The Owners - Strata Plan 46498 v Evagelakos

[2022] NSWLEC 115

Land and Environment Court

New South Wales

Medium Neutral Citation:

The Owners – Strata Plan 46498 v Evagelakos [2022] NSWLEC 115

Hearing dates:

5 September 2022

Date of orders:

7 September 2022

Decision date:

07 September 2022

Jurisdiction:

Class 2

Before:

Pepper J

Decision:

See orders at [79].

Catchwords:

REVIEW: review of a decision of the Registrar to award costs in Class 2 proceedings – applicable legal principles – whether necessary to demonstrate error on the part of the Registrar – error not required – error by Registrar in the decision to award costs – decision set aside.

COSTS: whether it is fair and reasonable to award costs in a Class 2 tree dispute – presumptive rule that there be no order as to costs unless fair and reasonable – whether respondent unreasonably rejected offers of settlement prior to commencement of proceedings – respondent engaged legal representative and expert arborist upon whose advise she relied – respondent made concessions during the course of the hearing – whether unreasonable to have made concessions – fact that Court rejected the evidence of her expert and that she was the unsuccessful party to the litigation did not make it fair and reasonable that costs be awarded against her – each party to bear their own costs of the proceedings, including the costs hearing before the Registrar and the review hearing.

Legislation Cited:

Civil Procedure Act 2005, s 98(1)

Land and Environment Court Rules 2007, r 3.7

Trees (Disputes Between Neighbours) Act 2006, s 10(2)(a)

Uniform Civil Procedure Rules 2005, r 49.19(1)

Cases Cited:

Arden Anglican Schoolv Hornsby Shire Council (2008) 158 LGERA 224; [2008] NSWLEC 103

DVCI Pty Ltd v City of Parramatta Council [2020] NSWLEC 31

Fox v Ginsberg (No 3) [2011] NSWLEC 139

Groeneveld v Wollongong City Council (2009) 168 LGERA 260; [2009] NSWLEC 149

Marks v Perham (No 2) [2020] NSWLEC 84

Port Stephens Council v Sansom (2007) 156 LGERA 125; [2007] NSWCA 299

Rialto Sports Pty Limited v Cancer Care Associates Pty Limited; CCA Estates Pty Limited; Davjul Holdings Pty Limited; Arman Pty Limited [2022] NSWCA 146

Simo Popovac v Dominic Kennedy [2022] NSWLEC 9

The Owners – Strata Plan 46498 v Evagelakos [2021] NSWLEC 1509

The Owners – Strata Plan 46498 vEvagelakos [2022] NSWLEC 1353

Tomko v Palasty (No 2) (2007) 71 NSWLR 61; [2007] NSWCA 369

Zhang v Davidson (No 2) [2020] NSWLEC 89

Category:

Costs

Parties:

The Owners – Strata Plan 46498 (Applicant)
Kalliopi Evagelakos (Respondent)

Representation:

Counsel:
T Bacon (Applicant)
M Seymour with C Koikas (Respondent)

Solicitors:
Strata Title Lawyers Pty Ltd (Applicant)
A Plus Legal (Respondent)

File Number(s):

2020/361816

Publication restriction:

Nil

JUDGMENT

The Unsuccessful Respondent Seeks a Review of the Registrar’s Decision to Award Costs in a Class 2 Tree Dispute

1. On 21 December 2020 the applicant in the proceedings, the Owners – Strata Plan 46498 (“Owners Corporation”), commenced a claim under the Trees (Disputes Between Neighbours) Act 2006 (“Trees Act”) and Dividing Fences Act 1991 against the respondent, Kalliopi Evagelakos.

2. On 11 May 2021 an onsite hearing took place before Galwey AC.

3. On 1 September 2021 Galwey AC determined the substantive application the subject of the proceedings (The Owners – Strata Plan 46498 v Evagelakos [2021] NSWLEC 1509).

4. On 26 October 2021 the Owners Corporation filed a notice of motion seeking an order that Evagelakos pay the costs of the proceedings.

