Thomas v Holmes (No 3)
[2017] NSWLEC 156
•22 November 2017
|
New South Wales |
Case Name: | Thomas & Anor v Holmes & Anor (No 3) |
Medium Neutral Citation: | [2017] NSWLEC 156 |
Hearing Date(s): | 6 November 2017 |
Date of Orders: | 22 November 2017 |
Decision Date: | 22 November 2017 |
Jurisdiction: | Class 2 |
Before: | Moore J |
Decision: | 1 The costs application made on behalf of the Second Applicant is dismissed as incompetent; |
Catchwords: | COSTS - status of First Applicant to make costs application or give evidence on behalf of the Second Applicant - First Applicant purported to make costs application on behalf of the Second Applicant - First Applicant purported to give evidence on behalf of the Second Applicant - First Applicant not lawyer or a director of the Second Applicant - First Applicant not authorised by the Board of the Second Applicant to represent it as the Company’s agent pursuant to the Land and Environment Court Act and Rules - costs application purportedly made on behalf of the Second Applicant incompetent and dismissed |
Legislation Cited: | Conveyancing Act 1919 |
Cases Cited: | Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 |
Category: | Costs |
Parties: | Mr Peter Thomas (First Applicant) |
Representation: | Counsel: |
File Number(s): | 386285 of 2016 |
Publication Restriction: | No |
TABLE OF CONTENTS
Introduction_Toc499039675
The application to the Court_Toc499039676
The on-site hearing_Toc499039677
The first decision_Toc499039678
The set-aside application_Toc499039679
Legal representation_Toc499039680
Representation of the Company at the second hearing_Toc499039681
The further hearing_Toc499039682
The costs application_Toc499039683
The Company's representation_Toc499039684
Introduction_Toc499039685
The relevant legal provisions_Toc499039686
Conclusion on the Company’s position on the costs application_Toc499039687
Matters determined in the principal proceedings_Toc499039688
What are costs?_Toc499039689
The appropriate costs framework_Toc499039690
Introduction - the general civil proceedings position_Toc499039691
The costs claim_Toc499039692
Consideration of matters arising in this costs hearing_Toc499039693
The merit outcomes before the Acting Commissioner_Toc499039694
The costs implications of the outcomes before the Acting Commissioner_Toc499039695
Introduction_Toc499039696
Two possible bases remain for a “fair and reasonable” costs award_Toc499039697
Introduction_Toc499039698
Delay before lodgement of the Tree Dispute Application_Toc499039699
Obstruction after lodgement of the Tree Dispute Application_Toc499039700
Conclusion on Mr Peter Thomas’ costs application_Toc499039701
Consideration of the Respondents’ costs claim on this motion_Toc499039702
Introduction_Toc499039703
The Respondents’ solicitor makes a Calderbank offer_Toc499039704
The basis for the Calderbank offer_Toc499039705
Submissions in support of the Respondents’ indemnity costs application_Toc499039706
Mr Peter Thomas is lucky only the Company replied to the Calderbank offer_Toc499039707
Conclusion on the Respondents’ costs application on the costs application_Toc499039708
Conclusion_Toc499039709
Orders_Toc499039710
JUDGMENT
Introduction
Mr Peter Thomas and Amartrin Pty Ltd (the Company) (together - the Applicants) are owners of a property in Cammeray. Mr and Mrs Holmes (the Respondents) own a property over which the Applicants enjoy a right-of-way, registered pursuant to the Conveyancing Act 1919 (the Conveyancing Act). A Eucalyptus robusta (Swamp Mahogany) (the tree) grows on the Respondents’ property near the right-of-way.
The application to the Court
The Applicants applied to the Court on 23 December 2016 pursuant to Pt 2 of the Trees (Dispute Between Neighbours) Act 2006 (the Trees Act). Their Tree Dispute Application form describes the orders that were sought as being:
Proposed orders for Part 2: Applications - Damage to Property
1. The removal of the tree.
2. Rectification of damage to the Applicants’ property caused by the Respondents’ tree. Details to be provided.
3. Payment of compensation for the damage to the Applicants’ property caused by the Respondents’ tree determined at $44,713.00
Includes:
• Reimbursement for monies already expended in undertaking the interim works to repair the damage to the Applicants’ property.
• Damages for works that need to be undertaken to complete repairing the damage. Quotations from builders outlining scope and cost of the works.
4. Access to the property to obtain quotes and carry out the work.
5. Rectification of the damage to the fence on the boundary between the Applicants’ property and the Respondents’ property.
6. Replacement of the entire fence on the boundary between the Applicants’ property and the Respondents’ property under section 13A of the Dividing Fences Act 1991.
7. All works ordered to be undertaken are to be paid for by the Respondents.
It is clear that the application was founded on the order-making power in s 9 of the Trees Act, on the basis that the jurisdiction of the Court was founded by satisfaction of the first and second elements of s 10(2)(a) of that Act, a provision which reads:
10 Matters of which Court must be satisfied before making an order
(1) ….
(2) The Court must not make an order under this Part unless it is satisfied that the tree concerned:
(a) has caused, is causing, or is likely in the near future to cause, damage to the Applicant’s property, or
(b) …
A directions hearing was held by the Court’s Assistant Registrar on 21 February 2017 and a timetable set to enable an on-site hearing to be conducted. The dates of the timetable were incorporated in the Court's Standard Tree Dispute Directions.
At that directions hearing, the Applicants were legally represented, whilst Mr Holmes represented himself and his wife. Copies of the directions were provided to the parties and the matter was set down for an on-site hearing on 27 March 2017.
The on-site hearing
The on-site hearing was conducted by Acting Commissioner Fakes, a qualified and highly experienced arborist, who has heard and determined many hundred applications made to the Court pursuant to the Trees Act since that Act came into effect in early 2007.
At the hearing on site, the Applicants were represented by counsel, whilst the Respondents appeared in person.
As is customary in tree dispute cases, the hearing was conducted entirely on site. The hearing included an inspection of the tree and its relevant surrounding area, including features giving rise to the claim. The Acting Commissioner received evidence and heard submissions from both sides. The Acting Commissioner reserved her decision.
The first decision
The Acting Commissioner promptly delivered her decision on 11 April 2017 (Thomas & anor v Holmes & anor [2017] NSWLEC 1192). It is unnecessary to deal with the decision at great length at this point. It is, however, appropriate to deal with one aspect of her findings, as well as to set out the orders that she made to give effect to the conclusions which she had reached.
In order to enliven the Court's jurisdiction to consider whether or not relief should be granted (whether in the terms sought or in some other fashion being immaterial), the Acting Commissioner needed to determine that all relevant jurisdictional tests had been satisfied.
First, she concluded, at [7], that the submission made for the Applicants that they were “owners” of land adjoining the land where the tree is situated for the purposes of s 7 of the Trees Act was correct. This conclusion meant that the Applicants each had standing to make an application to the Court concerning damage to their property by the tree which was situated on land adjoining their right-of-way. Thus, the tree was one to which the Trees Act applied for the purposes of the application made by the Applicants.
