Supreme Court New South Wales Medium Neutral Citation: Meadth v Nye [2024] NSWSC 1637 Hearing dates: On the Papers Date of orders: 18 December 2024 Decision date: 18 December 2024 Jurisdiction: Equity Before: Elkaim AJ Decision: The plaintiffs are to pay the defendants' costs of the proceedings on an ordinary basis. Catchwords: COSTS — where judgment was for the defendant — where plaintiff is seeking apportionment of costs as they had succeeded on two of the three substantive issues in the proceedings — Calderbank offer by defendants — where Calderbank offer was made at an early stage of the proceedings — where defendants rejected Calderbank offer — no indemnity costs awarded — plaintiffs are to pay the defendant's costs of the proceedings on an ordinary basis Cases Cited: Calderbank v Calderbank [1975] 3 WLR 586 Gray v Richards (No 2) [2014] HCA 47 Meadth v Nye [2024] NSWSC 1567 Category: Costs Parties: Alexandra Meadth (First Plaintiff) Medhat Eleisawy (Second Plaintiff) Arthur Nye (First Defendant) Alisa Nye (Second Defendant) Representation: Counsel: Mr M Klooster (Plaintiffs) Ms B K Nolan (Defendants) Solicitors: Diamond Conway Lawyers (Plaintiffs) Green & Associates (Defendants) File Number(s): 2021/179425 Publication restriction: No JUDGMENT 1. On 6 December 2024 I delivered judgment in this matter, finding in favour of the defendants (Meadth v Nye [2024] NSWSC 1567). I gave leave to the parties to provide written submissions on costs. 2. The plaintiffs had sued the defendants alleging nuisance arising from patrons of the defendants' business interfering with the plaintiffs' use and enjoyment of their respective properties as well as interfering with the right of the public to the safe use of the roadway running alongside the property of all of the parties. 3. At the commencement of the hearing, I was asked to deal with a threshold issue of jurisdiction. The defendants submitted that the matter fell within the exclusive jurisdiction of the Land & Environment Court (the LEC). After hearing submissions from both parties, I adjourned to the following day when I told the parties that I was satisfied that I had jurisdiction and that the matter should continue. I gave my reasons in the principal judgment. 4. In relation to jurisdiction, it is important to note that in pursuing the matter before me the plaintiff's abandoned a good deal of their statement of claim in obvious recognition that many of their allegations were properly restricted to the LEC. The claim pursued by the plaintiffs was confined to the tort of nuisance. Although their assertions implicitly necessitated a finding that a development consent that had been issued by the local council had been breached, the plaintiffs did not seek any remedy occasioned by any such breach. 5. I found that both a public and a private nuisance had been established. 6. The plaintiff's failed in the proceedings because I was not satisfied that the remedy they proposed to counter the nuisance was viable or capable of addressing the nuisance. Again, I note that the remedy put forward was one which had only materialised a short time before the hearing. My conclusion was that the only realistic remedy to address the nuisance lay with the local council by the erection of appropriate traffic and parking signage. 7. Based on what I have said above, it can be seen that of the three substantive issues decided in the proceedings (jurisdiction, the existence of nuisance and remedy) two were found in the plaintiffs' favour. 8. The plaintiffs, in their submissions on costs, have recognised that costs will usually follow the event. But they have emphasised that the court has a wide discretion on costs and that costs are "compensatory in nature, not punitive". 9. In the very broadest of terms the High Court stated in Gray v Richards (No 2) [2014] HCA 47, at [2]: "The disposition of costs is within the general discretion of the Court. Ordinarily, that discretion will be exercised so that costs are awarded to the successful party, but other factors may have a significant claim on the discretion of the Court. The disposition which is ultimately to be made in any case where there are competing considerations will reflect a broad evaluative judgment of what justice requires." 1. The plaintiffs proposed three alternative orders: 1. that there be no order as to costs; or 2. that the plaintiff's pay 25% of the defendant's costs of the proceedings on the ordinary basis (or such other percentage as the Court determines); or 3. that the plaintiff's pay the defendant's costs of the proceedings on the ordinary basis up to and including 18 November 2024. 