5. On 5 July 2022 the Registrar determined the motion for costs by making an order for Evagelakos to pay the Owners Corporation’s costs (The Owners – Strata Plan 46498 vEvagelakos [2022] NSWLEC 1353) (“the Registrar’s decision”).

6. On 22 July 2022 Evagelakos filed a notice of motion seeking review of the Registrar’s decision.

7. For the reasons that follow, the review must be upheld, the Registrar’s decision and orders set aside and in lieu thereof, an order made that the parties are to bear their own costs of the proceedings, including the application before the Registrar and the costs of this review.

A Tree Dispute Arises

8. The background to the Class 2 tree dispute was found in an agreed statement of facts filed by the parties, the affidavit of Tania Kallianiotis sworn 23 November 2021 (Evagelakos’s solicitor) and the affidavits of Thomas Bacon sworn 20 October and 30 November 2021 (the Owners Corporation’s solicitor) (“the Bacon affidavits”), together with exhibits.

9. On 23 January 2019 Evagelakos responded to a letter from the Owners Corporation dated 23 October 2018, complaining about the state of a dividing fence which it alleged had been damaged by her bamboo and a madeira vine, and therefore, needed to be replaced. Evagelakos indicated that the existing adjoining fence did not need replacement but was in need of repair and that she would assess the situation going forward.

10. On 29 January 2020 the Owners Corporation sent her a further letter to follow up on the bamboo and the fence.

11. On 5 February 2020 Evagelakos sent a letter advising that she had received advice from the relevant local council that “there are no laws or regulating from preventing anyone from having bamboo on their property” and that the fence was in good condition.

12. On 25 June 2020 Strata Title Lawyers (“STL”), solicitors for the Owners Corporation, were retained.

13. On 14 July 2020 STL wrote to Evagelakos. The letter stated that the vegetation was on her land and that she had to ensure that that it did not cause damage to the common fence. The letter requested Evagelakos to:

• agree to remove the bamboo and the madeira vine at her cost;

• install appropriate measures to avoid future damage to the fence; and

• pay an amount of $4,125.00, being 50% of the amount of $8,250 quoted by Jim’s Fencing on 15 June 2020, as contribution to “fencing works”.

14. The letter went on to say that proceedings would be commenced if the offer was not accepted by 14 August 2020.

15. On 3 August 2020 the daughter of Evagelakos replied to that letter by way of email. The email stated that Evagelakos did not agree that the fence had been damaged by the bamboo or that it needed to be replaced. The email explained that the “matter” had been forwarded to a solicitor.

16. In late August 2020 Kallianiotis was retained by Evagelakos.

17. On 20 August 2020 a further letter of demand was sent to the solicitor for Evagelakos. It sought a response to a similar offer to that outlined above, by 21 August 2020.

18. On 28 August 2020 Evagelakos sent a response noting that, the “current fence is compliant and in a good state”. The response was silent about the vegetation.

19. On 22 October 2020 another letter was issued by STL enclosing photographs. The letter again sought to settle the dispute. It provided for a further offer in similar terms to that made in July 2020.

20. On 5 November 2020 the solicitor for Evagelakos advised that she was in the process of obtaining expert reports to advise her and that she did not agree to the proposed settlement terms. A counter-offer was made by her to pay $1,000 “to resolve this matter commercially without further long and expensive legal proceedings”.

21. On 21 December 2020 the Owners Corporation commenced the proceedings.

The Proceedings and the Hearing Before Galwey AC

22. During the proceedings, Evagelakos and the Owners Corporation engaged and took advice from experts. Evagelakos was advised by Alex Tsardakidis of Lindex Construction Pty Limited on the condition of the fence. She also took advice from Paul Sprogis and Mark Kokot, both of whom are arborists. In addition, Evagelakos contacted the local council.

23. The Owners Corporation obtained and relied upon a survey report by SJ Dixon Surveyors, Parramatta City Council Management Plans, a Fence Inspection Report by Jim’s Fencing and a vegetation assessment report by arborist Glenn Bird.

24. At the onsite hearing on 11 May 2021, further discussions were had by the parties concerning whether a settlement could be achieved.