Relevantly, she was also satisfied that the tree had caused some damage to the property of the Applicants.
The combination of these findings meant that the Court's jurisdiction was enlivened, thus giving rise to her consideration having regard to a range of other factors (including those set out in s 12 of the Trees Act), as to whether or not, as a matter of discretion, orders should be made for some remedy founded on the application.
In this context, it is to be observed that the discretion vested in the Acting Commissioner by s 9(1) of the Trees Act was an extremely broad one, and she was not confined to determining, on a “yes/no” basis, whether the relief sought in the application should be granted.
At the conclusion of her first decision, the Acting Commissioner made the following orders:
1. The application to remove the tree is dismissed.
2. Within 30 days of the date of these orders, the Applicants are to engage and pay for a suitably qualified engineer/ architect/ landscape architect to design a masonry retaining wall and section of stairs as described in paragraphs [44] and [45] above. The Respondents are to be provided with a copy of the designs.
3. Within 60 days of the date of these orders the parties are to have obtained and exchanged up to two quotes each for the costs of implementing the designs for the stairs and retaining wall. In addition, in the event that the tree is removed, the quote for the stairs is to include an option of replacement of the existing pavers, that is, like for like. If there is no agreement as to the choice of contractor, the cheapest quote is to be selected. Any additional works beyond the wall and the section of stairs are to be separately itemised and quoted and to be paid for by the relevant party. The Applicants are to engage and pay for the nominated contractor.
4. The works in (2) are to be completed within 120 days of the date of these orders otherwise order (5) lapses.
5. Within 21 days of the receipt of a tax invoice for the completed works, the Respondents are to reimburse the Applicants 90% of the agreed cost of the stairs and 60% of the agreed cost of the wall.
6. The parties are to provide all reasonable access on reasonable notice for the purpose of quoting and the construction of the works in (2).
7. The exhibits except A are returned.
As can be seen, when comparing these orders with the relief that was sought in the application made by the Applicants (set out above at [2]), the Acting Commissioner did not accept unreservedly that the outcome proposed by the Applicants was appropriate. Indeed, the outcome in this first phase of the proceedings saw the Applicants fail on the primary order sought - namely, the requiring of the removal of the tree at the cost of the Respondents (combination of the proposed effect of orders (1) and (7) set out above at [2]).
It is also to be observed that the application for rectification of damage to the fence on the boundary between the Applicants’ property and the Respondents’ property and for replacement of the entire fence on the boundary between the Applicants’ property and the Respondents’ property was entirely unsuccessful.
Consideration of the terms of the orders made by the Acting Commissioner leads, self-evidently, to the inescapable conclusion that the Applicants were far from being significantly successful in their application.
The set-aside application
On 28 April 2017, the lawyers for the Applicants filed a Notice of Motion seeking to set aside portion of the Acting Commissioner’s orders. The terms of the orders sought were:
1. That this honourable Court sets aside or varies orders 2, 3, 4 and 5, inclusive, of a judgment pursuant to the Uniform Civil Procedure Rules (the UCPR) Part 36 rule 36.16 and rule 36.17 (or either of them).
2. Pursuant to Part 36 rule 36.17, an order that the Respondents pay the Applicants’ compensation for property damage in the amount of $4,098 being:
Investigation work invoice $3,583; and
Arborist report $515.
The Notice of Motion came before the Acting Registrar on 9 May. An Amended Notice of Motion was filed in Court on that day. The relief sought in the Amended Notice of Motion was:
1. That this honourable Court sets aside or varies orders 2, 3, 4 and 5, inclusive, of a judgment pursuant to the Uniform Civil Procedure Rules (the UCPR) Part 36 rule 36.15, rule 36.16 and rule 36.17 (or any of them).
2. Pursuant to Part t 36 rule 36.17, an order that the Respondents pay the Applicants’ compensation for property damage in the amount of $4,098 being:
Investigation work invoice $3,583; and
Arborist report $515.
The Acting Registrar listed the Amended Notice of Motion as a Duty Judge matter on 15 June 2017.
When this came before me as Duty Judge on 15 June 2017, Mr Peter Thomas appeared in person and Mr Jenkin Thomas appeared for the Company. Because the Amended Notice of Motion sought orders setting aside the substantive orders made by Acting Commissioner Fakes in her first decision, it was appropriate for the substantive issues which would arise to be dealt with by her. To set a timetable for this, I made the following orders on this occasion:
1 Orders 2-5 inclusive of the orders of Acting Commissioner Fakes made on 11 April 2017 in matter 2016/386285 are stayed until the Acting Commissioner determines the matters sought by Order 1 of the Amended Notice of Motion filed in Court on 9 May 2017.
2 Applicants to file and serve any material they wish to rely on by leaving the material in the letter box of 11 Cowdroy Avenue, Cammeray NSW 2062 by 4.30pm on 6 July 2017.
3 Respondents to file and serve any material they wish to rely on by leaving the material in the letter box of 15B Cowdrow Avenue, Cammeray NSW 2062 by 4.30pm on 17 July 2017.
4 The matter is adjourned to 10am in Court on 20 July 2017 before Acting Commissioner Fakes.
On the basis of the above orders, the matter was adjourned for a further hearing to take place before the Acting Commissioner on 20 July 2017.
Legal representation
The Tree Dispute Application filed on 23 December 2016 had been filed by the solicitor acting for Mr Peter Thomas and for the Company. That solicitor had instructed counsel to appear for the Applicants at the first hearing before the Acting Commissioner.
On 7 June 2017, two Notices of Removal of Solicitor were filed by the solicitor who had lodged the Tree Dispute Application. The first of these notices indicated that Mr Peter Thomas had terminated the authority of the solicitor to act on his behalf in the proceedings. The second notified that the Company had terminated the authority of the solicitor to act on the Company's behalf in the proceedings.
Representation of the Company at the second hearing
Provided to the Court, for the purposes of these proceedings, was a copy of a resolution of the Company adopted at a meeting of its Board held on 28 June 2017. The minuted terms of that resolution were:
It was resolved that Jenkin Griffith Thomas be the Representative of the company in all respects, without limitation, at any Tree proceedings of whatever nature and the Land and Environment Court and any adjournments thereof. The meeting noted the requirements of Rule 7.7 of the Land and Environment Court Rules 2007 on the sheet entitled New Rules regarding Agents attached.
The Board notes the contents of the letter of J G Thomas dated 28 June 2017 attached.
Mr Jenkin Thomas represented the Company at the second hearing before the Acting Commissioner.
