New South Wales Supreme Court Bates v Lloyd [2005] NSWSC 1253 CITATION : This decision has been amended. Please see the end of the judgment for a list of the amendments. HEARING DATE(S) : 2 December 2005 JUDGMENT DATE : 5 December 2005 JURISDICTION : Equity JUDGMENT OF : Hamilton J DECISION : Defendant ordered to pay plaintiff's costs of motion for enforcement of order on indemnity basis. CATCHWORDS : PROCEDURE [567] - Costs - Departing from the general rule - Conduct of parties - Demand, offer and consent - Failure to ask for consent before process issued. Supreme Court Rules 1970 Part 40 r 3, Part 42 r 6 LEGISLATION CITED : Uniform Civil Procedure Rules 2005 rr 36.4, 40.6 Eagle Star Trustees Limited v Tai Administration Pty Ltd (No 2) NSWSC Young J 30 October 1990 unreported Glandon Pty Ltd v Strata Consolidated Pty Ltd NSWCA Kirby P 29 December 1988 unreported CASES CITED : Kinsela v Metropolitan Mutual Provident Building and Investment Association (1887) 8 NSWLR 277 Moore v Gannon (1915) 32 WN(NSW) 60 Robertson and Son v Perkins and Co Ltd (1886) 2 QLJ 173 Philip William Bates (P) PARTIES : Jocelyn Estelle Lloyd (D) FILE NUMBER(S) : SC 3982/93 M S Campbell (P) COUNSEL : E A Cohen (D) Autore & Associates (P) SOLICITORS : Terence Jessop (D) LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION HAMILTON J MONDAY, 5 DECEMBER 2005 3982/93 PHILIP WILLIAM BATES v JOCELYN ESTELLE LLOYD JUDGMENT 1 HIS HONOUR: This was a suit in which the plaintiff sought the removal of a Wallangarra gum tree from the defendant's property, which was adjacent to a property that the plaintiff owned at Darlington. The matter came on for trial in the year 2000 before me, but was settled. A central feature of the settlement was that the gum tree was to be removed by the defendant and an order was made by consent to that effect. 2 The gum tree was not removed until May 2005, after the plaintiff had taken out a motion to punish the defendant for contempt of court for disobedience of the order. In view of the subsequent compliance with the order, the plaintiff does not seek to proceed with the motion for contempt, but asks for the costs of that motion on the indemnity basis, because it was not until it was instituted that the order was complied with. The defendant objects on various grounds to paying the costs of the motion. 3 The relevant history of the matter is as follows. Prior to the hearing in July/August 2000, the plaintiff's then solicitors obtained a letter from the South Sydney City Council dated 14 June 2000 indicating that the Council's permission would be given to the removal of the tree, despite its Tree Preservation Order, if the removal were ordered by the Court. That letter was put into evidence. The orders disposing of the proceedings were made by consent on 3 August 2000. The relevant order was as follows: "4 The Wallangarra gum tree, referred to in the Deed of Settlement attached hereto, be removed in accordance with clause 2 of that Deed." Clause 2 of the deed was as follows: "Mrs Lloyd shall as soon as practicable apply for any necessary permit from South Sydney Council with respect to the removal of the Wallangarra gum tree (as referred to in PP1 of exhibit A in the Proceedings). Within 90 days of obtaining that permit, Mrs Lloyd will at her own expense have the Wallangarra gum tree, the subject of these Proceedings removed by suitably qualified tree removalists of her selection. ..." The orders were made by me in open Court on that day. 4 Thereafter things did not proceed quickly. At some stage the defendant's then solicitors ceased to act for her, although they have never filed a notice of ceasing to act. On 5 November 2001 the plaintiff personally wrote to the defendant personally asking what she intended to do about complying with the Court's order and received no reply. On 25 March 2002 the plaintiff wrote again expressing grave concern at the disobedience of the order and threatening to take proceedings to enforce the order and to claim costs (including indemnity costs). This did provoke some action by the defendant. She claimed in evidence that prior to this time she had made an application for permission to remove the tree by telephoning the Council; that the Council said they would send a man to look at it; that the man either came, or did not come, to look at it (she could not remember which); and that she did not hear from the Council again. I am gravely doubtful as to whether she did or did not telephone the Council at all. I do not find that anything she did at that time constituted an application to the Council to remove the tree. However, apparently provoked by the letter of 25 March 2002, she filled in the Council's appropriate application form asking for permission to remove the tree. Under "Reason For Application" she wrote "objection from neighbour". She did not there or otherwise draw to the Council's attention the more important fact that she was the subject of an order by the Supreme Court to remove the tree, or draw attention to the 2000 letter in which the Council indicated that it would cooperate if an order were made. On the evidence before me, I am not prepared to find that she was personally aware of that letter, although it was tendered in evidence at the trial before me. However, it certainly would have been material to indicate to the Council that she was the subject of a Court order to remove the tree and there is no reason to doubt, that had the Council been informed of that, its response would have been different. 