New South Wales Supreme Court CITATION : Prerera and Dee v Gorczynski [2002] NSWSC 639 FILE NUMBER(S) : SC 2134/00 HEARING DATE(S) : 12/06/02 JUDGMENT DATE : 25 July 2002 Peter Francis Gorczynski - Appellent PARTIES : Ravini Neluka Perera - 1st Respondent Rebecca Patricia Dee - 2nd Respondent JUDGMENT OF : Gzell J LOWER COURT Supreme Court (Master) JURISDICTION : LOWER COURT 2134/00 FILE NUMBER(S) : LOWER COURT Master McLaughlin JUDICIAL OFFICER : COUNSEL : Cheney R J for the Appellant Clay P R for the Respondents SOLICITORS : Phillip Fox for the Appellant Mallesons Solicitors for Respondents CATCHWORDS : PROCEDURE - Courts and judges generally - appeal from Master's exercise of discretion - relevant principles - PROCEDURE - Costs - Order for costs to plaintiff on discontinuing proceedings - whether defendant acted unreasonably in resisting claim - EVIDENCE - Admissibility and relevancy - alleged user of land without local authority approval - whether relevant to Master's review of costs order by Deputy Registrar on discontinuance of proceedings to gain access to a right of carriageway - access sought regardless of user of land - no use of court procedure to achieve a breach of the law - Mulcahy v Blue Mountains City Council (1993) 81 LGERA 302 distinguishable. LEGISLATION CITED : Supreme Court Act 1970 Supreme Court Rules 1970 Donald Campbell & Co v Pollack [1927] AC 732 at 811-812 Chargecard Services Pty Ltd v Raad (Hamilton J, 2 September 1998, unreported Do Cormo v Ford Excavations Pty Ltd [1981] 1 NSWLR 409 Morrison v Judd (NSWCA) 10 October 1995, unreported House v The King (1936) 55 CLR 499 at 505 CASES CITED : Re the Minister for Immigration and Ethnic Affairs ex parte Lai Qin (1997) 186 CLR 622 at 624-625 Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201 Wincopy Pty Ltd v Humphrey Juan Xu [2000] NSWSC 157 at par 20 Burdel Investments Pty Ltd v Burchett [2001] NSWSC 600 Garwolin Nominees Pty Ltd v Statewide Building Society [1984] VR 469 Mulcahy v Blue Mountains City Council (1993) 81 LGERA 302 at 305 DECISION : Appeal dismissed IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION GZELL J THURSDAY 25 JULY 2002 2134/00 RAVINI NELUKA PERERA AND REBECCA PATRICIA DEE v PETER FRANCIS GORCZYNSKI JUDGMENT 1 On 14 August 2001, Master McLaughlin confirmed an order of Deputy Registrar Howe of 27 November 2000 that the appellant pay the respondents' costs of their summons up to and including 19 April 2000. The appellant appeals to the court from the order of the Master. 2 The respondents are the owners of land adjoining that of the appellant having the benefit of a right of carriageway over the appellant's land. On 14 April 2000 the respondents filed their summons seeking an order that the appellant be restrained from preventing them and persons authorised by them from passing and repassing along the right of carriageway, an order directing the appellant to provide to the respondents a key to the roller door at the street end of the right of carriageway and an order directing the appellant to remove a lattice screen erected on the right of carriageway. 3 On the first return of the summons on 19 April 2000, Windeyer J, without admission of liability, noted the following: "1. That the defendant has today provided to the plaintiffs all keys claimed by the defendant to be necessary to obtain access to the subject right of carriageway including the key to the roller door and the key to the padlock affixed to the roller door and to the padlock if any affixed to the metal framed gate (referred to as the lattice gate). The defendant says that he previously supplied to the plaintiffs such keys and he denies obstructing access. 2. The defendant undertakes strictly and without derogation to comply with the terms of the right of carriageway created by DP 231539 burdening the defendant's land at 78 Booth Street, Annandale." Windeyer J stood the matter over to the Registrar's list, the only outstanding issue being the question of costs. 4 That question came before Deputy Registrar Howe who noted that costs do not automatically follow the event but the court's discretion should not be exercised against a successful party unless there is material upon which the discretion may be exercised (Donald Campbell & Co v Pollak [1927] AC 732 at 811-812). Some orders as to costs had been made. The Deputy Registrar proposed to leave them in place. Since the appellant had notice of the intended summons on 28 February 2000, since the Deputy Registrar took the view that the respondents had acted reasonably in filing their summons and were successful, in that it spurred the appellant into action by handing over the keys on the first occasion the matter was before the court, Deputy Registrar Howe ordered the appellant to pay the respondents' costs of the summons up to and including its first return date. 5 An application to review this decision was brought before Master McLaughlin under the Supreme Court Rules 1970, Pt 61 r 3. The Master referred to Chargecard Services Pty Ltd v Raad (Hamilton J, 2 September 1998, unreported) in