Johnson Property Group Pty Ltd v Dabson

These proceedings are now spent in that the plaintiffs seek no further relief. There has been no determination as to the merits of the plaintiffs’ claim. Nonetheless the plaintiffs seek their costs of the proceeding as against the first defendant.

The plaintiffs do not seek costs against the second and third defendants, as those defendants were not served at the time that the relevant event occurred.

In my opinion the plaintiffs should have their costs.

Where there is no hearing of a case on its merits, the Court will not usually make any order for costs as there is often difficulty in "discerning a clear reason why one party, rather than the other, should bear the costs", to adopt the words of Burchett J in One.Tel Limited v Commissioner of Taxation (2000) 101 FCR 548; FCA 270 at [6].

The Court will not hear a case which has become moot merely to determine the question of costs. However, if it emerges, clearly, that one of the parties has acted so unreasonably as to warrant a costs order against that party, or unless (even if those parties have acted reasonably), one was almost certain to have succeeded, a costs order may be made (Re Minster for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622).

This is such a case.

The defendants owned land at Cooranbong. The plaintiffs are involved in the development of adjoining or nearby land. There is a dispute between the parties about an aspect of that development.

On 22 March 2016, a mediation between the parties concerning that dispute took place before Mr Lloyd QC. It was a term of that mediation that all discussions, including negotiations, were privileged and confidential.

On 16 November 2016, the defendants lodged with the New South Wales Department of Planning, a submission concerning an aspect of the development. It is now common ground that the submission contained confidential information; namely, the terms of other negotiations which took place at the mediation.

On 29 November 2016, the solicitors for the plaintiffs sent a letter to the defendants’ then solicitor, Mr Wilkinson, who had accompanied the defendants at the March 2016 mediation. There is a dispute between the parties as to whether the plaintiffs were entitled to assume that Mr Wilkinson was acting generally for the defendants, and as to whether the plaintiffs’ solicitors were justified in writing to him.

I do not need to resolve that dispute as it is common ground that the defendants came to know the contents of the letter on the following day.

The letter stated:

It must have been, at least it should have been, obvious to the defendants what confidential information the plaintiffs were alleging had been disclosed in the defendants’ submission; namely, details of negotiations that had taken place at the mediation.

The defendants thought the matter was sufficiently important to immediately seek advice the following day from HWL Ebsworth Lawyers.

By 6 December 2016, if not earlier, it was clear that HWL Ebsworth could not act for the defendants because they had previously acted for the plaintiffs.

On that day, 6 December 2016, a representative of the plaintiffs sent an SMS to the first defendant imploring him to "come up with a commercial deal" to resolve the dispute between the parties.

The first defendant did not respond to that invitation.

Nor did the defendants take any further steps to obtain legal advice about the letter of 29 November 2016, sent by solicitors for the plaintiffs.

There was no reason for the defendants to think that the plaintiffs no longer pressed the demand made in that letter.

Not having heard from the defendants, the plaintiffs wrote to the Department on 9 December 2016 in the following terms:

On 13 December 2016, the Department replied:

On the same day, the Department sent a similar letter to the defendants, adding:

The Department's attitude, although perfectly reasonable from its point of view, placed the plaintiffs in a difficult position. The Department agreed to (and did) remove the submission from its website "temporarily", and said that it would consider redacting the submission by deleting any confidential information. It invited submissions about what should be removed by close of business on 16 December 2016.

However, the plaintiffs were entitled to assume that the Department would seek submissions from the defendants about any such redaction. It was also entitled to assume that in view of the defendants' failure to respond to its solicitor’s letter of 29 November 2016 (written, by then, almost two weeks earlier), the defendants might object to the redaction, or at least raise some argument about it. It was by no means certain that those matters could be settled by negotiation in a timely manner (or indeed at all) before the deadline the Department had imposed.

The defendants did not respond to the Department's letter, seek to engage lawyers alternate to HWL Ebsworth, or seek to respond to the plaintiffs’ solicitor's letter of 29 November 2016; or to communicate in any way with the plaintiffs.

Finally, late in the evening of 14 December 2016, the plaintiffs’ solicitor sent an email to the defendants, as follows.

The attached summons sought the following relief:

The summons made quite clear the basis on which the plaintiffs proposed to move the Court, and made quite clear the basis on which the plaintiffs sought to have the defendants withdraw the submission; namely, that the submission contained confidential information.

On 15 December 2016, the plaintiffs, by counsel, approached McDougall J as Duty Judge.

His Honour granted the plaintiffs leave to serve the summons and supporting affidavits with short notice, and appointed the following day, 16 December 2016 (the last day of Court Term) as the return date of the summons.

On that occasion, the first defendant appeared by counsel, and consented to orders in the following terms.

That order obliged the first defendant to take all steps needed to ensure that the submission "not be restored" to the Department's website until further order. That was because by then, as I have said, the Department had "temporarily" removed the submission from the website.

Those orders, in substance, vindicated the position of the plaintiffs.

The defendants made no further attempt to agitate the matter in Court.

Rather, on 27 January 2017, the defendants lodged a revised submission with the Department, which did not contain any of the confidential information. In effect, the defendants thereby acknowledged the correctness of the basis upon which the plaintiffs had moved the Court.

There was then no cause for the plaintiffs to seek any further relief. All that remained was the determination of costs of the proceedings.

In substance, the plaintiffs have achieved success. Its position has been vindicated. It has achieved what it set out to achieve, and what the defendants have, in effect, acknowledged that it was entitled to achieve. The defendants have not pointed to any factor which suggests they had a sound basis to defend the proceedings.

The plaintiffs did not, in my opinion, behave precipitately. It gave the defendants fair warning that it would take whatever further action was needed if the defendants did not respond to its solicitor's letter of 29 November 2016 within seven days. In fact the plaintiffs waited some 17 days before taking action; including well over a week after the date upon which the defendants knew that HWL Ebsworth could not act for them.

I find this a clear basis to make a costs order.

I make the following orders: