A & M Green Investments Pty Limited v Albury City Council

Green Seeks Approval From the Council to Build Townhouses and Other Development Ancillary to a Retirement Village 5Green is the registered proprietor of the land contained in folio identifier 6542 DP 810286 ("Lot 6542"). The land is situated at Thurgoona, a suburb of Albury, adjacent to the Thurgoona Golf Club. 6The land was originally part of the land in Lot 654 DP 612771. In 1991 it was subdivided into two lots, which became Lots 6541 and 6542 in DP 810286. The former lot was eventually consolidated with another parcel of land and forms part of the golf club. 7Lot 6542 does not form part of the golf club. It is wholly owed by Green. 8On 26 September 2006, Coomes Consulting Group ("Coomes") lodged a development application with the council on behalf of Green for Lot 2 DP 874732 and Lot 6542 DP 810286 ("the first DA"). 9The first DA sought development of "307 homes, village centre, associated roads, drainage site works, removal of vegetation and landscaping" for a retirement village to be know as "Kensington Gardens" under the Albury Local Environmental Plan 2000 ("the 2000 LEP"). 10On 23 April 2007, the council issued a staged development consent ("the staged development consent") under the 2000 LEP. All development to be undertaken in respect of the staged development consent is located on Lot 2. 11In 2007 Coomes lodged a development application with the council on behalf of Green for Lot 2 ("the second DA"). The second DA was lodged pursuant to the staged development consent. It sought approval for the construction of 16 retirement units. 12The second DA was granted consent on 21 December 2007 by the council under the 2000 LEP ("the second development consent"). This consent approved the construction of "medium density housing 16 dwellings - Kensington Gardens". All of the development approved in the second development consent was located on Lot 2 of the plan attached to that consent. 13On 30 April 2008 Coomes lodged a third development application with the council on behalf of Green for Lot 2 ("the third DA"). The third DA was lodged pursuant to the staged development consent and sought approval for the construction of 50 retirement units. 14On 27 May 2008 the council issued a third development consent under the 2000 LEP ("the third development consent"). Again, all of the development approved in the third development consent was located on Lot 2. 15In 2010 Coomes lodged a fourth development application on behalf of Green for Lot 2 ("the fourth DA"). This was similarly lodged pursuant to the staged development consent and sought approval for the construction of 58 retirement units. On 9 November 2010 the council approved the fourth DA ("the fourth development consent") under the 2000 LEP. All development approved pursuant to the fourth DA was located on Lot 2. 16On 28 April 2010, an additional development application was lodged by Coomes, on behalf of Green, with the council, wherein Green sought approval to construct townhouses and other development ancillary to the Kensington Gardens Retirement Village, on land adjacent to Lot 6542 ("the 2010 DA"). 17Various discussions ensued between representatives of Green and representatives of the council during which it became apparent that the council would, in all likelihood, reject the 2010 DA. 18On 9 July 2010, the solicitor for Green, Mr Roderick Pogson of Pogson Cronin Solicitors, issued a notice to the council requiring that it acquire Lot 6542 pursuant to cl 28(3) of the 2000 LEP. 19This was rejected by the council on 23 July 2010. 20On 27 September 2010 the council formally refused the 2010 DA. 21Discussions followed between Green and the council concerning whether or not the council would reconsider its refusal of the 2010 DA. 22Subsequent to those discussions, on 7 October 2010 the solicitor for Green received an email from the council confirming that it would defend any appeal of its refusal of the 2010 DA and any application for a declaration that the council had to acquire the land. 23An invitation was also extended to the council by Green's solicitor to reconsider its position and either approve a further development application for Lot 6542 or acquire the land. 24On 14 December 2010 the council wrote to Green's solicitor confirming that it had no obligation to acquire Lot 6542. 25On 26 August 2011 Green lodged an amended 2010 development application with the council seeking approval for a development ancillary to Kensington Gardens on Lot 6542 ("the amended 2010 DA"). Pursuant to input from the local community, modifications were made to the amended DA. 26According to an affidavit of Mr Matthew Burt, a solicitor employed by Green's solicitors, sworn 4 July 2012, in order to ensure the preservation of its rights in the event of the refusal of the amended 2010 DA by the council, Green filed a summons seeking relief by way of compulsory acquisition of Lot 6542 pursuant to cl 28(3) of 2000 LEP on 23 December 2011. 27On 10 January 2012, according to an affidavit of Mr Matthew Rogers, a solicitor with Kell Moore Lawyers, the solicitors for the council, sworn 11 July 2012, Mr Rogers wrote to the solicitors for Green inviting Green to withdraw the summons. The basis of the invitation was that Green was statute barred from bringing the proceedings because its appeal rights had expired after 60 days. Moreover, the council contended that the 2000 LEP had been superseded by the Albury Local Environmental Plan 2010 ("the 2010 LEP"), which did not afford Green rights consistent with cl 28 of the 2000 LEP. The letter stated that if Green did not withdraw the summons within seven days, the council would seek indemnity costs. 28On 6 February 2012, the solicitors for Green wrote to the solicitors for the council stating that the summons did not seek to appeal against the refusal of the council to acquire the property, rather, the summons sought to enforce "rights" of Green against the council pursuant to the 2000 LEP. In addition, the application was not out of time. 29Unsurprisingly, on 7 February 2012 the solicitors for the council wrote to the solicitors for Green asking for particulars of the "rights" that Green was seeking to enforce against the council under the 2000 LEP. The letter went on to state that the request to acquire Lot 6542 in DP 810286 on 9 July 2010 was rejected for two reasons: (a)First, Lot 6542 DP 810286 was created by registration of that plan on 28 May 1991. Prior to that date the lot was part of a larger parcel know as Lot 654 DP 612771 created by registration of a plan on 5 December 1980. Lot 654 DP 612771 was specifically identified in Schedule 3 to Albury LEP 2000 and so by force of clause 28(1)(a) was not land subject to clause 28(2) or (3); (b) Secondly, and in addition to (a) above, Lot 6542 DP 810286 was expressly included in the development consent for Kensington Gardens and so by force of clause 28(1)(c) was not land subject to clause 28(2) or (3). 30Accordingly, the council foreshadowed a notice of motion for summary disposal of the claim pursuant to r 13.4 of the UCPR. It invited Green to withdraw the proceedings and reserved the council's right to costs on an indemnity basis. 31Meanwhile both Green and the council began preparations for the hearing of the summons. The matter had been set down for one day on 21 March 2012. 32On 13 February 2012 the solicitors for the council wrote to the solicitors for Green maintaining the council's opinion that Green had no entitlement to rely on cl 28 of the 2000 LEP because it had been repealed by the Albury Local Environmental Plan 2010 ("the 2010 LEP"). Furthermore, even if reliance on cl 28 of the 2000 LEP could be established, the council noted that Green did not meet the mandatory requirements necessary to obligate the council to acquire the land. This was because Lot 6542 was land to which cl 28(1)(a) applied and, therefore, cl 28(1)(c) effectively restrained Green's entitlement to rely any further on that clause. 33In the letter another invitation to Green was issued to withdraw the summons by 17 February 2012. If this occurred, then the council agreed that each party would bear its own costs. However, if this was not agreed, then the council reserved its right to rely on the letter in an application for indemnity costs "in the event that our client achieves a successful outcome". The offer made in the letter was stated to be in accordance with the principals in the decision of Calderbank v Calderbank [1975] 3 All ER 333. 34Points of claim were filed by Green on 21 February 2012. These alleged that Lot 6542 was zoned "Open Space" under the 2000 LEP and that, pursuant to cl 28(3) of that LEP, the council was required to acquire Open Space land upon being given notice in writing from the owner. Notice having been given on 9 July 2010, the council was in breach of its obligation to acquire the land. 35Points of defence were filed on 5 March 2012, which stated that the 2000 LEP no longer applied to the land because it had been repealed on 9 July 2010 and that, in any event, even it did, cl 28(2) did not apply to the land by reason of cl 28(1)(a) and (c) of the 2000 LEP. 36On 16 March 2012 the Court vacated the hearing date at the application of Green (A & M Green Investments Pty Ltd v Albury City Council [2012] NSWLEC 50). The basis of the application to vacate was that if the development application lodged by Green for the development of recreational facilities on adjoining land owned by Green adjunctive to Kensington Gardens, was likely to be approved (or a variant thereof), this would, as a practical matter, obviate the need for the substantive proceedings leaving only the question of costs outstanding (at [4]). 37Because there was a realistic prospect that an amended development application would be consented to by the council, Biscoe J vacated the hearing dates and reserved the question of costs of the motion (at [5] and [6]). 38On 25 June 2012, the amended 2010 DA was approved by the council.

