the Commonwealth of Australia.  The application was listed for mention on 17 May.  Mr McElwaine asked Mr Ellis if, on that day, the respondent was going to file a notice of submission, as it was obvious that on that day the Court would order him to serve all those persons who would have the benefit of the easements if they were burdened on the applicants' title.  Mr Ellis' e-mail in reply said, in part:

"I filed a notice of intention to appear – but I will certainly retire gracefully and submit if those others who will be served are proper opposers (in fact, if they do nothing after service the Recorder may well take the view that if they don't care why should she)."

1. Thus it seems to me that at that stage, the respondent was taking an active part in the litigation, but indicating that she might subsequently simply submit to the Court's order and let those who provoked her into taking this action, and who had an interest in that action being implemented, resist a review of her decision.

1. The application came before the Court for mention on 17 May 2004 and an order was made that 26 title holders of nearby or adjoining land be served with the application and affidavit in support.  It was also ordered that an explanatory letter accompany service of those documents.  Those title holders were duly served in accordance with the order.  The application came on for mention again on 28 June.  All the persons served were called and none made an appearance.  The application was adjourned to a date to be fixed.

1. On 12 July, Mr McElwaine wrote to Mr Ellis:

"I inquire whether the Recorder of Titles will now take an active part in this proceeding or will she simply abide by any decision the court may make.  If the former, then what sort of an active role does the Recorder intend to take, especially given the observations of Blow J in R v RPDC (No 3) [2003] TASSC 84 at [7 – 8]?"

1. Mr Ellis responded on the same day:

"Without prejudice, the Recorder may well take the view that if the owners of the proposed dominant tenements can't be fussed why should she.

One did make some representations to us, but will stop short of becoming a party.

I'll finalise my instructions and get back to you.  Please don't run up costs in the meantime."

1. On 20 July, Mr Ellis wrote to Mr McElwaine to the effect that he had instructions to agree to the application on the basis that each party pay their own costs, so that orders could be made by consent provided the Court was agreeable.  There followed an exchange of correspondence about the issue of the costs of the application which is now before me for determination.

1. The application came on before me on 26 October 2004.  It was ordered by consent, that the decision of the respondent, evidenced by her letter dated 27 April 2004 be quashed.  Mr McElwaine then sought a declaration that the respondent does not have jurisdiction to correct an error or supply an omission pursuant to the Land Titles Act 1980, s139 by amending or affecting or enforcing the applicant's title with the easements. Mr Ellis did not consent to an order in those terms, but did not oppose the making of such an order. He rightly saw a declaratory order as a matter within the discretion of the Court. I heard submissions from Mr McElwaine. One of them was that because the applicants were bona fide purchasers for value without notice of the claim concerning the easements, the respondent did not have jurisdiction.  It is unnecessary to set out the other submission.  It was not in the original letter that Mr McElwaine sent the respondent.  I upheld both submissions and made the declaratory order.  There followed argument about whether there should be any order for costs, as the respondent did not oppose the application.

The contentions

1. Mr Ellis relied upon the following expression of principle in Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex Parte Lai Qin (1997) 186 CLR 622 at 625:

"If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases [there follows a footnote setting out a list of cases]."

1. The key to McHugh J's reasoning in Lai Qin is that absent a hearing, the court is not able to exercise its discretion upon the customary basis, viz, the successful party recovers its costs against the unsuccessful party.  See Latoudis v Casey (1990) 17) CLR 534.  At 624, his Honour noted that there may be cases where the court can conclude that one party has acted so unreasonably that it should pay the other party's costs.  His Honour then proceeded, at 624 – 625:

"In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd [1971] QWN 13, the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans."

1. McHugh J acknowledged that there may be a case where the court can be so confident that one party would have succeeded if the proceeding went to a determination, that costs can be awarded in favour of that party.  However, he held that absent the critical determinant on the costs issue, who did, or would have succeeded, there should ordinarily be no order for costs in a case where both parties acted reasonably and the proceedings settled or were discontinued prior to any determination. 

1. As I understand him, Stone J saw McHugh J's judgment in the same light when he wrote, in Harvey Norman Holdings Limited v Fels [2002] FCA 13, at par10:

"McHugh J cautioned that it is not for the court to predict the outcome of a hypothetical case. His Honour, however, recognised that in some cases the court may be able to conclude that one or other of the parties has acted unreasonably or that, although both acted reasonably, one party was almost certain to have succeeded if there had been a hearing on the merits. In relation to this latter category his Honour observed that 'such cases are likely to be very rare.' Finn J was presumably referring to such a case in O'Neill [2000] FCA 1680, where his Honour commented at 13 that:

'[W]here the discontinuance can be said to be an acknowledgment by an applicant of likely defeat or where no objective circumstance provides reason for the discontinuance, a costs order in favour of the other party will ordinarily be made'."

1. In the present matter, the application proceeded to a determination.  Ordinarily, then, the proper exercise of the discretion calls for an order for costs against the unsuccessful respondent.  But different considerations arise in this case.  The respondent holds a public office and has statutory duties and responsibilities.  She was acting in the exercise of her statutory power when she made the decision which was reviewed.  Pursuant to the Supreme Court Rules 2000, rr777E, 777F and 777G, the applicants had to serve the respondent with the application, but after service the respondent had a choice either to file and serve a notice of intention to appear, or to file and serve a notice of submission to the Court. In many cases the respondent to an application for a review will let the protagonists for and against the impugned decision argue the issue in this Court and avoid incurring an order for costs by simply submitting to such order as the Court may make.

Conclusion

1. At the time the application was filed, the Recorder had made it plain that she was going to burden the applicant's title with the easements within a matter of a few days.  This decision was taken after she had had Mr McElwaine's submission for two months, and after it had been referred to solicitors in the respondent's office and the solicitors acting for some of those who may have had the benefit of the easements.  I infer it was a considered decision.  The subsequent statement of intention to put the decision into effect within about 5 business days put the applicants in the position that the only course reasonably open to them was to commence these proceedings.  After Mr Ellis was instructed to act and a notice of intention had been filed, Mr McElwaine asked if the respondent was going to oppose the application or submit.  The only indication of the respondent's course of action was that "if those others who will be served are proper opposers" she will "gracefully retire", or alternatively, if those served do not oppose the application, the respondent, "may well take the view that if they don't care, why should she?"  In these circumstances, the applicants had no reasonable alternative but to proceed with their application by getting directions and serving all the persons whom they were directed to serve by order of this Court.  The respondent's position remained uncertain until Mr Ellis' letter of 20 July 2004 advising that she would consent to the orders sought other than the order for costs.

1. The importance of this issue to the applicants, who were about to commence building on the land over which it had been claimed that easements existed, and the respondent's course of action until 20 July made it reasonable that they proceed with the application to obtain a declaratory order that would make the future secure.  I should add that I am not suggesting that the respondent acted unreasonably, but she did resist the making of the orders sought until July 2004 and as they were made, she was the unsuccessful party to the application.  Accordingly, the proper exercise of the discretion calls for the making of an order that the respondent pay the applicants' taxed costs of the application.