Land and Environment Court New South Wales Medium Neutral Citation: Fox v Ginsberg (No 3) [2011] NSWLEC 139 Hearing dates: 12 August 2011 Decision date: 12 August 2011 Jurisdiction: Class 2 Before: Pain J Decision: The Court orders the Respondent to pay $3,171.50 to the Applicant which sum is not recoverable for six months from the date of this order. Catchwords: COSTS - tree dispute - whether fair and reasonable to order respondent tree owner to pay costs - whether unreasonable conduct by tree owner in the circumstances leading up to the litigation - partial costs order made Legislation Cited: Civil Procedure Act 2005 s 98 Environmental Planning and Assessment Act 1979 s 121B Trees (Disputes Between Neighbours) Act 2006 Land and Environment Court Rules 2007 Pt 3 r 3.7 Cases Cited: Fox v Ginsberg [2011] NSWLEC 1204 Tou v Maskiney [2010] NSWLEC 105 Category: Principal judgment Parties: Jenny Fox (Applicant) Nicky Ginsberg (Respondent) Representation: Mr T Sattler (Applicant - Solicitor) Mrs N Ginsberg (Respondent - in person) Sattler & Associates (Applicant) File Number(s): 20155 of 2011 EX TEMPORE Judgment 1This is an application for costs in Class 2 proceedings made by the Applicant in relation to a tree dispute under the Trees (Disputes Between Neighbours) Act 2006 (the Act) determined in Fox v Ginsberg [2011] NSWLEC 1204 ( Fox No 1 ). At issue were three trees (T1, T2, T3) in the Respondent's back yard and their impact on the masonry brick wall which is on the boundary of the Applicant and Respondent's respective properties in Woollahra. The Applicant's land is lower than the Respondent's land; the circumstances are identified in Fox No 1 at [2]. The Commissioners made orders dismissing the application to remove T2 and T3 on the basis the Court did not have the necessary jurisdiction under the Act as no damage resulting from these trees was demonstrated. In relation to T1, the Commissioners accepted that this could remain as it was important to the protection and privacy of the Respondent's house. They observed that it was obvious that damage was caused by T1 to the masonry brick wall on the boundary and this was confirmed by the engineering reports the respective parties relied upon. The Commissioners made detailed orders requiring the disassembling and removal of the existing wall, cleaning of bricks, trimming of the tree roots and dead wood from T1 and T2, replacement of the wall in accordance with engineering plans and with the wall to be clad with the same bricks as before at the Respondent's cost and within 90 days of the order. 2Costs in Class 2 proceedings are to be considered under Pt 3 r 3.7 of the Land and Environment Court Rules 2007 (the Court Rules) as provided for in s 98 of the Civil Procedure Act 2005 (the CP Act). Section 98 of the CP Act provides: (1) Subject to rules of court and to this or any other Act: (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. (2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court. (3) An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings. 3Part 3 r 3.7 of the Court Rules provides: (1) This rule applies to the following proceedings: ... (b) all proceedings in Class 2 of the Court's jurisdiction, ... (2) The Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances. (3) Circumstances in which the Court might consider the making of a costs order to be fair and reasonable include (without limitation) the following: (a) that the proceedings involve, as a central issue, a question of law, a question of fact or a question of mixed fact and law, and the determination of such question: (i) in one way was, or was potentially, determinative of the proceedings, and (ii) was preliminary to, or otherwise has not involved, an evaluation of the merits of any application the subject of the proceedings, (b) that a party has failed to provide, or has unreasonably delayed in providing, information or documents: (i) that are required by law to be provided in relation to any application the subject of the proceedings, or (ii) that are necessary to enable a consent authority to gain a proper understanding of, and give proper consideration to, the application, (c) that a party has acted unreasonably in circumstances leading up to the commencement of the proceedings, (d) that a party has acted unreasonably in the conduct of the proceedings, (e) that a party has commenced or defended the proceedings for an improper purpose, (f) that a party has commenced or continued a claim in the proceedings, or maintained a defence to the proceedings, where: (i) the claim or defence (as appropriate) did not have reasonable prospects of success, or (ii) to commence or continue the claim, or to maintain the defence, was otherwise unreasonable. 