5 Its response was that, on 19 April 2002, it issued a Tree Pruning Permit, by which it refused permission to remove the tree and gave permission to "Prune only some lower overhanging branches from the neighbour's property". Her course of action when she received this from the Council was inappropriate. There is no doubt from the evidence she gave before me and her manner in the witness box that she was overjoyed to receive this response and believed it absolved her from her obligation to remove the tree. What was remarkable, however, was that she did not inform the plaintiff of this fact, but simply continued in a course of silence. Had the plaintiff been informed of the permit that was in fact issued, he no doubt would have drawn to her and to the Council's attention the letter of 2000, which offered the Council's cooperation, and would no doubt have informed the Council of the order. 6 The defendant then continued to disobey the order until 2005, during which time there was no further communication between the plaintiff and the defendant. On 7 March 2005 the plaintiff issued the notice of motion for enforcement, as I have mentioned, and on 8 March 2005 this was served on the defendant. This caused her to approach, with this letter, Mr Jessop, the solicitor who now acts for her. Although nothing specific was said about this, I can only infer that Mr Jessop took the very important step of informing her firmly of the necessity for her to obey the order of the Court and the likely consequences of her not doing so. Any suggestion emanating from her that it was not possible to obtain Council's permission to obtain a permit or remove the tree evaporated in the face of what followed. 7 On 12 April 2005 there was a joint application for permission to remove the tree made by the parties to the Sydney City Council, which had by then become the relevant local authority. That application, very relevantly and properly, mentioned the Court's orders made on 3 August 2000 in these proceedings and the letter of the South Sydney Council dated 14 June 2000. In a totally new spirit of cooperation it was taken to the City Council by Mr Jessop and a representative of the plaintiff jointly. This resulted in permission being granted only six days later, on 18 April 2005. This probably cured the defendant's disobedience of the order. It was undoubtedly cured by the removal of the tree on 11 May 2005. The plaintiff thereafter took the stance that he did not seek enforcement of the order or the defendant's punishment for contempt. Being a barrister, he was able to put in quite precise terms in his affidavit that what he now sought was the dismissal of the motion and an order for costs of the motion on the indemnity basis. 8 A number of objections were taken by Ms Elizabeth Cohen, of counsel for the defendant, to the making of a costs order. Most of these were quite without foundation. They included a submission that an order for costs could not be made on the motion unless a finding of contempt were made. This quite ignores the generality of the Court's power as to costs now contained in s 98 of the Civil Procedure Act 2005 and formerly contained in s 76 of the Supreme Court Act 1970. That is just not correct. Orders are almost daily made in proceedings where no substantive order is made, but a costs order is appropriate. 9 Secondly, it was suggested that the order disobeyed was defective because the deed could not be read with the orders, so that there was no identification as to who was to remove the tree. Reference was made to Eagle Star Trustees Limited v Tai Administration Pty Ltd (No 2) NSWSC Young J 30 October 1990 unreported. However, that case is not in point. It merely points out that where an agreement is simply noted by the Court, failure to honour the agreement is not a contempt of court. Here the relevant provisions of the deed were clearly incorporated in the order and could be read with it. 10 Thirdly, it was submitted that the order had not taken effect because it was not entered. Since it was given in open Court it took effect when it was made. That was the situation under the old rules and essentially remains the situation under the new rules: Supreme Court Rules 1970 ("SCR") Part 40 r 3; Uniform Civil Procedure Rules 2005 ("UCPR") r 36.4. No point was taken as to non service of a notice under SCR Part 42 r 6 (see now UCPR r 40.6), as it could not be. There was ample evidence that, although the defendant was not in Court when the order was actually made, she was well aware of its terms from, at latest, a few days after its making. Apart from anything else, she clearly admitted as much in evidence before me. Other points that were made were equally baseless. 11 I should add that Ms Cohen also took various procedural objections to the motion to punish the defendant for contempt. The most significant of those was the failure to file a statement of charge at the same time as the notice of motion. One was not filed until August 2005 after the tree had been removed. This is certainly not at all a satisfactory course of conduct on the plaintiff's part. However, the plaintiff is not proceeding on the motion to punish for contempt. There is no reason to think that, were the defendant still in disobedience of the order, the initial defect could or would not have been cured by the Court in order to permit the enforcement motion to proceed. 