Supreme Court New South Wales Medium Neutral Citation: Stepanoski v Chen (No 2) [2012] NSWSC 1037 Hearing dates: 30 August 2012 Decision date: 30 August 2012 Jurisdiction: Equity Division Before: Lindsay J Decision: Application dismissed. Costs of the application be paid by the Plaintiffs Catchwords: REAL PROPERTY - Easements - costs - Conveyancing Act 1919 s 88K (5) Legislation Cited: Conveyancing Act 1919 (NSW) Cases Cited: Tony Stepanoski v Zhimin Chen [2011] NSWSC 1573 117 York Street Pty Limited v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504 at 523-524 Owners Strata Plan 13635 v Ryan [2006] NSWSC 342. Category: Costs Parties: Tony Stepanoski (Plaintiff) Representation: Counsel: S Jacobs (Plaintiff) F Carsaro SC (Defendant) Solicitors: Marando Solicitors (Plaintiff) Proctor Phair Solicitors (Defendant) File Number(s): 2011 / 60849 Judgment - ex tempore 1On 16 December 2011 Bryson AJ made final orders upon determination of an application for an order for the creation of a drainage easement under s 88K of the Conveyancing Act 1919 (NSW). 2His Honour's orders and supporting reasons for judgment were published as Tony Stepanoski v Zhimin Chen [2011] NSWSC 1573. 3The orders, recorded at paragraph 54, required steps to be taken towards settlement of the form of an easement that the Court had in principle resolved be granted. 4I am informed by counsel, on both sides of the record, that those steps have, in substance, been taken; the terms of the easement have been agreed between the parties and embodied in an order made by the Court on 10 August 2012; any steps towards registration of the easement that remain to be taken are administrative in character; and the only outstanding question for consideration by the Court at this stage is the question of costs. 5Pursuant, in effect, to leave reserved by Bryson AJ the plaintiff seeks an order for costs that varies the usual order for which s 88K(5) provides: "The costs of [proceedings for an order under s 88K(1) imposing an easement over land] are payable by the applicant [in this case, the plaintiff], subject to any order of the Court to the contrary". 6The plaintiffs' application for costs has been made without a formal motion being filed, but it was listed before me today with the benefit of written submissions dated 9 August 2012 prepared by counsel for the plaintiffs. I have also had the benefit of written submissions on the defendant's side of the record dated 29 August 2012. 7The proper approach to an application to vary the usual order for which s 88K(5) provides has been the subject of consideration in a number of cases, some reported and some not. Reference was made, in argument, inter alia, to 117 York Street Pty Limited v Proprietors of Strata Plan No 16123 (1998) 43 NSWLR 504 at 523-524 and Owners Strata Plan 13635 v Ryan [2006] NSWSC 342. 8Neither side of the record suggests that the plaintiffs' application for an order varying the operation of s 88K(5) involves any question of principle outside these authorities. 9The plaintiffs' submission, in essence, is that the defendant's conduct of the principal proceedings should be characterised as "unreasonable". That is said to be for two reasons in particular. 10The first is that the defendant should, so it is said, have accepted that the case advanced by the plaintiffs in support of the grant of an easement was a strong one, and likely to succeed, in the light of authorities on the operation of s 88K. It is not suggested however that the defendant's position was so untenable as to deprive it of the character of a reasonable defence. It is not suggested, for example, that the plaintiffs were entitled to something in the nature of a summary judgment. 11The second argument advanced by the plaintiffs is a contention that the defendant led Bryson AJ to believe that the parties had not reached a particular, interlocutory agreement as to the quantum of compensation to be ordered under s 88K(4), contrary to what the plaintiffs now submit was in fact the true position. 12In recording this contention, I note that the plaintiffs have expressly disclaimed any allegation of impropriety directed towards the defendant, her counsel or his instructing solicitor. 13It may be that there was a misunderstanding between the parties' respective solicitors as to the existence, and terms, of an interlocutory agreement as to the quantum of any compensation to be ordered by the Court. 14In my view, I do not need to explore this territory. To do so would be to engage in an enquiry constituting a collateral attack on the judgment of Bryson AJ. Moreover, even if I were to permit that course to be taken, I very much doubt that acceptance of the plaintiffs' submissions could justify a departure from the usual order for which s 88K(5) provides. 15Quantification of the compensation to be ordered in favour of the defendant under s 88K(4) was but one task to be undertaken on the hearing of the plaintiff's application for an order under s 88K(1). The amounts of money at issue were not large. The Court had, still, to address the pre-requisites set out in s 88K(2), the nature and terms of the proposed easement as required by s 88K(3) and discretionary considerations generally. 16At the end of the day Bryson AJ held, at paragraph 51 of his reasons for judgment, that the defendant's resistance to the plaintiffs' summons for orders under s 88K was reasonable. His Honour, at paragraph 53, evidently saw nothing untoward in allowing the usual order for which s 88K(5) provides to operate. 17It is in the nature of a s 88K application that a defendant is entitled, acting reasonably no doubt, to have the benefit of a judgment from the Court explaining why an invasion of his, her or its property rights is necessary and appropriate. The mere fact that a plaintiff's case might be thought, in the abstract, to be compelling provides no warrant, in my view, for displacement of the usual order for which s 88K(5) provides. 18I have given consideration to submissions made on behalf of the plaintiffs in relation to negotiations, and the service of a Calderbank letter, on the question of quantification of any compensation order referable to s 88K(4). In doing so I have borne in mind that, at paragraphs 16 through to 19 of his reasons for judgment, Bryson AJ made a determination with the benefit of submissions on both sides of the record that could have embraced the submissions made today about the existence or otherwise of an interlocutory agreement as to quantum. 19In my opinion there is nothing in this case that warrants a departure from the terms of s 88K(5) and, accordingly, I order that the costs of the proceedings including the costs of today's application be paid by the plaintiffs. I see no warrant for any assessment of costs to be otherwise than on the ordinary basis. ********** 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: 04 September 2012