4In prayer 4 of the Notice of Motion filed 13 July 2011, the Applicant seeks an order her legal and consultant's costs of the proceedings be paid by the Respondent. Her solicitor states that she seeks her expert (arborist, engineer, surveyor) and legal (solicitor's) costs, which total $9,926.00 as identified in her affidavit of 29 July 2011. The order in the Notice of Motion states that orders are sought on an indemnity basis. Indemnity costs should not be lightly sought in any proceedings given the presumption that the usual costs order is on the basis of party and party costs. Indemnity costs were not pursued at the hearing by the Applicant's solicitor. Evidence 5The Applicant read the following affidavits in chief: affidavit of Mr Sattler, Applicant's solicitor, dated 13 July 2011 (par 14 - 20 - which I note are essentially submissions), and two affidavits of Mrs Fox dated 30 May 2011 and 29 July 2011. In reply the Applicant read her affidavit dated 10 August 2011. The Respondent read her affidavits dated 23 May 2011 and 4 August 2011. 6A relevant chronology which is a summary of key events referred to in the numerous affidavits follows. Date Event 10 - 11 years ago Applicant complained to the Respondent about the trees and crack in the wall. The Respondent disputes that the crack in the wall was existing at this time and that the Applicant complained about it. About mid 2002 Applicant wrote a letter to the Respondent complaining about the trees and a crack in the wall. The Respondent disputes that the crack in the wall was existing at this time and that the Applicant complained about it. 7 years ago Applicant wrote a letter to the Respondent complaining about the trees and a crack in the wall. The Respondent disputes that the crack in the wall was existing at this time and that the Applicant complained about it. 5 - 6 years ago Respondent noticed a small crack on her side of the wall. 3 years ago (2008) Respondent noticed that the crack was starting to become more significant and realised the wall might need to be replaced. 9 February 2010 Applicant wrote to the Respondent requesting that she discuss the serious damage to the rear adjoining fence. June 2010 Respondent made an offer via telephone message to replace the masonry wall with a timber fence. 18 June 2010 Applicant wrote a letter to the Respondent refusing the offer made via telephone message to replace the masonry wall with a timber fence ( Offer 1 ) because it would not be in keeping with the style of the house and the tree is so large that it would knock over a wooden fence. 2 July 2010 Applicant consulted Woollahra Municipal Council tree officer inquiring about removal of privet trees. 21 July 2010 Applicant received reply from Woollahra Municipal Council stating that they would only consent to the removal of the trees after receiving a Tree Preservation Order application with the owner's consent. Between 21 July 2010 and 6 September 2010 Woollahra Municipal Council compliance officer, Mr Host, inspected the brick wall. 6 September 2010 Woollahra Municipal Council served on the Applicant and the Respondent a notice of intention to give an order pursuant to s 121B of the Environmental Planning and Assessment Act 1979 that under the guidance and supervision of a structural engineer they must repair the masonry wall. This was a consequence of a council inspection of the boundary wall which revealed bulging resulting in structural failure of the boundary wall at the rear of the Applicant's property. 5 October 2010 Inspection carried out by the Respondent's structural engineer, Mr Smith of Serrao Smith Consulting Engineers, of the site in Woollahra. 27 October 2010 Applicant's structural engineer, Mr Benitez of VDM Consulting Engineers, carried out an inspection of the site in Woollahra. 10 November 2010 Applicant's structural engineer's report (Smith report) prepared. 13 November 2010 Respondent's structural engineer's report (Smith report) dated 10 November 2010 sent to Respondent only. 13 November 2010 Applicant's structural engineer's report prepared (VDM report). 24 November 2010 Applicant's solicitor wrote to Respondent advising that legal proceedings would be commenced within 21 days of the letter, the proposed orders sought, and that if the Respondent were able to agree to the terms within that period, costs of the proceedings would be minimised. 15 December 2010 Respondent's then solicitor wrote to the Applicant offering to replace the masonry wall with a timber paling fence and to pay 50 per cent of the cost. ( Offer 2 ) 1 February 2011 Mediation conducted by the Community Justice Centre, at the suggestion of the Woollahra Municipal Council, unsuccessful. 25 February 2011 Applicant commenced Class 2 proceedings. 