The further hearing
The Acting Commissioner held the further hearing on 20 July 2017, as scheduled. Again, she reserved her decision, delivering her reasoned decision on 16 August 2017. At this point, it is appropriate to set out the terms of the revised orders made by the Acting Commissioner in Thomas & anor v Holmes & Anor (No 2) [2017] NSWLEC 1443 (the second decision). The Acting Commissioner’s orders, in the second decision, were in the following terms:
1. The application to remove the tree is dismissed.
2. The Applicants are to engage and pay for a suitably qualified and experienced contractor to:
(a) reconstruct the lower section of partially demolished masonry wall to current industry standards and in its current location. The rectification of the wall is to include the installation of a solid/ reinforced conduit through which the lower portion of stormwater pipe can be directed; and
(b) install the 2.5 m section of stairway identified on the survey prepared by Geoffrey Browne, Surveyor on 12.02.1016. The stairs are to bridge and not damage any woody roots of 50 mm or greater in diameter in that section and make allowance for their expansion; the stairs need not necessarily be of the same material as the original stairs but must be durable and functional.
3. The works in (2) are to be completed within 6 months of the date of these orders otherwise Order (4) lapses.
4. Within 21 days of the receipt of an invoice for the completion of the works in (2) the Respondents are to reimburse the Applicants the sum of $8,252.
5. If the works in (2) are completed as required in (3) but no invoice is served on the Respondents as required by (4), the obligation of the Respondents to contribute to the works in (2) lapses.
6. Should the Applicants elect to undertake any works other than the limited scope of the works determined to be within the Court’s jurisdiction under the Trees Act as described in (2) and choose to lodge a Development Application (DA), and the scope of the DA encompasses the works pursuant to the Trees Act, the Applicants are to:
(a) notify the Respondents of their intention to do so within 45 days of the date of the these orders;
(b) notify the Respondents of the lodgement of the DA within 10 days of such lodgement; and
(c) notify the Respondents of the granting of development consent within 10 days of any consent.
7. The extended works the subject of any Development Consent which incorporate the scope of the works pursuant to the Trees Act are to be completed within 2 years of the date of these Orders otherwise Order (8) lapses.
8. Within 21 days of the receipt of an invoice for the completion of the approved extended works in Order (6) the Respondents are to reimburse the Applicants the sum of $8,252 being the Respondents’ contribution for the component of the works pursuant to the Trees Act.
9. If the approved extended works in (6) are completed as required in (7) but no invoice is served on the Respondents as required by (8), the obligation of the Respondents to contribute to the works in (6) lapses.
It is to be observed that the orders in the second decision also differed from those set out at [2], being the orders sought by the Applicants in the original application made pursuant to the Trees Act.
In this second decision, the outcome in this second phase of the proceedings saw the Applicants again failed on the primary order sought - namely, the requiring of the removal of the tree at the cost of the Respondents (combination of the proposed effect of orders (1) and (7) set out above at [2]). They also again failed on the elements of the Tree Dispute Application seeking orders concerning the fence.
The costs application
During the course of the first decision, at [30], the Acting Commissioner adverted to the fact that Commissioners of the Court do not have the power to deal with applications for costs. She observed that any application for costs made in matters heard and determined by a Commissioner (including Acting Commissioners) could only be heard and determined by the Registrar or a Judge of the Court.
She repeated this observation in the second decision at [6].
On 5 September 2017, Mr Peter Thomas filed a Notice of Motion (dated 4 September 2017) seeking an order for costs of the proceedings. The Notice of Motion was stated as being on his own behalf and on behalf of the Company. The relief sought in the Notice of Motion was in the following terms:
Notice of Motion orders sought
1. The Applicants claim an order that Respondents pay the Applicants the following:
(a) Exploratory works invoice - A. Walsh Tax Invoice 15th December 2014 $3,583
(b) Arborists costs - Glenice Buck Pty Limited Tax Invoices $1,770
(c) Survey costs - G A Browne Surveyors Pty Ltd Tax Invoice 17th February 2017 $1,078
(d) Engineers costs - Diskoros Engineering Tax Invoices $2,530
(e) Legal costs and disbursements
The affidavit, which was filed in support of the Notice of Motion (and subsequently admitted as evidence - subject to the limitation dealt with in the next section of this judgment - on the motion at the hearing of the costs application), was deposed by Mr Peter Thomas. It had annexed to it, as Annexure I, a spreadsheet setting out the nature of the costs and disbursements for which the claim was made. It is sufficient, at this point, to note that the amount claimed was nearly $90,000, an amount significantly in excess of the jurisdictional costs applications able to be determined by the Registrar. The costs application was set down for hearing on 6 November 2017.
The Company's representation
Introduction
The costs’ Notice of Motion was dated 4 September 2017 and was filed on the following day. Mr Peter Thomas signed the form and, against “Capacity”, subscribed the following:
First Applicant and on behalf of Second Applicant
In addition, in his affidavit in support of the costs application - dated 4 September 2017 - Mr Peter Thomas deposed, in paragraph 1, the following:
1. I am the First Applicant in Land and Environment Court Matter No. 386285 of 2016. I am also authorised by the other Applicant Amatrin Pty Limited to make this affidavit.
In his further affidavit in support of the costs application - dated 23 October 2017 - Mr Peter Thomas also asserted that he was authorised by the Company to speak on its behalf.
It is necessary to consider whether there is any proper basis why Mr Peter Thomas could initiate the Notice of Motion on behalf of the Company or give evidence on its behalf.
The relevant legal provisions
There are two relevant provisions requiring consideration as to how the Company might participate in these proceedings in Class 2 of the Court's jurisdiction, this Class being that within which applications pursuant to the Trees Act are allocated by virtue of s 18(g) of the Land and Environment Court Act 1979 (the Court Act). Such participation would be by being an initiator of the costs application (thus a party to the application) and, subsequently, being represented in the hearing of such an application.
The first of these is the general provision arising under the Uniform Civil Procedure Rules 2005 (the UCPR) concerning how a Company can commence or carry on civil proceedings conducted within the New South Wales court system. The relevant provision is contained in Pt 7 Div 1 r 7.1(2)(a) of the UCPR, a provision which reads:
7.1 By whom proceedings may be commenced and carried on
(1) …
(1A) …
(2) A company within the meaning of the Corporations Act 2001 of the Commonwealth:
(a) may commence and carry on proceedings in any court by a solicitor or by a director of the company, and
As can be seen, the persons authorised to represent a company in proceedings, generally, are narrowly and precisely defined by this provision.
As can also be seen from the provision set out above, that which is authorised to be undertaken on behalf of a corporation by a person authorised by the rule is to commence or carry on proceedings. As later discussed, commencing or carrying on proceedings involves functions that differ from appearing in the proceedings (that is, acting as an advocate for a company before a decision maker in proceedings; in this case, me).
I have earlier described the process by which the solicitor who had commenced the proceedings had notified the Court that she had ceased to act, relevant to this discussion, for the Company. That event took place, effective from 7 June 2017. The application for costs was filed on 5 September 2017, a date, self-evidently, after the Company had ceased to be represented by a solicitor. The consequence of that was that the only people authorised to “carry on these proceedings” (that is, authorised, relevantly, the Notice of Motion seeking costs) are the directors of the Company.
