The Council of the City of Shoalhaven v National Parks and Wildlife Service (No. 2)

[2003] NSWLEC 273

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Land and Environment Court

of New South Wales

CITATION:

The Council of the City of Shoalhaven v National Parks and Wildlife Service and Ors (No. 2) [2003] NSWLEC 273

PARTIES:

APPLICANT/FIRST CROSS RESPONDENT
The Council of the City of Shoalhaven

FIRST RESPONDENT
Director General, National Parks and Wildlife Service

SECOND RESPONDENT/CROSS APPLICANT
The Minister administering the National Parks and Wildlife Act 1974

THIRD RESPONDENT/ SECOND CROSS RESPONDENT
The Estate of the late H. L. Halloran

FOURTH RESPONDENT/ THIRD CROSS RESPONDENT
Irrayadda Pty Ltd

FIFTH RESPONDENT/ FOURTH CROSS RESPONDENT
Warren Halloran

SIXTH RESPONDENT
The Minister administering the Environmental Planning and Assessment Act 1979

FILE NUMBER(S):

40152 of 2001; 30048 of 2002

CORAM:

Cowdroy J

KEY ISSUES:

Costs :- application for Bullock order - whether costs of successful respondent should be paid by unsuccessful respondents - whether order for costs should include the costs of a discrete issue in respect of which the unsuccessful respondents succeeded.

LEGISLATION CITED:

Land Acquisition (Just Terms Compensation) Act 1991, Pt 2 Div 3, s 4(1), s 21, s 22
Land and Environment Court Act 1979, s 20

CASES CITED:

Allman v Daly (No 2); Allman v Country Roads Board [1959] VR 614;
Almeida v Universal Dye Works Pty Limited and Ors (No. 2) [2001] NSWCA 156;
Bullock v The London General Omnibus Company and Others [1907] 1 KB 264;
Canterbury Municipal Council v Taylor and Ors (No. 2) [2002] NSWCA 96;
Cretazzo v Lombardi (1975) 13 SASR 4;
Gould and Another v Vaggelas and Others (1984-1985) 157 CLR 215;
Hall v Wilson [1954] VLR 576;
Hughes v Western Australian Cricket Association (Inc.) & Ors (1986) ATPR 40-748;
Johnsons Tyne Foundry Proprietary Limited v President, Ratepayers and Councillors of the Shire of Maffra (1948) 77 CLR 544;
Lackersteen v Jones and Others (No 2) (1988) 93 FLR 442;
Mulready v J.H & W. Bell, Ltd and Another [1952] 2 All ER 215;
Sanderson v Blyth Theatre Company [1903] 2 KB 533;
Sved and Anor v Council of the Municipality of Woollahra and Ors (1998) NSW ConvR 55-842

DATES OF HEARING:

07/11/2003

DATE OF JUDGMENT:

12/04/2003

LEGAL REPRESENTATIVES:

APPLICANT
Mr J. Webster SC

SOLICITORS
Morton & Harris

FIRST RESPONDENT
Ms J. Jagot (Barrister)

SOLICITORS
Crown Solicitors

SECOND RESPONDENT
Ms J. Jagot (Barrister)

SOLICITORS
Crown Solicitors

THIRD RESPONDENT
N/A

FOURTH RESPONDENT
N/A

FIFTH RESPONDENT
N/A

SIXTH RESPONDENT
N/A

JUDGMENT:

IN THE LAND AND

ENVIRONMENT COURT

OF NEW SOUTH WALES

40152 of 2001
30048 of 2002

Cowdroy J

4 December 2003

The Council of the City of Shoalhaven

Applicant/First Cross Respondent

v

Director General, National Parks and Wildlife Service

First Respondent

The Minister administering the National Parks and Wildlife Act 1974

Second Respondent/Cross Applicant

The Estate of the late H.F. Halloran

Third Respondent/Second Cross Respondent

Irrayadda Pty Ltd

Fourth Respondent/Third Cross Respondent

Warren Halloran

Fifth Respondent/Fourth Cross Respondent

The Ministering administering the Environmental Planning and Assessment Act 1979

Sixth Respondent

Judgment No. 2 - Costs

Introduction

1 On 18 July 2003 the Court delivered judgment in these proceedings. Order 4 of the orders made by the Court is as follows:-

4. An order that the first respondent and second respondent pay the applicant’s costs of these proceedings unless an application is made to the Court within 28 days of this judgment.