25. Although the matter proceeded to a hearing before the Acting Commissioner, it appears that concessions were made by Evagelakos during the course of the hearing. These were recorded by Galwey AC (at [5]):

5   Some of the grounds for the application are not disputed by the respondent. For instance, the Ms Evagelakos does not dispute that her bamboo has damaged parts of the fence, nor that other parts of the fence are dilapidated. The respondent does not dispute that the madeira vine must be removed. The respondent does dispute, however, that the bamboo must be removed. Initially, the respondent also disputed that the fence needs replacing along the entire boundary. She had a quote for replacing sections of the fence, repairing other sections, and keeping some sections as they are. Her position changed during the hearing as she became more aware of the fence’s condition, and of its failure to comply with current fence height requirements, so that she ultimately agreed that the entire boundary fence should be replaced. However Ms Evagelakos wanted an opportunity to obtain quotes for this work, whereas the applicant asked the Court to rely on the quote included in the application, which had been sent to the respondent along with an earlier notice under the Dividing Fences Act 1991 (‘the Dividing Fences Act’).

26. Consistent with the chronology of negotiations outlined above, the Acting Commissioner found, as he was statutorily obliged to consider, that the Owners Corporation had made reasonable efforts to reach (see s 10(2)(a) of the Trees Act) agreement with Evagelakos (at [11]).

27. As a result of the expert evidence and observations made by Galwey AC during the onsite hearing, the Acting Commissioner found that the bamboo and the madeira vine had damaged the fence. He noted that this finding was “not disputed”, but that there “may” have been other contributing factors to the fence’s condition, including its age and construction quality (at [12] and [29]).

28. The parties disputed the origin of both the madeira vine and a small clump of bamboo. In the result, Galwey AC rejected the opinion of Kokot in less than emphatic terms (“unlikely” and “most likely”) with respect to those issues, finding that the vine and the bamboo originated from Evagelakos’s property (at [14]-[19]).

29. The Acting Commissioner also found that a root barrier was neither installed along the entire boundary adjacent to Evagelakos’s bamboo nor was it effective (at [21]).

30. In relation to Evagelakos’s claim that the bamboo afforded her privacy from the neighbours and other amenity, Galwey AC held that the reasons for removing the bamboo outweighed the benefits of its retention. In particular, its complete removal was required to avoid it spreading again to the boundary and damaging the fence (at [30]).

31. Ultimately the parties agreed that the entire fence along the common boundary needed to be replaced even though only parts of the fence were damaged by the vegetation (at [31] and [34]). Because the bamboo was being removed, Galwey AC declined to order that a root barrier be installed along the boundary as sought by the Owners Corporation (at [36]).

32. The orders made relevantly included the following (at [38]):

(1)   The application is upheld.

(2)   Within 60 days of the date of these orders, the respondent is to engage and pay for a suitably qualified bush regeneration contractor, with all appropriate insurance, to remove all bamboo and madeira vine growing in both the respondent’s property and the applicant’s property within 8 metres of the boundary. Any parts of the plants that cannot physically be removed are to be killed to prevent regrowth.

(3)   Within 28 days of the date of these orders the applicant and the respondent are each to obtain and provide to the other party a quote from a fencing contractor for:

(a)   removing the fence along their common boundary (as shown on the survey plan included in Exhibit B),

(b)   clearing vegetation that would obstruct a new fence along the boundary, and

(c)   constructing a new fence along the common boundary as follows:

(i)   1.8 m tall treated pine timber fence

(ii)   Steel posts at least 600 mm into the ground

(iii)   Post secured with concrete in ground…

A Cost Application is Made by the Owners Corporation

33. On 22 September 2021 the solicitors for the Owners Corporation made an offer to resolve any claim for costs on the basis that Evagelakos pay 70% of the legal costs incurred by it in the amount of $15,333. This was not agreed to by Evagelakos.

34. The hearing on costs occurred on 14 February 2022, with a decision handed down by Registrar Froh six months later on 5 July 2022.

35. After setting out the background to the application, the Registrar noted that the claim for costs was made “in reliance on r 3.7(3)(c)” of the Land and Environment Court Rules 2007 (“the LEC Rules”) (at [8]).