which leave to discontinue proceedings together with an order that the appellants pay the respondents' costs of the proceedings were sought. Hamilton J reviewed the authorities and pointed out that on such an application, the court cannot hear the whole proceedings in order to determine their merits and where proceedings have been compromised in the sense that some middle ground has been reached, or where the merits cannot be discerned, the appropriate course is that each party bear its own costs. His Honour went on to say that there are circumstances in which a plaintiff who has brought and abandoned proceedings ought to pay the costs and, equally, where it is clear that the plaintiff would have succeeded (and one way of perceiving this is that the appellant has in fact done or given what the plaintiff in substance seeks) it would be unfair if the plaintiff did not have its costs. 6 Master McLaughlin pointed out that the solicitors for the respondents in letters of 28 February 2000 and 1 March 2000 complained that the conduct of the appellant was preventing access by the respondents to the right of carriageway. The summons sought general relief of an injunctive nature then a specific order that the appellant provide the respondents forthwith with a key to the roller door. Master McLaughlin noted that the key in question was a key to a padlock. Since the letters expressly foreshadowed an application to the court to remove the padlock, the Master formed the view that the more general relief sought in the first paragraph of the summons was not inconsistent with the relief foreshadowed in the correspondence. Master McLaughlin pointed out that the outcome of the substantive part of the proceedings in consequence of the consent arrangements between the parties on 19 April 2000 was that the respondents were no longer being deprived of their rights such that they achieved substantially what they sought. Master McLaughlin considered that the respondents were justified in instituting the proceedings and upheld Deputy Registrar Howe's decision. 7 An appeal lies from Master McLaughlin's decision to the court under the Supreme Court Rules 1970, Pt 60 r 10. The Supreme Court Act 1970, s 75A(5) provides that the appeal is by way of rehearing. It is been held, however, that where a Master's decision involves an exercise of discretion, the same principles apply to the appeal as apply to an appeal from a single judge to the Court of Appeal (Do Carmo v Ford Excavations Pty Ltd [1981] 1 NSWLR 409, Morrison v Judd (Court of Appeal, 10 October 1995, unreported). The appellant must show that Master McLaughlin acted on a wrong principle such as failing to take into account a material consideration (House v The King (1936) 55 CLR 499 at 505). 8 Access to the right of carriageway from Booth Street was gained by a roller door. It had a central lock. The lock was damaged by someone who attempted to jemmy the roller door open and on 6 November 1999 the lock was repaired and the appellant placed a padlock on the inside of the roller door and, perhaps, an identical padlock on the lattice gate. 9 On confirmation that the respondents were the new owners of the adjoining premises at 80 Booth Street, the appellant caused them to be provided with a set of keys to the roller door and the padlock or padlocks on 23 November 1999. The respondents said that on request they returned the padlock and key and retained only the key to the roller door. The appellant maintained that the keys were given to be copied and returned. 10 Whatever the outcome of that issue might have been, it became obvious to the appellant on 28 February 2000 that the respondents were complaining that they could no longer gain access to the right of carriageway because the padlock had been replaced on the inside of the roller door. On that day the solicitors for the respondents sent a facsimile to solicitors acting for the appellant in other proceedings informing them that their instructions were that the appellant had placed a lock on the roller door thereby depriving the respondents of access to their property via the right of carriageway. The facsimile stated that if the locks (sic) were not removed by 5.00 pm that day they would approach the court seeking injunctive relief. 11 In response to the facsimile, the appellant telephoned the respondents' solicitors on that day. The appellant said that he informed the solicitors that the respondents had been provided with a set of keys and were not inconvenienced. The appellant raised a number of issues of concern to him. The respondents' solicitors said that the appellant said he needed to notify his insurers of the names of the new owners and those of other persons having a right to occupy the premises and he would not hand over the keys to the roller door until he had that information. Again, regardless of the way in which that issue might have been resolved at trial, it is clear that there was no offer by the appellant to provide a key for the padlock. 