Land and Environment Court of New South Wales CITATION : Mosman Municipal Council v Kelly (No 7) [2010] NSWLEC 90 APPLICANT Mosman Municipal Council PARTIES : RESPONDENT Mr David Kelly FILE NUMBER(S) : 40967 of 2006 CORAM: Pepper J KEY ISSUES: PRACTICE AND PROCEDURE :- costs - ex parte proceedings occasioned by non-appearance of respondent - respondent discontinued contempt motion - no disentitling conduct by council - costs follow the event Civil Procedure Act 2005 s 98 LEGISLATION CITED: Land and Environment Court Act 1979 s 63 Land and Environment Court Rules 2007 Uniform Civil Procedure Rules 2005 r 42.1 Broadwater Action Group Inc v Richmond Valley Council (No 2) [2003] NSWLEC 289; (2003) 129 LGERA 401 Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 CASES CITED: Mosman Municipal Council v Kelly [2007] NSWLEC 90 Mosman Municipal Council v Kelly (No 2) [2008] NSWLEC 229 Mosman Municipal Council v Kelly (No 3) [2009] NSWLEC 92; 167 LGERA 91 Mosman Municipal Council v David Kelly (No 6) [2010] NSWLEC 20 DATES OF HEARING: 15 April and 7 June 2010 EX TEMPORE JUDGMENT DATE : 7 June 2010 APPLICANT Mr A Simpson (solicitor) SOLICITORS Pikes Lawyers LEGAL REPRESENTATIVES: RESPONDENT Ms L Williams (agent) on 15 April 2010 no appearance on 7 June 2010 SOLICITORS N/A JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES PEPPER J 7 June 2010 40967 of 2006 Mosman Municipal Council v David Kelly (No 7) EX TEMPORE JUDGMENT Introduction 1 HER HONOUR: This is an application on behalf of Mosman Municipal Council ("the council") filed on 18 December 2009 that the respondent, Mr David Kelly, is to pay the council's costs ("the costs motion") in relation to a notice of motion filed on behalf of Mr Kelly on 2 April 2009, alleging contempt on behalf of the council, which was subsequently discontinued by Mr Kelly on 3 December 2009 ("the contempt motion"). 2 In my view there is nothing about the circumstances of the matter, and in particular the conduct of the council, that would warrant a departure from the usual rule in Class 4 proceedings such as these that costs follow the event. Therefore, Mr Kelly must pay the council's costs of the discontinuance by him of his contempt motion. Background 3 It is not necessary to comprehensively set out the long history of the proceedings between the council and Mr Kelly in this judgment. Suffice it to say that on 31 July 2008, Lloyd J ordered Mr Kelly to demolish a garage structure located at the rear of premises known as 91 Ourimbah Road, Mosman within a period of four months from 31 July 2008 (Mosman Municipal Council v Kelly (No 2) [2008] NSWLEC 229). This was a variation of a similar order made by Jagot J on 19 February 2007, compliance with which was required by no later than 20 April 2007 (Mosman Municipal Council v Kelly [2007] NSWLEC 90). 4 The council charged Mr Kelly with contempt for disobeying Lloyd J's order. On 19 June 2009, Biscoe J found Mr Kelly guilty of contempt as charged and gave directions for a sentencing hearing (Mosman Municipal Council v Kelly (No 3) [2009] NSWLEC 92; 167 LGERA 91). 5 When the matter came before Biscoe J on 23 February 2010 (it had been adjourned twice due to Mr Kelly's ill health), Mr Kelly still had not complied with the order nor commenced demolition. At the sentencing hearing the only evidence tendered by Mr Kelly concerned his ill health and to demonstrate that he was not a resident in New South Wales. Notwithstanding this latter evidence Biscoe J noted that Mr Kelly had been for sometime, and was continuing to be, treated by medical practitioners in the Sydney area (Mosman Municipal Council v David Kelly (No 6) [2010] NSWLEC 20 at [5]). His Honour imposed a fixed fine of $20,000 and a periodic fine of $5,000 per calendar month so long as the order for demolition was not complied with, suspended until 1 July 2010 (Kelly (No 6) at [22]). Hearing on 15 April 2010 6 When the council's motion came before me for hearing on 15 April 2010, the council relied, first, on an affidavit of Mr Andrew Simpson sworn 18 December 2009. Mr Simpson is a solicitor employed by Pikes Lawyers on behalf of the council. Mr Simpson deposed to the steps that the council had taken to comply with court orders for the preparation of the hearing of the contempt motion. That is to say, evidence and submissions were filed and served by the council. 7 Mr Simpson's affidavit further stated that the contempt motion was originally listed for hearing on 15 September 2009. On or about 20 August 2009, a notice of motion was filed by Mr Kelly to vacate the hearing of his contempt motion. The basis of vacation was that Mr Kelly was recovering from cardiac surgery performed in August 2009. By consent, Lloyd J vacated the hearing date for the motion. The motion was refixed for hearing on 7 December 2009. 8 However, pursuant to a fax from Ms Lydia Williams, Mr Kelly's agent pursuant to a written power of attorney dated 31 July 2007, the contempt notice of motion was discontinued on 3 December 2009, with any application for costs to be made by the council stood over to a later date. 9 Second, the council relied on an additional affidavit of Mr Simpson sworn 22 March 2010, which deposed to various attempts that the council had made to serve Mr Kelly. The issue of service had arisen because Ms Williams' authorisation to act as Mr Kelly's agent specifically excluded acceptance of documents for service on Mr Kelly and Ms Williams had refused to disclose Mr Kelly's address. 10 Third, the council relied on an affidavit of Mr Angelo Falato sworn 5 March 2010. Mr Falato is the Manager of Development Services at the council. Mr Falato's affidavit stated that he had attended the premises at 91 Ourimbah Road, Mosman and left two copies of the notice of motion seeking costs and the first affidavit of Mr Andrew Simpson at the premises. Mr Falato also stated that the council rate records indicated that the owner of the premises was Mr Kelly. 11 Ms Williams relied on an affidavit sworn by her on 22 January 2010, which stated: (a) that she was not authorised to receive documents for service on Mr Kelly; (b) that Mr Kelly was unavailable to appear in Court on medical grounds due to his heart surgery; (c) that Mr Kelly was not a resident in New South Wales; and (d) that the council had not provided clear details of the costs sought by it in order for Mr Kelly to settle the matter out of Court nor any bank details for the payment of these costs. 12 Ms Williams stated that the motion for costs should be struck out on an indemnity basis for the reasons given in her affidavit and because it constituted an abuse of process and unreasonable conduct by the council. 13 Ms Williams objected generally to the costs motion being heard on the basis that Mr Kelly had not been personally served with the costs motion or any of the council's supporting affidavits and because of Mr Kelly's continuing ill health. 14 Ms Williams reiterated that Mr Kelly was not a resident of New South Wales and queried the Court's jurisdiction in this regard. Remarkably, Ms Williams stated that she was aware that Mr Kelly was in Victoria but claimed not to know his precise location. More remarkably, Ms Williams told the Court that she did not have any contact details for Mr Kelly and that she could not communicate with him unless and until he contacted her. It was on this basis that she received instructions from him. 15 In an abundance of caution, the notice of motion was stood over to 7 June 2010, and the following orders were made by the Court: 1. either the respondent or the respondent's agent provide in writing to the applicant no later than 29 April 2010, an address for service for the applicant; 2. the applicant is to serve its notice of motion dated 18 December 2009 ("the motion"), all filed evidence in support ("the evidence") and a letter stating the date of the hearing of the motion, on the address provided by the respondent or respondent's agent pursuant to order 1 above. The service is to be verified by affidavit; 3. if no address for service is provided to the applicant pursuant to order 1 above, then pursuant to Pt 10 r 14(1) of the Uniform Civil Procedure Rules 2005, the applicant is to serve the motion, all evidence in support and a letter stating the date of the hearing of the motion, on 91 Ourimbah Road, Mosman. The service is to be verified by affidavit; 4. if no address for service is provided to the applicant pursuant to order 1 above, the respondent's agent is to file and serve an affidavit explaining why such address could not be provided and detailing all reasonable steps the agent has taken to obtain instructions from the respondent in relation to his address for service, by 7 May 2010; 5. the respondent's agent inform the respondent of the date of the hearing of the motion on the next occasion that she communicates with him; 6. the motion is list for further hearing on 7 June 2010; 7. the respondent is to file and serve any evidence upon which he wishes to rely by 17 May 2010; 8. the applicant is to file and serve any evidence in reply by 24 May 2010. 