Hayden v Brown (No 2) [2023] NSWLEC 1560 (25 September 2023)

Last Updated: 25 September 2023

Land and Environment Court New South Wales

Case Name:	Hayden v Brown (No 2)
Medium Neutral Citation:	[2023] NSWLEC 1560
Hearing Date(s):	5 June 2023
Date of Orders:	25 September 2023
Decision Date:	25 September 2023
Jurisdiction:	Class 2
Before:	Senior Deputy Registrar Holm
Decision:	The orders of the Court are: (1) The respondents are to pay the applicant’s legal costs of the proceedings, as agreed or as assessed. (2) The respondents are to pay the applicant’s costs of the arborist report in the sum of $2,112.00. (3) The respondents are to pay the applicant’s costs of the notice of motion, as agreed or as assessed. (4) The respondents are to pay the filing fees of the originating process and notice of motion in the sum of $743.00.
Catchwords:	COSTS – tree dispute – whether costs of proceedings fair and reasonable – whether unreasonable conduct in circumstances leading up to litigation – whether acted unreasonably in conduct of proceedings – costs order made for costs of proceedings and successful motion for costs
Legislation Cited:	Civil Procedure Act 2005, s 98 Land and Environment Court Rules 2007, r 3.7 Trees (Disputes Between Neighbours) Act 2006, Pt 2
Cases Cited:	Arden Anglican School v Hornsby Shire Council (2008) 158 LGERA 224; [2008] NSWLEC 103 Bailey v Gould (No 2) [2011] NSWLEC 103 Fox v Ginsberg (No 3) [2011] NSWLEC 139 Grant v Kiama Municipal Council [2006] NSWLEC 70 Hayden v Brown [2023] NSWLEC 1060 Marks v Perham (No 2) [2020] NSWLEC 84 The Owners – Strata Plan 46498 v Evagelakos [2022] NSWLEC 115 Tou v Maskiney [2010] NSWLEC 105
Texts Cited:	Land and Environment Court, Practice Note – Class 2 Tree Applications, 2018
Category:	Costs
Parties:	William Evan Hayden (Applicant) Phillip William Brown (First Respondent) Jennifer Joy Brown (Second Respondent)
Representation:	S Cunningham (Solicitor) (Applicant) No appearance (Respondents) Solicitors: Cunninghams – The Law Practice (Applicant)
File Number(s):	2022/354371
Publication Restriction:	No

JUDGMENT

1. William Hayden (the applicant) seeks orders that Phillip and Jennifer Brown (the respondents) pay the applicant’s costs of the Class 2 tree dispute proceedings before this Court.
2. The applicant successfully brought tree dispute proceedings under Pt 2 of the Tree (Disputes Between Neighbours) Act 2006 (Trees Act), obtaining orders that the respondents remove two trees (tree 1 and 3) and repair or replace sections of fence damaged by two trees (tree 2 and 3). See Acting Commissioner Galwey judgment in Hayden v Brown [2023] NSWLEC 1060 (judgment).
3. The applicant’s amended notice of motion filed 20 April 2023 (motion) seeks orders:

(1) That the Respondents pay the Applicant’s legal costs incurred in proceedings 2022/354371 in the sum of $7,665.00

(2) That the Respondents pay the Applicant’s costs of obtaining an arborist report in proceedings 2022/354371 in the sum of $2,112.00.

(3) That the Respondent’s pay the Applicant’s costs of this motion in the sum of $3,219.55.

(4) Such further or other orders as the Court deems fit.

4. Class 2 tree disputes are ordinarily a no cost jurisdiction however the applicant seeks that the Court exercise its discretion to award costs under r 3.7(2) of the Land and Environment Court Rules 2007 (Court Rules).
5. There was no appearance for the respondents at the hearing of the motion. The applicant served the motion and supporting evidence on the respondents and provided notice of the hearing date. The Court also issued a notice of listing to the respondents. I heard the motion ex parte.
6. For the reasons that follow, I consider in the circumstances of these proceedings, it is fair and reasonable that the respondents pay the applicant’s costs of the proceedings and the notice of motion.

Applicant’s Evidence

7. The applicant relied on the affidavits of William Hayden filed 20 January 2023, 20 April 2023, and 3 May 2023; and the affidavit of Shane Cunningham filed 1 May 2023. It also relied on the tree risk assessment report prepared Douglas Arbour dated 27 October 2022 filed with the application (marked exhibit C before Commissioner Galwey). The applicant’s evidence provides a narrative of the conduct of the parties prior to and during the proceedings, which I summarise below. The applicant’s evidence also provides receipts for legal costs of the proceedings and the motion.

Background

8. The applicant is the owner occupier of the property adjoining the property owned by the respondents and occupied by their son Billy Brown (the occupier).
9. The applicant says on 7 January 2022, tree 3 fell from the respondents’ property while he was in his yard narrowly missing him and damaging the boundary fence. That day, the applicant telephoned the second respondent about the fallen tree and was allegedly told ‘Billy’ (the occupier) will look after it in the morning. On 8 January 2022, the applicant telephoned the first respondent who allegedly swore and terminated the call. Later that day, the occupier came and inspected tree 3 with the applicant and told the applicant to cut up the tree and throw it over the fence. The applicant replied refusing to do so, saying it was the occupier’s responsibility to remove it, to which the occupier allegedly replied, “I left it there to teach you a lesson”.
10. The applicant approached the Community Justice Centre (Justice), who wrote to the respondents on 24 January and 3 February 2022 that the applicants would like to arrange mediation. Justice advised on 14 February 2023 that they received no reply from the respondents and assumed that they did not wish to arrange mediation.
11. The applicant then engaged solicitors Cunninghams – The Law Practice (applicant’s solicitors). On 10 May 2022, the applicant’s solicitors wrote to the respondents requesting that they remove tree 3 (noting that when it fell it narrowly missed the applicant), remove tree 1 and 2 which at the time were alleged to both be dead standing trees covered in ivy, and undertake works to the boundary fence damaged by tree 3. The letter stated that the applicant has been advised by an arborist that trees 1 and 2 are likely to fall into his property and pose a significant risk of injury to persons and damage to property. Further that the applicant would prefer to resolve the dispute without the time and cost of proceedings however if it is unable to be resolved, the applicant would be left with no alternative but to file a tree dispute application with the Court.
12. The applicant’s solicitor says that on 1 June 2022, he received a telephone call from the occupier who advised that tree 3 would be removed immediately and the boundary fence rectified, and the respondents were working on having tree 1 and 2 removed. On 16 July 2022 the applicant’s solicitor wrote a letter marked ‘urgent’ to the respondents noting the conversation with the occupier, stating their instructions that no works have been undertaken and seeking that the works be undertaken within 21 days. The letter stated that failure to undertake the works by that time will result in the applicant filing a tree dispute application with the Court without further notice and the applicant will rely on the letter and previous correspondence on the question of costs against the respondents. The applicant’s solicitor received no written response to its letters of 10 May or 1 June 2022.
13. In about July 2022, tree 2 fell into the applicant’s property across the boundary fence, and about three months later the boundary fence collapsed.
14. On 27 October 2022, the applicant obtained an arborist report from Douglas Arbour (arborist report), which provided the opinion that trees 1-3 posed an unacceptable risk of harm to others and recommended they be removed to mitigate against the risk of harm. The arborist report stated that the likelihood of tree 1’s trunk failing would increase over time and there was a high likelihood if it fell that it would fall in the direction of the boundary fence and the applicant’s dwelling. Further, the arborist report considered the most significant targets of trees 1-3 being the boundary fence and dwelling repairs and estimated the target range of these repairs of $4,560 - $45,600.
15. On 2 November 2022, the respondents arranged for the removal of tree 2. During removal, the occupier indicated to the applicant that when the ground dries, he will remove tree 1 and 3.
16. On 19 November 2022, the applicant filed these proceedings under Pt 2 of the Trees Act, in relation to trees 1-3, seeking orders to remedy, restrain or prevent damage to property and prevent injury to persons. The claim alleged that tree 1 poses a real risk of significant damage to the applicant’s home and potential injury to occupants, and attached the arborist report. The orders sought included that the respondents pay the applicant’s costs of the proceedings. On 16 December 2022 the applicant’s solicitor served the respondents with the proceedings.
17. The respondents did not file an appearance in the proceedings or attend the tree directions hearing on 17 January 2023 at which the Court set a timetable for hearing. The timetable included orders for the respondent to file any evidence.
18. An onsite hearing was presided over by Commissioner Galwey on 7 February 2023. The respondents did not appear at the hearing, the Commissioner knocked on their door without response and the matter was heard ex parte. The Commissioner found that the applicant made a reasonable effort to reach agreement with the respondents at [3]:

“[3] The Applicant has contacted the Respondents via telephone. He has spoken to their son, who occupies their property, about the trees. He has received unfulfilled assurances that the trees would be removed. He unsuccessfully sought mediation through the Community Justice Centre.”

19. In relation to tree 1 the Commissioner found at [4]:

“[4]...It is close to Mr Hayden’s dwelling and would cause some damage should it fall that way. Two other trees have fallen across the common boundary recently. Mr Hayden is concerned this tree will soon do the same. I accept this is likely. Damage could be avoided by removing the tree.”

20. The Commissioner was satisfied that the three trees have caused damage (tree 2 and 3) or in the near future are likely to cause damage (tree 1) to the applicant’s property: at [7]. Further, the Commissioner considered that “The respondents have been aware of the risk of damage for some time, but have taken no action to prevent it.”: at [8].

Applicant’s submissions

21. The applicant filed written submissions on 8 May 2023, which submit that the orders sought in the motion be granted on the basis that the respondents acted unreasonably in the circumstances leading up to the commencement of the proceedings and acted unreasonably during the conduct of the proceedings, thereby putting the applicant to the costs sought.
22. In relation to the respondents’ conduct prior to commencing the proceedings, the applicant relies on the correspondence sent 24 January 2022 to 16 July 2022 (detailed in paragraphs [10]-[12] above) and the fact the respondents did not respond to that correspondence. Further, that the respondents failed to engage in mediation or undertake the works requested, as a result, the applicant claims they were forced to commence the proceedings. The applicant says it put the respondent on notice of the risk of harm and damage to property. Further, the respondent had the experience of tree 2 falling into the applicant’s property and still they did not take action.
23. In relation to the respondents’ conduct during the proceedings, the applicant relies on respondent not appearing at the directions hearing, not filing a notice of appearance or any evidence, and not attending the onsite hearing to demonstrate that the respondent failed to engage whatsoever in the proceedings and in doing so acted unreasonably. The applicant says the lack of engagement of the respondent led to it incurring costs during the proceedings and at the hearing, which may not have been needed if the respondent responded to or engaged with the applicant.
24. The applicant also says the Commissioner made the orders sought in their entirety and the applicant was successful in full in its application.
25. Further, the applicant’s solicitor made submissions at the hearing of the motion that it incurred legal and expert costs in response to the respondents’ conduct as follows:

(1) The applicant engaged solicitors after attempts to engage with the respondents of its own accord and to arrange mediation with Justice were fruitless. It says solicitors were engaged in an attempt to bring the respondents to the negotiating table without the need for proceedings and they hoped correspondence from solicitors might resolve the matter. It became apparent to the applicant that the respondent was not engaging, and the applicant sought the assistance of legal representatives with the proceedings.

(2) The applicant engaged an expert arborist to confirm their concerns about the impending seriousness of the risk posed by the trees and in the hope that the respondents would address the issues in response to independent expert evidence. The applicant relied on the expert report in the proceedings.

Consideration

Legal Principles of costs in tree disputes

26. The power of the Court to award costs is conferred by s 98(1) of the Civil Procedure Act 2005, subject to the Court Rules:

(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.

27. Rule 3.7 of the Court Rules provides the presumptive rule which applies to Class 2 appeals and includes a non-exhaustive list of circumstances in which it may be fair and reasonable to depart from the rule (relevant extract below):

(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—

...
(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,

28. The principles applicable to the Court’s exercise of the power to award costs under r 3.7 are well known: Grant v Kiama Municipal Council [2006] NSWLEC 70 at [15]. The Court’s power is not confined by the matters in r 3.7(3), rather the power is in the broadest terms, all rational considerations are relevant, and the ultimate question is whether the considerations are sufficient to overcome the presumptive rule: Arden Anglican School v Hornsby Shire Council (2008) 158 LGERA 224; [2008] NSWLEC 103 at [9] (“Arden”). The “no discouragement” principle underlies the presumptive rule, that persons should not be discouraged from making or defending an application by the prospect of an adverse costs order: Arden at [10].
29. The “no discouragement” principle is considered particularly important in Class 2 tree applications, given that the Court’s Class 2 Tree Applications Practice Note provides appropriate and easily accessible procedure designed to facilitate the just, quick and cheap resolution of tree disputes: Marks v Perham (No 2) [2020] NSWLEC 84 at [29]. Tree application appeals are designed to enable parties to represent themselves, and it is preferable that parties represent themselves and reduce the necessity to engage experts where possible: Fox v Ginsberg (No 3) [2011] NSWLEC 139 at [9] and The Owners – Strata Plan 46498 v Evagelakos [2022] NSWLEC 115 at [46] (“Evagelakos”). The Court is slow to find that such circumstances exist in tree applications to overcome the presumptive rule: Evagelakos at [46].

Unreasonable conduct leading up to the proceedings – r 3.7(3)(c)

30. The evidence demonstrates that the applicant progressively made numerous attempts to raise the issues of trees 1-3 with the respondents and request that they take action (paragraphs [9]-[15] above). The applicant initially made direct contact by phone with both respondents and the second respondent provided some assurance that the occupier would look after tree 3. When no action was taken, the applicants attempted to arrange mediation using the Justice mediation service. When those attempts to get the respondents to engage failed, the applicants then progressed to engage solicitors who wrote to the respondents on two occasions seeking removal of trees 1-3 and rectification of the damage to the boundary fence. The Commissioner found that the applicant made a reasonable attempt to reach agreement with the respondent before commencing the proceedings (judgment at [3]).
31. The applicant’s conduct was based on the undisputed fact that the respondents’ trees had caused damage to the applicant’s property (tree 2 and 3) and the applicant’s arborist opinion that trees 1 and 2 would likely cause damage to persons and or property if no action was taken. The respondent had the experience of two trees falling and causing damage to the boundary fence, and still took no action to remove tree 1 or the fallen tree 3. The respondents could have removed tree 3 as it had removed tree 2. The respondents also could have made a written application to remove the trees. The respondents were on notice from the applicant’s solicitor letter dated 10 May 2022 of the risk posed by the trees, that they were likely to fall and pose a significant risk to persons and damage to property. The Commissioner found that the respondents had been aware of the risk of damage for some time but took no action to prevent it, and that tree 1 would likely soon fall and cause damage which could be avoided by removing the tree (judgment at [4] and [8]).
32. The respondents’ conduct in choosing not to respond to the applicant’s reasonable attempts to resolve the issues and not to act following two trees falling and causing damage, in the context of claims from an arborist that the trees posed a significant risk is in my view unreasonable conduct. The respondents accepted at least regarding tree 2 that it was responsible for removing the fallen tree, but there was no evidence to suggest why tree 2 could be removed but not the other trees. I find in particular the risk of harm to persons and damage to property made it unreasonable for the respondents to ignore the applicant’s requests to remove the trees. I am satisfied that the application was left with no other reasonable alternative but to commence the proceedings.

