Clough v Breen (No.5)

The Court gave judgment on the final hearing of this matter on 22 September 2023: Clough v Breen (No. 4) [2023] NSWSC 1155 (“the September 2023 judgment”). This judgment deals with two issues consequent upon the giving of the September 2023 judgment: (1) whether any damages should be awarded for the torts established against Mr Breen, and if so, in what quantum; and (2) costs.

This judgment should be read with the Court’s September 2023 judgment. Events, matters and persons are referred to in both judgments in the same way.

The Court had the benefit of written submissions from the parties and heard short oral submissions on 12 February 2024. The parties continued to engage the same lawyers as they did at the main hearing.

Mr D. O’Connor and Ms C. Langford of counsel, instructed by Michael Sommerville of Redmond Hale Simpson Solicitors & Barristers, appeared for the plaintiff/cross-defendant, Ms Clough. Mr F. Maghami and Mr M. McGirr of counsel, instructed by Charlotte Morson, of Morson Law Litigation Lawyers appeared for the defendants/cross-claimants, Mr Breen, and Ms Dillon.

These reasons first deal with the damages issues then the costs issues. On the pleadings, some issues remain to be considered. These relate to whether the inclinator can be replaced in the circumstances that now exist given the terms of Easement A. In the September 2023 judgment (at [213]), the Court also noted that the form of final relief including any permanent injunction needed to be finalised. In the interim, the parties continue to operate under the interlocutory orders made in August 2022 (Clough v Breen & Anor [2022] NSWSC 1026).

The first question is whether Mr Breen should pay damages to Ms Clough in relation to the incidents in which the Court has found that torts of nuisance or trespass have been established against him.

Ms Clough claims damages for four incidents that were the subject of adverse findings against Mr Breen in the September 2023 judgment. These incidents were:

These reasons will deal with each of these incidents in turn. In each incident, Ms Clough claims damages on the basis that the interference to her rights consists of a disturbance with the amenities of her living at her property without the need on her part to prove any actual financial loss or physical injury. She submits that annoyance or discomfort alone can be sufficient to support a claim for general damages. She also seeks exemplary or aggravated damages for the trespasses to her land. She contends that all the incidents would attract an award of exemplary damages.

The applicable legal principles in relation to the availability of the torts of trespass and nuisance in relation to easements were discussed in the September 2023 judgment, at [209] – [211]. The applicable legal principles in relation to the assessment of damages for trespass and for obstruction to a right of way may be shortly stated.

General damages are available for the torts of nuisance and trespass to compensate for the loss of amenity and enjoyment of the property occasioned by the tort. The Court may also award aggravated or exemplary damages for these torts. It is not uncommon in the authorities for compensatory and exemplary damages to be awarded in one lump sum.

Aggravated damages are a form of compensatory damages, being awarded for injury to the plaintiff’s feelings caused by insult, humiliation and the like; but exemplary damages are awarded as a form of punishment to deter repetition of reprehensible conduct by the defendant or others, or to mark the Court’s disapproval of that conduct and are punitive and are deterrent in nature: Lamb v Cotogno (1987) 164 CLR 1. Aggravated damages are assessed from the point of view of the plaintiff and with exemplary damages the focus is on the conduct of the defendant, but it is necessary to determine heads of compensatory damages before deciding whether or not the quantum is such that a further award is necessary to serve the objectives of punishment or deterrence or condemnation: State of New South Wales v Ibbert (2005) 65 NSWLR 168 at [83]. The award of exemplary and aggravated damages is discretionary, and caution is required to ensure that the circumstances in which they are awarded are appropriate and bear proper proportion to the circumstances of the case: Day v The Ocean Beach Hotel Shellharbour Ltd (2013) 85 NSWLR 335. Provocation is relevant to determining whether exemplary damages should be awarded, and if so, how much: Tilden v Gregg [2015] NSWCA 164.

One general observation may be made at the outset. All four incidents occurred after Darke J’s judgment in 2017. A theme of Darke J’s judgment was the need for cooperation between the parties and that theme was repeated in the September 2023 judgment.

The Court’s findings in relation to this incident are set out in the September 2023 judgment at [88] – [106]. The findings are not reproduced here. The Court’s present analysis is based on those findings.

The parties each advanced written submissions in relation to this incident. Ms Clough’s submissions were as follows.

Mr Breen and Ms Dillon said the following in chief about this incident:

Mr Breen and Ms Dillon replied to Ms Clough’s submissions as follows.

