Smart v Launceston City Council (No 2)
[2022] TASSC 48
•12 August 2022
[2022] TASSC 48
| COURT: | SUPREME COURT OF TASMANIA |
| CITATION: | Smart v Launceston City Council (No 2) [2022] TASSC 48 |
| PARTIES: | SMART, Rodney Charles |
| v | |
| LAUNCESTON CITY COUNCIL | |
| FILE NO: | 1269/2013 |
| DELIVERED ON: | 12 August 2022 |
| DELIVERED AT: | Hobart |
| HEARING DATE: | 15 June 2022 |
| JUDGMENT OF: | Brett J |
| CATCHWORDS: |
Procedure - Civil proceedings in State and Territory courts – Costs – General rule costs follow the event – General principles and exercise of discretion –Application for indemnity costs made by plaintiff following successful declaratory relief in its favour – Defendant a contradictor to proceedings only – Proceedings solely for plaintiff’s benefit – Each party to bear own costs.
Local Government Highways Act 1982, s 14.
Supreme Court Rules 2000, r 57
Supreme Court Civil Procedure Act 1932, s 12
BMI v Federated Clerks Union of Australia (NSW Branch) (1983) 76 FLR 141, 6 IR 416, referred to.
Oshlack v Richmond River Council (1998) 152 ALR 83, applied.
Aust Digest Procedure [1477]
REPRESENTATION:
Counsel:
Plaintiff: In Person Defendant: D Morris
Solicitors:
Plaintiff: In Person Defendant: Simmons Wolfhagen
| Judgment Number: | [2022] TASSC 48 |
| Number of paragraphs: | 15 |
Serial No 48/2022 File No 1269/2013
RODNEY CHARLES SMART v LAUNCESTON CITY COUNCIL
| REASONS FOR DECISION | BRETT J 12 August 2022 |
1 On 27 April 2022, I resolved this case in favour of the plaintiff by granting the declaratory relief sought by him. When I handed down the judgment, the plaintiff, who was legally represented throughout the proceedings until the conclusion of the trial, sought an order for costs. At that time, the application was in general terms, but in the course of subsequent submissions, the plaintiff has indicated that he seeks costs assessed on an indemnity basis.
2 The defendant opposes any order for costs. It argues, in essence, that it acted reasonably as a contradictor in respect of the proceedings, provided assistance to the Court in that role and did nothing to extend or prolong the proceedings or increase costs beyond that which would otherwise have been necessary for the plaintiff to obtain the claimed relief. Further, it argues that the plaintiff should be held to an agreement entered into between the parties' lawyers at an early stage in the litigation, whereby the plaintiff agreed not to claim costs in the event of his success in the action.
3 The power of this Court to award costs in respect of proceedings such as this is discretionary. See s 12 of the Supreme Court Civil Procedure Act 1932 and r 57 of the Supreme Court Rules 2000. Further, it is uncontroversial, as I understand it, that the usual rule applies with respect to the exercise of that discretion, that is, in the absence of good reason to make a different order, costs should follow the event. Finally, I must keep in mind that the purpose of a costs order is to compensate the successful party, not punish the defendant. The rational underlying the "usual order as to costs" was further explained by McHugh J in Oshlack v Richmond River Council (1998) 152 ALR 83:
"The expression the 'usual order as to costs' embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation."
4 The only relief that was sought in this action was the grant of the declaration ultimately made by me. There is ample authority for the proposition that a declaration should not be granted unless all affected parties have been joined to the proceedings and have had an opportunity to make submissions. Further, it is genuinely accepted that the grant of a declaration is a matter for the court, irrespective of the attitude of the parties. Declaratory relief should not normally be granted by consent, except in cases in which the issue to which the declaration relates concerns only the parties, such as in a case concerning the construction of a private contract. If a declaration is likely to have wider effect, including on the community generally, then the declaration should not be made by consent, but rather, is a matter for the determination of the court; BMI v Federated Clerks Union of Australia (NSW) Branch (1983) 76 FLR 141, 6 IR 416. This was clearly the position in this case because the subject land was owned by the defendant in its capacity as a municipal council and had a history of ongoing public user.
5 It follows logically, in my view, from this understanding of the nature of the proceedings, that an important consideration with respect to the exercise of the costs discretion is the plaintiff's need for the declaration. If the declaration was necessary to overcome the intransience or unreasonable conduct
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of the defendant, or the proceedings could otherwise have been avoided by an appropriate concession by the defendant, then it seems to me that there would be no reason why the usual order would not apply. However, if, as the defendant claims, the proceedings were unavoidable in any event, and it has done nothing else to prolong or increase their expense, then those circumstances would be relevant to whether the usual order should be displaced. To assess this question, it is necessary to have some regard to the background dispute and the events which led to the proceedings.
6 While the parties dispute various specific aspects of the history, it seems from their respective submissions that the general background is uncontroversial and, in any event, can be largely derived from the reasons for decision handed down on 20 September 2010 by Magistrate Hill, in a case which related to the laneway. In the mid-1990s, the previous owner of the plaintiff's land constructed a fence along the full portion of the common boundary between the plaintiff's land and the laneway, enclosing a portion of and thereby encroaching on the laneway. The plaintiff purchased the land with knowledge of the encroachment. In 2007, the defendant passed a resolution requiring the plaintiff to remove the fence. The plaintiff did not do so and no effort was made to enforce the resolution.
