New South Wales Supreme Court CITATION : Catherine Carey v Michael Antoska [2008] NSWSC 1389 HEARING DATE(S) : 17 December 2008 JUDGMENT OF : McDougall J at 1 EX TEMPORE JUDGMENT DATE : 17 December 2008 DECISION : See paras [23] and [24] of the judgment. CATCHWORDS : COSTS - where proceedings settled - plaintiff obtained both interlocutory and final relief - costs follow event but with reduction to reflect plaintiff's unreasonable demands. Catherine Michelle Carey (Plaintiff) Michael Alan Antoska (First Defendant) PARTIES : Elisa Antoska (Second Defendant) Romcorp Constructions Pty Ltd (Third Defendant) Angelo Romeo (Fourth Defendant) FILE NUMBER(S) : SC 55084/08 COUNSEL : C P Taylor (Plaintiff) A Hudson (Defendants) SOLICITORS : Heenan and Company Solicitors (Plaintiff) Wilshire Webb Staunton Beattie Lawyers (Defendants) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION TECHNOLOGY & CONSTRUCTION LIST McDOUGALL J 17 December 2008 ex tempore (revised 17 December 2008) 55084/08 CATHERINE MICHELLE CAREY v MICHAEL ALAN ANTOSKA & 3 ORS JUDGMENT 1 HIS HONOUR: The plaintiff (Ms Carey) is the owner of premises 17 Allen Street Leichhardt (number 17). The first and second defendants (Mr and Ms Antoska) are the owners of the adjoining premises number 19 Allan Street Leichhardt (number 19). The two properties are a pair of semi detached cottages. From the street, number 17 is to the right and number 19 to the left. They are separated by a party wall. 2 Mr and Ms Antoska commenced substantial works on number 19 using the third defendant, a builder of whom the fourth defendant is the principal. In the course of demolition works, damage appeared to certain parts of number 17. Ms Carey became concerned that her property was suffering damage as a result of the demolition and associated works. 3 A number of issues were raised, and attempts to resolve them (including through the involvement of the local council and the principal certifying authority) were unsuccessful. Ms Carey retained an engineering expert to advise on the damage to her property and the likely causes. Mr and Ms Antoska did likewise. There was initially little agreement between the experts, but after a joint conference (or series of joint conferences) they have reached agreement on certain matters. 4 Correspondence between the parties and their solicitors did not lead to a resolution of Ms Carey's concerns. I have to say that I think that Mr and Ms Antoska took a somewhat high handed attitude to her complaints. At the same time I have to say that some of Ms Carey's complaints appear to me to go further than could possibly be sustained having regard to the damage that she observed and the likely causes of it. To some extent, I think, the stand-off that ensued (before the commencement of these proceedings) resulted from the somewhat extreme positions taken by Ms Carey on the one hand and Mr and Ms Antoska on the other. 5 In the end, however, Mr and Ms Antoska did not agree to do anything other than comply with their undoubted legal obligation to repair any damage to number 17 at the conclusion of their own works. In particular, they did nothing to address Ms Carey's concerns as to the safety and security of her property. 6 In those circumstances, Ms Carey commenced these proceedings. She sought interlocutory relief, and obtained it, in the form of undertakings given by Mr and Ms Antoska to the Court. Those undertakings were continued on a number of occasions. Given the situation, the matter was allocated an urgent hearing date. 7 When the matter was called on today, I was informed that the parties had resolved the matters in issue between them save for the question of costs. Accordingly, I made orders that reflected the parties' agreement. The effect of those orders is that Mr and Ms Antoska have agreed to perform at their own expense and in a proper and workmanlike way certain items of repair and rectification to number 17. It is clear from the evidence (including the joint report of the experts) that underlying the consent orders is acceptance of the fact that the works to number 19 - in particular, I think, extensive demolition works - have caused some of the damage to number 17 that is the subject of the consent orders. 8 In those circumstances, Ms Carey asks for her costs. 9 It is always a difficult matter to deal with costs following orders by consent. That is because, in very broad terms, the proposition that costs normally follow the event of litigation is predicated upon there having been a hearing on the merits and a resolution of the matters in dispute. In this case, there has been a resolution of the matters in dispute. But that has not followed from a hearing on the merits. It has followed from the consent of the parties. 10 A matter of prime importance, to be considered in an application of the kind with which I am faced, is that the court should always be seen to encourage resolution through settlement. Particularly where the dispute is one between neighbours, and where it is likely that the parties will have an ongoing relationship (for better or for worse) following the conclusion of the litigation, the merits of consensual settlement are even more apparent than they are in the ordinary case. 11 Thus, the court both encourages parties to settle (and sometimes nudges them in that direction by making orders for compulsory mediation) and, where the parties have settled, the court does what it can to give effect to their agreement. 12 However, where the settlement that has been reached leaves a matter for the resolution of the court, then the appropriate basis for considering the matter is that the parties are content to accept their settlement as resolving the substantive matters in dispute, even though the court may make a costs order that one or other of them (or, on occasions, neither of them) particularly wants. Thus, in a case such as this, I do not see the philosophy of encouraging settlement as being a matter of particular significance. That is because, as I have said, the settlement that has been negotiated in effect accepts on each side that the outcome in terms of costs may not be what is desired. 