2 Pursuant to such leave, the first and second respondents filed a notice of motion on 6 August 2003 seeking the following order:-

That order 4 made by the Court on 18 July 2003 be varied to read “An order that the First Respondent and Second Respondent pay the Applicant’s costs of these proceedings other than:
(i) the costs of the Applicant of and incidental to the Applicant’s claim against the Sixth Respondent; and
(ii) the costs of the Applicant of and incidental to its claim in paragraphs 2 and 3 of the Further Amended Class 4 Application dated 22 July 2002 that it has an interest in the roads in Deposited Plans 8515, 8516 and 8517”.

History of the proceedings

3 The applicant sought various declarations and orders to have certain lands owned by it at Jervis Bay (“the subject lands”) acquired by either the first or second respondents (“the principal claim”) pursuant to the Jervis Bay Regional Environmental Plan 1996 (“the JBREP”). An additional issue concerned the ownership of the fee simple in various roadways within the subject lands (“the roads issue”).

4 Points of defence were filed on 19 December 2001 by the first respondent which claimed that it was not empowered to acquire the subject lands. On 19 July 2002 the applicant was granted leave to join the second, third, fourth, fifth and sixth respondents to the class 4 proceedings.

5 In the Court’s judgment dated 18 July 2003 the Court held in favour of the applicant in respect of the principal claim and declared that the first respondent as agent of the second respondent was empowered to acquire the subject lands pursuant to the JBREP and was ordered to do so. However the Court held that the applicant’s claim in respect of the roads issue should be dismissed. The proceedings against the sixth respondent were dismissed. The applicant was ordered to pay the costs of the sixth respondent.

6 The applicant did not file a notice of motion to vary the existing orders but it seeks an order that order 4 made on 18 July 2003 constitutes a Bullock order (see Bullock v The London General Omnibus Company and Others [1907] 1 KB 264). Such an order would entitle the applicant to recover the costs which it would be liable to pay to the sixth respondent from the first and second respondents. Alternatively the applicant seeks a Sanderson order (see Sanderson v Blyth Theatre Company [1903] 2 KB 533), requiring the direct payment of the sixth respondent’s costs by the first and second respondents.

7 The applicant also claims that order 4 made on 18 July 2003 should include its costs in respect of the roads issue.

Applicant’s submissions

8 The applicant claims to be entitled to a Bullock order or a Sanderson order because of the first and second respondents’ denial of any liability to acquire the subject lands. The applicant claims that it was appropriate to join the sixth respondent to ensure that if the Court held the first respondent was not empowered to acquire the subject lands, the Court could order the sixth respondent to nominate the relevant public authority under the JBREP. The applicant referred the Court to an affidavit of Mr Grant Norman Gleeson sworn 1 July 2002 which deposed at par 15:-

Insofar as the matters raised by the Director General are technicalities which go to the proper person whom should be designated to acquire the land, I am instructed to seek leave of the Court to join in these proceedings, for the purpose of resolving all doubt, the Minister administering the Environmental Planning & Assessment Act so as to ensure that the relevant public authority under the Jervis Plan be determined and bound by any orders made by this Court.

9 The applicant submits that it was not until the eve of the hearing that the first and second respondents indicated that whilst they would not consent to an order being made against the second respondent, they would not oppose any order made to the contrary. However the first and second respondents maintained that they would oppose an order made against the first respondent. The applicant submits that the defence of the first and second respondents which included the raising of the issue concerning the validity of the JBREP (this defence being denied by the first and second respondents), required the applicant to join the sixth respondent. In these circumstances the applicant says it was justified in joining the sixth respondent.

10 The applicant additionally submits that the costs relating to its unsuccessful claim to an interest in the fee simple in the roads should be borne by the first and second respondents. It submits the roads comprised an integral part of the subject lands which the council sought to have acquired and that it was necessary for that issue to be resolved. It was an issue which was closely related to the principal claim.

First and second respondents’ submissions

11 The first and second respondents submit that the applicant needs to establish more than the mere fact that it felt it appropriate to join the sixth respondent because the first and second respondents denied liability, and allegedly put in issue the validity of the JBREP.

12 The first and second respondents rely upon the principles referred to by Giles J in Sved and Anor v Council of the Municipality of Woollahra and Ors (1998) NSW ConvR 55–842 which have been subsequently approved by the New South Wales Court of Appeal in Almeida v Universal Dye Works Pty Limited and Ors (No. 2) [2001] NSWCA 156 and in Canterbury Municipal Council v Taylor and Ors (No. 2) [2002] NSWCA 96.