Applicable Planning Controls 39It is not in dispute that prior to the repeal of the 2000 LEP, Lot 6542 was zoned "Open Space" under Sch 3 of the 2000 LEP. Lot 6543 of DP 810286 was identified as part of Lot 654 of DP 612771 in Sch 3. 40Clause 28 of the 2000 LEP states as follows: 28 Acquisition of land in the Open Space Zone (1) This clause applies to all land in the Open Space Zone, other than: (a) private open space identified in Schedule 3, or (b) Crown land, or (c) land in respect of which development consent has been granted in accordance with clause 29. (2) The owner of land to which this clause applies may, by notice in writing, require the Council to acquire the land. (3) On receipt of such a notice, the Council must acquire the land. (4) However, the Council is not required to acquire land if the land might reasonably be required to be dedicated for public open space. 41Clause 29 relevantly provides: 29Development on land in the Open Space Zone (1)A person must not carry out development on land in the Open Space Zone without the consent of the consent authority. ... (4) Despite any other provision of this Division, the consent authority may grant consent to development of the privately owned land identified in Schedule 3, whether or not such development is consistent with one or more of the objectives of the zone, provided that: (a) the consent authority is satisfied that the natural and significant features of the land will be retained and improved by the development, and (b) the development is justified on the basis that no other viable alternative is available for the continuance of the current land use. 42Schedule 3 to the 2000 LEP is titled "Schedule 3 Excluded open space land - private open space". It includes the following notation (emphasis added): Thurgoona Golf Club - Lot 7, DP 777709, Lot 654, DP 612771 and Lot 8, DP 771610 Green Must Pay the Council's Costs Upon the Discontinuance 43Costs in Class 4 proceedings are governed, at first instance, by s 98 of the Civil Procedure Act 2005 and r 42.1 of the UCPR. Although the Court is afforded a broad discretion to award costs, the combined operation of these provisions, in the absence of discontinuance, is that costs will usually follow the event. 44Of course, it is trite law that orders for costs are designed to compensate for expenses reasonably incurred and not to punish a particular party (Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534), and that the power to award them is purely discretionary (Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72). 45In the absence of an 'event', because, for example, one party has discontinued the proceedings without a hearing on the merits, r 42.19 is the governing costs rule. 46In Eather v Mosman Municipal Council [2012] NSWLEC 92 I set out the principles applicable in the exercise of the Court's discretion to award costs in Class 4 proceedings concomitant upon the discontinuance of the proceedings by a party (at [28]-[35]): 28. Generally costs will follow the event in Class 4 proceedings. But where, as in the present case, the proceedings are discontinued absent a determination on the merits, and thus an 'event', the issue of costs becomes complex. Thus, in ONE.TEL Ltd v Deputy Commissioner of Taxation [2000] FCA 270; (2000) 101 FCR 548 Burchett J said (at [6]): 6. In my opinion, it is important to draw a distinction between cases in which one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event or settlement so removes or modifies the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case, there will commonly be lacking any basis for an exercise of the Court's discretion otherwise than by an award of costs to the successful party. It is the latter type of case which more often creates problems, since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs. In Ex Parte Lai Qin, McHugh J was careful to state (at 624) that the principles with which he was concerned were those that "govern an application for costs when a party elects not to pursue an action because he or she has achieved the relief sought in the action either by settlement or by extra-curial means". ... 29. In Kiama Council v Grant [2006] NSWLEC 96; (2006) 143 LGERA 441 Preston J drew together some of the relevant guiding legal principles governing the position at that time and said (at [80]): 80. The principles that emerge from these cases are that in a civil enforcement or judicial review case where there has been no hearing on the merits: (a) where one party effectively surrenders to the other party by: (i) discontinuing without the consent of the other party; or (ii) giving undertakings to the Court or submitting to the Court making orders against the party substantially in the terms or to the effect claimed by the other party; the proper exercise of the costs discretion will ordinarily be to make the usual order as to costs, unless there is disentitling conduct on the part of the other party; and (b) where some supervening event or settlement so removes or modifies the subject of the dispute that no issue remains except that of costs, the proper exercise of the costs discretion will ordinarily be to make no order as to costs unless: (i) one of the parties has acted so unreasonably that the other party should obtain the costs of the action; or (ii) even if both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried so that the party should obtain the costs of the action. 