Supreme Court New South Wales Medium Neutral Citation: Ross Bilton & Ors v Georgia Ligdas (Costs) [2016] NSWSC 1585 Hearing dates: 25 October 2016 Date of orders: 02 November 2016 Decision date: 02 November 2016 Jurisdiction: Equity Before: Rein J Decision: See [29] Catchwords: COSTS- Whether there was disentitling conduct by the 1st defendant - where two of three groups of plaintiffs were granted easement by prescription and the third group of plaintiffs was granted easement by virtue of s.88K - where plaintiffs perceive themselves as a one unit HELD-1st Defendant was entitled to resist s.88K claim- defendant's conduct not sufficient to deny her the benefit of s.88K (5)-By reason of offset and because plaintiffs succeeded on different basis each party to pay own costs REAL PROPERTY-where defendant argues that the passageway burdened by the easement should be locked by a second gate for security reasons- where plaintiffs contend second gate is no more than an obstruction HELD: The second gate is an obstacle to the prescriptive easement to which two sets of plaintiffs have been found to be entitled - gate to be removed Legislation Cited: Conveyancing Act 1919 (NSW) Cases Cited: Deanshaw & Deanshaw v Marshall (1978) 20 SASR 146 Dresdner v Scida [2003] NSWSC 957 Gohl v Hender [1930] SASR 158 Goodwin v Yee Holdings Pty Ltd (1997) 8 BPR 15,795 McCrow v Chaplin [2009] NSWSC 965 Owners Strata Plan 13635 v Ryan [2006] NSWSC 342 Rainbowforce Pty Limited v Skyton Holdings Pty Limited [2010] NSWLEC 2 Mitchell v Boutagy (2001) 118 LGERA 249; [2001] NSWSC 1045 Ross Bilton & Ors v Georgia Ligdas [2016] NSWSC 1262 Shi v ABI-K Pty Ltd (2014) 87 NSWLR 568; [2014] NSWCA 293 Stepanoski v Chen (No 2) [2012] NSWSC 1037 Texts Cited: Kunc J "S.88K Easements- How Much Discretion Really?" paper delivered to the Environment and Planning Law Association 22 October 2016 Category: Costs Parties: Ross Bilton (1st Plaintiff) Clair Weaver (2nd Plaintiff) Sinead Dwyer (3rd Plaintiff) Alan Dwyer (4th Plaintiff) David Hudson (5th Plaintiff) Georgia Ligdas (1st Defendant) Christine Kensworthy (2nd Defendant) Executor of the Estate of the late Brian Holbache (3rd Defendant) Colleen Earl (4th Defendant) Gerald Michael Carr (5th Defendant) Joanne Crews (6th Defendant) Margaret Morrell (7th Defendant) Robert Morrell (8th Defendant) Representation: Counsel: G.A Moore (Plaintiffs) J.M Ireland (1st Defendant) Solicitors: Kreisson Legal (Plaintiffs) Mavrakis & Associates (1st Defendant) Defendants 2-8 Submitting Appearance File Number(s): 2014/319743 Publication restriction: Nil Judgment 1. On 29 July 2016 I handed down my reasons for judgment in this matter and invited the parties to prepare Short Minutes of Order to reflect the conclusions to which I had come. The reasons handed down (Ross Bilton & Ors v Georgia Ligdas [2016] NSWSC 1262) did not address the issue of costs and I invited the parties to discuss that question in conjunction with other matters such as the form of orders to be made. The parties sought an extensive period within which to have those discussions. 2. When the matter was listed on 6 September 2016 the parties indicated that they had not been able to agree on all matters and they sought time to provide written submissions on the matters on which they were divided. I received submissions and competing draft orders. 3. On 23 September 2016 the parties sought time in which to discuss matters further. I directed that the parties provide my Associate with a list of issues remaining for determination. 4. These reasons should be read together with the reasons of 29 July 2016. Remaining Issues 1. There remained on Tuesday morning (25 October) the following issues: 1. one or two gates, 2. the time of use, 3. the form of the declaration in 1 and 3 of the Short Minutes of Order proposed by the plaintiffs, 4. the form of the easement in relation to its length, 5. costs. One or Two Gates 1. Mrs Ligdas contends that there should be two gates (both locked) in place, one at the Phillip Street end of the Ligdas Passageway and one at the intersection of the Church Street and Ligdas passageways. The Plaintiffs accept that a gate at the Phillip Street end is appropriate but they resist the second gate. 2. Mrs Ligdas submits that the gate is important for ensuring the security of the properties, and that she is "entitled to have [the passageway] fenced and secured", citing Gohl v Hender [1930] SASR 158; Deanshaw & Deanshaw v Marshall (1978) 20 SASR 146; McCrow v Chaplin [2009] NSWSC 965 and Dresdner v Scida [2003] NSWSC 957. She also submits that "in any event, there is no claim for injunctive relief to take out the second gate". The Plaintiffs submit that the second gate is no more than an obstruction, and does not provide any genuine additional security to Mrs Ligdas. 