Respondents acted unreasonably in conduct of proceedings – r 3.7(3)(d)

33. The respondents were given numerous opportunities to participate in the proceedings, following service of the proceedings which included a copy of the arborist report. The arborist report provided evidence of an unacceptable risk of harm and recommended removal of the trees to mitigate against the risk of harm including the estimated cost of repairs, and that the likelihood of the tree falling would increase over time. The respondents were on notice from service of the proceedings filed 19 November 2022 that its inaction would allegedly increase the likelihood of harm being caused the more time that passed. The respondents continued not to engage in response to Court directions ordering the respondents to file an appearance and file any evidence, which in accordance with the court orders were to be served on the respondents. The Court file record confirms that the respondents did not appear at the directions hearing, and filed no appearance or evidence. The respondents chose not to put on any evidence to counter the applicant’s arborist report. The judgment confirms that there was no appearance for the respondents at the hearing.
34. The respondents’ conduct in refusing to engage with the proceedings and take no steps in the proceedings is, in my view, unreasonable conduct in the circumstances of the alleged unacceptable risk of harm posed by the trees.

Costs of proceedings

35. I find that the combination of the respondents’ unreasonable conduct in the lead up to and during the proceedings is of sufficient weight to overcome the presumptive rule such that it is fair and reasonable to make an order for costs. The applicant elected to commence the proceedings and it was the applicant’s choice to engage solicitors and an expert in a jurisdiction where solicitor and experts are not necessarily required. However, I am persuaded that the applicant’s reasons for engaging solicitors and an arborist (at paragraph [25]) weigh in favour of awarding the applicant its legal and arborist costs in the circumstances of this case. I am satisfied that expert costs may be ordered as a disbursement incurred in the proceedings: see Bailey v Gould (No 2) [2011] NSWLEC 103 (“Bailey”) at [21] and [23].
36. The respondents were on notice following correspondence from the applicant’s solicitor on 10 May and 1 June 2022 that the applicant was incurring legal and expert fees and chose not to address the issues or engage in the proceedings. The applicant was on notice following the correspondence of 1 June 2022 and service of the orders sought in the proceedings, that the applicant was seeking to recover its costs of the proceedings from the respondents. Further, the respondents were on notice following the correspondence from the applicant’s solicitor of 20 April 2023 that the Court may make an order for costs against them in their absence should they fail to appear at the hearing of the motion. The Court was not made aware of any offer of compromise made by the applicants since filing the proceedings, however this lack of compromise is not sufficient to outweigh the respondents’ unreasonable conduct particularly in circumstances where the respondents did not file an appearance.
37. However, I am not minded to grant the orders in the form sought by the applicant in the nominated amounts, as it would amount to an order for indemnity costs which was not argued and would not, in my view, be reasonable. The applicant also seeks legal costs which may pre-date the commencement of the proceedings as it is not evident from the receipts for legal fees whether the costs of at least the 11 May 2022 and 7 September 2022 invoices are costs of the proceedings and recoverable from the respondents. The order for costs should be the ordinary order for legal costs limited to the proceedings on a party-party basis as agreed of assessed.
38. Further, I consider that the respondents are to pay the applicant’s original filing fee of $238. The applicant has not applied for a refund of these fees. I am satisfied that filing fees may be ordered as a disbursement incurred in the proceedings: see Bailey at [21] and [23]. I consider these fees a reasonable disbursement recoverable from the respondent.

Costs of Notice of Motion

39. The applicant seeks its costs of the motion. The applicant provided receipts for legal costs of the motion, and seeks those costs minus the filing fees for the motion as the respondent anticipated that the Court may refund the filing fees. The applicant has not applied for a refund of the filing fees of the motion, which total $505 (being for filing the motion and amended motion).
40. As the applicant has been successful in its motion seeking orders for costs, they should also receive their costs of the motion (see Tou v Maskiney [2010] NSWLEC 105 at [31]). Again, the costs should be on the ordinary party-party basis as agreed or assessed, and the further consequential order should be made that the respondent pay the applicant’s filing fees of the motion.

Orders

41. The orders of the Court are:

(1) The respondents are to pay the applicant’s legal costs of the proceedings, as agreed or as assessed.

(2) The respondents are to pay the applicant’s costs of the arborist report in the sum of $2,112.00.

(3) The respondents are to pay the applicant’s costs of the notice of motion, as agreed or as assessed.

(4) The respondents are to pay the filing fees of the originating process and notice of motion in the sum of $743.00.

D Holm

Senior Deputy Registrar of the Court

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