Land and Environment Court of New South Wales CITATION : Wollongong City Council v Falamaki (No 4) [2009] NSWLEC 83 APPLICANT PARTIES : Wollongong City Council RESPONDENT Masood Falamaki FILE NUMBER(S) : 40091 of 1997 CORAM: Pain J KEY ISSUES: COSTS :- discretion to award costs - both parties seeking costs of respective Notices of Motion LEGISLATION CITED: Uniform Civil Procedure Rules 2005 r 42.1 CASES CITED: Latoudis v Casey (1990) 170 CLR 534 13 May 2009 DATES OF HEARING: 14 May 2009 22 May 2009 DATE OF JUDGMENT: 1 June 2009 APPLICANT Mr J Ayling SC with Mr D Shoebridge SOLICITORS Fisher Cartwright Berriman LEGAL REPRESENTATIVES: RESPONDENT Mr M Vasilli (solicitor) (13 May 2009) Dr M Falamaki (in person) (14 May 2009) Mr D Knaggs (solicitor) (22 May 2009) JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Pain J 1 June 2009 40091 of 1997 Wollongong City Council v Falamaki (No 4) JUDGMENT ON COSTS 1 Her Honour: In Wollongong City Council v Falamaki (No 3) [2009] NSWLEC 80 (Falamaki No 3), which considered two Notices of Motion filed by the respective parties, I determined on 22 May 2009 that a certain declaration and orders ought be made in relation to the Dr Falamaki's property at 12 Arter Avenue, Figtree. Following discussion with the parties on 22 May 2009 and subsequently, today I make the declaration and orders as follows: The Court makes the following declaration: That the Respondent has failed to comply with orders 2(iv) and 2(v) of the orders of Talbot J dated 17 February 1999 (as extended by the Supreme Court of New South Wales Court of Appeal on 4 April 2001) (hereinafter referred to as the "Orders"). . The Court makes the following orders: 1. That order 2 of the Orders be varied by deleting the phrase "until further order" wherever appearing; 2. That the Orders be varied as follows: (i) order 2(iv) be complied with by 22 February 2010; 3. Failing compliance with order 2 of the Orders as varied by order 2 above, order 1 of the Orders shall without further order operate, so as to oblige the Respondent to do the demolition and restoration work therein, such work to be completed by 22 April 2010; 4. Failing compliance with orders 2 and 3 above, the Applicant (should it elect to do so) is directed/authorised pursuant to r 40.8 of the Uniform Civil Procedure Rules 2005 (NSW), to enter the land at 12 Arter Avenue, Figtree and carry out the work necessary to effect compliance with order 1 of the Orders; 5. The Respondent must pay the Applicant's reasonable costs and expenses of carrying out the works referred to in order 4 above; and 6. Costs are reserved. 2 I must now consider the issue of costs in relation to the Notices of Motion heard on 13 and 14 May 2009. The relevant history of the proceedings is identified in Falamaki No 3. In issue was compliance with orders made by Talbot J in 1999, time for compliance having been extended by the Court of Appeal to 2001. Dr Falamaki's submissions 3 In written submissions on costs Dr Falamaki submitted that the Council had continued to submit the site was unsafe despite the evidence on that issue being equivocal. While the Council had that concern it has chosen not to pursue enforcement diligently. It has failed to give effect to order 1 (for demolition) made by Talbot J in 1999. It should have brought the matter to finality and should not be rewarded with its costs. Dr Falamaki was not able to comply with order 2 as a result of the financial constraints placed on him because of the proceedings commenced by the Council and the orders of Talbot J. The Council should have been more pro-active in seeking compliance. There are deficiencies in the order of Talbot J as it does not state on whom the obligation to demolish rested or the time within which demolition is to occur, therefore the matter had to be returned to the Court. A Notice of Motion had to be filed in any event in order to seek orders to give effect to the Court's original orders. The written submissions stated the Council should pay Dr Falamaki's costs. In oral submissions on 22 May 2009 Dr Falamaki's solicitor submitted the appropriate order is that each party should pay its own costs. Council's submissions 4 The Council seeks an order that the costs of its Notice of Motion be paid by Dr Falamaki. It has been required to come to Court to seek enforcement of orders made in 1999 due to non-compliance by Dr Falamaki. The original motion filed by Dr Falamaki raised a wide range of issues which required extensive expert evidence and legal submissions to be prepared. The grounds in the Notice of Motion were not limited until the middle of the first day of hearing resulting in much of the preparation being unnecessary. The Council has been largely successful on its motion as the Court's orders give effect to order 1 made by Talbot J in 1999. Finding 5 Costs rules in Class 4 proceedings are considered under r 42.1 of the Uniform Civil Procedure Rules 2005 which provides: 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 6 In terms of identifying the relevant event for cost purposes, both parties have been partially successful in relation to their respective Notices of Motion. I have allowed Dr Falamaki nine months to comply with order 2(iv) made by Talbot J (the order ultimately sought) and also confirmed order 1 for demolition in the event that order 2 is not complied with (as the Council sought, inter alia). 7 Costs are compensatory not punitive, Latoudis v Casey (1990) 170 CLR 534 at 543. Any costs decision in this case must be informed by the history of the matter, given that orders were made in 1999 by the Court which required compliance in 2001 following their extension of time for compliance by the Court of Appeal. 8 The obligation to comply with order 2 made by Talbot J in 1999 fell squarely on Dr Falamaki and the order clearly stated that. There are several parts within the order. Those parts of the order requiring work to be done (order 2(iv) and 2(v) leaving aside order 2(iii) as I did in Falamaki No 3) have not been complied with. Had these been complied with the matter would have been able to be finalised and neither party would have had to return to the Court for any order. To essentially argue there has been a failure on the Council's part to enforce the order overlooks the fact that it was Dr Falamaki's responsibility to comply with order 2. While I have taken into account Dr Falamaki's general evidence concerning his financial position as part of my decision to extend time for compliance with order 2(iv), the fact that he ran out of funds is not a relevant matter to consider in relation to the awarding of costs, which are compensatory. Dr Falamaki has had to come back to Court because of his own inaction, not inaction on the Council's part. The obligation in order 1 made by Talbot J for demolition in the event that order 2 was not complied with also fell on Dr Falamaki. I have amended the order to add that it is Dr Falamaki's responsibility, in the interests of reducing any further argument on the matter. In these circumstances I do not consider the Council should have to pay Dr Falamaki's costs of his Notice of Motion. The issue remains whether each party should pay its own costs, as Dr Falamaki's solicitor submitted, or Dr Falamaki should pay the Council's costs. 9 The issues at the hearing in Dr Falamaki's case were substantially reduced from those raised in the original Notice of Motion half way through the hearing on the first day. Evidence and legal submissions were required to be prepared to address the wide ranging issues in the original Notice of Motion filed. Much of that material became irrelevant because of the considerable reduction of the matters in issue in the middle of the first day of hearing. As a result the Council has had costs thrown away and these should be paid by Dr Falamaki. In light of the fact that Dr Falamaki did have some of the orders finally sought by him made I will not order that all the Council's costs be paid by him. 10 In the interests of reducing debate about costs I will order Dr Falamaki to pay half the Council's costs of the preparation for the hearing commencing on 13 May 2009. I also consider that the Council's costs of the first day of hearing should be paid by Dr Falamaki. Had the issues as ultimately presented to the Court been pressed by him from the start only a one day hearing would have been necessary. Orders 11 The Court makes the following orders: 1. The Respondent is to pay half the costs of the Applicant's preparation for the hearing of the two Notices of Motion dated 12 February 2009 and 13 February 2009, as agreed or assessed. 2. The Respondent is to pay the Applicant's costs of the first day of hearing of the Notices of Motion on 13 May 2009, as agreed or assessed. 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