2 April 2011 Respondent wrote letter to Applicant's solicitor referring to his email of 25 February 2011, in which he had indicated that the matter may still be resolved by negotiation and agreement, advising that she would also prefer for the matter to be settled prior to hearing. If the Applicant agreed to discontinue the proceedings, the Respondent stated she would remove one of the trees subject of the Class 2 application, make arrangements for a qualified builder to remove and replace the boundary wall with a timber fence and pay 100 per cent of the cost. ( Offer 3 ) 24 May 2011 The Respondent opposed the orders sought by the Applicant and proposed orders and alternative orders annexed to her affidavit filed on 24 May 2011. The proposed orders were as follows: firstly, that the brick wall and footing is to be disassembled and removed under the supervision of a qualified builder, secondly, that the Respondent pay 100 per cent of the cost of removing the brick wall and footing, thirdly that the brick wall is to be replaced by a suitable timber fence constructed so as to enable the two privet trees to remain in situ, fourthly, that the Respondent pay for 100 per cent of the cost of the replacement timber fence and fifthly, access for the work to be carried out be shared by between the parties. The proposed alternative orders differed in that the brick wall was to be replaced by a suitable masonry wall constructed to enable the two privet trees to remain in situ and the Respondent was to pay 75 per cent of the cost of that wall. Applicant received a copy of Respondent's structural engineer's report (Smith report) for the first time when she received the Respondent's affidavit filed on 24 May 2011 attaching it. 16 June 2011 Hearing and decision in Fox No 1 . Whether Respondent acted unreasonably in the lead up to commencement of proceedings 7The Applicant's claim for costs is made in reliance on r 3.7(3)(c) of the Court Rules which identifies circumstances in which it might be fair and reasonable to make a costs order and includes that a party has acted unreasonably in the lead up to the commencement of proceedings. The affidavit of Mrs Fox demonstrates that she has attempted on several occasions for about 10 years to raise the issue of the trees impacting on the boundary masonry wall. The wall became so damaged that Woollahra Council issued a notice of intention to issue an order requiring the wall to be repaired. The offers made by the Respondent were only to replace the masonry wall with a wooden fence which was not acceptable as that did not suit the styling of the Applicant's house. Despite getting an engineer's report from Mr Smith in November 2010 following receipt of the notice of intention to issue an order, that report was not received from the Respondent until her affidavit sworn 23 May 2011 was served in the lead up to the hearing. These circumstances are similar to Tou v Maskiney [2010] NSWLEC 105 where a partial costs order was made. 8The Respondent opposed the costs order sought on the basis that the usual position in Class 2 proceedings is that each party pays its own costs and that an award of costs that is fair and reasonable is not justified in this case. She submitted that she had made every effort to settle the matter referring to the three offers made (see chronology). She initiated mediation meaning that she called the Community Justice Centre to arrange the mediation with the Applicant and participated in the mediation in good faith. Her decision to contest the orders sought in the Class 2 proceedings was valid given that the orders sought were in the nature of an ambit claim seeking the removal of all three boundary trees which she valued for the protection of her privacy, that access to repair the wall would be through her property, she should pay all legal and consultants' costs, and the Applicant's experts' reports were too narrowly focussed and did not consider the possibility that the trees could remain. The Commissioners' decision was that the Court did not have jurisdiction in relation to T2 and T3 as there was no evidence they were causing damage. T1 was allowed to remain because it was accepted that this was important to her privacy. This suggests her actions were reasonable. She has been ordered to pay for the removal and replacement of the masonry wall at a considerable cost of $15,000. Consideration 9Class 2 proceedings are intended to provide a cost effective and efficient means of delivering justice in tree disputes between neighbours within the limits identified by the Act. The presumption is that each party will pay his or her own costs and that is an important presumption in Class 2 proceedings when considering what is fair and reasonable. It is preferable that parties represent themselves rather than engage a lawyer and reduce the need for expert reports wherever possible. The Applicant has commenced proceedings seeking the removal of the Respondent's three trees and the repair of the masonry boundary wall, inter alia. She has been partially successful in doing so in terms of the orders made by the Commissioners in Fox No 1 . She has incurred the costs of engaging a solicitor and obtained an arborist, engineer and surveyor's report to assist in the presentation of her case. The focus of the Applicant's submissions are the circumstances leading up to the commencement of Class 2 proceedings in February 2011. 