30.In Kiama, however, no reference was made to r 42.19 of the UCPR because it was not applicable. The decision must therefore be read with this in mind. 31.It has been said that r 42.19 does not give rise to a "presumption" that costs will be ordered against the discontinuing party (Fordyce v Fordham [2006] NSWCA 274; (2006) 67 NSWLR 497; Prodromos Anastasi Foukkare v Angreb Pty Limited [2006] NSWCA 335 (at [65]); Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32 (at [53]). 32.But in Bitannia it was stated that (at [54]): 54. However, like UCPR 42.20, UCPR 42.19 states what the order for costs is to be unless there is a discretionary decision to order otherwise: Australiawide Airlines Limited v Aspirion Pty Limited [2006] NSWCA 365 at [53]. This means there is an onus on the discontinuing party to make an application in respect of costs if it does not propose to pay the costs of the other parties: Foukkare at [65]. In my opinion, it also means that there must be "some sound positive ground or good reason for departing from the ordinary course": Australiawide Airlines at [54]. 33.This view is consistent with the opinion expressed by Santo JA in Fordyce (at [3]) where his Honour said: 3. I would wish to add this observation on one aspect of the reasons on UCPR 42.19 and 42.20. I consider the fact of discontinuance is likely to be a factor of some weight in exercising the discretion to determine whether the discontinuing party should be ordered to pay the other party's costs. While it is true the Court may otherwise order, the onus remains on the discontinuing party to justify such an order by reference to the circumstances said to justify exception to the normal cost outcome in such event. That the Court retains discretion to accommodate such circumstances does not alter their character as being by way of exception nor the consequence in terms of onus. That said, the discretion remains to otherwise order. 34.To the extent that the earlier 'non-presumptive' position expressed in Fordyce may be seen as inconsistent with subsequent pronouncements as to the intended operation of r 42.19 of the UCPR, in Bitannia Basten JA attempted to reconcile the tension in the following nuanced way (at [72]-[75]): 72. One question raised in these proceedings is the relevance of the default provision with respect to the exercise of the discretion to otherwise order. In Fordyce v Fordham [2006] NSWCA 274; 67 NSWLR 497, McColl JA (Beazley JA agreeing) concluded that the "default orders do not create a presumption" that the plaintiff ought to pay the costs of the proceedings: at [84]. Her Honour also indicated that the default order is "a relevant, but not determinative, consideration". 73. The use of the term "presumption" in this context is unclear and was properly rejected. In some circumstances, a presumption may do no more than indicate on which party lies the onus of proof of primary facts. In other cases it will supply evidence of the fact presumed: see McCormack v Federal Commissioner of Taxation [1979] HCA 18; 143 CLR 284 at 314 (Jacobs J). In other cases again, clearly not relevant to the present circumstance, it may be a way of stating a rule of law, as with respect to the capacity of a young child to form a relevant criminal intent. In other circumstances, the burden of persuasion may be expressed in terms of a presumption. For example, in Australian Coal & Shale Employees' Federation v The Commonwealth [1953] HCA 25; 94 CLR 621 at 627, Kitto J expressed the principle limiting appellate review of discretionary judgments in terms that "there is a strong presumption in favour of the correctness of the decision appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong". This range of meanings undoubtedly renders adoption of such terminology undesirable. 74.However, it is less clear what was intended in Fordyce by stating that the default order constituted a material consideration in exercise of the discretion to otherwise order. No doubt it is true to say that the default order is relevant in the sense that it identifies that from which the court is invited to depart. Beyond that, the existence of the default consequence is not itself helpful in deciding whether to depart from it. Rather, it is the underlying reason for the default position with respect to costs that may bear upon the exercise of the discretion. A party which seeks to discontinue must generally, in a relevant sense with respect to costs, be treated as an unsuccessful party. The general costs rule set out in s 98 of the Civil Procedure Act 2005 (NSW) does not identify the limits of the court's discretion with respect to costs. The most important limitation for present purposes is the requirement that, again subject to the court otherwise ordering, costs should follow the event: see r 42.1. If that rule were to be applied, absent persuasion that the court should otherwise order, the plaintiff would be required to pay the costs of discontinuance. It seems likely that it is consistency with that general principle which underlies the default consequence