3. Mr Ireland concedes that the second gate was introduced only in 2015 (well after the commencement of proceedings). Mrs Ligdas's affidavit explains as her reason for the second gate a concern that the Church Street owners had agreed to give the Dwyers and Mr Hudson rights over the Church Street Passageway which meant that they would start using the Ligdas Passageway- paragraph 11 (h) and (k) of Mrs Ligdas's affidavit of 18 September 2015. 4. Since I have found that the Dwyers and Mr Hudson are entitled to an easement by prescription the concern of Mrs Ligdas that they may want to use the Ligdas Passageway from the Church Street Passageway evaporates because they are entitled to use it. Mr Ireland points out that the owner of No.37 was not a party to the proceedings and has no right to use the Ligdas Passageway but Mrs Ligdas expressed no concern in her affidavit about that. The registered easements in favour of the Church Street properties do not call for a gate anywhere along the passageways. In my view there is sufficient fencing around the Church Street Passageway and the Ligdas Passageway when coupled with the first gate to provide security and to make it unnecessary and burdensome to the Dwyers and Mr Hudson to add the second gate, and the second gate should be removed. I note that the Dwyers and Mr Hudson are not insisting on the return of the boundary to a width of 1.8 metres. The existence of the second gate has been part of the controversy and is an obstacle to the prescriptive easement to which I have found the Dwyers and Mr Hudson entitled. Accordingly I regard a direction for its removal as appropriate. Time of Use 1. Mrs Ligdas contended that the s.88K easement should be limited to the hours between 7am and 7pm. The Plaintiffs contended that was too restrictive particularly given the fact that both Mr Bilton and Ms Weaver work but were willing to agree to a notation that they would not, absent special circumstances, ordinarily use the right of way outside the hours of 7am and 9pm. I indicated to the parties that I think it is undesirable to have notations of the kind proposed and I suggested instead a restriction to permit use to between 7am and 10pm. Mr Moore obtained instructions to consent to that. Mr Ireland whilst he did not have instructions to agree said he had nothing to say in opposition to that proposal. The terms of the easement should therefore be amended to provide for use by the Plaintiffs between 7am and 10pm. The Wording of the Declaration 1. The dispute about whether the words in Declaration 1 and 3 should read "that by no later than" or "as at" was resolved by deletion of the words "no later than." Length of Easement 1. Mr Ireland pointed out that the right of way in favour of Mr Bilton and Ms Weaver should commence at their gate and not extend back to the Church Street Passageway. Mr Moore accepted that amendment. Costs 1. The Dwyers and Mr Hudson were successful in obtaining an easement as of right and in my view it is not appropriate to deprive them of costs because they did not succeed on one of their arguments namely the easement by conveyance. They are entitled, subject to what follows, to an order that Mrs Ligdas pay their costs. 2. As between Bilton/Weaver and Mrs Ligdas different considerations apply. S.88K(5) provides that a party who succeeds in obtaining an easement pursuant to that section will be required to pay the defendant's costs. The Court can otherwise order but there must be some basis for departure from the usual position. Mr Moore contended that there should be a different order because of Mrs Ligdas's conduct. He submitted that Mr Bilton and Ms Weaver should be awarded costs in relation to the s.88K claim from at least June 2015 onwards (at which time the Plaintiffs' claims against the second to eighth defendants were resolved). This submission focused on the following allegations of unreasonable conduct by Mrs Ligdas and her solicitors: 1. Prior to the commencement of the proceedings, refusing to allow access to the passageway to remove a damaged tree; 2. Mrs Ligdas's solicitors demanding that the Plaintiffs agree to meet her costs and disbursements on an indemnity basis in order to obtain Mrs Ligdas's instructions in respect of the s.88K claim for relief; 3. Defending a case that "should never have been defended"; 4. Relying until the commencement of the hearing upon a report valuing the diminution of the value of her property as $120,000; 5. Failing to properly instruct experts, with the result that the report of the town planning expert retained by Mrs Ligdas was not read and Mr Staas "was not properly briefed"; and 6. Pressing of a submission after judgment that Mr Bilton and Ms Weaver should be restricted to an easement from 7am-7pm only on Mondays and Tuesdays with an additional locked gate in place of the present side gate. 1. Mr Moore submitted that in light of the "unreasonableness" of Mrs Ligdas prior to the s.88K claim being added, "further efforts to negotiate were unlikely to be fruitful". 