New South Wales Supreme Court CITATION : Commissioner for Fair Trading v Tschannen & Ors [2004] NSWSC 352 22-26, 29 September 2003 HEARING DATE(S) : 3, 8 & 10 October 2003 1 April 2004 JUDGMENT DATE : 30 April 2004 JURISDICTION: Common Law JUDGMENT OF : Sperling J at 1 DECISION : (1) Orders pursuant to short minutes of order initialled by me; (2) Costs of mediation, costs in the cause; (3) Plaintiff to pay defendants' costs of plaintiff's application for interlocutory orders; (4) Costs of defendants' application to strike out the summons, costs in the cause; (5) Subject to (3) above, defendants to pay two-thirds of the plaintiff's costs of the proceedings; (6) Liberty to apply in relation to form of orders, provided such liberty is exercised within 28 days. CATCHWORDS : Costs - no question of principle LEGISLATION CITED : Residential Parks Act 1998, s20, s30, s41, s48, s61, s62, s82 Commissioner for Fair Trading PARTIES : Warren Eric Tschannen Blackington Pty Ltd Caraco Pty Ltd FILE NUMBER(S) : SC 13202/02 COUNSEL : Ms JAD Needham for the Plaintiff Mr IM Wales SC for the Defendants SOLICITORS : Office of Fair Trading for the Plaintiff Graham Cochrane, Solicitor for the Defendants - 7 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Sperling J Friday, 30 April 2004 13202/02 Commissioner for Fair Trading v Warren Eric Tschannen & Ors Judgment on costs and form of orders 1 His Honour: I gave judgment in this matter on 18 February 2004. 2 The amended summons sought declarations of breach of ss20, 30, 41, 48, 61 and 82 of the Residential Parks Act 1998. I decided that declarations of breach of ss30, 41 and 82 should be made. 3 Consequential orders were sought but refused, including injunctions to restrain further breaches of ss30 and 82 and an order for appointment of a manager in place of the first defendant. Orders were also sought for compliance with Tribunal orders and for compensation and those orders also were not made. 4 At the request of the plaintiff and there being no objection by the defendants, I withheld making formal orders pending my decision as to costs. 5 Written submissions were supplemented by oral argument. 6 It was submitted on behalf of the plaintiff that there should be an order for costs of the proceedings in its favour. 7 It was submitted that the plaintiffs had been substantially successful, that the bulk of the evidence related to the access issue, consent to assignments, interference with sales and the conduct of the first defendant generally. It may be noted that the conduct of the first defendant generally was not squarely within the ambit of the issues decided in favour of the plaintiff. 8 It was further submitted that the bringing of the proceedings had caused a change of attitude on the part of the defendants involving a wider course of conduct than the matters covered by the declarations ultimately made. It was submitted that, but for the defendants' change of attitude, brought about by the proceedings, injunctive relief would have been granted. 9 It was submitted that matters on which the plaintiff was not successful did not take up a great deal of evidentiary time. 10 It was submitted that a more liberal attitude should be taken in relation to a claim for costs made on behalf of a government agency with responsibility for action in the public interest, notwithstanding that the proceedings might be in furtherance of private rights. It was submitted that a less than favourable order for costs could inhibit such action in the future. 11 On behalf of the defendants, it was submitted that there should be an order for costs in their favour. 12 It was submitted that the plaintiffs had substantially failed in the proceedings. 13 In December 2002, the plaintiff sought interlocutory relief, the principle relief sought being the appointment of a manager. The application was stood over to 3 February 2003. It appears that the application was not prosecuted to a determination by the plaintiff. It was submitted that the plaintiff should pay the costs of the application. 14 It was submitted on behalf of the defendants that the plaintiffs had obtained a result no more favourable than the defendants had offered before trial. 15 In a letter dated 16 September 2003, the defendants offered an undertaking to the court, concerning key cards for the boom gates, that they would not wilfully breach or cause to be breached s30 of the Residential Parks Act. 16 The defendants further offered an undertaking to the court that the defendants would not wilfully breach or cause to be breached the provisions of Pt 10, Div 1, of the Residential Parks Act. Part 10, Div 1, includes s82. Arguably, the breach of the term implied by s41 would be a breach of s82. However that may be, I do not doubt that, if an undertaking had been sought that the defendants would not wilfully breach the term implied by s41, the undertaking would have been forthcoming. 17 The defendants opposed the appointment of a manager in place of Mr Tschannen as being unworkable. 18 At that stage, there were other outstanding matters between the defendants and some residents as to which the defendants proposed solutions. These matters were ultimately resolved either prior to or during the course of the hearing. 19 In the letter, the defendants proposed that each party pay its own costs of the proceedings, including the costs of the interlocutory proceedings to which I have referred. 