Reid and Anor v Shearan and Anor [2002] NSWSC 902 (1 October 2002)

Last Updated: 17 October 2002

NEW SOUTH WALES SUPREME COURT

CITATION: Reid & Anor v Shearan & Anor [2002] NSWSC 902 revised - 8/10/2002



CURRENT JURISDICTION: Equity

FILE NUMBER(S): 2097/2002

HEARING DATE{S): 19 September 2002

JUDGMENT DATE: 01/10/2002

PARTIES:
William George Reid and
Margaret Law Reid
(Plaintiffs)

John Charles Shearan and
Joyce Evelyn Weller
(Defendants)

JUDGMENT OF: Acting Master Berecry

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:
Mr P Friedlander
(Plaintiffs)

Mr G Grinter
(Defendants)

SOLICITORS:
Hartcher Reid with Writer Ryan Boesen
(Plaintiffs)

Cutlers The Law Firm
(Defendants)


CATCHWORDS:
Discontinuance - leave - entitlement to costs -reasonableness of plaintiffs' actions

ACTS CITED:
Part 21 r 2 & Part 52A r 21 Supreme Court Rules

DECISION:
(1) Leave be granted to the plaintiffs to file a notice of discontinue
(2) The defendants pay half the plaintiffs' costs.


JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION


ACTING MASTER BERECRY

TUESDAY, 1 OCTOBER 2002


2097/2002 - WILIAM GEORGE REID & ANOR v
JOHN CHARLES SHEARAN & ANOR

JUDGMENT

1 MASTER: On 23 February 1988 the plaintiff entered into an agreement for sale of land with the defendant to purchase Lot 1 in DP 730853. The land was part of a subdivision of the defendants’ land. The defendants held Lot 2. Both lots had a boundary with Stimsons Lane. However, access to the public road was over a bridge on the defendants’ land (Lot 2). Discussions and correspondence had been entered into between the parties’ solicitors concerning access to the plaintiffs’ property. It appears that the question of access was never formalised. The parties agreed that the plaintiffs could have access over part of the defendants’ land. Between 1988 and 17 January 2002, the plaintiffs continued to use the access that the defendants had granted.

2 In February 2001 the plaintiffs commenced to build on their land. At about this time the defendants submitted an application to the local Council for subdivision of Lot 2. During the survey of the land, the defendants were informed of certain encroachments on to their land. A meeting took place on 29 September 2001 between the parties’ surveyors, the plaintiffs and Mr Shearan. Mr Shearan was prepared to grant a right of way provided the plaintiffs paid all of the costs of the upgrading of the access. He was not prepared to negotiate of any other terms or variation of this term. The nature of the work was agreed and the defendants’ surveyors estimated the cost at about $7,000.00. The plaintiffs accepted the terms on the basis that the costs would be approximately $7,000.00.

3 Subsequently, the plaintiffs were informed by their surveyor that the costs would be between $20,000.00 and $25,000.00. The plaintiffs were not prepared to meet all of this expense. Attempts were made by the plaintiffs to formalise the access by creation of appropriate easements. Initially, there was no response from the defendants. However, on 25 October 2001 the plaintiffs were advised that the defendants were prepared to meet on 26 October 2001 to discuss the matter. At the last moment the defendant advised that they would not negotiate any further.

4 A suggestion was made by the defendants’ solicitor that the plaintiffs could create their own access on that part the existing easement that gave direct access to their property. They were reluctant to do that as it would mean clearing some trees which they regarded as fine specimens of Australian rainforest trees. In addition, they considered that they were bound by Wyong Shire Council’s (the Council) 1993 Development Consent which required the retention of all native emergent vegetation along the northern boundary of the property (Lot 1).

5 On 29 November 2001, William Reid (the first plaintiff) had an on-site meeting with an officer of the Council. This officer was from the Development Control Department. He informed the first plaintiff that he would recommend that the defendants’ subdivision development consent be altered to provide that the parties negotiate an extension of the right of way. This was subsequently confirmed by the Council.

6 Notwithstanding this requirement the defendants refused to negotiate. Subsequently, the defendants dug ditches in the roadway, placed star pegs and tape across the boundary and erected a gate. The gate was locked for a period of three days in January 2002. Thus, preventing access to the plaintiffs’ land.

