Moussa v Camden Council (No.7)

On 13 and 14 December 2022, the Court had a hearing (“Common Questions Hearing”) to determine the common questions (“Common Questions”) in these representative proceedings. The Court identified 35 common questions. The Court’s reasons for that conclusion are published in Moussa v Camden Council (No.5) [2023] NSWSC 1135 (“Judgment No.5”).

This judgment, which has been dealt with on the papers, determines the question of the costs of the Common Questions Hearing.

The plaintiff submits that they should be awarded costs for the following reasons:

The plaintiff submits that, in the alternative, costs should be the plaintiff’s costs in the cause.

The plaintiff notes several features of the Common Questions Hearing which the plaintiff submits are relevant to the issue of costs. Firstly, that none of the defendants made an application for orders to strike out the Statement of Claim on the basis that there were no substantial questions of law or fact, nor did any of the defendants make an application to “de-class” the proceedings pursuant to s 166 of the Civil Procedure Act 2005 (NSW) (“CPA”); secondly, the parties could not agree on whether any, and if so which, Common Questions arose; thirdly, the plaintiff’s 48 proposed Common Questions were opposed in part, or wholly, by each of the three defendants; and finally, the 35 common questions which were identified by the Court closely resemble the plaintiff’s 48 proposed Common Questions.

The plaintiff submits that these circumstances indicate that the plaintiff enjoyed “substantial success” at the Common Questions Hearing and that, therefore, the ordinary principle that costs should follow the event should apply, pursuant to r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW).

By way of comparison with the Common Questions identified by the Court, the plaintiff submits that:

On the basis of this comparison, the plaintiff submits that the defendants did not have any substantial success at the Common Questions Hearing.

The plaintiff concedes that their proposed questions addressed the whole of the Cornish Masterplan Area, whereas the Court’s questions focused on a smaller area being the Council Land and areas reasonably proximate to the Council Land. However, the plaintiff submits that this distinction did not constitute a significant part of the written or oral submissions. By contrast, the plaintiff submits that the defendants caused the hearing to be consumed by technical arguments, which were all unsuccessful and, some of which were expressly rejected in the Court’s reasons.

This comparison of the parties’ positions and the outcomes, the plaintiff submits, demonstrates the plaintiff’s substantial success and justifies costs being awarded to the plaintiff.

The plaintiff makes a further submission that the plaintiff should be awarded costs because the Common Questions Hearing was, in effect, an unsuccessful attempt by the defendants to de-class the representative proceedings. The defendants, in particular Cornish, made submissions during the Common Questions Hearing that there were no Common Questions. As such, significant time during the Common Questions Hearing was spent on the issue of whether any Common Questions arose. The plaintiff submits that it incurred significant costs addressing this question, which should have been ventilated as part of a declassing application, which the defendants ought to have filed in order to raise such issues.

The plaintiff notes the decision in Richmond Valley Council v JLT Risk Solutions Pty Ltd [2021] NSWSC 584 at [6], where Hammerschlag J said that costs orders following such hearings should reflect “a responsible debate directed to a proper formulation of common questions [such that costs be] costs in the cause”. The plaintiffs distinguish their case by submitting that the “proper formulation” of the Common Questions was not the substantial focus of the hearing, rather the focus was directed to “agitating arguments about a complete lack of commonality”.

The first defendant, Camden Council, submits that it should be awarded costs against the plaintiff on an ordinary basis of and incidental to the Common Questions Hearing. In the alternative, it submits that costs should be either costs in the cause or that each party bears their own costs of the application.

The Council submits that it had substantial success in the Common Questions because the Common Questions were limited to Council Land (and an area reasonably proximate to it) as opposed to the Cornish Masterplan Area.

The Council otherwise adopts the submissions of the second and third defendants.

The second defendant, CGSF, seeks its costs from the plaintiff on an ordinary basis. CGSF submits that the hearing was largely dedicated to the issue of whether Common Questions should, or could, be extended beyond the Council Land to the Cornish Masterplan Area. The Court decided that the Common Questions (with the exception of those relating to stigmatisation) would be limited to the Council Land. CGSF submits it has achieved overwhelming success with this outcome as the question of the geographical area which the Common Questions covered took up approximately 90% of the hearing time.

CGSF submits that, although their position at the Common Questions Hearing was that there were no Common Questions, this should be understood as a submission relating to the Common Questions as they extended to the entire Cornish Masterplan Area. However, they submit that during oral submissions they did concede that there could be Common Questions relating to the Council Land.

CGSF concluded by submitting:

The third defendant, SMEC, submits that the Court should order that costs be costs in the cause or, alternatively, that the parties bear their own costs of and incidental to the Common Questions Hearing.

SMEC submits that a contested hearing regarding Common Questions was an inevitable part of case management for these representative proceedings. SMEC submits that the contested hearing was inevitable because the questions that the plaintiff initially proposed in their pleadings were not appropriate Common Questions, such that the plaintiff later formulated a different list of proposed Common Questions.

SMEC submits that the plaintiff and SMEC each had a degree of success, in particular as the assessment of whether lots were unsound for building was limited to the plaintiff’s land and not the entire Cornish Masterplan Area. Other issues, such as the risk of harm, were limited to the Council Land rather than the Cornish Masterplan Area. SMEC refers to Judgment No.5 and submits that the Court found at [52] that some of the plaintiff’s proposed questions were too broad or not common, and that the defendants’ questions were too narrow. As such, the parties had mixed success and, it is submitted, it cannot be concluded that the plaintiff “won the event”.

Finally, the content of the Common Questions will ultimately be determined by the trial judge, such that if there was any “victory” of the plaintiff, it is effectively preliminary or contingent.

In their submissions in reply to the plaintiff’s submissions, SMEC submits that the plaintiff has overstated his success, as the parties in fact had mixed success and any success is dependent on what occurs at the final hearing.

Further, in their reply submissions, SMEC states that the plaintiff’s characterisation of the defendants as being “obstructive” and not “practical” is “unfair”. SMEC submits that many of the issues raised by the defendants were not rejected because they were unfounded, unrealistic, or overly technical - the plaintiff’s own proposed questions were also rejected or amended in many instances.

In response to the plaintiff’s submission that the defendants advanced a de facto de-classing application, SMEC submits that this is misconceived as SMEC never suggested that the matter should be de-classed.

It is submitted that a costs order against the defendants should not be awarded based on the plaintiff’s “overall complaint” that:

While it is accepted that many of the plaintiff’s proposed questions were ultimately incorporated in the Court’s differently worded Common Questions, some were also not adopted at all. The plaintiff did not succeed in persuading the Court, with minor exceptions, that the questions should encompass the entire Cornish Masterplan Area.

It is also clear that, in many respects, the principal argument of the second defendant, with which the other defendants aligned themselves, was that there were no Common Questions of any significance which ought to be the subject of a “Merck” order. I do not accept that this approach by the second defendant was only taken because the plaintiff sought to identify questions relating to the entirety of the Cornish Masterplan Area. If that was the real approach of Cornish, then the second defendant could have, and should have, proposed questions limited to a smaller area, e.g., the area of the Cornish Land. It did not adopt that approach.

None of the parties adopted the approach outlined by Beech-Jones J (as his Honour then was) in Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority t/as Seqwater (No.5) [2015] NSWSC 1771 at [16]-[22], namely, in a practical way, to identify as many questions that are of utility to the resolution of the group members’ claims. In my view, the opposite occurred.

In my view, none of the parties adopted reasonable positions. The consequence was a hearing which was much more protracted than it should have been.

It is also the case that some contest regarding the formulation of Common Questions is an inevitable part of the costs for each party in running representative proceedings.

Taking all of these matters into account, in my view the interests of justice are best served by ordering that each party is to pay his and its own costs of the Common Questions hearing.

I make the following orders: