Oaks Hotels & Resorts (NSW) No 2 Pty Ltd v Otrebski [2015] NSWLEC 129

Land and Environment Court New South Wales

Medium Neutral Citation: Oaks Hotels & Resorts (NSW) No 2 Pty Ltd v Otrebski [2015] NSWLEC 129 Hearing dates: 13 August 2015 Date of orders: 13 August 2015 Decision date: 13 August 2015 Jurisdiction: Class 4 Before: Pepper J Decision: Application for costs dismissed. Catchwords: COSTS: application for respondents to pay applicant's costs – no hearing on merits – as soon as respondents served with summons they agreed to relief – correspondence notifying respondents of commencement of proceedings if unlawful conduct did not cease sent to wrong address and not received – costs of costs application disproportionate to the costs of obtaining relief – sustainability of hearing on papers where contested issues of fact based on evidence not formally before the court – application for costs dismissed. Legislation Cited: Civil Procedure Act 2005, s 98 Cases Cited: Texts Cited: Category: Costs Parties: Oaks Hotels No 2 & Resorts (Applicant) Andrew Otrebski (First Respondent) Grace Kurek (Second Respondent) Representation: Counsel: Mr C McFadzean, solicitor (Applicant) Mr B Gelonesi, solicitor (Respondents)

Solicitors: Swaab Attorneys (Applicant) GP Legal (Respondents) File Number(s): 40933 of 2014

EX TEMPORE Judgment

Oaks Hotels Seek an Order for Costs 1. This application for costs by the applicant in Class 4 proceedings, Oaks Hotels & Resorts (NSW) No 2 Pty Ltd ("Oaks"), has had a brief, but unsatisfactory history. 2. On 12 November 2014, Oaks filed a summons effectively seeking injunctive relief (no declarations were sought) to stop the respondents, Mrs Grace Kurek and Mr Andrew Otrebski, from using a unit owned by them as residential accommodation absent development consent. 3. Upon being served with the summons in December 2014, the respondents immediately agreed to relief sought. 4. At this juncture, the cost to both parties of the litigation would have been minimal. However, not content with each party bearing their own costs, notwithstanding the immediate capitulation by the respondents upon being informed that proceedings had been commenced against them, Oaks decided to pursue the respondents for its costs. 5. Suffice it to say that after several appearances before the Court for directions, the filing of two affidavits and the filing of three sets of written submissions, the costs to the parties of preparing for, and proceeding with, the costs application have grossly and disproportionately exceeded the initial costs of obtaining the relief in the summons. This is a deplorable state of affairs, which ought neither be readily condoned nor facilitated by the Court. 6. Costs in Class 4 proceedings are governed by s 98 of the Civil Procedure Act 2005, which affords the Court a discretion as to whether or not to award them. Having said this, costs normally follow the event in this jurisdictional Class. 7. Oaks argued that because it was successful in obtaining the relief it sought in the summons, it had enjoyed success on the 'event', and therefore, was entitled to its costs. 8. Oaks relied upon an affidavit of Mr Nicholas Mark (a solicitor employed by Oaks' legal representative) affirmed 13 August 2015, to submit that a number of letters had been sent to the respondents notifying them of the alleged unlawful development being carried on at the unit and warning them that if the use of the apartment as a residential premises did not cease, that legal proceedings would be commenced against them. No response to the correspondence was, however, forthcoming, and hence, proceedings were instituted. 9. By contrast, the respondents relied upon an affidavit sworn by Ms Kurek on 15 May 2015, to submit that: 1. first, the correspondence referred to above had been sent to the wrong address and that they did not realise that Oaks had commenced legal proceedings against them in the Court until early December 2014; and that 2. second, partly based on advice from the local council, and the developer from whom they purchased the unit, they believed that they had approval to use the apartment in the manner in which they did, or at the very least, that such a use was not unlawful, and that, in any event, they had been leasing the apartment out only on a short term basis, that is to say, three months, which was consistent with the lawful use contended for by Oaks. 1. No objections were taken to either affidavit and neither deponent was required for cross-examination.