36. As it transpires this was not correct. Submissions that were before the Registrar that were handed up to the Court during the review by the Owners Corporation make it plain, as the Owners Corporation noted, that its claim for costs was also made pursuant to r 3.7(3)(e) and (f)(i) of the LEC Rules. The Registrar did not deal with these alternative costs bases.

37. In the present application, however, a claim for costs was made by the Owners Corporation only under r 3.7(3)(c) and (f)(i) of the LEC Rules.

38. The Registrar summarised the parties’ submissions as follows (at [8]-[9]):

8 The Applicant's claim for costs is made in reliance on r 3.7(3)(c) of the Court Rules which identifies circumstances in which it might be fair and reasonable to make a costs order and includes that a party has acted unreasonably in the lead up to the commencement of proceedings. The affidavit of Mr Bacon demonstrates that the Applicant has attempted on several occasions for about two years to raise the issue of the bamboo and madeira vine impacting its property and the boundary fence.

9   The Respondent countered by offering to contribute $1000 to the cost of replacing the fence. This was not considered acceptable by the Applicant as it did not address issues of the bamboo and madeira vine. The Respondent opposed the costs order sought on the basis that the usual position in Class 2 proceedings is that each party pays its own costs and that an award of costs that is fair and reasonable is not justified in this case. She submitted that her decision to contest the orders sought in the Class 2 proceedings was not unreasonable conduct and that her experts had advised her that the bamboo and madeira vine did not need to be removed and that the dividing fence did not need to be replaced in its entirety and that it was not unreasonable for her to refuse the invitations to settle.

39. Under the heading “Consideration”, the entirety of the Registrar’s reasons for awarding costs against Evagelakos were stated as follows (at [11]-[14], emphasis added):

11   The Applicant has incurred the costs of engaging a solicitor and obtained an arborist report to assist in the presentation of its case. The focus of the Applicant's submissions are the circumstances leading up to the commencement of Class 2 proceedings.

12   The chronology of this dispute demonstrates that there has been correspondence between the parties initiated by the Applicant for two years concerning the bamboo and madeira vine and damage being caused to the boundary fence and the Applicant’s property. Given that no agreement could be reached between the parties I consider the Applicant had no alternative but to commence these proceedings.

13   The Respondent submitted that she acted reasonably. I do not agree. It is apparent from the judgment of Galwey AC that something had to be done about the bamboo, the madeira vine and the boundary fence, the damage caused was obvious and that the Respondent's bamboo and madeira vine was the cause. Greater efforts to settle the matter could have been made on the Respondent's part.

14   Balancing up all these circumstances suggests that it is fair and reasonable that I make a costs order in the Applicant's favour.

Costs in Class 2 Proceedings

40. The statutory framework that governs the Court’s power to make a costs order in Class 2 matters is as follows. Section 98(1) of the Civil Procedure Act 2005 confers power on the Court to make a costs order subject to the LEC Rules:

98   Courts powers as to costs

(1)   Subject to rules of court and to this or any other Act—

(a)   costs are in the discretion of the court, and

(b)   the court has full power to determine by whom, to whom and to what extent costs are to be paid, and

(c)   the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.

41. Rule 3.7(2) of the LEC Rules sets out a presumptive rule with respect to costs in Class 2 of the Court’s jurisdiction:

3.7   Costs in certain proceedings

(2)   The Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances.

42. The LEC Rules further relevantly state the circumstances in which the Court may consider that it is fair and reasonable to depart from the presumptive rule contained in r 3.7(2):

3.7    Costs in certain proceedings

(3)   Circumstances in which the Court might consider the making of a cost order to be fair and reasonable include (without limitations) the following ––

…

(c)   that a party has acted unreasonably in circumstances leading up to the commencement of the proceedings,

(d)   that a party has acted unreasonably in the conduct of the proceedings,

(e)   that a party has commenced or defended proceedings for an improper purpose,

(f)   that a party has commenced or continued a claim in the proceedings, or maintained a defence to the proceedings, where:

(i)   the claim or defence (as appropriate) did not have reasonable prospects of success, or

(ii)   to commence or continue the claim, or to maintain the defence, was otherwise unreasonable.