With respect to representing a company (a company being a legal person for the purposes of the provision - Interpretation Act 1987, s 21(1)) in proceedings, inter alia, in Class 2 of the Court's jurisdiction, s 63 of the Court Act is applicable. This provision is in the following terms:
63 Right of appearance
(1) A person entitled to appear before the Court may appear in person, or by an Australian legal practitioner, or (except in proceedings in Class 5, 6 or 7 of the Court’s jurisdiction) by an agent authorised by the person in writing.
(2) Despite subsection (1), a person may not appear before the Court by an agent except with the leave of the Court.
(3) In determining whether to grant leave for a person to appear by an agent the Court is to consider:
(a) whether the agent has provided the person with the information required by the rules, and
(b) whether granting leave is in the best interests of the person.
(4) Leave granted under this section may:
(a) be granted subject to conditions, and
(b) be revoked at any time for any reason.
For a party (applicant or respondent being immaterial) to an application made pursuant to the Trees Act, this provision applies. Any relevant provision of the Land and Environment Court Rules 2007 (the Court Rules) is called up and made applicable. The Court Rules do make additional provision concerning representation by agents, with those provisions being contained in Pt 7 r 7 of the Court Rules. This provision, relevantly, reads:
7.7 Granting of leave for a person to appear by agent
(1) For the purposes of section 63(3)(a) of the Act, the following information is required to be provided by an agent to the person for whom the agent wishes to appear:
(a) that the person is under a duty to assist the Court to further the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in the proceedings and, to that effect, to participate in the processes of the Court and to comply with directions and orders of the Court,
(b) that the person is under a duty to take reasonable steps to resolve or narrow the issues in the proceedings,
(c) that the agent must not, by the agent’s conduct, cause the person to be in breach of a duty referred to in paragraph (a) or (b),
(d) that the Court may take into account any failure to comply with a duty referred to in paragraph (a), (b) or (c) in exercising a discretion with respect to costs,
(e) that the Court may make a costs order against the person in proceedings to which rule 3.7 applies if the Court considers it fair and reasonable in the circumstances and in any other proceedings if the person is unsuccessful,
(f) the knowledge and experience of the agent with respect to the type of matter that is the subject of the proceedings,
(g) whether the agent proposes to charge for the agent’s services and, if so, the agent’s proposed written costs agreement, a written estimate of the likely total of the agent’s charges and the likely disbursements to be incurred by the person.
(2) Before the Court determines whether to grant leave for a person to appear before the Court by an agent, the agent must acknowledge to the Court in writing, unless the Court waives the writing requirement, that the agent has provided the information referred to in subrule (1) to that person.
I have earlier set out (at [24]) the resolution of the Board of the Company authorising Mr Jenkin Thomas to represent the Company in these proceedings.
Attached to the resolution was a letter signed by Mr Jenkin Thomas, being a letter addressing matters raised by Pt 7 r 7 of the Court Rules. It is sufficient to note that the resolution of the Company's Board, set out above, was adopted at a meeting at which the attending directors were noted as being Mr B A Thomas and Mr Jenkin Thomas. The effect of the resolution was to authorise Mr Jenkin Thomas to act for the Company in these proceedings. This facultative provision permitting an authorised director to act as a company's advocate meant that it was unnecessary for Mr Jenkin Thomas, as an authorised director of the Company, to comply with the provisions in the Court Act and the Court Rules relating to representation by agents. It is to be observed that, at the hearing on 6 November 2017, Mr Peter Thomas confirmed that he was not a director of the Company (Transcript, page 2, lines 9 to 13).
Conclusion on the Company’s position on the costs application
The various provisions set out above, in combination with the resolution of the Company's Board of 28 June 2016, operate in conjunction so that, unless there was to be a subsequent resolution of the Board of the Company providing that some other person who was a director of the Company was to replace Mr Jenkin Thomas for the purposes of taking steps - initiate the Notice of Motion seeking costs (“carry on” or “commence”) in these proceedings - or was authorised, in addition to, or substitution for, Mr Jenkin Thomas to speak for the Company for the purposes of these proceedings, only Mr Jenkin Thomas had authority to speak or act on behalf of the Company. It is to be observed that, at various attendances before a Registrar and at each of the hearings before the Acting Commissioner, he did so.
This position also means that Mr Peter Thomas had no standing to purport to initiate a costs application on behalf of the Company. To that extent, the element of the costs application on behalf of the Company must be dismissed as incompetent. Although Mr Jenkin Thomas was present for the costs hearing, as the Company was not a party to the costs application, for the reasons earlier set out, there was no role for him in the costs hearing.
Matters determined in the principal proceedings
In D'Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1; [2005] HCA 12 (D'Orta-Ekenaike), the plurality of the High Court observed, at [34]:
A central and pervading tenet of the judicial system is that controversies, once resolved, are not to be reopened except in a few, narrowly defined, circumstances.
This was specifically reconfirmed by the plurality of the High Court in Burrell v The Queen (2008) 238 CLR 218; [2008] HCA 34 at [15].
Although I am not here dealing with reopening, the above proposition from D'Orta-Ekenaike is equally applicable to the inappropriateness of seeking to relitigate, on a costs application, matters determined in the principal proceedings.
As a consequence, I am not dealing with the correctness or otherwise of the orders made in the Acting Commissioner’s first or second decisions. Revisiting the merit findings is not permitted on a costs application. What I am dealing with is only the question of whether it is “fair and reasonable” to make some costs order in favour of Mr Peter Thomas in light of the outcomes determined as appropriate by the Acting Commissioner.
What are costs?
It is, in the context of this costs application now confined to being by Mr Peter Thomas, appropriate to propose this rhetorical question and to answer it. There are two reasons for doing so. First, the answer defines the starting point from which a financial calculation would be made if I was to make some costs order in favour of Mr Peter Thomas and, second, to provide some basis upon which to assess the reasonableness of the conduct of the parties for the purposes of one of the matters arising pursuant to r 3.7 of the Court Rules.
Costs, in the context of these proceedings, for Mr Peter Thomas are those legal costs and disbursements (such as the costs of expert reports) incurred by him (and not, for reasons elsewhere explained, by the Company) in the preparation for, and the conducting of, the tree dispute proceedings. For Mr and Mrs Holmes, their costs are any disbursements incurred after being served with the Notice of Motion until they engaged their present legal advisers and then legal costs and disbursements on the same basis as for Mr Peter Thomas.
Neither Mr Peter Thomas nor Mr and Mrs Holmes would be entitled to any compensation for any time which they spent, personally, in preparation for the substantive tree dispute litigation, or for this costs motion arising from it (Cachia v Hanes (1994) 179 CLR 403).
The appropriate costs framework
Introduction - the general civil proceedings position
There are two general observations to be made about the costs regime in civil litigation. Before turning to consider the specific and different regime which applies in the Land and Environment Court's merit jurisdiction (relevantly, here, Class 2 matters, the class of the Court's jurisdiction within which tree dispute proceedings fall).