12 On 1 March 2000 the solicitors for the respondents sent a facsimile to the appellant referring to the conversation of 28 February 2000 and noting the concerns which he believed supported his position of locking the roller door thereby preventing access to the right of carriageway. The solicitors said that they had perused the terms of the right of carriageway and there was no provision entitling the appellant to take that action. The letter concluded that should the appellant not remove the lock from the roller door and allow access to the right of carriageway by 5.00 pm that day they would proceed to obtain injunctive relief. 13 On 1 March 2000, the appellant also responded to the conversation of 28 February 2000 by facsimile to the solicitors for the respondents. He enclosed a letter of complaint of 26 November 1999 addressed to the former solicitors for the respondents which raised issues of concern to him, most of which had been raised by him in his conversation of 28 February 2000. They related to an easement to drain sewerage, encroachments, cracks in a garage wall, a dividing wall, a problem with stormwater and the question of contributions to the maintenance of the right of carriageway. In his facsimile, the appellant referred to his request to hold a conference with the respondents in an endeavour to resolve outstanding issues and the respondents' rejection of this proposal. He reiterated that he had a right to secure his property and again requested the residential addresses of the owners. 14 Regardless of how the issue with respect to the appellant's complaints might have been resolved at trial, if relevant to the central issue, what is abundantly clear, again, is a lack of offer on the part of the appellant to provide a key to the padlock. 15 In Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 at 624-625, McHugh J said that the court might make an order for costs even where there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. Quoting with approval from the discussion of the issue by Hill J in Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201, McHugh J said that the court cannot try a hypothetical action between the parties, but in some cases the court might be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. His honour also said that a judge may feel confidant that although both parties have acted reasonably, one party was almost certain to have succeeded, thereby justifying an order for costs in its favour. I was also referred to Wincopy Pty Ltd v Xu [2000] NSWSC 157 and Burdel Investments Pty Ltd v Burchett [2001] NSWSC 600. 16 In Garwolin Nominees Pty Ltd v Statewide Building Society [1984] VR 469 the plaintiff who had sought to enforce a lease assigned to the defendant, sought leave to discontinue when shortly before the matter came on for hearing, the defendant remedied its non-compliance. Kaye J granted the plaintiff its costs. At p 472 his Honour said: "Other circumstances in which a plaintiff might seek to discontinue might be after the close of pleadings in an action for possession the defendant has surrendered possession of the subject premises. In that event the plaintiff would have achieved what he set out to obtain by the issue of proceedings. It would be quite unjust and unfair if the plaintiff were denied his costs incurred in achieving the relief he sought by the commencement of his action." Whether one regards this decision as an example of unreasonable conduct on the part of a defendant or an example of a plaintiff bound to succeed does not matter very much, in my view. They seem, with respect, to be different expressions of the same proposition. In the absence of a decision on the merits, a court will not conclude that a defendant acted unreasonably unless convinced that the plaintiff would have succeeded on the merits. Hence the base proposition that in the absence of such satisfaction, the appropriate order is that each party pay its own costs. 17 It was submitted before me that it was unreasonable of the respondents to commence the action because the relief obtained, another key to the padlock, had already been provided by the appellant, had not prior to the filing of the summons been sought from the appellant and would have been provided by the appellant had he simply been asked. It was submitted that the relief claimed in the summons had not been sought beforehand. What had been sought in the letter of 28 February 2000 was the removal of the locks. It was submitted that Master McLaughlin fell into error in concluding that the respondents were being deprived of their rights, that the respondents achieved substantially what they sought and that it was necessary to go to court to enforce their rights. 