10The chronology demonstrates that there has been correspondence between the parties initiated by the Applicant over ten years concerning the trees on the Respondent's property. While there is dispute about whether damage to the masonry boundary wall was raised in relation to the trees for that entire period, the affidavit evidence of the Respondent is that she was aware of a hairline crack in the wall five to six years ago and that the crack had become more significant three years ago and she realised then that the wall would require attention. The impact of the bulging wall resulting from at least one tree on the Respondent's land impacted on the amenity and potential use of the Applicant's property due to safety risks it posed. The Council's notice of intention to issue an order served in September 2010, following an inspection carried out at the request of the Applicant, demonstrates that there were safety concerns for the use of the Applicant's property as a result of the state of the masonry wall. This notice was also received by the Respondent. Given that no agreement could be reached between the parties and clearly something had to be done about the wall I consider the Applicant had no alternative but to commence these proceedings. That there was damage to the masonry wall by T1 was described in Fox No 1 at [9] as blindingly obvious. 11The Respondent submitted that she acted reasonably in making offers to repair the wall foundations and erect a wooden paling fence instead which were offers 1 and 2 made before proceedings were commenced. I do not agree. I note that offer 3 and the Respondent's proposed orders (the latter were closer to what the Court ordered in Fox No 1 ) were made not long before the hearing. It was reasonable for the Applicant to reject these earlier offers given that the only reason the wall was damaged was the growth of at least one of the privet trees on the Respondent's land (see Fox No 1 at [26]). It was reasonable that the Applicant should wish to maintain a masonry wall for aesthetic reasons as advised to the Respondent by letter dated 18 June 2010. It is also relevant to note that despite obtaining an engineering report from Mr Smith in November 2010 following receipt of the Council's notice of intention to issue an order this was not sent to the Applicant at that stage. The Respondent engaged Mr Smith and it was her responsibility to ensure that report was provided to the Applicant. It is apparent that something had to be done about repairing the masonry wall, the damage caused was obvious and that the Respondent's tree was the cause. Greater efforts to settle the matter could have been made on the Respondent's part. That the parties were not able to successfully mediate the matter is a neutral factor. 12That conclusion is softened by one circumstance. An important matter of disagreement between the parties before the proceedings were commenced was whether the trees on the Respondent's property should be removed. The Respondent did not agree with the orders sought in the application filed seeking that all three trees be removed. The Applicant was unsuccessful in obtaining orders that any trees be removed, suggesting that the Respondent's position on this issue was justified and not unreasonable. 13Balancing up all these circumstances suggests that it is fair and reasonable that I make a partial costs order in the Applicant's favour. I consider the Respondent did act unreasonably in not engaging in more constructive settlement negotiations in the lead up to the commencement of proceedings. I do not consider the Applicant should have her legal costs paid. As stated above, I make no assumption in tree dispute matters that legal representation is essential and I am not satisfied that it was on this occasion. I do not intend any criticism of the Applicant or her solicitor in making this finding but I am emphasising that in matters of this type legal representation is not the norm and will not automatically be compensated. 14I consider 50 per cent of the Applicant's experts' costs should be paid by the Respondent which is a total of $3,171.50. As I understand that the Respondent may be under some financial pressure due to her obligations under the orders made in Fox No 1 I will order that these costs are not recoverable for six months. Each party should bear the costs of this motion. Order 15The Court orders the Respondent to pay $3,171.50 to the Applicant which sum is not recoverable for six months from the date of this order. 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. Decision last updated: 15 August 2011