provided in r 42.19. If that rule has application with respect to a discontinuance (and no reason was proffered as to why it should not) the discretion to make a costs order under r 42.19 will be confined by that general principle. In that respect, it may be misleading to describe the discretion under r 42.19 as "unconfined": see Fordyce at [87]. In some cases (though not necessarily all) discontinuance will involve the termination of proceedings without the court knowing what the result would have been had they been determined on the merits. In one sense, the existence of a hearing on the merits may be largely irrelevant, just as the actual result of a hearing on the merits will not be affected by the fact that the proceedings might have been run differently and might then have achieved a different result. 75. There are, nevertheless, circumstances in which it is entirely appropriate for the court, by order, to depart from the consequence provided by the rule. For example, discontinuance may result from the plaintiff obtaining a favourable result in other proceedings, in circumstances where it had not been unreasonable to commence the discontinued proceedings. Such cases frequently arose in challenges to decisions made under the Migration Act 1958 (Cth), when the scope for judicial review in the Federal Court was limited and it was commonplace for applicants to commence proceedings in both the Federal Court and in the original jurisdiction of the High Court. 35.To summarise, while not rising as high as a presumption, pursuant to r 42.19 of the UCPR the discontinuing party must demonstrate a good reason why a court should not exercise its discretion in the ordinary way by ordering that the discontinuing party pay the costs of the other parties. Such an approach is consistent with both the language and objective purpose of the rule. 47In Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622 McHugh J stated (at 624-625, footnotes omitted): 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. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. 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. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd, the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans. 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. This is perhaps the best explanation of the unreported decision of Pincus J in South East Queensland Electricity Board v Australian Telecommunications Commission where his Honour ordered the respondent to pay 80 per cent of the applicant's taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare. 48More recently in this Court these principles have been applied in Broken Hill City Council v Tumanic [2012] NSWLEC 162 (at [51]-[56]), Mosman Municipal Council v Harvey and Fizgerald [2012] NSWLEC 83 (at [90]-[97]) and Shoalhaven City Council v South Coast Concrete Crushing & Recycling Pty Ltd [2010] NSWLEC 80; (2010) 174 LGERA 184 (at [18]-[22] and [29]). 49Of course it is neither necessary nor appropriate that the Court conduct a hypothetical trial in order to determine the burden of costs when a case resolves absent a determination on the merits (Mosman at [4] citing Lai Qin). It is also desirable to deal with the arguments the parties raise "without over-elaboration, if this is possible" (Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (No 2) [2009] NSWCA 12 at [5] per Allsop P). In the present case, for the reasons given below, this is possible. 50The council submits that, first, cl 28(3) of the 2000 LEP never applied to Lot 6542 by reason of the application of cl 28(1)(a) and (c), and therefore, the claim was doomed to fail. First, the land is classified as private open space as identified in Sch 3 of the 2000 LEP insofar as the land is part of the description contained in Sch 3, namely, "Lot 654 in DP 612771". Therefore it is excluded from acquisition pursuant to cl 28(1)(a) of the 2000 LEP. 51Although not determinative, the correctness of this construction was, the council argued, reinforced by a Coomes' report dated 28 September 2006 in support of the development application to build the retirement village and a Section 149 Certificate issued 20 December 2007, both of which state that Lot 6542 of DP 810286 is part of Lot 654 of DP 612771 and therefore falls within Sch 3 of the 2000 LEP and cannot be the subject of a request for compulsory acquisition. 52Second, Lot 6542 is land in respect of which development consent has been granted, viz, the staged development consent which described the subject land as "PLT: 6542 DP: 810286" (a similar description was given in condition (A3) of the consent), and was therefore excluded by reason of cl 28(1)(c) of the 2000 LEP. 53Thus the land never attracted the operation of cl 28(2) of the 2000 LEP and the proceedings therefore had no reasonable prospects of success. 54Third, properly characterised pursuant to the authorities, the approval of the 2010 amended DA did not amount to a supervening event that could displace the operation of r 42.19 of the UCPR. 55It should be noted that in written submissions filed by the council, the council maintained that the 2000 LEP had been repealed by the 2010 LEP and that the claim was also "doomed to fail" on this basis. However, this contention was properly abandoned by the council at the hearing, on the basis that, on current authority, it could not be maintained. 