13 The first and second respondents submit that the claims against the sixth respondent were legally and factually distinct from those made against them. The first and second respondents say that they never challenged the validity of the JBREP, which became an issue solely between the applicant and the sixth respondent. The sixth respondent filed a notice of motion on 30 August 2002 for summary dismissal of the applicant’s proceedings against it on the ground that the claim against it was so distinct from claims made against the first and second respondents. That motion came before Talbot J in this Court on 28 October 2002. The first and second respondents claim that the applicant opposed the notice of motion but this fact is not agreed. The motion was adjourned to the hearing of the proceedings. The first and second respondents submit that had the Court summarily dismissed the applicant’s claims against the sixth respondent, any question of costs would not have concerned the first and second respondents, but would have been an issue between the applicant and the sixth respondent.

14 Secondly, the first and second respondents maintain that the claim against the sixth respondent was not properly or reasonably instigated. The first and second respondents submit that the Court did not have jurisdiction in respect of the applicant’s claim against the sixth respondent since it was brought pursuant to the Land Acquisition (Just Terms Compensation) Act 1991 (“the Just Terms Act”) which is not a statute listed in s 20(1) of the Land and Environment Court Act 1979 and is not defined in s 20(3) as a “planning or environmental law”. Additionally the first and second respondents submit that the claim against the sixth respondent was dependent upon the provisions of s 21(4) and s 21(5) of the Just Terms Act. Section 22 of the Just Terms Act does not enable an owner of land which is an “authority of the State”, as defined in s 4(1) thereof, to request the acquisition of land under Pt 2 Div 3. An “authority of the State” is defined to include a local government council. For these two reasons the first and second respondents submit that the applicant’s claim against the sixth respondent could not have succeeded.

15 Thirdly, the first and second respondents submit that they have not engaged in conduct which suggested or encouraged the applicant to believe that it should look to the sixth respondent for relief. The sixth respondent was unilaterally joined by the applicant.

16 In respect of the roads issue the first and second respondents submit that the applicant bore the onus of proof to establish that it had an interest in the roads. It was held in the judgment that the applicant failed to discharge the onus of proof in respect of this issue. Consequently the Court dismissed the class 3 application and made a declaration pursuant to the class 4 cross-application brought by the first and second respondents that only the second respondent had an interest in the roads within the subject lands. In this respect the first and second respondents were successful: see par 8 of the judgment.

17 The first and second respondents rely on the observations of Toohey J in Hughes v Western Australian Cricket Association (Inc.) & Ors (1986) ATPR 40–748 and submit that where a litigant has succeeded only upon part of its claim, the circumstances may make it reasonable that it should bear the costs of the portion upon which it has failed.

Applicant’s submissions in reply

18 The applicant submits that mere fairness does not enter into the exercise of judicial discretion in the making of a Bullock order. The applicant relies upon the observations of Santow AJA in Almeida v Universal at par 34:-

There must also be some sufficient element in the conduct of the unsuccessful defendant which makes it reasonable and proper to join the successful defendant (Brennan J) or fair for such a cost order to be made against the unsuccessful defendant (Gibbs CJ).

Such quotation refers to the observations in Gould and Another v Vaggelas and Others (1984-1985) 157 CLR 215 per Gibbs CJ at p 229 to p 230 and Brennan J at p 260. The applicant submits that the first and second respondents conducted themselves in a manner which raised significant issues, namely that the first respondent had no power to acquire the subject land pursuant to the JBREP; that the nomination of the first respondent in cl 18 of the JBREP made it incapable of performance and was therefore invalid; and that the sixth respondent had nominated an invalid authority to acquire the subject land. The first and second respondents dispute that they ever raised such matters.

19 The applicant submits that because of the doubt which existed concerning the applicant’s entitlement to have the subject lands acquired, the joinder of the sixth defendant was justified. It maintains that it was the first and second respondents who asserted that liability lay with the sixth respondent failing to act in accordance with its powers. Accordingly the claim against the sixth respondent was not doomed to fail and that such claim could be determined within the ancillary jurisdiction of the Court.

Findings

20 It is well established that the Court must enquire whether it was reasonable for the applicant to have joined the sixth respondent and that it is just for the applicant to be indemnified by the first and second respondents for the costs it has incurred against the sixth respondent. In Gould v Vaggelas, Gibbs CJ at p 230 said:-

In my respectful opinion the true position was clearly stated by Blackburn C.J. in Steppke v. National Capital Development Commission (1978) 39 L.G.R.A. 94 at p. 100; 21 ACTR 23, at pp. 30-31), when he said that “there is a condition for the making of a Bullock order, in addition to the question whether the suing of the successful defendant was reasonable, namely that the conduct of the unsuccessful defendant has been such as to make it fair to impose some liability on it for the costs of the successful defendant”.