20 This was a package offer, consisting of the undertakings to which I have referred, proposals for resolution of other matters and each party to bear its own costs of the proceedings. 21 By letter dated 22 September 2003, the defendants made an offer to underwrite the relocation of movable dwellings. 22 In a further letter of the same date, the defendants conveyed an offer of additional undertakings, namely, to consent to all assignments, not to commence proceedings against any permanent resident without written legal advice that there were reasonable prospects of success, and to maintain a visible list of relocatable dwellings which were for sale by permanent residents. The defendants now also offered to leave costs to the court to determine. 23 The defendants sought an order for the costs of mediation conducted before trial. The order for mediation was made by me. It was supported by the defendants and opposed by the plaintiff. The plaintiff, however, assured the court that, notwithstanding its opposition to mediation, it would mediate in good faith. The defendants submitted that the court would infer from the plaintiff's conduct of the proceedings that the plaintiff's claim for the totality of relief sought was intransigent. Counsel for the plaintiff submitted that the costs of the mediation should be costs in the cause. 24 The defendants' counsel explained the qualification of "wilfully" in the proffered undertakings as being necessary to avoid unintended breaches arising from possible misconstruction of the legislation. The qualification is not relevant in the ultimate analysis. The proffered undertakings were no more (and perhaps less) than an offer to comply with the law without acknowledgment of prior breach of the law. As such, they served little, if any, purpose. Whilst I decided, in the result, that injunctions were not warranted, I saw the need to make findings that the defendants had breached provisions of the legislation in particular respects so that it would be clear to the defendants what was wrongful in relation to past conduct and with a view to ensuring that the defendants' newfound resolve to comply with the law would find expression in a practical and relevant way. 25 It was not correct to say, in these circumstances, that the proffered undertakings were more favourable to the plaintiff than the orders obtained. It follows that the pre-trial correspondence is immaterial on this score. 26 The costs of mediation should be costs in the cause. The court cannot and should not infer that the plaintiff's stance at the mediation was intransigent, nor anything else concerning the stance of the parties on that occasion. 27 The defendants should have the costs of the plaintiff's application for interlocutory orders. 28 The costs of the defendants' application to strike out the summons should be costs in the cause. 29 The plaintiff has succeeded in part but a substantial part of the plaintiff's claim has been unsuccessful. In particular, the plaintiff has failed in its ultimate claim, namely, to have a manager appointed in place of Mr Tschannen. A good deal of time and cost was involved directly in that part of the plaintiff's case and, indirectly, a good deal of the evidence going to subsidiary issues on which the plaintiff did not succeed was relied upon in support of that part of the case. 30 I reject the plaintiff's argument that I should take a more liberal attitude to its claim for costs because of its public role. I am not persuaded that the argument has merit in principle. But, in this case at least, the proceedings were in prosecution of private rights and the considerations should be no different from private litigation. 31 Subject to what I have said about the costs of the plaintiff's application for interlocutory orders, the defendant should pay two thirds of the plaintiff's costs of the proceedings. Orders 32 Short minutes of order intended to implement what was decided in my principle judgment were annexed to the plaintiff's written submissions on costs. The defendants took no objection to the form of orders proposed. However, I have noticed that the orders do not provide for declarations of breach of the legislation as envisaged in paragraphs [222] and [238] of the judgment. There should also be a declaration, pursuant to paragraph [186] of the judgment, that the statements there referred to were false and misleading. 33 I have amended the short minutes. I have also made some other minor changes. The amended document will be the document initialled by me when the orders are made in court. I reserve liberty to apply in case either party is dissatisfied with what I have done. 34 The orders are as follows. (1) Orders pursuant to short minutes of order initialled by me; (2) Costs of mediation, costs in the cause; (3) Plaintiff to pay defendants' costs of plaintiff's application for interlocutory orders; (4) Costs of defendants' application to strike out the summons, costs in the cause; (5) Subject to (3) above, defendants to pay two-thirds of the plaintiff's costs of the proceedings; (6) Liberty to apply in relation to form of orders, provided such liberty is exercised within 28 days. -oOo- Last Modified: 05/03/2004 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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