12 There was one point that Miss Cohen made that I thought at one stage had some force. That was that, although "a letter before action" was written threatening enforcement proceedings in 2002, the warning was not renewed before the motion was in fact taken out in 2005. In general terms, whether in respect of substantive proceedings or interlocutory motions, a letter before action should be written to permit the opponent, if so minded, to consent to what is sought without costs being incurred. If action is taken without such a warning, and it is demonstrated that the opponent would have consented, the party taking proceedings may be deprived of costs: Robertson and Son v Perkins and Co Ltd (1886) 2 QLJ 173 Lilley CJ; Kinsela v Metropolitan Mutual Provident Building and Investment Association (1887) 8 NSWLR 277 FC; Moore v Gannon (1915) 32 WN(NSW) 60 Harvey J; Glandon Pty Ltd v Strata Consolidated Pty Ltd NSWCA Kirby P 29 December 1988 unreported. The paucity of authority is probably explained by the axiomatic nature of the principle. The principle, although axiomatic, is important and current. However, only a little consideration leads one to the conclusion that that principle does not apply in this case. 13 As I have already indicated, the defendant gave oral evidence before me. She was, and I do not doubt genuinely, emotional and upset over the entire subject matter of these proceedings and the removal of the tree. Part of her reluctance to communicate with the plaintiff was because she said that he had on one occasion in a telephone conversation been rude to her, using bad language and shouting. I do not doubt that this reason existed in her mind. I do not, and I cannot on the evidence before me, make any finding that it has any substance in fact, that is, I do not find that the telephone incident which she described took place as she described it. However, even if the plaintiff were rude to her on the telephone, it would hardly be an excuse for not communicating with him, when appropriate, by letter. More basic is the impression, very distinctly conveyed in her evidence, that she was most upset about the removal of the tree, about the existence of the proceedings and about the existence of the order which she was obliged to obey. She said that "it is difficult to cope with any of this". She sighed or hyperventilated constantly throughout her time in the witness box. I formed the impression that she simply wished the entire subject matter to go away, that she did nothing to remove the tree because she did not want to, and that she hoped that the requirement for her to do so would go away. 14 Nothing that she did constituted a proper discharge of her obligation to obey the order. I do not accept that she made an oral application to the Council to remove the tree. The written application that she made for its removal was totally inadequate, as it did not mention the real reason for the removal of the tree, namely, the order of this Court. Nor did she behave appropriately, in that she did not convey the Council's response to her written application to the other side, so that the matter could be reviewed. I have already said that, had that occurred, no doubt the situation would have been reviewed and cured at that time. 15 With reference to the question of a letter before action in relation to the enforcement proceedings, a written warning was given in 2002. It may have been better had the plaintiff written in 2005 giving a fresh warning that a motion was at last to be taken out. However, the defendant has not sworn that, had she received such a letter, she would have acted without the need for enforcement proceedings. Her previous course of conduct would make it reasonable for the plaintiff to think that there was no point in writing such a letter at that stage. 16 Most importantly, the defendant had since 2000 been under an obligation to obey the Court's order against her. That obligation arose from the making of the orders which she consented to. The existence of the obligation was quite independent of any steps that the plaintiff took or did not take to enforce it. Unless she approached the Court for the stay or discharge of the order, she remained obliged to obey it. As I have already said, it is my view that she quite plainly did not wish to obey it. That it could be obeyed was very clearly demonstrated by what occurred when the motion was served. In the circumstances, I am of the view that, since it was only the filing and service of the motion that ultimately caused her to obey the order, that course of action was necessary to procure that result. She must pay the plaintiff's costs of the motion. Since there was a long and conscious failure to obey the Court's order, those costs must be paid on the indemnity basis. 17 I order that the plaintiff's notice of motion of 7 March 2005 be dismissed and that the defendant pay the plaintiff's costs of that motion on the indemnity basis. ********** 01/05/2006 - Plaintiff replaced by Defendant where appropriate - Paragraph(s) 2, 4, 11 and 13 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.