43. The Court’s discretion is not confined to the considerations in r 3.7(3) of the LEC Rules and it may assess “all rational considerations” in making a costs order (Arden Anglican Schoolv Hornsby Shire Council (2008) 158 LGERA 224; [2008] NSWLEC 103 at [9]).

44. The presumptive rule as to costs for Class 2 matters is founded upon the “no discouragement principle” (Port Stephens Council v Sansom (2007) 156 LGERA 125; [2007] NSWCA 299 at [22]-[27]). That principle establishes that a person should not be discouraged from making or defending an application because of the risk of an adverse costs order (Arden Anglican School at [10]).

45. In Marks v Perham (No 2) [2020] NSWLEC 84, Robson J described the importance of the principle in relation to Class 2 matters in the following way (at [29]):

29 The no discouragement principle is particularly important in the context of applications made pursuant to the Trees Act, as such applications are subject to the Court’s Practice Note Class 2 – Tree Applications which is designed to facilitate the just, quick and cheap resolution of tree disputes through an appropriate and easily accessible procedure.

46. Class 2 matters are intended to be an efficient and cost effective means of facilitating justice in tree disputes between neighbours. The statutory regime has been designed to enable parties to represent themselves (Fox v Ginsberg (No 3) [2011] NSWLEC 139 at [9]). Therefore, there must be considerations of “sufficient weight to overcome the presumptive rule” (Arden Anglican School at [9]). The Court will be slow to find that such circumstances exist.

47. In Perham (No 2) Robson J stated that the task that the Court undertakes in exercising its discretion to award costs under r 3.7(2) is informed by r 3.7(3) as follows (at [30]):

30   … first, to identify whether there is anything within the judgment of the Commissioner which indicates that an order for costs may be fair and reasonable; and second, to look to the conduct of the parties both before and during the hearing for any indication that such an order may be appropriate.

Legal Principles Applicable to a Review of a Registrar’s Decision

48. Rule 49.19(1) of the Uniform Civil Procedure Rules 2005 (“UCPR”) empowers the Court to review a decision of a Registrar:

49.19   Review of registrar’s directions, certificates, orders, decisions and other acts

(1)   Subject to subrule (2), if in any proceedings a registrar gives a direction or certificate, makes an order or decision or does any other act, the court may, on application by any party, review the direction, certificate, order, decision or other act and make such order, by way of confirmation, variation, discharge or otherwise, as the court thinks fit.

49. The principles governing the exercise of the Court’s discretionary power to review a decision of the Registrar were explained in Groeneveld v Wollongong City Council (2009) 168 LGERA 260; [2009] NSWLEC 149 (at [12]-[13], citing the leading authority of Tomko v Palasty (No 2) (2007) 71 NSWLR 61; [2007] NSWCA 369):

12   What will be required to make out a case for intervention will vary depending upon the nature of the registrar’s decision under review, in particular whether it is a decision on practice and procedure or a decision which finally determines or has a decisive impact on a party’s rights. In Tomko v Palasty (No 2) at [8] and [9], Hodgson JA (with whom Ipp JA also agreed) provided guidance as to what might be required for the different types of decisions:

8.   In the case of a decision on practice of procedure, this will normally require at least demonstration of an error of law, or a House v The King [(1936) 55 CLR 499] error, or a material change of circumstances, or evidence satisfying the strict requirements for fresh evidence. Even then, a court may not think that the interests of justice require intervention. This could be so, for example, if the error of law is a deficiency of reasons and the result is on its face not an unreasonable one.

9.   In the case of a decision which finally determines a party’s rights, or which (albeit one of practice or procedure) has a decisive impact on those rights, a court may be more willing to intervene. It may permit further evidence to be led which does not satisfy the strict requirements for fresh evidence, if it is satisfied that the interest of justice require it. It may decide to substitute its own discretionary decision for that of the registrar, even though no House v The King error is shown, again if it is satisfied that the interests of justice require this. To that extent, the review may be considered a de novo hearing.

