Turner v Devine

This judgment concerns the question of costs in relation to proceedings originally commenced ex parte seeking urgent interlocutory orders late in the evening on Maundy Thursday, 28 March 2024.

On 28 March 2024, I ordered that:

Eventually, the matter came back before me on 11 July 2024. By that time, the parties had reached agreement except as to costs. The agreement included a form of proposed orders to be made by consent, signed by the parties on 31 May 2024.

On a review of the proposed consent orders, however, it appeared that certain of the orders proposed by the parties were otiose or no longer necessary in the circumstances. Furthermore, I did not think it appropriate to make a declaration that Dripping Rock Road as it passed through Lots 6 and 7 in DP754927 (Road) was a public road without the Narrabri Shire Council, in whom the road would be vested if it were a public road, being a party to the proceedings. In those circumstances, the plaintiffs did not press the making of orders 1, 2 or 3 of the form of proposed consent orders.

Accordingly, on 11 July 2024, I made orders by consent as follows:

In relation to costs, what relevantly occurred included that on 12 April 2024, the plaintiffs’ solicitors wrote to the solicitors for the defendant a letter on a without prejudice except as to costs basis which included a form of offer of compromise pursuant to r 20.26 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) signed on behalf of the plaintiffs, which included an order that the defendant was to pay the plaintiffs’ costs as agreed or assessed. The offer was stated to be open for 28 days.

On 3 May 2024, the defendant’s solicitors wrote to the plaintiffs’ solicitors stating that they were instructed to accept the plaintiffs’ offer. In a further letter of the same date, also sent a without prejudice except as to costs basis, the defendant’s solicitors offered to pay $32,000.00 in respect of the costs payable under the agreed settlement. This offer to quantify the costs payable as $32,000.00 was rejected by the plaintiffs’ solicitors. In addition, there was a dispute as to whether the costs referred to in the offer of compromise were costs only up to the date that the offer of compromise was made, that is 12 April 2024, rather than the whole of the costs of the proceedings, including any hearing necessary because of the declaration to be sought from the Court as part of the orders proposed to be made by consent. In relation to the form of proposed consent orders signed on behalf of the defendant, in an email dated 31 May 2024, his rights in relation to the relevant date for the payment of costs were expressly reserved.

There was no dispute that the defendant should pay the plaintiffs’ costs up to the date of the offer of compromise on 12 April 2024. The only issue required to be resolved by the Court was who should pay the costs after that date. The plaintiffs submitted that the defendant should pay the costs of the whole proceedings and the defendant submitted that the plaintiffs should pay his costs after 12 April 2024.

At the hearing on 11 July 2024, it was not in issue that, since the offer of compromise was made under UCPR r 20.26, the order for the defendant to pay costs included in the offer of compromise referred only to the costs up to the time the offer was made, that is 12 April 2024, as explained by Rein J in The Owners Corporation Strata Plan No 74667; 74670 and 74662 v Auburn City Council [2015] NSWSC 86 at [14]. Nonetheless, it was noted by Mr White of counsel, who appeared for the plaintiffs, that Rein J had also said in that case at [21]:

Mr White contended that there were exceptional circumstances in the present case which would justify making an order for additional costs against the defendant beyond what he had agreed to by accepting the offer of compromise under r 20.26. Those exceptional circumstances were said to be that it was made clear, both in the correspondence and in the actual offer, that a declaration was to be sought and thus it was inevitable that further work would be required and a substantive appearance before the Court would be required and this was more than is usually required when consent orders are to be made.

Mr Hopkins of counsel, who appeared for the defendant, submitted that the circumstances of the present case did not come near to being exceptional. The defendant had accepted an offer of compromise with the consequences which flowed from that and he had not acted unreasonably thereafter. The fact that further costs might be required to be incurred because a declaration was sought by the plaintiffs did not provide a basis for making the defendant liable to pay those costs. This was said to be so, especially since the defendant consented to the making of the declaration, even though it may not have been necessary in any event, and thus did not stand in the way of that relief being granted. Furthermore, it was noted that, at the hearing, the declaration was not pressed, given that the relevant Council had not been joined, and this was said to have been an issue for which the plaintiffs were responsible.

I accept the defendant’s submissions and, in particular, it appears to me that the defendant acted reasonably and did not create any situation which caused the plaintiffs to incur additional costs. The costs in relation to the declaration resulted from the plaintiffs’ choice to seek that form of relief and all that that entailed. Viewed as a whole, the circumstances were not exceptional and did not justify the Court exercising any discretion under s 98 of the Civil Procedure Act 2005 (NSW) or any discretion in the Court’s inherent power to order that the defendant pay the plaintiffs’ costs for the period after 12 April 2024.

The defendant went on to submit that the plaintiffs should pay his costs for the period from 13 April 2024. It did not appear to me, however, that there was any conduct on the part of the plaintiffs sufficient to justify that order, especially since they had in effect been successful as a result of the defendant’s acceptance of their claims by agreeing to the offer of compromise. In these circumstances, I do not propose to order that the plaintiffs should pay any of the defendant’s costs.

For these reasons, the orders of the Court are: