New South Wales Supreme Court CITATION : Hillebrand & Anor. v. The Council of the City of Penrith & Ors. [2001] NSWSC 233 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 3391/00 HEARING DATE(S) : 30/03/01 JUDGMENT DATE : 30 March 2001 Bernard Hillebrand - 1st plaintiff Lindy Gai Hillebrand - 2nd plaintiff PARTIES : The Council of the City of Penrith - 1st defendant Richard Mork - 2nd defendant The Registrar-General of NSW - 3rd defendant JUDGMENT OF : Hodgson CJinEq at 1 Mr. J. Whittle SC with Mr. H. Woods for plaintiffs COUNSEL : Mr. J. Campbell QC with Mr. D. Robinson for 1st defendant Mr. J. Loofs for 2nd defendant Submitting appearance for 3rd defendant Roberts Mann Davies, Windsor, for plaintiffs SOLICITORS : Gadens, Sydney, for 1st defendant Mark Solomon & Associates, Castle Hill, for 2nd defendant K.C. Hall, Solicitor for Registrar-General, for 3rd defendant CATCHWORDS : COSTS - Successful defendant ordered to pay plaintiffs' costs - Council sold plaintiffs' land without entitlement to do so - Law unclear as to whether purchaser obtained good title - Whether Council should bear costs of resolution of question. CASES CITED : Ohn v. Walton (1995) 36 NSWLR 77 DECISION : See end of judgment IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORAM: HODGSON, CJ in Eq. Friday 30th March 2001 NO. 3391 OF 2000 HILLEBRAND & ANOR. V. PENRITH CITY COUNCIL & ORS. JUDGMENT (On Costs) 1 In my judgment, I expressed a tentative view about costs. 2 Mr. Campbell QC for the Council has submitted that I should not adhere to that view, but rather should make a costs order on the usual principle that costs should follow the event of the only contested issue. He submitted that there were particular further reasons why that should be so. 3 Firstly, the proceedings were brought without any letter warning the Council of the proceedings, and giving the Council an opportunity to take the action which, as a result of the case, the Council has been required to take in relation to the repayment of $3,050.00 plus interest, and the return of half of Lot 31. Further, there were offers made by the Council in this case which were at least as favourable to the plaintiffs as the result which they have achieved. 4 Mr. Campbell submitted that the circumstance that the plaintiffs' case was reasonably arguable was no reason for granting the plaintiffs' costs or depriving the Council of costs, and he referred me to Ohn v. Walton (1995) 36 NSWLR 77 at 85. 5 He submitted that, at worst for the Council, this case would be like a case where there was a contest as to the effect of an easement, which one party had granted in unclear terms, where that party was successful in its contentions. In that situation, it could be said that the successful party created the unclear legal situation, but the Court would not order costs against the successful party for that reason. He also submitted that the same result follows where economic loss is caused by carelessness of another party, but the person who suffers economic loss fails in proceedings because it is held that there is no duty of care. Again, costs in that sort of case would follow the event. He submitted also that costs follow the event where a clear wrong has been done, but the defendant successfully relies on the Limitation Act. 6 There is force in those submissions, and I do accept that, in the circumstances, the recovery of $3,050.00 plus interest and half of Lot 31 would not justify a refusal to order that the plaintiffs pay the Council's costs. 7 However, it still strikes me very forcibly that the Council sold the plaintiffs' land when it had absolutely no right to do so, and in circumstances where it appears there were matters that should have brought home to the Council that it was selling land that it had no entitlement to sell; and that the result was to give rise to what I considered to be a very unclear situation as to the title to land affecting the plaintiffs and the second defendant, requiring the Court to determine which of two innocent parties should suffer because of the Council's wrongdoing. It could be said that, having regard to the result in the case, the plaintiffs should simply have surrendered, and that, not having done so, they should bear the costs of the proceedings. However, I do not think that gives sufficient weight to the circumstance that an unclear situation as to the title to land was created by the wrong conduct of the Council. 8 The Council succeeded on a limitation defence in relation to the claim made against it for negligence, and has received the costs of that issue being determined, and I would not consider doing anything about those costs. However, as regards the remainder of the proceedings, the Limitation Act did not protect the Council against the plaintiffs' other claims, and would not have protected it against the second defendant's claim, had the title issue gone against the second defendant. And this is not merely a case where it might be said, as the Magistrate had said in Ohn v. Walton, that it was reasonable for the plaintiffs to bring the proceedings. It is a case where there was a real problem that had to be resolved, and that problem was created by the wrong conduct of the Council. 9 For those reasons, I adhere to the tentative view expressed. 10 I make orders in accordance with the Short Minutes of Order which I initial and date. 11 I order that the plaintiffs pay the costs of the second defendant of the proceedings. 12 I order that the first defendant pay the plaintiffs' costs of the proceedings, apart from costs of the hearing before Austin, J, and also indemnify the plaintiffs in respect of the costs of the second defendant which the plaintiffs have been ordered to pay. 13 The exhibits may be returned after 28 days if there no appeal. ******** Last Modified: 04/02/2001 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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