1. In essence, the plaintiffs submitted that apportionment of costs was appropriate because they had succeeded on two of the three primary issues. In addition to this success, the plaintiffs pointed out that notwithstanding the existence of the nuisance, the defendants: 1. made no attempt to ameliorate the nuisance; 2. effectively ignored an email from the Council following a meeting on 20 April 2021 stating: "As a business owner you have been informed of the potential triggers of impacts on living amenity of the adjoining neighbours such as traffic, parking and noise. As discussed in meeting you have recognised these issues and has assured to minimise any impacts." and 1. took positive steps to frustrate the plaintiffs' efforts to ameliorate the nuisance by removing the flags and fencing erected by one of the plaintiffs. 1. The plaintiffs also submitted that the defendants deliberately raised issues which should never have been in genuine dispute. These included denying the second defendant had operated the business and taking issue with the existence of website extracts that were ultimately admitted without objection. 2. The defendants' response was to reinforce the standard position that the loser pays and also to rely on a Calderbank offer (derived from Calderbank v Calderbank [1975] 3 WLR 586) made by the defendants on 23 August 2021. In this offer the defendants solicitors wrote: "… we make an offer that both parties withdraw from this matter with no order as to costs. This offer is subject to a Deed which we will draft." 1. The offer was not accepted. On 26 August 2022 the defendants' solicitors emailed their counterparts: "We note we made an offer to your clients on 23 August 2021 for both parties to walk away and bear their own costs. That offer was rejected and our clients have been put to significant cost as a result. Rather than to allow this to continue, would you kindly take instructions to ascertain whether your clients are prepared to open settlement discussions on the basis that some of these costs will be reimbursed, and revert back to us as a matter of priority." 1. Although not strictly an offer, the suggestion of entering settlement negotiations was not pursued by the plaintiffs. 2. The correspondence referred to above is attached to an affidavit of Mr Dominic Green dated 17 December 2024. Mr Green is the defendants' solicitor. In addition to the correspondence Mr Green also annexes a "Certificate as to Orders" issued by the local council in respect of the first plaintiff's property (No 8). I join with the learned plaintiffs' counsel in wondering "what relevance the certificate has." 3. In addition to using the Calderbank offer to blunt the plaintiffs' submissions, the defendants have also submitted that costs in their favour should be awarded on an indemnity basis from 31 August 2021 until noon on 16 November 2024. The submission is drawn from the rejection of the Calderbank offer. 4. I am not sure what event occurred at noon on 16 November 2024. 5. Subject to one matter, I thought there was substance in the plaintiffs' submissions such that a costs order, other than the usual costs order, might be countenanced. The one matter concerns the argument on jurisdiction. While I agree that this argument took up at least a full day of the hearing, I do not think this fact necessarily weighs in the plaintiffs' favour because it was only at the last minute that the plaintiffs refined their claim to restrict it to the allegation of nuisance. 6. I do think the defendants behaved inappropriately in ignoring the council's exhortations to consider their neighbours, and also to not take any steps to lessen the parking problem after their solicitors wrote to the plaintiffs on 18 May 2021, stating: "We confirm that our client is aware of the issues and obligations involved, and your clients can rest assured that our client will do everything possible to ensure that her obligations are met." 1. In fact, the defendants did nothing, and positively acted to hamper the plaintiffs' efforts to restrict parking. 2. The difficulty faced by the plaintiffs is to overcome the Calderbank offer made on 23 August 2021. This offer would have brought to the proceedings to a close with a limited costs impact for both parties. The plaintiffs not only had the option to accept the offer but also to transfer the proceedings to the LEC where in particular, if the council had been joined to the proceedings, a suitable remedy to address the nuisance might have been found. 3. Therefore, despite the cogent arguments made by the plaintiffs I do not think there is a sufficient basis to stray from the usual order, in particular noting that the Calderbank offer was made at an early stage of the proceedings and would have avoided effectively three years of accumulating costs by both sides. 4. I do however think that the plaintiffs' limited success, taken together with the defendants' contrary conduct are sufficient for me, in my quest to achieve justice between the parties, to refuse to award indemnity costs. 5. I make the following order: The plaintiffs are to pay the defendants' costs of the proceedings on an ordinary basis. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 December 2024