2. The solicitors for Mrs Ligdas in their written submissions contended that the ordinary rule under s.88K(5) should apply because: 1. Mr Bilton and Ms Weaver offered "no compensation whatsoever until well into the trial"; 2. Mrs Ligdas acted reasonably in opposing the s.88K easement because "the evidence of all Plaintiffs was marginal" and the owners of No.35 "had the weakest case"; 3. Mrs Ligdas was entitled to contest the "novel proposition" that the existence of rights by others over Mrs Ligdas's land "bore upon the issue of 'reasonable necessity'", and the claim was "unlikely to have succeeded" without acceptance of this proposition; and 4. In respect of the initial response of Mrs Ligdas's solicitor to the s.88K claim, the letter was not unreasonable because s.88K "had not been mentioned" until the letter of 17 February 2015 and Mrs Ligdas "was at pains to enquire whether this new approach recognised the wisdom of abandoning the claim as of right". 1. There may be cases in which the person against whom the easement is sought has engaged in conduct disentitling him or her from having the benefit of the usual order, such as making the proceedings more expensive: Rainbowforce Pty Limited v Skyton Holdings Pty Limited [2010] NSWLEC 2 at [182]. The presentation of patently false evidence or manufacturing of a case may be sufficient as well: see Owners Strata Plan 13635 v Ryan [2006] NSWSC 342. As I have previously noted in Ryan at [14], the discretion under s.88K(5) in respect of "unreasonableness" may be compared to the discretion of the Court to award indemnity costs against a party. 2. As to the assertion that Mrs Ligdas should never have defended the s.88K claim, there may be situations in which the case for an easement is so strong and the claim for compensation sought so extravagant that the owner's failure to accede to the application should displace the ordinary rule in s.88K(5). However as the Court of Appeal has recently emphasised, the ordinary rule "relates to proceedings which could only be brought after all reasonable attempts had been made (presumably by seeking agreement) but have been unsuccessful", such that there must be "more than rejection of reasonable offers of compensation" to justify an alternative order: Shi v ABI-K Pty Ltd (2014) 87 NSWLR 568; [2014] NSWCA 293 at [98] (Basten JA with whom Barrett and Ward JJA concurred). Similarly, it has been said that it is not enough that the plaintiffs' case was a "strong one", where the defendant's position was not "so untenable as to deprive it of the character of a reasonable defence": Stepanoski v Chen (No 2) [2012] NSWSC 1037 at [10] (Lindsay J). In my view, Mrs Ligdas was entitled to resist the Bilton/Weaver claim for an easement based on s.88K in addition to her successful defence of the easement by conveyance and prescriptive easement, and she should not be deprived of the usual order because she did defend the matter. As I noted in the earlier reasons at [119], No.39 and No.41 had "better claims to an easement of necessity than No.35". I do not accept that the conclusion I reached was based on a novel proposition as asserted by Mr Ireland– see the cases cited at [114] of the earlier reasons, but nevertheless it was not unreasonable in my view for Mrs Ligdas to pursue her ultimately unsuccessful argument that the threshold of "reasonable necessity" was not met in respect of No.35, and I do not accept Mr Moore's proposition [14](3). 3. Nor do I think that proposition [14](1) or (6) could warrant depriving Mrs Ligdas of the benefit of s.88K(5). In relation to [14](1) if there was no easement Mrs Ligdas was entitled to deny access no matter how petty or unneighbourly that may have been. In relation to [14](6) above I do not think that Mrs Ligdas should penalised for seeking to place constraints even in a context where the Dwyers and Mr Hudson may have been able to insist on the pushing back of the boundary of the easement to its original 1.8 metre width. 4. In relation to proposition [14](2), I think it is unfortunate that Mrs Ligdas's solicitor chose to impose a condition on the passing on of the Plaintiffs' request that Mrs Ligdas advise of the amount she claims would be appropriate compensation and other matters see [6](14) of the earlier reasons. I doubt that it could ever be a solicitor's role to put conditions on an offer or the seeking of an offer without the approval of the client, if that is what he did. Additionally, the condition imposed was an unreasonable one. I have held that the conduct of Mrs Ligdas (including that of her lawyers and also her refusal to attend mediation) led to the conclusion that the Plaintiffs had done all they could to obtain the easement (see [125] of the earlier reasons). I do not think that Mrs Ligdas should be able to recover the costs of Mr Neskovski's report from Mr Bilton and Ms Weaver, (although for reasons which will become clear, it will not be necessary to frame a specific order to that effect). It is however another matter to say that by reason of the conduct to which I have referred and the reliance on a wholly erroneous valuation Mrs Ligdas should be deprived entirely of the benefit of s.88K(5). 