18 In my opinion Master McLaughlin was entitled to take the view he did in the exercise of his discretion whether or not to confirm the order of Deputy Registrar Howe. Injunctive relief was clearly sought in the solicitor's letters of 28 February 2000 and 1 March 2000. Injunctive relief was sought in par 1 of the summons. It was apparent to the appellant from the solicitors' letters that the complaint was that the padlock on the inside of the roller door was preventing access to the right of carriageway, thereby depriving the respondents of their rights. That this was translated, inaccurately, into a request for an order to provide a key to the roller door rather than the padlock in par 2 of the summons, does not excuse the appellant's failure to offer a further set of keys to remedy the situation. Nor does the claim for an order that the lattice gate be removed, defeat the respondents' need to approach the court for relief. 19 Master McLaughlin was, in my view, entitled to conclude that the respondents had, by commencing the proceedings, achieved substantially what they sought. The material before the Master enabled him to conclude that it was the padlock on the roller door that was causing the problem and the provision of a key to it on the first return date of the summons substantially achieved the respondents' purpose. In the absence of an offer by the appellant to remedy the lack of access to the right of carriageway by reason of the padlock, the Master was entitled also to find that it was necessary for the respondents to commence the proceedings. 20 In my view, not only was the Master entitled to conclude in the way he did, but also he was correct in his conclusions. It is nothing to the point that there was no specific request for a key to the padlock. The subject of the complaint was eminently clear. The appellant, having being put on notice that the respondents claimed that the padlock deprived them of access to the right of carriageway, could no longer assume that the respondents had made copies of the key to the padlock. On being put on notice, it was up to the appellant to offer to provide a further key. In the absence of that offer, the respondents were entitled to commence proceedings and the provision of the key thereafter was a substantial achievement of what they sought in those proceedings. On the basis that the appellant was unreasonable in not providing the key before action, or on the basis that the respondents were bound to succeed if their proceedings had been determined on the merits, Deputy Registrar Howe was entitled to order that the appellant pay the respondents' costs of the proceedings up to the first return date of their summons. 21 Master McLaughlin rejected, on the ground of relevance, evidence sought to be led by the appellant on his application for review of the order of the Deputy Registrar that the respondents had granted a lease of the premises at 80 Booth Street for use as a real estate agency without approval of the relevant local council, that they were using the garage on the premises for storage of furniture associated with another business without the approval of the local council and that the garage had been constructed without a development consent or building approval. 22 It was submitted that the evidence, if admitted, would support a finding that the proceedings were instituted for an improper purpose in breach of the rule that a party may not use the court procedure to achieve or bring about a breach of the law (Mulcahy v Blue Mountains City Council (1993) 81 LGERA 302 at 305). In that the Crown grant of the appellant's land reserved an area for a road. A sealed road was constructed on her property but, by mistake, not within the reserved area. The public used the road. The appellant constructed fences across the road to exclude the public. The respondent sought injunctive relief to compel the removal of the fences on the ground that development consent and building approval had not been sought for them. The Land and Environment Court granted the injunction. The Court of Appeal held that the discretion to grant the relief had miscarried. The court relied upon the above proposition. The context for its operation was that if the proceedings before the court were successful, members of the public would be allowed to trespass on the appellant's land. That is a context far removed from the proceedings in question to enforce a right of access to a right of carriageway regardless of the user of the dominant tenement. 23 For the reasons set out above, I am of the view that Master McLauglin was entitled to find that it was appropriate for the respondents to seek the aid of the court to remove the impediment to their use of the right of carriageway. That finding negates the suggestion that the respondents were misusing court procedure to bring about a breach of the law. In my view, Master McLaughlin was entitled to form the view that this material was not relevant to the review of the decision of Deputy Registrar Howe. Furthermore, I am of the view that the decision to reject the evidence was correct. Whether the user of 80 Booth Street required consents of a local authority and whether the owners or lessee were acting without such consents has no bearing upon the entitlement to access to the right of carriageway. 24 I will dismiss the notice of appeal. I will hear the parties on costs. Last Modified: 07/26/2002 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.