21 In Sved the plaintiffs had purchased a dwelling which had been the subject of unauthorised building work. The plaintiffs sued the former owners, the builders and the local government authority, namely the Council of the Municipality of Woollahra (“the Council”). The Court upheld the claim for damages against the Council but not against the other defendants. Giles J determined that the Council should have a Bullock order made against it since the Council had suggested, prior to the commencement of the proceedings, that the builders were liable. In documents disclosed by the Council to the plaintiffs before proceedings were commenced, Council maintained that liability, if any, would be limited to the defective drainage system. Accordingly the Court determined that it would not be easy for Mr and Mrs Sved to identify the correct Court tortfeasor. Giles J held at p 56,605 in summary that, “[i]t is not sufficient for the making of a Bullock order that it was reasonable for the plaintiff to bring the proceedings against both defendants…”. Such an order may be made where “the costs have been reasonably and properly incurred by the plaintiff between it and the unsuccessful defendant”. His Honour observed at p 56,605:-

…it has also been said that the conduct of the unsuccessful defendant must have been such as to make it fair to impose some liability on it for the costs of the successful defendant, or that the conduct of the unsuccessful defendant must show that the joinder of the successful defendant was reasonable and proper to ensure of recovery of the damages sought.

At p 56,605 His Honour stated the following test to ascertain whether the conduct is reasonable:-

The difference in formulations is probably more apparent than real, as reasonableness as between the plaintiff and the unsuccessful defendant will normally be demonstrated by some conduct of the unsuccessful defendant which made it proper that the successful defendant be joined or that the unsuccessful defendant should bear the costs of the successful defendant.

22 In Almeida v Universal the relationships between the three defendants was uncertain and confusing causing the plaintiff to bring a damages claim against all three. At first instance the plaintiff failed against all three defendants but on appeal succeeded against one defendant, namely Universal. Such conduct satisfied the test explained by Giles J in Sved at p 56,605. Priestley JA held that the meaning of “conduct” in the test formulated by Giles J is not limited to “conduct either at the time the plaintiff’s intended litigation was known to the other party or conduct after the litigation commenced.” His Honour said at par 8:-

In my view any conduct by the defendant or state of affairs in which the defendant is an integral part which makes it fair and reasonable for other parties to be joined as defendants will be relevant to deciding on fair costs orders.

Santow AJA stated at par 32:-

In order for a Bullock order to be made in favour of a plaintiff against an unsuccessful defendant, the conduct of that defendant must have been such as to make it fair, as between plaintiff and unsuccessful defendant, to impose some liability on it for the costs of the successful defendant; see Gould v Vaggelas (1984) 157 CLR 215 per Gibbs CJ at 565-6. Brennan J (at 579) formulated the test in these terms: "the conduct of the unsuccessful defendant in relation to the plaintiff's claim against him showed that the joinder of the successful defendant was reasonable and proper to ensure recovery of the damages sought". This formulation requires not only fairness in the sense of what is proper, but also reasonableness. It focuses on the joinder of the successful defendant.

23 In Canterbury Municipal Council v Taylor the parties disputed the costs order that should be made following an earlier related judgment in which damages were apportioned 25% against Mr Taylor, 50% against Canterbury Municipal Council and 25% against the third cross-respondent. A Bullock or Sanderson order was sought by Mr Taylor against Canterbury Municipal Council and the third cross-respondent. The application was initially heard by the primary judge before which Mr Taylor stated that it was reasonable to join all the defendants as he was uncertain which of the defendants to pursue. Ipp AJA (as he then was) agreed with the primary judge’s observations that Mr Taylor had independently determined to sue all the defendants and it was not the arguments of Canterbury Municipal Council that caused him to maintain his claim against the remaining defendants. Ipp AJA also held that while each claim against the defendants alleged a breach of a duty of care, there was a distinction between each claim arising from the differences in the scope of the duty of care that each defendant owed. In these circumstances the Court did not grant a Bullock order or Sanderson order.

24 The principles referred to in the above authorities clearly establish that to enable an applicant to succeed in obtaining a Bullock order in respect of the costs of the sixth respondent, it must show that the conduct of the first and seconds respondents was such as to make it fair and reasonable to impose liability on them. The conduct of the first and second respondents may indicate whether it was reasonable for the applicant to join the sixth respondent: see Giles J in Sved. However the mere fact that the joinder was reasonable does not always justify the making of a Bullock order. Gibbs CJ in Gould v Vaggelas observed at p 229:-

In my respectful opinion, however, the mere fact that the joinder of two defendants was reasonable does not mean that the unsuccessful defendant should be ordered to pay, directly or indirectly, the costs of the successful defendant. Obviously a judge should make a Bullock order only if he considers it just that the costs of the successful defendant should be borne by the unsuccessful defendant, and, if nothing that the unsuccessful defendant has said or done has led the plaintiff to sue the other defendant, who ultimately was held not to be liable, it is difficult to see any reason why the unsuccessful defendant should be required to pay for the plaintiff’s error or overcaution.

25 There is no evidence that the first and second respondents have conducted themselves in a manner which justifies the making of a Bullock order. The first and second respondents were entitled to deny the claims of the applicant and to deny that the JBREP operated to require the first respondent to acquire the subject land. The defence of the first and second respondents did not put in issue the validity of the JBREP and did not suggest that the sixth respondent was the liable party. The decision to join the sixth respondent was made entirely by the applicant. The applicant sought declarations and orders against the first and second respondents to have the subject lands acquired pursuant to the JBREP. The sixth respondent was joined in the event that the applicant failed against the first and second respondents, it thereby becoming necessary to require the sixth respondent to designate the correct statutory authority to acquire the subject lands. However, the issues between the sixth respondent and the first and second respondents were separate.

26 Authority also exists for the proposition that it is not appropriate to award Bullock orders if independent causes of action are alleged against each respondent or defendant: see Mulready v J.H & W. Bell, Ltd and Another [1952] 2 All ER 215 at p 219; Hall v Wilson [1954] VLR 576 at p 577; Allman v Daly (No 2); Allman v Country Roads Board [1959] VR 614 at p 623.

27 Asche J in Lackersteen v Jones and Others (No 2) (1988) 93 FLR 442 at p 449 enunciated four principles to consider when making a Bullock order, the second principle being as follows:-

2. The causes of action against two or more defendants need not be the same but they must be substantially connected or dependent the one on the other.

Had the claims of the applicant against the sixth respondent been the same as those made against the first and second respondents, but the applicant was uncertain of the party against whom it would succeed, a Bullock order might follow. This is not the case here. The claim against the sixth respondent was not “connected to or dependent upon” the claim against the first and second respondents. It was merely a claim in the contingent event that the claims against the first and second respondents failed. In these circumstances it would be unreasonable for the unsuccessful first and second respondents to be penalised by having to pay not only the applicant’s costs, but also the costs of the successful sixth respondent: see Johnsons Tyne Foundry Proprietary Limited v President, Ratepayers and Councillors of the Shire of Maffra (1948) 77 CLR 544 at p 572.

28 Accordingly the Court will order that the first and second respondents pay the applicant’s costs other than the costs of the applicant’s claim against the sixth respondent.

29 In relation to the roads issue it is established that a successful party who has failed on certain issues may be deprived of costs and may also be liable to pay the other party’s costs: see Cretazzo v Lombardi (1975) 13 SASR 4 at p 12; Hughes v Western Australian Cricket Association at p 48,136.

30 The roads issue was treated as a separate issue by the applicant as indicated by the separate class 3 application which was unsuccessful. In these circumstances the Court accepts the first and second respondents’ submissions that it would be unreasonable that they be ordered to pay any of the applicant’s costs in respect of that discrete issue. This finding is consistent with the Court’s finding that the first and second respondents were successful in their class 4 cross application, indicated by order 8 of the judgment. Accordingly the first and second respondents will not be ordered to pay the costs of the roads issue.

Orders

31 Pursuant to the leave granted in order 4 made on 18 July 2003, the Court orders that:-

1. Order 4 made on 18 July 2003 be vacated;

2. In lieu of order 4 the following order be substituted:-

An order that the first respondent and second respondent pay the applicant’s costs of these proceedings other than:
(i) the costs of the applicant of and incidental to the applicant’s claim against the sixth respondent; and
(ii) the costs of the applicant of and incidental to its claim in paragraphs 2 and 3 of the further amended class 4 application dated 22 July 2002 that it has an interest in the roads in Deposited Plans 8515, 8516 and 8517.

3. No order for costs be made of this application.