5. In circumstances where there was a reasonable basis to resist the easement, and not solely on the ground of the amount sought or assessed, I think these aspects have less significance than they might otherwise have (see in contrast Goodwin v Yee Holdings Pty Ltd (1997) 8 BPR 15,795 and see also Mitchell v Boutagy (2001) 118 LGERA 249; [2001] NSWSC 1045 per Austin J [60]-[67]. It should be noted that no offer of an amount was made by the Plaintiffs until the third day of the hearing. No amount was identified by the Plaintiffs' expert until he was in the witness box. Mrs Ligdas accepted the Plaintiffs' offer of $10,000 per lot as an appropriate figure the day after it was offered although she did not agree to accept that an easement should be granted. 6. As to Mrs Ligdas's reliance upon the evidence of Mr Staas whom the Plaintiffs allege "was not properly briefed", I noted several difficulties with the evidence of Mr Staas in the earlier reasons at [70] and [73](3), in particular that his evidence was not informed by the actual use of the owners and their predecessors in title of the Phillip Street properties. I do not view that fact as a reason to deprive Mrs Ligdas of the benefit of s.88K(5). Much of Mr Staas's evidence was relevant and in any event an inherent weakness in it would not be sufficient in this context. 7. The position therefore is that the Dwyers and Mr Hudson have succeeded and are entitled to all of their costs from Mrs Ligdas, and Mrs Ligdas has succeeded against Bilton/Weaver and is entitled to all of her costs from them. The Dwyers and Mr Hudson and Mr Bilton and Ms Weaver have the same lawyers acting for them and of course Mrs Ligdas has one set of lawyers. 8. The Plaintiffs regard themselves as a united group (see paragraphs 10 and 11 of the submissions of the plaintiffs of 25 October 2016), and T5.6-18 (23 September 2016) and have made it clear that I do not have to be concerned as to any conflict of interest between the two groups of Plaintiffs. Mr Ireland originally proposed that the question of what is to be allowed for each matter be left to the costs assessor but that is likely to be a very difficult task and I do not accept that it is appropriate to burden the costs assessor with such a process. 9. Treating the plaintiffs as a block they have been only partially successful. Mrs Ligdas is entitled to such of her costs as relate to No.35. Whilst it could be said that the plaintiffs should obtain two thirds of their collective costs from Mrs Ligdas and Mrs Ligdas obtain one third of her costs from the Plaintiffs in my view this does not take into account that more time was spent in the case on No.35 than each of No.39 and 41, although there was an overlap between the matters both factual and legal. 10. If No.39 and 41 are viewed as together taking up 50% and No.35 50% of the Court time, which I think is appropriate, the result is that the Dwyers and Mr Hudson would be entitled to 50% of their costs from Mrs Ligdas and Mrs Ligdas would be entitled to 50% of her costs reflecting s.88K(5). The two can be offset against each other with result being that each party pays their own costs. 11. Mr Moore contended that the 50/50 assessment for No.35 on one hand and No.39 and 41 on the other was not appropriate and that only 10% of the case related solely to No. 35. My 50% assessment is not based on treating 50% as solely referable to No.35. Rather what I have endeavoured to do is assess what percentage of the case is fairly attributable to No.35. Since much of the common ground of the cases for No's 39, 41 and 35 related to the s.88K easement I do not think this works any unfairness to the plaintiffs. Mr Ireland accepted that the ultimate approach of each party pay their own costs by reason of offset was a fair outcome having regard to the complex situation which has arisen. 12. I accept that it may seem somewhat anomalous that the Plaintiffs, who have each had success against the first defendant, will not have any of their costs paid but this is a consequence of the fact that some of them succeeded on the easement as of right and some did not and also because of s.88K(5). It may be that the legislature and or the Uniform Civil Procedure Rules Committee will need to reconsider s.88K(5) if its operation is unconducive to encouraging settlement of these types of cases (see the paper by Kunc J "S.88K Easements- How Much Discretion Really?" delivered to the Environment and Planning Law Association 22 October 2016 particularly at [51] to [63] and accessible on the Supreme Court website). Conclusion 1. Orders should be made in accordance with the agreed Short Minutes of Order to which should be added an order that Mrs Ligdas remove the second gate at the junction of the Ligdas Passageway and the Church Street Passageway and an order that each party to the proceedings pay his or her own costs. ********** 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: 09 November 2016