9. the parties are to exchange a written outline of argument by 27 May 2010. 10. liberty to restore on 3 days' notice. 16 On 27 April 2010, by way of letter sent to the Court, Ms Williams gave two addresses for Mr Kelly: (a) Yea Caravan Park, Yea, Victoria; and (b) 10 Melbourne Road, Wodonga, Victoria. 17 In addition to the addresses, Ms Williams stated in her letter that Mr Kelly was a Victorian resident who had developed cardiovascular problems in his dealings with the council. She stated that "common sense has it he would be convalescing after heart surgery where people can look after him". However, Ms Williams went on to state that she did not have any information on these personal matters. She reiterated that she relied on him contacting her. 18 No evidence was filed by Mr Kelly in response to the council's motion. Hearing on 7 June 2010 19 When the matter resumed on 7 June 2010, there was no appearance by Mr Kelly or by anyone on his behalf. The matter was called three times outside Court. Mr Simpson, appearing on behalf of the council, told the Court that he had received no correspondence from either Mr Kelly or anyone acting on his behalf indicating that there would be no appearance. Consequently, the Court proceeded on an ex parte basis. 20 The following further affidavits were read by Mr Simpson deposing to attempts by the council to personally serve Mr Kelly. First, was an affidavit from Mr Simpson sworn 3 June 2010, attaching the letter from Ms Williams dated 27 April 2010. 21 Second, was an affidavit of attempted service by Mr Shane Hotschilt sworn 27 May 2010. Mr Hotschilt stated that he could not locate 10 Melbourne Road, Wodonga, Victoria. When Mr Hotschilt went to that location there was no number 10 and the road was a shopping strip and vacant land with no housing in the area. Mr Hotschilt called the City of Wodonga Council who confirmed that there was no number 10 Melbourne Road in Wodonga. 22 Third, was an affidavit of Ms Anne Burke sworn 1 June 2010, who similarly stated that she had had a telephone conversation with a female employee of the Wodonga Council who told her that there was no number 10 Melbourne Road, Wodonga, and moreover, that there was no listing for the name Mr David Kelly. 23 Fourth, was an affidavit from Mr James Seddon sworn 3 June 2010, which stated that he had attempted service of the notice of motion, affidavits in support and a sealed copy of the orders made on 15 April 2010 on Mr Kelly at the caravan park address provided by Ms Williams. However, Mr Seddon had spoken to a female who was the manager of the caravan park who had advised him that she had been there for eight years and that Mr Kelly had not lived there in that time. 24 Mr Simpson further advised the Court that: (a) apart from the letter dated 27 April 2010 from Ms Williams, he had had no further correspondence from either Ms Williams or Mr Kelly; (b) as far as Mr Simpson was aware, Ms Williams' power of attorney had not been revoked or altered in any way; and (c) other than the material contained in Ms Williams affidavit sworn 22 January 2010, he was not aware of any further information concerning the health of Mr Kelly. 25 As a result of the material tendered by the council on 15 April and 7 June 2010, I am satisfied that the council has properly served the motion and all evidence in support, including a letter stating today's date for the hearing of the costs motion, on 91 Ourimbah Road, Mosman in accordance with order 3 of the orders made by the Court on 15 April 2010. I am therefore satisfied that substituted service has been properly effected (see r 10.14(1) of the Uniform Civil Procedure Rules 2005 ("UCPR")) on Mr Kelly. Statutory Framework 26 The power to award costs in this Court is contained in s 98 of the Civil Procedure Act 2005 and r 42.1 of the UCPR. These provisions state as follows: 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. 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. 27 There are no rules of the Land and Environment Court Rules 2007 or the Land and Environment Court Act 1979 that displace the presumptive rule in r 42.1 that costs follow the event in Class 4 proceedings. Thus the proper exercise of the Court's discretion, subject to any disentitling conduct on behalf of the council, is that the council ought to have its costs paid by Mr Kelly to the extent that they have been reasonably incurred in the conduct of the now discontinued contempt motion. The exercise of the costs discretion in this regard is compensatory and not punitive (Latoudis v Casey (1990) 170 CLR 534 at 566-567). Consideration 28 There was no evidence before me that in any way suggested that the council had acted unreasonably in pursuing its costs following the discontinuance by Mr Kelly of his contempt motion or in its preparation for that motion. 