Newcastle City Council v Wescombe [2008] NSWLEC 301

Land and Environment Court of New South Wales

CITATION : Newcastle City Council v Wescombe [2008] NSWLEC 301

APPLICANT Newcastle City Council PARTIES : RESPONDENT Rebecca Alice Wescombe

FILE NUMBER(S) : 40471 of 2007

CORAM: Pain J

KEY ISSUES: Costs :- exercise of the Court's discretion to award costs where no finding on the merits and proceedings dismissed in part - whether disentitling conduct

Civil Procedure Act 2005 s 56 Environmental Planning and Assessment Act 1979 LEGISLATION CITED: Evidence Act 1995 s 131 Revised Professional Conduct and Practice Rules 1995 Uniform Civil Procedure Rules 2005 r 42.20

Calderbank v Calderbank [1976] Fam 93 CASES CITED: Kiama Council v Grant (2006) 143 LGERA 441 Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622

DATES OF HEARING: 22 October 2008 23 October 2008

DATE OF JUDGMENT: 27 October 2008

APPLICANT Mr M Fraser SOLICITORS Sparke Helmore LEGAL REPRESENTATIVES: RESPONDENT Mr G Carolan SOLICITORS Bilbie Dan

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

Pain J

27 October 2008

40471 of 2007 Newcastle City Council v Wescombe

JUDGMENT ON COSTS 1 Her Honour: These Class 4 proceedings were set down for hearing on 22-24 October 2008. The Amended Class 4 application sought a declaration that the Respondent was in breach of the Environmental Planning and Assessment Act 1979 (the EP&A Act) (prayer 1). It also sought an order that the Respondent undertake certain engineering and landscaping work within 60 days of the order being made (prayer 2). After the opening address commenced the parties engaged in further settlement discussions and ultimately agreed that orders be made by consent. It was unnecessary for the hearing to continue. The orders made were to the effect that the Respondent undertake specified works in a certain timeframe. The orders were made without admission of liability in relation to the breach of the EP&A Act (prayer 1). On the Council's application the proceedings were otherwise dismissed except as to costs. Each party now seeks part of its costs. 2 The removal of retaining walls, excavation and filling on the Respondent's land which gave rise to the proceedings took place in November 2006. A landslide occurred in and around the Respondent's property in April 2007 following heavy rain. These Class 4 proceedings were commenced by the Council on 21 May 2007. A settlement conference was held on 21 April 2008. The first hearing in May was vacated on the Council's application because the parties had been directing their resources towards settlement and were not ready to proceed to hearing. The Amended Class 4 application was filed on 22 July 2008. A defence was filed on 25 September 2008 stating that the Respondent desired to undertake the work identified by the Council in a joint engineering report but had been prevented from doing so by the Council, and there was a need for remedial work to occur on a defective sewer line as well as additional works by adjoining owners. 3 Both parties appointed engineers to advise them. In a joint report dated 26 February 2008 the engineers identified the work necessary to remedy the situation on the Respondent's land and neighbouring land in the categories of urgent, high priority and longer term. The urgent and high priority works required action by two neighbours and the Hunter Water Corporation (HWC) in moving its sewer pipe which currently lies across the Respondent's land. In a letter dated 20 October 2008 shown to the Court the HWC wrote to the Respondent stating it considered it appropriate to complete its works in conjunction with landholders. The HWC also requested advice as to her expected program of works. In other words the work identified as urgent and high priority by the joint engineers' report has yet to be undertaken by those responsible. The longer term engineering work identified was the provision of retaining walls and suitable landscaping on the Respondent's land. That work cannot be undertaken until the urgent and high priority work has been undertaken. The engineers disagreed on the cause of the landslide which occurred in April 2007. 4 An agreed bundle of correspondence was tendered in evidence. The Council also read the affidavit of Mr McKelvey, solicitor, dated 14 May 2008 which dealt with a successful application to vacate hearing dates in May 2008. The correspondence included that between the respective parties' solicitors between 11 May and 19 July 2007 in relation to obtaining geotechnical advice and the Respondent agreeing to undertake stabilisation work. 5 The correspondence tendered shows that there were numerous without prejudice settlement offers made by the Council's solicitors on 24 April 2008 and 4 June 2008 and also offers made in open correspondence on various other dates. The parties agreed that the without prejudice correspondence should be provided to the Court in relation to the costs argument as provided for by s 131(2)(a) of the Evidence Act 1995. 6 On 24 April 2008, following a settlement conference, a without prejudice letter was sent from the Council's solicitor to the Respondent's solicitor offering to resolve the proceedings and noting the possibility of discontinuing related local court proceedings if the Respondent performed the work and paid the Council's costs. That offer was rejected by the Respondent's solicitor by letter on 2 May 2008, stating disagreement with the Council's assertions. A without prejudice offer was made in that letter that the Respondent would perform the work if the Council paid her legal costs to date of $80,000.00. A reply from the Council's solicitor on 19 May 2008 stated no instructions had been received to make another offer and that an application to vacate the hearing date had been made. On 4 June 2008 the Council's solicitor made a conditional and without prejudice offer that the parties bear their own costs of the proceedings and the local court proceedings would be discontinued if the Respondent entered a deed to perform and to undertake to perform work. Further letters from the Council's solicitor were sent on 25 June and 1 July 2008 after no response to the 4 June 2008 letter was received. The 1 July 2008 letter openly restated the offer of 4 June 2008 on a "without prejudice save as to costs" basis in accordance with Calderbank v Calderbank [1976] Fam 93 in light of the possibility of increasing costs. The Respondent's solicitor replied on 2 July 2008 stating that he would seek that the matter be referred to mediation. On the same day an open reply was sent from the Council's solicitor stating there was no utility in seeking further mediation and that the Council was prepared to accede to an order that each party bear its own costs if the matter was finalised at a 4 July 2008 mention, and that costs of that mention would be borne by it as a compromise. The letter enclosed a proposed Amended Class 4 application and instructions to proceed to hearing if the offer was not accepted. A further open letter dated 10 July 2008 was sent by the Council's solicitor stating that the previous offer would remain open until a further mention on 11 July 2008 and that the letter would be relied on for any costs application if necessary. On 10 October 2008 the Council's solicitor sent an open letter assessing the prospects of success of the Respondent's case by reference to its evidence and recommending reconsideration of the offer to resolve the proceedings. Another open letter dated 10 October 2008 was sent by the Council's solicitor setting out possible issues for trial and repeating the offer to settle.