The Court analyses these submissions as follows. The Court found in relation to this incident that Mr Breen engaged in excessive use of Easement A and thereby committed a trespass upon Lot 116: September 2023 judgment at [103]. This was a serious incident as the Court’s findings show. The incident involved excessive use, indeed monopolisation, of the inclinator for a not insubstantial period occasioning serious disruption and inconvenience to Ms Clough. In it, Mr Breen was dismissive of Ms Clough’s concerns at her rights to use the inclinator, when he must have known she would be seriously inconvenienced. He well understood that giving advance notice to Ms Clough would have allowed some timeslots to be fixed for her to use the inclinator, but he high-handedly ignored her and showed unacceptable indifference to her exercise of her legitimate rights. Although the Court has found that she reacted too strongly at times to his conduct, she did not in any sense provoke it in a way that should reduce his responsibility for what occurred. This incident was an identifiable contributor to her anxiety, nervousness and apprehension about use of the inclinator.

The Court will award damages, including aggravated damages and exemplary damages, of $6,000 for this incident against Mr Breen. Ms Dillon was not responsible for what occurred in this incident, and damages should not be awarded against her for it.

The Court’s findings in relation to this incident are set out in the September 2023 judgment at [107] – [119]. The findings are not reproduced here. But the Court’s present analysis is based on those findings.

The parties each advanced written submissions in relation to this incident. Ms Clough’s submissions were as follows.

Mr Breen and Ms Dillon said the following in chief about this incident:

Mr Breen and Ms Dillon replied to Ms Clough’s submissions as follows.

The Court analyses these submissions as follows. The Court has found that the obstruction to Ms Clough’s rights as the dominant tenement owner of Easement E through the events of this incident is an actionable nuisance. This incident was a planned and calculated denial of Ms Clough’s access to the enclosed Easement E on Landing 5. But in the September 2023 judgment (at [109]) the Court emphasised that the context of the nuisance was important, despite the deliberate nature of Mr Breen’s conduct. Either Mr Clough or Ms Rose had begun to lock the Landing 5 gate by early 2020. This conduct on their part was bound to escalate tensions between the occupants of Lot 116 and Lot 118. The Court will not in any way reward provocative conduct by awarding aggravated or exemplary damages for a situation which was at least partly brought about by Ms Clough or Mr Rose.

Moreover, as the Court has found in the September 2023 judgment (at [111]) Mr Breen’s somewhat extreme conduct on this occasion was partly prompted by his concern about the safety of Ms Dillon who had expressed well based on genuine fears about Mr Rose’s conduct towards her.

For these reasons the Court will not award any compensatory or exemplary damages to Ms Clough in respect of this incident. But the incident that followed a few days later is in a different category. Before confronting Mr Drew, the locksmith, Mr Breen had an opportunity to reflect upon his own conduct, to cool off, and to take advantage of the lapse of time to de-escalate. But what he did widened the dispute so as to cause distress to innocent third parties.

The Court’s findings in relation to this incident are set out in the September 2023 judgment at [120] – [138]. The findings are not reproduced here. But the Court’s present analysis is based on those findings.

The parties each advanced written submissions in relation to this incident. Ms Clough’s submissions were as follows.

Mr Breen and Ms Dillon said the following in chief about this incident:

Mr Breen and Ms Dillon replied to Ms Clough’s submissions as follows.

The Court analyses these submissions as follows. The Court has found that this incident amounted to a substantial interference with Ms Clough’s rights to access Landing 5 through Easement E. The Court accepts Ms Clough’s submissions in relation to this incident. Conduct such as this must be deterred and condemned. An award of aggravated and exemplary damages against Mr Breen is appropriate for this incident because of its special features.

Mr Breen’s false statement to Mr Drew that he had a Supreme Court order entitling him to change the locks when he must have known that he did not have the benefit of such an order is particularly disturbing. Leaving aside whether it is a contempt of Court, Mr Breen’s conduct in this incident was a deliberate misuse of the authority of the Court to intimidate Mr Drew. Persons who falsely cloak themselves in the Court’s authority undermine and discredit that authority and exhibit a contumelious disregard for the rights of the people who are adversely affected by such intimidation, as Ms Clough was on this occasion. Mr Breen’s misuse of the Court’s authority in this incident was powerful and effective and Mr Breen’s scheme caused great discomfort to Mr Drew and his girlfriend and directly and indirectly to Ms Clough.

The Court does not accept Mr Breen’s submission that this incident was just about imposing a cost on Ms Clough bringing tradespeople to the property. Nor was Mr Breen’s concern for Ms Dillon’s welfare a mitigating factor, because of the lapse of time for reflection. The Court will impose aggravated and exemplary damages of $18,000 for this incident. This figure is selected to show appropriate condemnation of Mr Breen’s conduct and to deter any repetition of it. Ms Dillon was not responsible for what occurred in this incident, and damages should not be awarded against her for it.