56Green denied that the land fell within the exclusions contained in cl 28(1)(a) or (c) of the 2000 LEP on the basis that, first, while its successor, namely, Lot 6541 of DP 810286 formed part of the Thurgoona Golf Club and thus attracted the operation of Sch 3 of the 2000 LEP, the subject land did not. It was wholly separate. Thus properly construed Lot 6542 did not fall within the description of "Thurgoona Golf Club" in Sch 3. Green submitted that such a construction was consistent with the objects and purpose of Sch 3, namely, to ensure that the council was not required to compulsorily acquire the genus of recreational facilities described therein, conducted, as they are, by private organisations for the benefit of their members and not necessarily the public at large. And, in any event, nowhere in the evidence is it suggested that the land might reasonably be required by the Council to be dedicated for open public space (cl 28(1)(a)). 57Second, no development consent has in fact been granted in respect of Lot 6542 either for the purposes of cl 28(1)(c) or cl 29(4) of the 2000 LEP. This is because, applying the decisions in Polarizers (Aust) Pty Ltd v Marrickville Municipal Council (1979) 40 LGRA 18 and Vaisey v Parramatta City Council [2002] NSWLEC 182; (2002) 124 LGERA 270 (at [39]), neither clause was engaged because that consent was in fact only for development on the land adjacent to Lot 6542, that is to say, on land other than the subject land. This was evident from all of the development applications and consents, none of which approved development on Lot 6542, but which approved development primarily on Lot 2. Thus no consent was granted which involved development on the land as contemplated by cls 28(1)(c) and 29. 58Alternatively, Green submitted that any development to be carried out on the land is development that does not, in any event, require consent within the meaning of cl 29(2) of the 2000 LEP. 59The outline of the parties' positions above plainly demonstrates, in my view, that far from being "hopeless", as the council submitted, Green has, by its summons and points of claim, raised fairly arguable issues concerning the construction of cl 28 and Sch 3 of the 2000 LEP. In particular, whether the description of the land comprising the "Thurgoona Golf Club" included Lot 6542 within the description of "Lot 654", and whether or not the staged development consent was a consent for the purposes of cls 28 and 29, were plainly both arguable issues. 60Further, although conceded by the council, at least up until the hearing of the notice of motion, whether the 2010 LEP repealed the 2000 LEP was, at a minimum as it transpired, also plainly arguable. 61But this is not the end of the matter. It is also necessary to consider whether the approval of the 2010 amended development application by the council was a supervening event that meant that, in the absence of disentitling conduct by either party, r 42.19 did not operate. In my opinion it was not. 62This is because the granting of the consent by the council on 25 June 2012 did not, of itself, remove the subject-matter of the summons and points of claim. The issues raised in the pleadings could have, if Green had so chosen, readily been litigated to finality. Put another way, the approval by the council did not have the consequence of rendering those allegations a nullity. Instead, Green made a commercial decision not to pursue the proceedings seeking compulsory acquisition by the council of the land because, it may be inferred, it was not as advantageous to do so given the consent granted by the council. 63This bona fide motivation is, however, insufficient to displace r 42.19 of the UCPR and it follows that Green must pay the council's costs. 64The only question remaining is, on what basis? The Costs are Payable as Agreed or Assessed 65As stated above, the council seeks it costs payable on an indemnity basis. It does so on three bases: (a)first, because the proceedings raised no triable issues; (b)second, on the basis of the Calderbank offer made on 13 February 2012; and (c)third, by reason of the application of r 42.15A of the UCPR. 66The first reason may be swiftly dispensed with for the reasons given above. 67As to the second, in Old v McInnes and Hodgkinson [2011] NSWCA 410 the Court of Appeal described a Calderbank offer as follows (at [22] and [29]-[33]): 22. As this Court (Meagher, Beazley and Santow JJA) stated in Jones v Bradley (No 2) [2003] NSWCA 258 at [5], a Calderbank offer is a well recognised means of making an offer of settlement where the party making the offer ultimately seeks to obtain a costs advantage if the offer is not accepted: see Calderbank v Calderbank (1975) 3 WLR 586. When a Calderbank offer has been made, the rules of court governing offers of compromise do not apply. Rather, the court is asked to exercise its discretion as to the costs order that it considers ought to be made. ... 29. In Computer Machinery Co Ltd v Drescher [1983] 1 WLR 1379; [1983] 3 All ER 153, Megarry VC stated at 1383: "Whether an offer is made 'without prejudice' or 'without prejudice save as to costs,' the courts ought to enforce the terms on which the offer is made so as to encourage compromises and shorten litigation. The latter form of offer has the added advantage of preventing the offer from being inadmissible on costs, thereby assisting the court towards justice in making the order as to costs." 30.This approach has been judicially endorsed by this Court on innumerable occasions. In Leichhardt Municipal Council v Green [2004] NSWCA 341 in referring to Calderbank offers, Santow JA stated, at [17]: "... the practice of Calderbank letters is allowed because it is thought to facilitate the public policy objective of providing an incentive for the disputants to end their litigation as soon as possible. Furthermore, however, it can be seen as also influenced by the related public policy of discouraging wasteful and unreasonable behaviour by litigants." 31.See also South Eastern Sydney Area Health Service v King [2006] NSWCA 2 where Hunt AJA (Mason P and McColl JA agreeing) stated, at [83], that the purpose of offers of compromise was: "... to encourage the proper compromise of litigation, in the private interests of the litigants and in the public interest of the prompt and economical disposal of litigation." See also Elite Protective Personnel Pty Ltd v Salmon [2007] NSWCA 373; Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15. 32. The significance of a Calderbank offer is that it provides a readily recognisable basis for the court to exercise its costs discretion in a form which may result in a more favourable costs outcome than would have been the case had UCPR, r 42.1 applied: see SMEC Testing Services Pty Ltd v Campbelltown City Council [2000] NSWCA 323 at [37]; Jones v Bradley (No 2) ; Commonwealth of Australia v Gretton [2008] NSWCA 117 at [40]; [114]. However, the Court's discretion is not confined to cases which are 'strictly' characterised or expressly stated to be Calderbank offers. 33. In Commonwealth of Australia v Gretton Hodgson JA stated, at [121]: "In my opinion, underlying both the general rule that costs follow the event, and the qualifications to that rule, is the idea that costs should be paid in a way that is fair, having regard to what the court considers to be the responsibility of each party for the incurring of the costs . Costs follow the event generally because, if a plaintiff wins, the incurring of costs was the defendant's responsibility because the plaintiff was caused to incur costs by the defendant's failure otherwise to accord to the plaintiff that to which the plaintiff was entitled; while if a defendant wins, the defendant was caused to incur costs in resisting a claim for something to which the plaintiff was not entitled: cf Ohn v Walton (1995) 36 NSWLR 77 at 79 per Gleeson CJ. Departures from the general rule that costs follow the event are broadly based on a similar approach." (emphasis added) 68In Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 Basten JA (with whom McColl JA at [1] and Campbell JA at [26] agreed) noted that the approach is to ask two questions: first, was there a genuine offer of compromise; and second, was it unreasonable for the offeree not to accept (at [8]). 69As a matter of principle, it is the offeror who must persuade the court that the rejection of the offer was unreasonable (Miwa at [16]). Having said this, it "is not intended to suggest that an application for indemnity costs be turned into a mini-trial" (at [16]). 70As to the genuineness of any offer of compromise, including an informal offer such as a Calderbank offer (Miwa concerned the latter), Basten JA stated (at [9]): 9. There is authority for the proposition that both an offer of compromise under the rules and an informal offer must involve "a real and genuine element of compromise": The Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) [2006] NSWCA 120; 67 NSWLR 706 at [8]. While this terminology is not entirely apposite, it has been described as "serviceable": Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [25] (Spigelman CJ, Beazley and McColl JJA). To characterise an offer by reference to epithets such as "real" or "genuine" adds little to the requirement of compromise, and may imply (wrongly) that the appropriate inquiry is as to the subjective intentions of the offeror: Hancock v Arnold; Dodd v Arnold (No 2) [2009] NSWCA 19 at [23] (Ipp, McColl and Basten JJA); Evans of Robb Evans & Associates v European Bank Ltd (No 2) [2009] NSWCA 170 at [17]- [18]. As explained by Giles J in Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 at 368: "Compromise connotes that a party gives something away. A plaintiff with a strong case, or a plaintiff with a firm belief in the strength of its case, is perfectly entitled to discount its claim by only a dollar, but it does not in any real sense give anything away, and I do not think that it can claim to have placed itself in a more favourable position in relation to costs unless it does so." 71As his Honour observed in Miwa, most cases turn on the second element, namely, whether there has been an unreasonable refusal by the offeree (at [10]). Basten JA also noted that the response of the offeree must be assessed at the time it was made and not with the benefit of hindsight resulting from a known outcome (at [11]). 