29 To the extent that Ms Williams complains that the council did not provide her with an estimate of its costs or any bank account details, this is not correct. In his affidavit sworn 22 March 2010, Mr Simpson annexes correspondence which demonstrates clearly that on 24 December 2009 and 5 January 2010, the amount of costs claimed by the council ($4,895) was communicated in writing to Ms Williams. Supporting material justifying this sum was also provided. On 22 January 2010, the amount was repeated and details of Pikes Lawyers' trust account were provided to Ms Williams. 30 With respect to Ms Williams' submission that the Court has no jurisdiction in relation to Mr Kelly because he is living in Victoria, first, the whereabouts of Mr Kelly are not known. Second, and in any event, Mr Kelly's present physical location is irrelevant to the Court's power to make a costs order in respect of proceedings filed and discontinued in the Court in New South Wales. 31 Finally, while material was attached to Ms Williams' affidavit evidencing that Mr Kelly had had heart surgery in August 2009, this material (which consisted of various medical certificates) was all dated December 2009. No current medical evidence was provided to the Court giving any details of Mr Kelly's present condition. Furthermore, none of the attached material suggested that Mr Kelly was not able to give instructions to his agent, Ms Williams, so that she could appear in Court on his behalf. I therefore do not find that Mr Kelly's health problems in 2009 in any way precludes the council from pursuing its costs in 2010. There is also no proof before me that the council's conduct in the pursuit of its costs has, as Ms Williams suggested, caused or exacerbated Mr Kelly's condition. I emphatically reject this submission. 32 In these circumstances I see no reason why costs should not follow the event. As Mr Simpson deposed, the council incurred expense in preparing for Mr Kelly's contempt motion. It is entitled to recover its reasonable costs in this regard. Appearance by an Agent 33 Finally, I wish to make some observations concerning Ms Williams' appearance on behalf of Mr Kelly. While s 63 of the Land and Environment Court Act permits a person by an agent authorised by the person in writing to appear before the Court in Classes 1, 2, 3 and 4 of the Court's jurisdiction, this right ought not be subject to abuse. 34 In the present case, Ms Williams' limited power of attorney expressly excluding, as it did, the acceptance of documents for service, did not assist either the Court or Mr Kelly. On the contrary, the additional lengths to which the council had to go in order to effect service on Mr Kelly has only added to the costs that Mr Kelly is required to pay. Nor has it facilitated the just, quick and cheap resolution of the real issues in the proceedings (see s 56 of the Civil Procedure Act). On one view, the limited terms of the agency conferred on Ms Williams could be characterised as a device to frustrate the proper workings of the Court process. So too, Ms Williams' inability to properly take instructions from Mr Kelly because she did not have his contact details. 35 I note the comments of Lloyd J in Broadwater Action Group Inc v Richmond Valley Council (No 2) (2003) 129 LGERA 401 (at [48]-[49]) where his Honour made observations concerning the difficulties faced by the parties, and the Court, where a party is represented by an unqualified agent. In that case his Honour proposed an amendment to the Act to the effect that unqualified agents cannot appear without leave, as a possible model to replace s 63. I strongly endorse his Honour's suggestion. Conclusion and Orders 36 For the reasons above the Court makes the orders sought in the council's notice of motion. 37 The orders of the Court are therefore: 1. that Mr Kelly pay the council's costs occasioned by the discontinuance of his contempt motion dated 2 April 2009. 2. that Mr Kelly pay the council's costs of and incidental to its costs motion dated 18 December 2009, except in respect of the vacation application due to Mr Kelly's ill health on 7 December 2009 (which the council does not, in any event, press). ********** 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.