13 It is also the case that the court is in a difficult position because it is difficult to see how the merits of the case would have been resolved in practice. In this case, I have been taken to a large part of the evidence on which the parties would have relied. Thus, I have been able to gain some understanding of the underlying factual concerns. It is however apparent that as well as those factual issues there would have been significant and complex issues of law. Neither party has sought to address me on those issues, for which I am grateful. 14 However, it remains the case that there is in this matter a "result" or "event". The defendants (perhaps, more accurately, Mr and Ms Antoska) have agreed to carry out some of the work sought by Ms Carey. The orders that have been made are in form mandatory injunctions requiring the performance of that work, by reference to a schedule which in effect reflects the outcome of the expert conference, with some additional matters of concession. 15 Thus, Mr C P Taylor of counsel for Ms Carey submits, there is an event by reference to which costs should be assessed and his client should have the benefit of the presumption. 16 Mr A Hudson, solicitor, for Mr and Ms Antoska submits in effect that his clients have made a commercial decision to compromise, thereby saving the parties and the court the expense of a two day hearing. He submits that the attitude that his clients took was reasonable (or not unreasonable) and that the mere fact that they made a commercial decision to consent to final relief does not mean that they should be visited with costs. 17 None of the submissions that were put addressed the position of the third and fourth defendants - the builder and its principal. Nothing has been put to suggest that Mr Romeo or his company bear any responsibility for the situation that has arisen. They acted pursuant to a contract with Mr and Miss Antoska. They were undoubtedly necessary parties, having regard to the interlocutory and final relief sought. However, I do not think that it is possible to regard them as in any real way the authors of the situation that has arisen. In particular, there is no basis on which I could conclude that to the extent that there is a causal relationship between the work undertaken and the damage to number 17, that causal relationship reflects negligence on the part of the builder rather than a natural consequence of carrying out the work in a non-negligent way. 18 For that reason, I think the appropriate order as to costs between Ms Carey and the third and fourth defendants is that there be no order as to costs. It has not been put that the third and fourth defendants have incurred any costs that would not be covered by Mr and Ms Antoska, and I note that they have had common representation. 19 That leaves the situation between Ms Carey and Mr and Ms Antoska. Relevant considerations appear to me to include the following: (1) I do not think that Mr and Ms Antoska acted reasonably in their response to Ms Carey's initial demands for protection to her property. (2) On the other hand, as I have said, I think that Ms Carey over-stated her case at the outset. (3) Nonetheless, Ms Carey was forced to come to court to obtain protection for her interests. (4) Ms Carey's decision to come to court, and her rights, have been vindicated by consent at both an interlocutory and a final level. (5) The position initially taken by Mr and Ms Antoska was in substance one of denial of responsibility. However, that position has been undermined both by the evidence of their own expert and, in particular, by the outcome of the process of consultation between the experts retained by both parties. 20 Those matters seem to me to indicate that Ms Carey should have some award of costs in her favour. In particular, I note that it was not until yesterday evening that the settlement was ultimately negotiated, although Ms Carey had indicated a willingness to settle (admittedly, on terms somewhat more generous to her) well before that time. 21 Having said that, I do not think that Ms Carey should have all her costs (or all of so much of her costs as would be recoverable on the ordinary basis, there being no application for indemnity costs). That is because, as I have said, I think that she has over-stated her entitlement, and this has been to some extent a reason for the difficulty that the parties had in resolving Ms Carey's undoubted and undoubtedly legitimate grievances. I have little doubt that if the areas of dispute had been focused where, the joint expert report shows, they should have been focused then an earlier resolution would have been possible. 22 The discretion as to costs is necessarily one that involves a degree of imprecision, or approximation. It is not possible to measure in a scientific way the proportionate responsibility of each party to the situation that has arisen. Taking a broad-brush approach, which is really the only approach available, I think that the appropriate order which reflects both the presumption consequent upon the "event" and the parties' contributions to the unfortunate situation that has arisen is that Ms Carey receive 50 per cent of her costs. 23 Accordingly, as between the plaintiff and the first and second defendants, I order the first and second defendants to pay one-half of the plaintiff's costs of the proceedings. 24 I order that the exhibits on the application be handed out. ********** 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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