7 Thereafter, the parties entered into negotiations, which resulted in an agreement that the defendant would sell the land to the plaintiff. The defendant contends that, at that time, it assumed that the laneway was a local highway and accordingly, the land could not be transferred to the plaintiff unless that part of the laneway was closed as a highway pursuant to s 14 of the Local Government Highways Act 1982. It gave the required public notice of that intention. There were public objections which were then referred to the Magistrates Court (Administrative Appeals Division) in accordance with that provision. The magistrate determined that it was not in the public interest to accede to the closure. The primary reason for this decision was ongoing public user. His Honour consequently made a local highway order upholding the objections pursuant to s 14(7).
8 It is not necessary nor appropriate for the purpose of my decision to fully consider the legal implications of this decision. It is sufficient to observe that the case proceeded on the basis of an assumption by all concerned that the laneway was, indeed, a local highway. The plaintiff was given notice of and participated in the hearing. In fact, Mrs Smart seems to have provided evidence to the magistrate. It seems that no one, including the plaintiff, suggested or even raised the possibility that the laneway was not a local highway.
9 In the light of the magistrate's decision, it is difficult to see how the defendant could have subsequently transferred the relevant part of the laneway to the plaintiff without a declaration from this Court that the laneway was not a local highway. His Honour's decision assumed the laneway's status as a local highway as a jurisdictional fact. This was tacitly accepted by all parties involved in that case, including the plaintiff. Had it been challenged, then it would have been necessary for the magistrate to determine the question in order to establish his jurisdiction. His determination about this could have then been challenged on appeal. The plaintiff claims that he was given little notice of the hearing and, in any event, that he had disputed the status of the laneway as a local highway in discussions with the defendant in 2009. Whether or not this is so, the reality is that this matter was not disputed during the hearing, and provides the jurisdictional basis for the determination.
10 In my view, it would have been completely inappropriate, if not a contempt, for the defendant to then effectively ignore the decision and proceed to transfer the land to the plaintiff. This is so notwithstanding the correctness or otherwise of the assumption that the laneway was a local highway. I do not intend to determine whether some form of estoppel had arisen, but it would have been intolerable and unreasonable to expect the defendant to act contrary to the magistrate's decision, without the confirmation provided by the declaration. This is particularly so given its status as a municipal council.
11 In those circumstances, it was necessary for one or the other of the parties to commence an action for the declaration, if the encroachment issue was to be resolved in the manner originally agreed.
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I accept that this transfer was to rectify a problem that had been caused by the plaintiff's predecessor in title, and was solely for the plaintiff's benefit. It seems clear that the defendant had no interest or need to obtain the relevant declaration except to give effect to a transaction that was for the benefit of the plaintiff. I accept that from the defendant's point of view, the situation could also have been adequately resolved by removal of the encroaching structure.
12 It follows that the proceedings seeking the declaration were contributed to equally by each party having regard to the position taken before and during the proceedings before the magistrate. Although, as I have now found, the laneway was not then and never had been a local highway, the defendant's position at the time was not unreasonable or inappropriate. It was entitled to exercise a cautious approach, particularly given its responsibilities to the community generally, the interference with public user that would have resulted from the closure of the laneway, the general assumption that the land was a highway, and the fact that the closure was for the discrete purpose of solving the plaintiff's private difficulty. Of course, once the proceedings had been commenced, the defendant had no alternative but to participate in them until the court reached its decision. It was entitled, and indeed expected to act as a contradictor. I am satisfied that it took a balanced and reasonable approach to its role in that regard. It provided significant historical information to the plaintiff to assist him to make his case and at trial did not challenge or dispute any question of fact. All evidence was admitted by consent. The only role taken by the defendant's counsel was to make submissions as to the inferences which the court could or should draw. This was done in a balanced way and, in my view, the defendant appropriately and reasonably fulfilled its role as contradictor without causing any unnecessary expense in the conduct of the proceedings. In any event, as already discussed, even its concession that the laneway was not a local highway would not have avoided the need for an independant examination of the evidence by the Court.
13 A further issue which has been the subject of debate before me concerns an agreement between the legal representatives at an early stage of the proceedings concerning the question of costs. It seems that this agreement arose from a discussion between counsel at a directions hearing in 2014. The interpretation of the agreement by the plaintiff's lawyer, Mr McElwaine SC (as he then was), was that the defendant would "file a defence, file a list of documents as to the factual matters in dispute and thereafter take no further role in the proceedings". On that basis, the plaintiff would not make a claim for costs. On 11 December 2020, Mr McElwaine wrote to the defendant's lawyers in these terms:
"Doubtless as you will appreciate, the LCC has undertaken a far more active role in this litigation since 2014. On that basis, the plaintiff considers that the costs agreement is no longer binding."
14 I do not intend to determine whether or not this agreement is binding, nor its effect. It is not necessary to do so. Given what I have said about the need for and role of a contradictor in proceedings seeking declaratory relief, it is difficult to see how the defendant could have complied with the promise to "take no further role in the proceeding", and still have the proceedings resolved in favour of the plaintiff. The real issue is that on my assessment of the matter, the proceedings were not for the benefit of the defendant, the defendant had no option but to participate in them once commenced, and then did so reasonably and without unduly expanding or extending the hearing or the ambit of the issues requiring resolution, or causing any unnecessary cost.
15 Accordingly, I am of the view that in the particular circumstances of this case, I should depart from the usual order with respect to costs. In my view, it is just and reasonable that each party should bear their own costs of the proceedings. Accordingly, to give effect to that position, I make no order as to costs.
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