Supreme Court New South Wales Medium Neutral Citation: McDonald v Wills (No 2) [2015] NSWSC 329 Hearing dates: Decided on the papers Date of orders: 30 March 2015 Decision date: 30 March 2015 Jurisdiction: Equity Division Before: Robb J Decision: (1) Order that the costs of the plaintiff's notice of motion filed on 16 June 2014 be the plaintiff's costs in the cause. (2) Order that the proceedings be listed before the Registrar on 9 April 2015 for directions. Catchwords: COSTS – consideration of appropriate order for costs on a successful motion by the plaintiff for an order under UCPR r 28.2 that the issue of damages be heard separately from and subsequently to the balance of the issues in the proceedings Legislation Cited: Uniform Civil Procedure Rules 2005 (NSW) Cases Cited: McDonald v Wills [2014] NSWSC 1183 Category: Costs Parties: Gayle Christine McDonald (plaintiff) David Alexander Wills (first defendant) Alexis Clare Wills (second defendant) Representation: Counsel: J Lazarus (plaintiff) A Cheshire/S Spadijer (defendants) Solicitors: P F Irvine & Co (plaintiff) McLachlan Thorpe Partners (defendants) File Number(s): 2014/77086 Publication restriction: None Judgment 1. By judgment in McDonald v Wills [2014] NSWSC 1183, I made an order in favour of the plaintiff upon her notice of motion that, pursuant to UCPR r 28.2, the issue of the quantum of the plaintiff's claim for damages in these proceedings be determined separately from and subsequently to the balance of the issues in the proceedings. 2. There is a contest between the parties concerning the enforceability of an easement over the defendants' residential land at Mosman in favour of the plaintiff's adjoining residential land. The issues that arise in the proceedings have been set out in my earlier judgment. It is sufficient for me to record that the need for the damages issue to be determined will not arise if the defendants succeed in their claim that the easement does not burden their land. That will be so whatever the basis might be of the defendants' success on that issue. On the other hand, if the plaintiff succeeds in upholding the easement, and obtains orders from the Court that enforce the easement, she will not suffer any damage. In that event also it will not be necessary to determine the quantum of her loss. It will only be if the plaintiff succeeds in upholding the easement, but for some discretionary reason the Court does not make orders for its enforcement, that the plaintiff's claim for damages in the alternative will have to be determined. 3. As I recorded in my earlier judgment, the defendants put forward genuine and reasonable arguments in opposition to the making of an order that the issues of liability and damages be decided separately. Given that the dispute is between neighbours, there was much to be said for determining all of the issues in the case at the one time. However, for the reasons set out in my earlier judgment, I formed the view that the common sense way for the case to proceed was for the issue of liability to be determined first. I formed that view because of my belief that, if the damages issue was vigorously contested by the parties, it would require the parties to obtain expert valuation evidence, and also possibly planning evidence, on a potentially difficult valuation issue, being the valuation of a residential property in Mosman, with or without the benefit of the easement, and upon different assumptions as to the rights conveyed by the easement on the owner of the dominant tenement. Those costs would be wasted if the course of the proceedings obviated the need for the damages question to be decided. 4. However, as I indicated at [41], I could envisage circumstances in which future developments in the proceedings could prove my common sense approach to be misguided, and observed that it would be open to the Court to reassess the position and correct the consequences of the order. 5. I therefore invited the parties to make submissions as to the proper order for costs to be made by the Court, and the parties have done so. The plaintiff submits that, as she has been successful on her notice of motion, the costs should follow the event, and the Court should make an order that the defendants pay her costs of the notice of motion. The primary submission of the defendants is that the costs of the notice of motion should be costs in the cause. 6. The applicable rule is UCPR r 42.1, which provides: Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs. 1. In my view it is appropriate in this case to make a different order than that the costs of the notice of motion should follow the event. I dealt with the plaintiff's notice of motion in substance as if it involved a case management issue required to be dealt with at a directions hearing. I decided the issue on balance, taking a practical view of what I thought would probably be in the best interests of both parties, but recognising that there were circumstances in which it might turn out that the order that I made would not be the most felicitous outcome for the parties. In particular, although I was sceptical about the validity of the defendants' submissions that it would turn out that there would be an overlap between the issues relevant to liability and damages, the possibility of that happening could not absolutely be ruled out. In essence, I overcame the natural resistance that the Court has to ordering that the issues in proceedings be dealt with separately, by making my own judgment that it would probably turn out that dealing with liability first would prove to be in the best interests of all parties. 2. The cost order that is to be made should nonetheless reflect the fact that the plaintiff succeeded on her notice of motion. She should not be required to pay the defendants' costs of the notice of motion in any event. However, the order that she has sought was primarily in her own interests, as it would permit the plaintiff to bring the proceedings to trial without having to incur the costs of preparing the damages issue. Given that the question was relatively finely balanced, I do not think that the defendants should have to pay the plaintiff's costs of the notice of motion, if they succeed on the issue of liability. In that event the parties should bear their own costs of the notice of motion. 3. I accordingly think that the appropriate order for costs is that the costs of the plaintiff's notice of motion be the plaintiff's costs in the cause. I will make an order to that effect. 4. I now appreciate from the submissions that I have received from the parties that this matter was not listed before the Registrar for the making of directions for the further conduct of the proceedings at the time of, or soon after, I handed down my earlier judgment. I had assumed that that had occurred (although I now note that a request to that effect was made in the plaintiff's submissions on the costs issue). 5. It is the responsibility of both the Court and the parties to ensure that, when judgment is given on an issue such as that raised in the plaintiff's notice of motion, the matter is listed before the Registrar at an early date for further directions. The parties do not appear to have pursued that course, but I accept that I also share some responsibility for that outcome. It has led to a regrettable delay in the preparation of the matter for hearing. 6. I make the following orders: 1. Order that the costs of the plaintiff's notice of motion filed on 16 June 2014 be the plaintiff's costs in the cause. 2. Order that the proceedings be listed before the Registrar on 9 April 2015. 1. As I have made order (2) without reference to the convenience of the parties, I will be prepared to make an order varying the next listing date, if the parties jointly asked me to do so by contacting my Associate by 1 April 2015. ********** 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: 30 April 2015