13   Basten JA also noted that policy factors justifying restraint on interference by a reviewing court may have more weight in the case of decisions on practice and procedure than those determinative of legal rights: see at [47]-[48] and [52](4).

50. They have been applied consistently in this Court (see the authorities cited by Robson J in DVCI Pty Ltd v City of Parramatta Council [2020] NSWLEC 31 at [25]).

The Court Should Intervene to Review the Registrar’s Decision

51. The Owners Corporation submitted that the application for review should be dismissed as an exercise of the Court’s discretion under r 49.19(1) of the UCPR because no error or other basis was evident in the Registrar’s decision warranting review.

52. The reasons for the costs order were not those contained at [11]-[14] of the Registrar’s decision, but were those stated at [8], namely, the refusal of Evagelakos to accept, in the two years prior to the proceedings being commenced, the Owners Corporation’s offers of settlement. It was this conduct that was unreasonable on the part of Evagelakos.

53. In response, Evagelakos submitted that although it was not necessary to identify error in the reasoning of the Registrar on review, she had nevertheless erred by failing to engage with r 3.7 of the LEC Rules, and moreover, had failed to provide adequate reasons for her decision. It was unclear from her reasoning when these “greater efforts” to settle the matter ought to have been undertaken by Evagelakos or in what way the efforts that had been made by her were deficient. Put another way, the Registrar had failed to explain how, other than relying on the fact that Evagelakos had not agreed to settle the matter on the terms put forward by the Owners Corporation, Evagelakos had acted unreasonably such that the imposition of a costs order was warranted.

54. In the present case, intervention is necessary in circumstances where the Registrar has committed an error of law in a decision which finally determines the right of the parties, namely, the right not to be subject to a costs liability having regard to the presumptive nature of r 3.7(2) that in Class 2 proceedings that there is to be no order as to costs.

55. Alternatively, having regard to the likely quantum of costs Evagelakos is presently burdened with after two unsuccessful hearings, it is in the interests of justice that the Registrar’s decision be reviewed.

56. I accept the submission of Evagelakos that the Registrar has failed to provide adequate reasons for her decision to award costs to the Owners Corporation. The failure to give adequate reasons is an error of law. In Rialto Sports Pty Limited v Cancer Care Associates Pty Limited; CCA Estates Pty Limited; Davjul Holdings Pty Limited; Arman Pty Limited [2022] NSWCA 146 the Court of Appeal stated as follows (at [58] per Gleeson JA, Bell CJ and Macfarlan JA agreeing):

58   The obligation to give adequate reasons is well-established. The need for transparency in decision-making and what is required in any particular case is discussed in numerous authorities, including: Pollard v RRR Corporation Pty Limited [2009] NSWCA 110 at [56], citing Soulenazis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247 at 260 and Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at 444.

57. While concision in judgments is desirable, it must not come at the expense of adequacy of reasoning (Rialto at [63]).

58. In the present case, the insufficiency of the Registrar’s reasons is patent. First, contrary to the submissions of the Owners Corporation, the reasons provided for the Registrar’s decision were not those found at [8] but were those found at [11]-[14]. So much so is evident by the heading “Consideration”. The statement at [8] is no more than a recitation of the submissions of the Owners Corporation.

59. Second, turning to those reasons, the Registrar’s decision to award costs to the Owners Corporation comprises three elements (see at [12]-[13]):

1. first, that the Owners Corporation had no alternative but to commence the proceedings because no agreement could be reached to settle the matter (at [12]);

2. second, that it was “obvious” that Evagelakos’s bamboo and madeira vine that had caused damage to the boundary fence (at [13]); and

3. third, “greater efforts to settle the matter could have been made on the Respondent’s part” (at [13]).

60. Critically, nowhere is it explained what “greater efforts” could have been made by Evagelakos or why the efforts to settle the matter that were made by her (as evidenced by the correspondence exhibited to the Bacon affidavits that was before the Registrar) were insufficient, such as to amount to conduct warranting costs. In my view, such an explanation was required, however brief. The Registrar’s failure to provide it amounts to an error of law.

61. While the rejection by Evagelakos of the Owners Corporation’s offers of settlement meant that it was necessary for it to commence the proceedings, it is not clear from the Registrar’s reasons why it was unreasonable for Evagelakos to reject those offers. The ‘obviousness’ of the result before the Acting Commissioner was the product of a contested hearing with expert evidence presented by both parties, whereupon the Acting Commissioner made findings based upon the likelihood that the offending vegetation belonged to Evagelakos and that it had caused damage to the fence (noting that other factors may have contributed to its condition). There was, with great respect, nothing “obvious” about the ultimate conclusion and orders that ought to have compelled Evagelakos, acting reasonably, to accept the offers made by the Owners Corporation prior to the litigation commencing. If there was, then this was not apparent on the face of the Registrar’s decision.

An Award of Costs is Not Fair and Reasonable

62. Because a review is warranted, it falls to the Court on this application to determine de novo whether it was fair and reasonable for the Owners Corporation to be awarded its costs of the Class 2 proceedings before Galwey AC.

63. In this context, Evagelakos made the following submissions during the review hearing:

1. there was no finding, either express or by implication, made by the Acting Commissioner that Evagelakos had acted unreasonably during the hearing and that an order for costs would be fair and reasonable;

2. Evagelakos had engaged a solicitor, a builder and an arborist to advise her and she had relied upon their advice, which was to the effect that there was merit in defending the claim made against her. That Galwey AC did not accept her expert evidence was, without more, insufficient to render it fair and reasonable that costs be awarded against her;

3. that Evagelakos made concessions during the hearing ought not be held against her. On the contrary, this was entirely appropriate and reasonable conduct by her which resulted in a savings of time and money;

4. it could not, given her expert evidence, be concluded that Evagelakos had no reasonable prospects of success. This was reflected in the language employed by the Acting Commissioner in making his findings;

5. it was not, as the Registrar appeared to suggest, unreasonable conduct to refuse to acquiesce to an offer to settle proceedings, even if the orders ultimately made by Galwey AC put Evagelakos in the same position (or worse) that she would have been in had she accepted the offer; and

6. it was not unreasonable for Evagelakos not to want to replace the whole fence when only part of it had been damaged by the bamboo and vine. The evidence of her builder was that only certain parts of the fence needed to be repaired. Nor was it unreasonable for her to want to retain the bamboo for the benefit of the privacy that it afforded her. The council had advised her that bamboo could be planted for this purpose and her arborist had advised her that the root barrier was effective. The advice of her experts may be contrasted with the proposed offer from the Owners Corporation, which was for her to remove all of the bamboo and to replace the entire fence. On the advice of her experts, this was not warranted.

64. In reply, the Owners Corporation submitted that:

1. the failure to accept its offers amounted to unreasonable conduct by Evagelakos prior to the commencement of the proceedings pursuant to r 3.7(3)(c) of the LEC Rules;

2. because the evidence of her experts was not accepted by the Acting Commissioner, Evagelakos engaged in unreasonable conduct by maintaining claims during the proceedings that were ultimately unfounded (see r 3.7(3)(f)(i) of the LEC Rules); and

3. Evagelakos acted unreasonably during the conduct of the proceedings by changing her position and making concessions that favoured the Owners Corporation (see r 3.7(3)(f)(i) of the LEC Rules).

65. In my view, the submissions of Evagelakos ought to be accepted and each party should bear their own costs of the proceedings. In other words, it is not fair and reasonable for costs to be awarded against her.

Rule 3.7(3)(c) of the LEC Rules

66. Turning first to r 3.7(3)(c) of the LEC Rules, the refusal to accept offers of settlement prior to the commencement of the Class 2 proceedings does not amount to unreasonable conduct on the part of Evagelakos. On the evidence before the Court, it was reasonable for her to refuse the offers in circumstances where she believed that the vegetation did not wholly emanate from her property, it was not clear that the damage to the fence was caused by the vegetation, the whole of the fence did not need to be replaced, a root barrier was in place, and the council had informed her that bamboo was allowed to be planted as a privacy screen. On the contrary, I find that her refusal to accept the offers proposed were entirely reasonable in all of the circumstances. It is not the case that from the outset Evagelakos enjoyed no prospects of success.

67. The submission made by the Owners Corporation must be emphatically rejected. The mere refusal to accept offers of settlement does not, without more, amount to unreasonable conduct for the purpose of r 3.7(3)(c) of the LEC Rules. Had Evagelakos refused to engage with the settlement offers and ignored all entreaties by the Owners Corporation to resolve the matter, a different conclusion may have been entertained but this is not what occurred as the correspondence exhibited to the Bacon affidavits and the agreed statement of facts discloses.

Rule 3.7(3)(f)(i) of the LEC Rules

68. In respect of the claim for costs under r 3.7(3)(f)(i) of the LEC Rules, it is not the case that simply because the Acting Commissioner did not accept the evidence of her experts that Evagelakos’s conduct may be characterised as unreasonable. Nowhere in the reasons of Galwey AC does he suggest that Evagelakos’s defence of the proceedings was hopeless or unarguable. On the contrary, his findings were made after a contest on the evidence, including expert evidence, and based upon his own observations having regard to his specialist knowledge. They were expressed in terms that indicated that for the most part they were not “obvious” from the outset. For example, Galwey AC accepted that the bamboo was beneficial but found that its removal, on balance, was justified (at [30]).

69. Had it been the case that no expert evidence (it was not suggested by the Owners Corporation that the expert evidence relied upon by Evagelakos was anything other than objective and impartial) was relied upon by Evagelakos to support her contentions or that she had persisted in making claims that were contrary to her expert evidence, then it is more likely that a costs order against her would be fair and reasonable. But that is not this case.

70. To be clear, merely because the expert evidence of a party is not accepted by a decision-maker does not render that party’s conduct unreasonable for the purpose of r 3.7(3)(f)(i) of the LEC Rules, as the Owners Corporation submitted. For Evagelakos to rely upon, and act consistently with, the advice of her solicitor, her arborist, her builder and the council, cannot constitute unreasonable behaviour.

71. In respect of the submission that Evagelakos acted unreasonably by changing her position during the hearing and by making concessions, this too must be rejected. Her concessions saved the parties and the Court time and money.

72. Finally, the fact that one of the letters was expressed as a Calderbank offer does not assist the Owners Corporation as the Court concluded in Simo Popovac v Dominic Kennedy [2022] NSWLEC 9 (at [70]-[77]).

73. In short, it was neither unreasonable in the circumstances of this case for Evagelakos to refuse to accept the offers of settlement made by the Owners Corporation prior to the proceedings commencing, nor was it unreasonable for her to maintain claims in her defence based on the advice of her experts that were ultimately not accepted by Galwey AC.

74. The fact that the Owners Corporation incurred costs in bringing a successful claim against Evagelakos is not sufficient to make a costs order in its favour. As Pain J opined in Fox v Ginsberg, there is “no assumption in tree dispute matters that legal representation is essential…legal representation is not the norm and will not automatically be compensated” (at [13]). It is a sentiment that I respectfully endorse.

75. There being no other conduct by Evagelakos that would render it fair and reasonable in the circumstances of the matter to award costs against her, the appropriate order is that each party should bear their own costs.

Costs of the Application Before the Registrar and This Application

76. The motion seeking costs also falls within Class 2 of the Court’s jurisdiction, and therefore, r 3.7(2) of the LEC Rules applies (Zhang v Davidson (No 2) [2020] NSWLEC 89 at [70]).

77. There is no evidence before me that would justify a departure from the presumptive rule in r 3.7(2). Therefore, each party is to bear their own costs of the notice of motion seeking review.

78. The same conclusion follows in respect of the costs of the application before the Registrar.

Orders

79. The orders of the Court are therefore as follows:

1. set aside the orders of the Registrar made on 5 July 2022;

2. in lieu thereof order that each party pay their own costs of the proceedings, including the costs of the application before the Registrar and the costs of this motion for review; and

3. all exhibits in the proceedings are to be returned.

**********

Decision last updated: 07 September 2022