The Court’s findings in relation to this incident are set out in the September 2023 judgment at [165] – [173]. The findings are not reproduced here. But the Court’s present analysis is based on those findings.

The parties each advanced written submissions in relation to this incident. Ms Clough’s submissions were as follows.

Mr Breen and Ms Dillon said the following in chief about this incident:

Mr Breen and Ms Dillon replied to Ms Clough’s submissions as follows.

The Court analyses these submissions as follows. The Court will award aggravated and exemplary damages for this incident in the sum of $4,000. This award is necessary because although the trespass was relatively brief it was in the face of a negotiated Court order designed to regulate their mutual conduct.

Parties are not entitled to breach Court orders merely because they realise that their lawyers should have negotiated more flexible terms. Mr Breen’s conduct was high-handed and a cynical disregard of the rights that Ms Clough had secured by engaging lawyers to negotiate a reasonable regime for access on this occasion. Despite the efforts that had been invested into negotiating detailed terms upon which access would be allowed, they were blithely ignored without any demonstrable attempt to guide or control the workmen. Conduct such as this should be condemned and deterred. And Mr Breen should know that whenever he engages in such conduct he is liable attract damages of this kind. Once again Ms Dillon was not responsible for what occurred in this incident, and damages should not be awarded against her for it.

There are two costs issues: whether a costs order should be made and if so, what should that costs order be. The parties have put their opposing submissions about the appropriate costs’ outcome of these proceedings.

On the first costs issue, Mr Breen and Ms Dillon submit as follows.

In reply on this issue, Ms Clough submitted as follows:

The Court is not persuaded that it should decline to make a cost order at this stage of the proceedings. In the recent course of the litigation between these parties, the Court has now given five judgments. The Court has resolved all issues other than costs that were raised on Ms Clough's Statement of Claim and most of the issues raised on the Cross-Claim. All that remains to be determined is the Cross-Claim relief relating to whether the inclinator car can be replaced due to any changes in circumstances that have occurred since Darke J’s judgment in December 2017. This is a relatively discrete issue.

The Court has case managed these proceedings so that all issues in relation to the past conduct of the parties including damages would be determined first, and then the separate questions of what modifications might take place to the inclinator would be determined. The Court took the view that the case was more logically managed by dealing with the past before trying to fashion a remedy affecting the future state of the inclinator and the future mutual conduct of the parties. The only other issue relating to the future between the parties is the moulding of the form of final injunctive relief. But that issue is interdependent with the issue of what, if any, modifications to, or replacement of, the inclinator permissibly takes place within the terms of the Easement A. The present moment is a logical division in the proceedings where a range of discrete issues have been resolved and the Court is about to embark upon other separate issues between the parties.

Moreover, it has been a considerable time since these proceedings commenced. The first judgment in this round of litigation was in August 2022. It is unclear how long it will take to resolve the balance of the proceedings. Considerable legal costs have been incurred on both sides of these proceedings. It is far better for parties to know where they stand in relation to their costs liability in relation to their future financial planning. To leave issues of costs as a matter of uncertainty for much longer is likely to financially disadvantage both parties in these proceedings.

The Court does not find Mr Breen and Ms Dillon's arguments against this conclusion to be persuasive. First, the Court is not persuaded there is a "substantial risk of unfairness" should the Court make a costs order at this point in the proceedings. Whilst it is true that some of the costs already incurred by the parties are attributable to questions arising on the Cross-Claim, the Court can readily discern the questions on the Cross-Claim that have been resolved from those that have not been resolved and can take that into account in the costs orders that are now made. There is no danger that making a costs order now will deprive Mr Breen and Ms Dillon of such successes as they have had either on their Cross-Claim so far, or on Ms Clough’s claim against them. The Court can identify the areas of that success and can give it appropriate weight at this stage when making a costs order. Doing this has the advantage of bringing costs up to date and drawing a line for costs determinations in the future.

Whilst it is true that “the good proportion of the evidence heard at trial could be relevant to the determination of the Cross-Claim” this relevance is limited; it really only provides background to the remaining issues. The issues that were strongly contested at the trial have been determined. These issues related to what incidents took place, who was at fault for them and what are the consequences in damages for those incidents. Also resolved have been contests in relation to the construction of the terms of Easement A and Easement E and other matters. But the relevance of this material to determining the remaining issues on the Cross-Claim is only to illustrate the problems that can occur and that might perhaps be avoided were the inclinator to be upgraded, modified or replaced in the future should that be permitted by the terms of Easement A. None of the factual contests at trial needs to be re-determined or indeed can be re-determined on the remaining Cross-Claim issues.