First, in civil litigation, generally, s 98 of the Civil Procedure Act 2005 makes it clear that matters of costs engage consideration of matters of discretion in the circumstances of the particular case. Although that discretion must be exercised judicially, it is one which is unfettered. The provision reads:
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.
(2) …
(3) An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings.
(4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to:
(a) costs up to, or from, a specified stage of the proceedings, or
(b) a specified proportion of the assessed costs, or
(c) a specified gross sum instead of assessed costs, or
(d) such proportion of the assessed costs as does not exceed a specified amount.
(5) ...
(6) …
The second observation to be made is that, although the UCPR creates a presumption that costs will follow the event (consistent with Latoudis v Casey (1990) 170 CLR 534), the position is only a presumption. This is made clear by the provision in r 42.1 the UCPR, a rule which reads:
42.1 General rule that costs follow the event
Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.
It will also, in the context of this costs application, be necessary to consider what “the event” is for the purposes of a proper understanding of the outcome of each of the hearings conducted by the Acting Commissioner.
The costs claim
Annexure I to the affidavit of Mr Peter Thomas of 4 September 2017 comprised a table setting out the amounts claimed (totalling $93,451.74). It is not necessary to reproduce the whole table - however, I have extracted sufficient of the information contained in it to provide an understanding of the nature of the elements of the claim.
| Description | $ | $ |
| Exploratory works invoice | 3,583.00 | |
| Tree Dispute Application and initial hearing | ||
| Legal Costs and Disbursements | 49,400.24 | |
| Expert Fees | 2,848.00 | |
| Total Costs | 52,248.24 | |
| Post initial hearing costs | ||
| Legal Costs and Disbursements | 35,090.50 | |
| Expert fees | 2,530.00 | |
| Total | 37,620.50 | |
| Overall total Costs | 93,451.74 |
The earliest of the amounts claimed (“Exploratory works invoice” - $3,583) dates from December 2014 - some two years prior to the filing of the Tree Dispute Application and about three months prior to the last exchange between Mr Peter Thomas and Mr Holmes (discussed below).
Consideration of matters arising in this costs hearing
Although it has been necessary to deal with issues relating to the status of Mr Peter Thomas, and of the Company, in order to determine what costs application is correctly, in a legal sense, before me, and on whose behalf could evidence be given and submissions made; having done so, disposal of the costs application, to the extent to which it validly remains for me, is comparatively uncomplicated.
Although Mr Peter Thomas appended to his affidavit a considerable number of documents explaining the history and background to the dispute concerning the tree which gave rise to the original application made pursuant to the Tree Disputes Act (including material relating to a fencing quote of November 2012, almost exactly four years prior to the making of the Tree Dispute Application), that material is, in the circumstances, not relevant to my consideration of this costs application. This position also applied to a further bundle of documentary material entitled “Assorted Documents” (which became Exhibit A on the costs application) upon which he relied.
As I observed during the course of the hearing, a costs application does not provide an opportunity to seek to reagitate factual matters that had been subject to detailed consideration by, and findings of, the Acting Commissioner in her determining what were the appropriate substantive orders to be made to dispose of the proceedings. The fact of the stay of a number of her original orders and further consideration of the application made by the Applicants on a second occasion must remain to be assessed against the relief originally sought in the application made on 23 December 2016 which initiated the proceedings and what was determined to be the relevant jurisdictional and merit outcomes.
Similarly, a significant portion of the volume of material appended to the affidavit of Mr Holmes, although responsive to the material relied upon by Mr Peter Thomas, also plays no substantive part to the extent that this material addresses historical matters.
The merit outcomes before the Acting Commissioner
As can be seen from a comparison of the orders sought in the Tree Dispute Application made on 23 December 2016 and the substantive orders made by the Acting Commissioner, first, on 11 April 2017 and, subsequently, after the second hearing, on 16 August 2017, the primary relief sought by the Applicants was the removal of the tree. They were entirely unsuccessful on this point, at either the first or second stage of the proceedings.
Although the Acting Commissioner found that she did have jurisdiction to proceed to determine merit matters arising out of the application (this consequence arising because she was satisfied, to some extent, that the tree had caused damage to the Applicants’ property, nonetheless, in each of the sets of orders that she crafted, the outcome achieved by the Applicants when compared to the substantive relief (other than the removal of the tree) that had been sought in the Tree Dispute Application was limited and modest.
Although the Acting Commissioner also crafted her orders, at each stage, in a facultative fashion to make it possible for the Applicants to undertake a broader scope of works (outside anything that the Acting Commissioner found arose from the impact of the tree and, hence, being work outside that which she proposed to mandate as any remedy ordered pursuant to the authority given to her by s 9 of the Tree Disputes Act), this was not strictly necessary to dispose of the Tree Dispute Application as made.
The fact that she made these more expansive and facultative provisions in the scope of her orders does not assist Mr Peter Thomas in this costs application.
For the purposes of the costs application, I must simply have regard to the nature of the relief adjudged by the Acting Commissioner to be the appropriate obligations imposed on Mr and Mrs Holmes by her orders when compared to the nature of the relief, within the Court’s jurisdiction, that was sought in the Tree Dispute Application commencing the proceedings.
It is also to be observed that, in the Tree Dispute Application commencing the proceedings, the Applicants also sought orders relating to their proposal that a dividing fence be replaced utilising the ancillary powers given to this Court to make orders pursuant to s 13A of the Dividing Fences Act 1991, powers given as a consequence of an application under the Trees Act involving impacts of the tree on a dividing fence. They also failed in this regard.
Not only did the Applicants not succeed in obtaining the relief that they had sought in their application of December 2016, matters were agitated at each phase of the proceedings before the Acting Commissioner that were clearly outside the jurisdiction of this Court given to it by the Tree Act.
The costs implications of the outcomes before the Acting Commissioner
Introduction
The above shows that “the event” (being the outcome in each of the decisions given by the Acting Commissioner) was what can only be regarded as substantial failure of the Applicants to obtain those remedies sought that were within the jurisdiction of the Court.
In conventional civil litigation costs are ordinarily expected to follow the event. In SzeTuv Lowe (No 2) [2015]NSWCA91 (Sze Tu), Gleeson JA (Meagher and Barrett JJA concurring) wrote, at [39]:
How “the event” should be defined will depend upon the nature of the litigation. Generally the “event” refers to the event of the claim and may be understood as referring to the practical result of a particular claim.
A summary of the general principles providing guidance on departing from the general rule (of costs following the event) was set out in SzeTu, at [40] - quoting from BostikAustralia Pty Ltd vLiddiard(No 2) [2009] NSWCA 304 at [38]. That summary [citations omitted] was:
• Where there are multiple issues in a case the Court generally does not attempt to differentiate between the issues on which a party was successful and those on which it failed. Unless a particular issue or group of issues is clearly dominant or separable it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed.
• In relation to trials it has been said that it may be appropriate to deprive a successful party of costs or a portion of the costs if the matters upon which that party was unsuccessful took up a significant part of the trial, either by way of evidence or argument.
• If the appellant loses on a separate issue argued on the appeal which has increased the time taken in hearing the appeal, then a special order for costs may be appropriate which deprives the appellant of the costs of that issue.
• Whether an order contrary to the general rule that costs follow the event should be made depends on the circumstances of the case viewed against the wide discretionary powers of the court, which powers should be liberally construed.
• A separable issue can relate to “any disputed question of fact or law” before a court on which a party fails, notwithstanding that they are otherwise successful in terms of the ultimate outcome of the matter.
• Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion and mathematical precision is illusory. The exercise of the discretion depends upon matters of impression and evaluation
I can discern no basis in the outcomes before the Acting Commissioner that would warrant any apportionment approach being appropriate.
As can be seen from a comparison of the relief sought in the 23 December 2016 Tree Dispute Application, and the outcomes actually achieved by the Applicants in either of the sets of orders made by the Acting Commissioner (setting aside facultative aspects of them and concentrating, entirely, on mandated relief within the Court’s jurisdiction ordered by her in favour of the Applicants), the outcomes (that is, “the events”) upon which the Applicants succeeded can only be regarded, at most, as being substantially less than the relief which had originally been sought in the Tree Dispute Application.
In this case, the limited degree of success on substantive relief obtained when compared to substantive relief sought would not, as earlier discussed, have given rise to such an entitlement on a “costs follow the event” basis.
Two possible bases remain for a “fair and reasonable” costs award
Introduction
However, the costs regime relevant to my consideration in these Class 2 proceedings is not one based on a simple “costs follow the event” basis. The test raises a higher bar, namely, that it is “fair and reasonable”, in the circumstances of the particular proceedings, to make a costs order (r 3.7(1)(b) of the Court Rules)).
Schedule 2 to the UCPR makes it clear that this provision in the Court Rules applies and displaces the terms of r 42.1 of the UCPR for a wide range of merit matters encompassed in the Court's jurisdictions (including applications made pursuant to the Tree Act falling in Class 2 of the Court's jurisdiction).
The Court Rules set out, in r 3.7(3), a non-exhaustive list of circumstances when it may be fair and reasonable to award costs (see also the decision of Preston CJ in Grant v Kiama Municipal Council [2006] NSWLEC 70 at [74]).
Of the various matters which arise, potentially, for consideration as to whether or not it would be “fair and reasonable” to make a costs order in favour of Mr Peter Thomas, two of them are entirely unrelated to, and independent of, the merit outcome of the proceedings.
Delay before lodgement of the Tree Dispute Application
The first is the question of whether or not there has been any unreasonable delay or obstructive conduct by Mr and Mrs Holmes (r 3.7(3)(c)):
that a party has acted unreasonably in circumstances leading up to the commencement of the proceedings.
This issue is independent of “the event” for the purposes of my consideration. To consider this question (and only for the purposes of this question), it is appropriate to examine some of the historical material provided by the parties. It will also be necessary to make reference to an element of the transcript of the costs hearing before me.
It is obvious that the dispute between the parties has been one which has been ongoing for some considerable time (well before 23 December 2016, the date upon which the Applicants filed the Tree Dispute Application commencing the substantive proceedings in this Court). For the purposes of my analysis, however, it is unnecessary to traverse the entirety of their history. It is sufficient to turn to the final, pre-filing written exchange between Mr Peter Thomas and Mr Holmes, an exchange which commenced with an e‑mail from Mr Peter Thomas to Mr Holmes on 21 March 2015. It is not necessary to repeat the terms of this communication; it is sufficient to note that it set out a number of propositions by Mr Peter Thomas for the resolution of the matters in dispute with Mr and Mrs Holmes.
On 23 March 2015, two days later, Mr Holmes replied to this e-mail. He did so by inserting, after each of the propositions contained in Mr Peter Thomas’ document sent to him, the Holmes’ response in red typescript. A copy of the terms of this e-mail exchange was included in the material appended to Mr Holmes’ affidavit (as Annexure D).
On 8 April 2015, Mr Peter Thomas replied to Mr Holmes saying, inter alia (Annexure C to Mr Holmes’ affidavit):
… I believe the best approach will be to progress through a formal mediation process.
On the evidence before me, this exchange was the last one which occurred between the parties prior to the service on the Holmes of the Tree Dispute Application documentation commencing these proceedings. There was, obviously, from the dates involved, a gap of approximately 21 months between the time of the final direct exchange between the parties and the commencement of the proceedings.
During the course of the costs hearing before me, the transcript records Mr Peter Thomas making the following comment in his submissions in reply to explain why there had been this very long delay after this e-mail exchange in making the Tree Dispute Application (Transcript, 6 November 2017, page 63, lines 11 to 18):
I was a little bit confused as to mediation and court. Are they different?
In my view, mediation was to come to court. Talked a little bit about the time period it took to get to court, which we've been through that, and they were things like, I have a lot of neighbours that use the easement, the stormwater. Commissioning of a lawyer and the time period it takes to do all those things, investigations at council and so on.
Mr Peter Thomas’ comment about not knowing the difference between mediation and an application to the Court to adjudicate the dispute is irrelevant to my consideration of this costs application. However, the quite extraordinarily long time between April 2015 and December 2016 is not adequately explained. In fact, this temporal gap demonstrates that there is no fault falling to the Respondents in the delay in commencing proceedings.
There, therefore, is no possible foundation in r 3.7(3)(c) to consider making any costs order in Mr Peter Thomas’ favour.
Obstruction after lodgement of the Tree Dispute Application
The second is the question of whether or not there has been any unreasonable delay or obstructive conduct by Mr and Mrs Holmes after the Tree Dispute Application was filed and served on them (r 3.7(3)(d)):
that a party has acted unreasonably in the conduct of the proceedings
The commencement of the proceedings on 23 December 2016 provides a clear starting point from which to assess whether there has been any conduct by Mr and Mrs Holmes that has been unreasonable or delaying or causing the incurring by Mr Peter Thomas of unnecessary costs in the conduct of the proceedings so as to make it “fair and reasonable” that some costs order might be appropriate to be made in favour of Mr Peter Thomas.
Any such costs order on this basis would also need to be made despite the fact that the substantive outcome of the proceedings (“the event”) fell far short of the relief which had been sought by the Applicants in the Tree Dispute Application commencing the proceedings.
For the purposes of my consideration of this confined question (raised by r 3.7(3)(d) of the Court Rules), I have carefully examined all of the material provided by Mr Peter Thomas in his affidavit and in his bundle of material, as well as the narrative set out in his affidavit itself. I have, similarly, had regard to Mr Holmes’ affidavit and the material attached to it. I have also examined the material contained in the Court’s file (including notations made by both the Court's Assistant Registrar and by the Acting Commissioner).
What is disclosed from my examination of all of this material is that these proceedings, from the time of filing of the Tree Dispute Application to the first hearing before the Acting Commissioner, were entirely conventional as to process and timing. There was no delay, at all, occasioned by Mr and Mrs Holmes in what would have been expected to be the ordinary timeline for their participation in the proceedings. There is, therefore, no basis to conclude that there was any conduct-based reason why Mr Peter Thomas would be entitled to any costs order in his favour.
There, therefore, is no possible foundation in r 3.7(3)(d) to consider making any costs order in Mr Peter Thomas’ favour.
Conclusion on Mr Peter Thomas’ costs application
As a consequence, it cannot be concluded that it would be “fair and reasonable” to make any costs order whatsoever in these proceedings in favour of Mr Peter Thomas.
Consideration of the Respondents’ costs claim on this motion
Introduction
Although costs do not “follow the event” in the substantive elements of merit proceedings in Class 2 Tree Disputes Act proceedings, that position does not apply in the consideration of costs applications made concerning such matters.
In costs applications made in Class 2 proceedings, the usual presumption is that costs will “follow the event” on an ordinary costs basis, unless there is some particular reason why that presumption should not apply. In this instance, “the event” is my rejection of this costs application.
I have earlier explained why these costs proceedings, although validly commenced by Mr Peter Thomas, were not validly commenced on behalf of the Company. It therefore follows that any costs order to be made arising from these costs proceedings can only be made as a costs order applicable, personally, to Mr Peter Thomas. It is appropriate that such a costs order be made.
Properly and competently legally advised, Mr Peter Thomas would not have made a costs application in these proceedings. Further, for the reasons earlier set out in considerable detail (detail necessary, at least in part, to provide a proper understanding for any casual reader of this decision why a costs order should be made personally against Mr Peter Thomas), there was no proper foundation for a costs application to be made concerning either the first or second phase of the proceedings before the Acting Commissioner.
The Respondents’ solicitor makes a Calderbank offer
The Respondents’ solicitor, Ms Taylor, caused a letter to be sent to Mr Peter Thomas on 16 October 2017 making an offer of compromise concerning the proceedings. The letter to Mr Peter Thomas was attached to Ms Taylor’s affidavit of 20 October 2017 - an affidavit in evidence in these costs proceedings.
That offer of compromise was, in essence, that if the proceedings were finalised by Mr Peter Thomas discontinuing his application for costs, that discontinuance would be able to be on the basis that each party would bear its own costs of the costs application. The letter observed that this offer was made as a Calderbank offer (see Calderbank v Calderbank [1975] 3 All ER 333). The offer was open for a period of seven days - that is, until 23 October 2017, being 14 days prior to the date upon which Mr Peter Thomas’ costs application was listed for hearing.
Mr Peter Thomas did not reply to this offer and, therefore, it lapsed by effluxion of time.
The basis for the Calderbank offer
The letter sent to Mr Peter Thomas included the following explanation of the reasons why it was said Mr Peter Thomas should accept the offer and withdraw the costs application:
4. Further, and in addition, in light of your proceedings having been defeated and the subject tree remaining, there is no issue with respect to Rule 3.7 of the Land and Environment Court Rules 2007 that would rebut the non-discouragement presumption with respect to costs in class 2 proceedings.
5. There is also no question of it being fair and reasonable in the circumstances for a costs order be awarded against the Respondents as:
(a) Order No. 4 of your original claim was incompetent and/or unnecessary as the Respondents always granted access to their property for the purpose of undertaking exploratory work;
(b) Orders No. 5 and 6 of your original claim was incompetent and/or unnecessary as the Respondents wholly at their own will and cost, erected a new dividing fence;
(c) We are instructed that at all times prior to you commencing proceedings, the Respondents acted reasonably and despite this, were afforded no notice that proceedings would be commenced;
(d) We are instructed that at all times during the proceedings, the Respondents acted reasonably;
(e) The Respondents were successful in the defence of your claim on account of the Court determining the tree in question should be retained;
(f) The Respondents were required to pay only a fraction of the compensation sought in your claim.
Submissions in support of the Respondents’ indemnity costs application
Dr Smith submitted to me that, if I were to find that Mr Peter Thomas’ costs application was without merit (as I have found), the Respondents should have their costs of the costs motion on an indemnity basis from the time of expiry of the offer.
There are, in broad terms, two tests to be considered as to whether or not the making and non-acceptance of such a Calderbank offer give rise to an order for indemnity costs from the expiry of the offer (Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [8]). These are:
(1)Did the offer genuinely propose a compromise on the position that would apply if the offeror was successful in the proceedings? and
(2)Was the period of time for which the offer was open to be accepted reasonable in the circumstances of the proceedings?
I questioned Dr Smith on timing aspects of the offer, matters of particular concern - given that Mr Peter Thomas has been self-represented on this costs application since his Notice of Motion seeking costs was filed on 5 September 2017. I observed to Dr Smith that the Notice of Motion had been before the Court's Assistant Registrar on 22 September 2017 and, on that date, the matter had been set down for hearing on 6 November 2017. I asked, (1), why it had taken 21 days after that date for the Calderbank offer to be made and, (2), why I should regard the period for which the offer was open as being a reasonable one, particularly in circumstances where Mr Peter Thomas was self-represented and the offer, which was made 21 days prior to the date set for the hearing, was only open for acceptance for a period of a maximum of six working days.
Dr Smith informed me that his instructing solicitor had only been retained a matter of a few days prior to the sending of the Calderbank offer letter to Mr Peter Thomas. In response to a further question from me concerning the timing of the lapsing of the offer, the transcript records (Transcript, 6 November 2017, page 61, line 24 to page 62, line 30) the following exchange:
HIS HONOUR: All right, the Calderbank letter, Dr Smith, to Mr Peter Thomas is dated 16 October, which is, it seems to me, some more than three weeks, or about three weeks after the matter was set down for hearing today. It allowed a period of a week for acceptance of the offer. Now, to the extent that you say to me in paragraph 25(5) that that was sufficient time in circumstances where Mr Peter Thomas is self-represented and the expiry date of the offer is a fortnight prior to the date of the hearing. Why do you say that that, consistent with what the Court of Appeal tells me, the test is not sufficient time, it's reasonableness.
Why do you say to me that that period of time of one week was a reasonable period within which Mr Peter Thomas should consider the offer. Particularly, in circumstances where - and, perhaps as an unintended consequence of the Thomas's collectively not understanding the law - the letter from Mr Jenkin Thomas of 19 October constitutes a rejection of the offer on behalf of the company does not constitute a rejection on behalf of Mr Peter Thomas and Mr Peter Thomas, at least on such documents as have been tendered in these proceedings, did not respond to the offer. Therefore, I am to assume, at least as I understand the position, that the offer to Mr Peter Thomas expired by the effluxion of time, rather than by earlier rejection.
SMITH: The only submission I make in terms of reasonableness, your Honour, is that the Respondents were unrepresented up until 12 October. Within four days obstructions (as said) had been obtained, the solicitors had absorbed the file and sent a cost letter within four days. Then, obviously to make sure that there was sufficient time between the costs letter and the hearing, a date was picked. The respondent finds itself in a not dissimilar position to the Applicant, being unrepresented up until this point.