7 In January 2002 the defendants’ solicitor, without instructions, suggested to the plaintiffs that the matter might be resolved if they offered to pay half the costs of constructing the access. Despite having reservations about the likelihood about the offer being accepted, the plaintiffs engaged an engineer to cost the works. He informed the plaintiffs that he would require a copy of the defendants’ Development Consent relating to the up-grading of the access to enable him to prepare a proper quote. The first defendant agreed to send a copy however, a copy was never sent and subsequently correspondence was not answered. Further discussions took place between the first plaintiff and the defendants’ solicitor. On 18 March 2002, the plaintiff’s sent to the defendants’ solicitor an offer of settlement. In a subsequent telephone attendance, the defendants’ solicitor indicated that the offer seemed to be all right but the defendants were still considering some contribution for granting the easement. He said he would get back to the plaintiffs again once he had instructions. On 26 March 2002, the plaintiffs had not heard from the defendants. A final letter was sent to the defendants’ solicitor advising that they proposed to take proceedings.

8 It appears that the problem of access arose in mid 2001 when the plaintiffs’ builders moved on site to construct the dwelling. The defendants objected to the way that they drove onto the land and the damage their vehicles were causing to the land. The dispute reached a critical stage in January 2002 with the placing of the star posts and gate thus restricting access to the plaintiffs’ land. It would appear that the limited access that the plaintiffs had, meant that the contractor could not get reasonable access to the building site, and thus construction could not be completed. By March, with the issue still not resolved, the plaintiffs were faced with the prospect of renting alternate accommodation until this dispute was resolved. The plaintiffs allege that they were denied access which would have enable their tradesmen to complete the work. As negotiations has broken down these proceedings were commenced.

9 The plaintiffs filed a summons on 2 April 2002 seeking, inter alia, an order that the plaintiffs and their agents be given free and inhibited access by foot and vehicle at all times over the disputed part of the defendants’ land, and secondly, that the plaintiffs do all things necessary to create a right of carriageway and easement for services.

10 On 5 April 2002 consent orders were made in the following terms:

Consent Orders

(1) Application adjourned to 10 May 2002.

(2) Costs reserved.

(3) Liberty to apply on two days notice.

(4) Noted without prejudice to the ultimate rights of the parties that they have reached agreement for the defendants to give the plaintiffs temporary access across the defendants’ property.

11 Subsequently, the defendants demanded additional work be carried out in respect of the agreement reached on 5 April 2002. Sometime after 8 April 2002 the plaintiffs sought to obtain an easement over another neighbour’s property. However, that neighbour declined to consent to the easement. As a result of the refusal, the plaintiffs lodged a development application with the Council for access to their land through the northern portion of the carriageway and easement abutting Stimson Lane. Environmental issues were raised by the Council and the plaintiffs responded to those issues by lodging a further development application. This development application was accepted by Council. The plaintiffs now have access to their property which does not impinge on any part of the defendants’ land. It was contended for the defendants that the plaintiffs should have sought access for Lot 1 from the Council when they commenced construction of their house. Further, it was submitted that they were dilatory in not pursuing the application until 18 months after the commence of construction.

12 However, the plaintiffs had used the disputed access for 13 years without any concern being raised by the defendants. It was not unreasonable to assume that they would be able to use the access to enable the builders to entered upon the plaintiffs’ land.

13 Whilst with hindsight, it might be thought that the plaintiffs were dilatory that, in fact, was not the case.

14 They had used the disputed land for 13 years. The development consent they obtained from Council required the vegetation on the northern boundary to be retained. True it is that on part of the land, for aesthetic reasons, they did not wish to fell trees. Nevertheless, they were bound by the conditions of the development application. The defendants did not put on any evidence which would show that the plaintiffs could have put in access on Lot 1 and still comply with the Council’s condition.

15 In late November 2001, Council informed all parties that as a condition of the defendants’ subdivision of Lot 2 that they (the defendants) had to negotiate access with the plaintiffs. It was reasonable for the plaintiffs to assume that access to Lot 1 would only be permitted by Council through Lot 2. Those negotiations broke down. The plaintiffs have put on evidence concerning the delays that they experienced with completion of their house because of the dispute with the defendants. It would seem that the actions of the defendants in January 2002 meant that the plaintiffs may have been trespassers had they and the builders continued to use the roadway. It was not unreasonable in the circumstances to negotiate with the defendants concerning access and formalise the access that they had been granted and used over a period of 13 years.

16 The plaintiffs seek leave to file and serve a notice of discontinuance. Part 21 r 2 permits the plaintiff to discontinue with consent of the other part or by leave of the court. Part 52A r 21 provides, inter alia, that a party discontinuing proceedings without leave must pay the other party’s costs. The defendants submit that the plaintiffs should either pay the defendants’ costs or that each party should pay their own costs. It is further submitted that the plaintiffs would not have succeeded in obtaining their remedies.

17 In Hill v Copeland [1999] NSWSC 632; unreported BC9903587 Master Macready review a numbered of cases dealing with the questions of costs when a plaintiff seeks leave to discontinue. The learned Master referred to a number of cases which suggest that in the ordinary case the plaintiff cannot usually apply to discontinue on terms that an order for costs be made against the defendant – see Mulcahey v Wilkinson (1887) 9 ALT 22, Lambton & Co v Parkinson (1887) 35 WLR 545 and Denman Homes Pty Ltd v Madnara (unreported, Needham J, 14 September 1983). He then referred to recent cases which suggest that in exceptional cases a costs order may be made against a defendant. He cited the cases of Garwolin Nominees Pty Ltd v Statewide Building Society [1984] VicRp 38; (1984) VR 469, Telstra Corporation v Australian Telecommunications Authority unreported Haynes J VICSC 10 June 1994, and Australian Securities Commission v Aust-Home Investments Ltd 34 FCR 194.

18 In the last case Hill J summarised cases in the following way:

"(1) Where neither party desires to proceed with litigation the Court should be ready to facilitate the conclusion of the proceedings by making a cost order: Stratford and the SEQEB case.

(2) It will rarely, if ever, be appropriate, where there has been no trial on the merits, for a Court determining how the costs of the proceeding should be borne to endeavour to determine for itself the case on the merits or, as it might be put, to determine the outcome of a hypothetical trial: Stratford. This will particularly be the case where a trial on the merits would involve complex factual matters where credit could be an issue.

(3) In determining the question of costs it would be appropriate, however, for the Court to determine whether the applicant acted reasonably in commencing the proceedings and whether the respondent acted reasonably in defending them (SEQEB).

(4) In a particular case it might be appropriate for the Court in its discretion to consider the conduct of a respondent prior to the commencement of the proceedings where such conduct may have precipitated the litigation: cf Sunday Times Newspaper Co Ltd v McIntosh [1933] NSWStRp 37; (1933) 33 SR (NSW) 371.

(5) Where the proceedings terminate after interlocutory relief has been granted, the Court may take into account the fact that interlocutory relief has been granted: cf Re Asiatic Electric Co Pty Ltd [1973] 1 NSWLR 603 at 606, a case which, however, depended upon the specific working of the statute under consideration."

19 In Re Minister for Immigration & Ethnic Affairs; Exparte QIN [1997] HCA 6; 71 ALJR 533 McHugh J made the following comments:

"In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. ...

... In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. ...

Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. ...”

20 After review of these cases the learned Master in Hill v Copeland supra at para [26] made the following comments:

“As is clearly indicated by these excerpts it is inappropriate for the court to determine the case on the merits or to determine the outcome of a hypothetical trial. However, the court can take the preliminary step of determining whether the plaintiff acted reasonably in commencing the proceedings.”

21 In my view the facts as they were at the time the plaintiffs commenced these proceedings show that the plaintiff had acted reasonably throughout the period of this dispute and took great pains to negotiate a settlement with the defendants. It seems to me that up to a point the defendants also acted reasonably in that they instructed a solicitor, agreed to negotiate and came up with proposals to reach a satisfactory outcome. However, there were also actions taken by the defendants which caused the negotiations to breakdown, ie., refusal to attend meetings, respond to correspondence and impede access to the plaintiffs’ land.

22 There has been no interlocutory determination on any of the merits in these proceedings. It is therefore dangerous to venture into the dispute to attempt to determine what might have been the outcome. Steps taken subsequent to the commencement of proceedings by the plaintiffs result in a position that the plaintiffs no longer need to proceed with its action. It seems to me that the plaintiffs were forced to bring these proceedings. As a result of commencing these proceedings an agreement was reached on 5 April in respect of the disputed access. In my view however, the plaintiffs are not entitled to an order for all their costs in these proceedings. It could not be said that the defendants were totally unreasonable in the approached in which they took. Time was of the essence for the plaintiffs in relation to the building works. It was in my view possible for the plaintiffs at least on an interim basis to obtain the order that was sought in paragraph (1) of the summons. Therefore, the appropriate orders I make are as follows:

(1) Leave be granted to the plaintiffs to file a notice of discontinuance.

(2) The defendants pay half the plaintiffs’ costs.
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LAST UPDATED: 08/10/2002