72The factors relevant to determining whether the rejection of an offer was unreasonable include the following (Hazeldene's Chicken Farm Pty Ltd v Victorian WorkCover Authority (No 2) [2005] VSCA 298; (2005) 13 VR 435 at [25] cited in Miwa at [12]): (a)the state of the proceeding at which the offer was received; (b)the time allowed for the offeree to consider the offer; (c)the extent of the compromise offered; (d)the offeree's prospects of success, assessed as at the date of the offer; (e)the clarity with which the terms of the offer were expressed; and (f)whether the offer foreshadowed an application for indemnity costs in the even of the offeree's rejection of it. 73In Miwa Basten JA also rejected the suggestion that an offer need set out with specificity the bases upon which it is said that the offeree should accept the compromise (at [13]) and emphasised importance of factor (c) insofar as the amount offered to compromise the claim should not be trivial, derisory or contemptuous (at [14]-[15]). 74Some of the principles articulated above were recently endorsed and applied in this Court by Biscoe J in Al Amanah College Inc v Minister for Education and Training (No 4) [2012] NSWLEC 26 (at [14]-[16]) and Craig J in Davies v Sydney Water Corporation (No 2) [2012] NSWLEC 150 (at [46]). Although those cases concerned Class 3 proceedings for compensation for the compulsory acquisition of land, the principles applied in each are nevertheless apposite here (see also the useful discussion in the earlier authority in Vis Visitor Investment Services Pty Ltd v Hawkesbury City Council (No 2) [2010] NSWLEC 252; (2010) 178 LGERA 97 at [16]-[31]). 75Applying these principles, I do not doubt that the offer made in the letter dated 13 February 2012 was genuine. But the rejection by Green of the offer contained in the letter was, in my view, entirely reasonable, or not unreasonable, for two principal reasons. First, at that stage it was not known to Green, at least on the evidence before me, that the approval of the 2010 amended DA would be forthcoming. I note that the motion to vacate was not filed until a month later, viz, 13 March 2012. Second, as the reasons above elucidate, the council's prospects of success were not as strong as it believed. This is demonstrated by the fact that it was only at the hearing that the council abandoned its claim that the 2000 LEP was no longer operative for the purpose of the proceedings. I do not, therefore, consider that the letter had the consequence that the council is now entitled to indemnity costs. 76Finally, turning to the third basis, r 42.15A of the UCPR states: 42.15A Where offer not accepted and judgment as or more favourable to plaintiff (1) This rule applies if the offer concerned is made by the defendant, but not accepted by the plaintiff, and the plaintiff obtains an order or judgment on the claim concerned as favourable to the plaintiff, or less favourable to the plaintiff, than the terms of the offer. (2) Unless the court orders otherwise: (a)the plaintiff is entitled to an order against the defendant for the plaintiff's costs in respect of the claim, to be assessed on the ordinary basis, up to the time from which the defendant becomes entitled to costs under paragraph (b), and (b) the defendant is entitled to an order against the plaintiff for the defendant's costs in respect of the claim, assessed on an indemnity basis: (i) if the offer was made before the first day of the trial, as from the beginning of the day following the day on which the offer was made, and (ii) if the offer was made on or after the first day of the trial, as from 11 am on the day following the day on which the offer was made. 77The effect of this rule is plainly to qualify the operation of the general rule that costs follow the event. But under r 42.15A the Court nevertheless retains the discretion whether or not to award costs on an indemnity basis (as indicated by the words, "unless the Court otherwise orders"). Accordingly, the considerations discussed above concerning the rejection by Green of the Calderbank offer also inform the exercise of my discretion pursuant to this rule. I therefore do not consider it an appropriate exercise of the Court's discretion under this rule to award costs on an indemnity basis and I decline to do so. Orders 78The orders of the Court are therefore that: (1)leave to discontinue is granted to the applicants; (2)the applicants are to pay the respondent's costs of the proceedings on a party-party basis as agreed or assessed; (3)the applicants are to pay the respondent's costs of the motion on a party-party basis as agreed or assessed; and (4)the exhibits are to be returned.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 18 July 2012