HIS HONOUR: All right, well, assume I accept that as an explanation as to why the Calderbank letter was sent on 16 October. It still doesn't address the question of the reasonableness of seven days, when the hearing was 21 days later than the date of the letter. So, why do you say to me, under the circumstances of a self-represented litigant, that seven days is a reasonable period of time, that being the test that the Court of Appeal tells me, amongst other things, I am to apply?
SMITH: The only potential submission, your Honour, is that to the extent there was going to be a rejection or a potential counter offer, for that to have work to do, there needed to be time between the offer and the hearing. In terms of seven days, it is a situation where, though I do accept that the Applicant has chosen not to be represented for the purposes of the motion hearing, but
HIS HONOUR: Now, assume I set that aside entirely. The position is three weeks before the hearing self-represented party to whom an offer is being made by a now legally represented party, one third of that period of time is allowed for the running of the offer, and two thirds of that period of time is left for the now legally represented parties to consider what if anything further they might need to do.
SMITH: The only thing your Honour to consider is that the Applicants have had ready access to legal advice throughout the prior proceedings, and we just say seven days was sufficient to obtain that advice if it needed, or otherwise, consider its position. Which it did, and it was - obviously sent a response within the time permitted, rejecting the offer. So, any prejudice that was suffered wasn't crystallised because it actually provided a response. So, that in itself is a fact that it was able to respond within the time provided.
In response to the submissions made by Dr Smith on this offer and the Respondents’ seeking of an indemnity costs order against Mr Peter Thomas for costs incurred after the lapsing of the offer on 23 October 2017, I permitted, in the interests of time efficiency of this costs hearing, Mr Peter Thomas to adopt the functional elements of a letter dated 19 October 2017 by Mr Jenkin Thomas (on behalf the Company), rejecting a Calderbank offer that had been made to the Company in identical terms, relevantly, to that made to Mr Peter Thomas. Mr Jenkin Thomas’ letter was not in evidence because, for the reasons earlier explained, there was no valid costs application on behalf of the Company that was before me for the purposes of this costs hearing. Given the conclusion which I have reached, for the reasons set out below, concerning the Calderbank offer, it is not necessary to address, in detail, any aspects of those submissions.
I turn, now, to consideration of the two questions to be addressed, contextually, for the offer made in these proceedings.
First, I am satisfied that the terms of the offer proposed a genuine compromise on what would otherwise be the “costs follow the event” conclusion that would be the outcome of the inevitable failure, on the facts, of Mr Peter Thomas’ costs application. In circumstances where initial costs for legal preparation for the hearing would have been incurred but would have been comparatively modest, the offer to avoid the incurring of the inevitable future costs of preparation for, and attendance at, the hearing was an offer that proposed a genuine advantage to Mr Peter Thomas. The offer, therefore, satisfies the first of the relevant tests.
I turn, therefore, to consider whether the period for which the offer remained open was a reasonable one or not. I have earlier set out the terms of my exchange with Dr Smith on this point.
I am satisfied that the timing of the making of the offer was not unreasonable in circumstances where the offer was made sufficiently promptly after the Respondents instructed their solicitor to represent them on this costs application.
However, on balance, I am not satisfied that, in circumstances where the Respondents’ solicitor knew that Mr Peter Thomas was self-represented, allowing seven days out of a pre-trial period of 21 days to a self-represented litigant to consider the terms of the offer was reasonable in the circumstances. On that basis, I am satisfied that the second of the relevant tests is not met and that costs should not be ordered against Mr Peter Thomas on an indemnity basis.
Mr Peter Thomas is lucky only the Company replied to the Calderbank offer
I add a cautionary note, however, given that Mr Jenkin Thomas had replied, promptly, to the Calderbank offer which had been made to the Company (an offer and rejection with which I am not formally engaged for reasons earlier set out). It is to be observed that, had Mr Peter Thomas replied to the Calderbank offer in the same or similar terms to the reply penned by his brother, it might well have been my conclusion that the second of the tests had also been satisfied and an indemnity costs order might have been appropriate against him. For whatever reason, a matter upon which it is inappropriate to speculate, the lapsing of the offer made to Mr Peter Thomas by the effluxion of time has led to the result that the costs order to be made against him is to be on the conventional as “agreed or assessed” basis.
Conclusion on the Respondents’ costs application on the costs application
Therefore, the Respondents’ application for an indemnity costs order is rejected and Mr Peter Thomas is to pay the Respondents’ costs of his costs application on an “as agreed or assessed” basis.
Conclusion
For the reasons which I have earlier set out in detail, the following conclusions must be drawn:
(1)First, Mr Peter Thomas had no authority to make a costs application for, or to purport to depose an affidavit giving evidence on behalf of, the Company;
(2)Second, for the first phase of these proceedings leading to the decision of the Acting Commissioner given on 11 April 2017, it is clear, for the reasons which I have earlier set out in my analysis of the Acting Commissioner's decision, the extent to which the Applicants succeeded in their application made pursuant to the Trees Act, this success was extremely limited and far more confined than the nature of the relief sought in the original application. The consequence of this is that, for the reasons set out by the Acting Commissioner in her decision on this phase of the proceedings, not only is it not “fair and reasonable” that there be any costs order made against the Respondents for that phase of the proceedings, but that the pursuing of a costs order for this phase of the proceedings was completely and fundamentally misplaced. Properly legally advised, such an application would never have been lodged, let alone pursued to hearing; and
(3)Finally, for the second phase of these proceedings leading to the decision of the Acting Commissioner given on 16 August 2017, it is clear for the reasons which I have earlier set out in my analysis of the Acting Commissioner's second decision, the extent to which the Applicants succeeded in their application made pursuant to the Trees Act, this success was extremely limited and far more confined than the nature of the relief sought in the original application. The consequence of this is that, for the reasons set out by the Acting Commissioner in her decision on this second phase of the proceedings, not only is it not “fair and reasonable” that there be any costs order made against the Respondents for that second phase of the proceedings, but that the pursuing of a costs order for this second phase of the proceedings was also fundamentally misplaced.
It therefore follows that:
(1)The element of this costs application purporting to have been made by the Company must be dismissed as incompetent; and
(2)The costs application made by Mr Peter Thomas, whilst validly made, has no merit and is to be dismissed;
(3)Although the Respondents made a genuine offer of compromise, the period for which it was open to be accepted by Mr Peter Thomas was unreasonable. Mr Peter Thomas is only to pay the Respondents’ costs of his costs motion on an “as agreed or assessed” basis.
Orders
It therefore follows that the orders of the Court are:
(1)The costs application made on behalf of the Second Applicant is dismissed as incompetent;
(2)The costs application made by the First Applicant is dismissed; and
(3)The First Applicant is to pay the Respondents’ costs of this costs application as agreed or assessed.
**********
2
10
7