Nor do the various estoppel issues that have been determined by the Court create any special reason why costs orders should not be made now. The estoppels found by the Court in the September 2023 judgment were relatively limited and still left open determination of questions of the modification or replacement of the inclinator in the future in respect of changes that had occurred since Darke J’s judgment in 2017. It is difficult to say that the estoppel issue was a “threshold issue” in relation to the Cross-Claim. Its determination in the September 2023 judgment merely serves to further divide past issues from future issues, which in the Court’s view is also an appropriate dividing point for the Court now to make a costs order.

Mr Breen and Ms Dillon put alternative submissions if the Court did not defer the question of costs pending the outcome of the balance of the proceedings. Their submission was advanced as follows.

In reply on this issue Ms Clough submitted as follows:

The Court is not persuaded that it should make no order as to costs with each party bearing their own costs of the proceedings thus far, as Mr Breen and Ms Dillon submit.

The Court is warranted in this case in making a costs order in favour of Ms Clough for several reasons. First, Ms Clough has been successful on some of the most contentious parts of the proceedings which have now been determined. She has been successful in establishing approximately half of the incidents which she alleged took place, and on several other disputes she has been successful in achieving findings that facts for which contended took place, although the cause of action that she claimed was not made out. But it is she clear that she has failed with respect to several other incidents where she has not been believed, or where she or Mr Rose provoked the situation or where her allegations were exaggerated and not believed.

But she has nevertheless achieved a substantial measure of success overall in relation to conduct which the Court has found worthy in places of condemnation with aggravated and exemplary damages. It is true that her unsuccessful claims in trespass and nuisance took up a considerable portion of the trial. That is a matter which the Court can and does consider in fixing the percentage of costs that Ms Clough should recover.

Second, Mr Breen and Ms Dillon point out that although Ms Clough was successful on the CCTV issue, she was unsuccessful on the construction of Easement A. Whilst this is true. this is a matter that can be taken into account and this relative balance of success in the fixing of an appropriate percentage. The Court acknowledges that the construction of Easement A was a highly contentious issue that occupied time in the parties’ submissions and in Court time. Added to that is Ms Clough failed to make out many of her claims of estoppel on the Cross-Claim, which can also be taken into account.

Third, Mr Breen and Ms Dillon’s argument that they had enjoyed success on an interlocutory basis in relation to the regime for the issue of the inclinator somewhat misconceives the nature and purpose of that interlocutory regime. The August 2022 judgment and the regime of orders which were put in place with it stands somewhat apart from the merits of the contest of the parties. The interlocutory regime created the August 2022 judgment should be viewed like many interlocutory injunctions obtained at the commencement of proceedings where it is imperative that stability be brought to our dynamic and unpredictably damaging situation. An initial interlocutory dispute generates legal costs which will usually be borne in the same manner as the other costs in the proceedings, by the party who is unsuccessful at the end of the proceedings. In the Court’s view the interlocutory regime that was imposed in August 2022 is neutral in the Court’s present determination of costs. When some form of interlocutory regime was initially proposed largely at the Court’s initiative, each party opposed parts of it. The final form of interlocutory regime was settled as a result of hearing submissions from both sides, to try and achieve workable live-and-let-live regime for these parties pending determination at a final hearing.

If the Court is to make a costs order against Mr Breen and Ms Dillon, it is appropriate to make a percentage costs order rather than one that awards costs by reference to various issues. The latter kind of costs order generates unnecessary costs in calculating the apportionment of costs between issues.

Overall, Ms Clough was justified in bringing these proceedings and that should be reflected in an appropriate order for costs. In the Court’s view, weighing all the competing considerations the Court considers that an appropriate order is that Mr Breen and Ms Dillon pay 60 per cent of Ms Clough’s costs of the proceedings on the ordinary basis. It is appropriate that this costs order cover all costs incurred up to the date of this judgment, so there is a clear dividing line between past and future costs, should future costs issues arise in the balance of the proceedings.

The Court considered whether a separate costs order should be made against Mr Breen and Ms Dillon because Mr Breen is the subject of the aggravated and exemplary damages orders. But the Court has rejected that idea because overall the conduct of the proceedings on the defendants’ side has been for the benefit of them both. It is appropriate to mark out Mr Breen’s conduct as warranting an award of aggravated and exemplary damages for the three incidents where that has occurred. But that on its own is sufficient to distinguish his conduct from that of Ms Dillon.

The only issues now remaining to be determined in these proceedings relate to whether the inclinator can now be required to be replaced and in light of the outcome of that issue, what should be the final form of any permanent injunction that should be left in place to regulate the conduct of these parties.

The Court made directions on 2 April 2024 for the filing of any supplementary evidence relating to the modifying, upgrading, or replacing the inclinator. Otherwise, the Court will make the following orders for the reasons here given: