Barton v Orange City Council

KEY ISSUES: Costs :- Judicial Review - development consent declared invalid without contest and consequential contested demolition order made - council filed submitting appeareance - whether council liable in the circumstances for the other parties' costs of the proceedings.

LEGISLATION CITED: Land and Environment Court Rules 2007 r 3.7

Cutcliffe v Lithgow City Council (2006) 147 LGERA 330 Grant v Kiama Municipal Council [2006] NSWLEC 70 Latoudis v Casey (1990) 170 CLR 534 CASES CITED: Maurici v Chief Commissioner of State Revenue (No 8) (2007) 155 LGERA 115 [2007] NSWLEC 37 Oshlack v Richmond River Council (1998) 193 CLR 72 Our Town FM v The Australian Broadcasting Tribunal (No 3) (1987) 77 ALR 609 Port Stephens Council v Sansom (2007) 156 LGERA 125 [2007] NSWCA 299

APPLICANTS: Mr M Wright, barrister SOLICITORS King-Christopher Carpenter

LEGAL REPRESENTATIVES: FIRST RESPONDENT: Mr P McEwen SC

SECOND RESPONDENT: Mr G Miller QC and Mr T To SOLICITORS Campbell Paton & Taylor

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

GREGORY JOHN BARTON & ANOR. v ORANGE CITY COUNCIL & ANOR. (No 2)

EX TEMPORE JUDGMENT 1 HIS HONOUR: These proceedings are before the Court to settle the form of final relief and to decide the issue of costs. Those two matters are consequential upon my judgment in the substantive proceedings: Barton v Orange City Council [2008] NSWLEC 104. I held that (a) a development consent issued by the first respondent, Orange City Council, to the second respondent, Mrs Westgeest, for an extension to her home was invalid; and (b) that I would make an order that the extension be demolished subject to a stay of six months with liberty to apply for a longer period. At the hearing there was a contest as to the second of those matters but not as to the first. The council was not represented at the hearing. At an early stage of the proceedings it filed a submitting appearance save as to costs.

2 After hearing the applicants and Mrs Westgeest today, the substantive relief will be as set out at the end of these reasons for judgment.

3 I turn to the costs issue. The applicants and Mrs Westgeest propose an order that the council and Mrs Westgeest pay the applicants' costs. Mrs Westgeest also seeks orders that the council indemnify her in respect of her liability for costs to the applicants and that the council pay her costs.

4 In accordance with the general guidelines in Cutcliffe v Lithgow City Council (2006) 147 LGERA 330 at [50], the council accepts that it should pay the other parties' costs relating to the obtaining of the declaration of invalidity. However, the council opposes any order that would make it liable for the costs of the whole proceedings, which were mainly taken up with the issue of whether a consequential demolition order should be made. The Cutcliffe guidelines do not address liability for costs in relation to a consequential demolition order.

5 In Cutcliffe I proposed some general guidelines for the exercise of the Court's discretion where an applicant successfully brings proceedings that are necessary to have a development consent declared invalid. Guidelines for the exercise of a costs discretion are not to be viewed as a fetter on the discretion but as assisting the discretion to be exercised consistently and rationally: Latoudis v Casey (1990) 170 CLR 534 at 541; Oshlack v Richmond River Council (1998) 193 CLR 72 at [35] - [38], [65] - [66] and [72]; Maurici v Chief Commissioner of State Revenue (No 8) (2007) 155 LGERA 115 [2007] NSWLEC 37 at [41]. They are not to be treated as rules and are indicative only: Port Stephens Council v Sansom (2007) 156 LGERA 125 [2007] NSWCA 299 at [55]. In that case at [56] the Court of Appeal approved the formulation of such guidelines in relation to merits appeals by Preston CJ in Grant v Kiama Municipal Council [2006] NSWLEC 70 at [15], which have recently been incorporated into the Land and Environment Court Rules 2007 r 3.7.

6 Although the guidelines in Cutcliffe do not address liability for costs in relation to a consequential demolition order; the following passage in Cutcliffe at [30] is relevant: Oshlack and Kindimindi do not address the costs consequences where a council files a submitting appearance except as to costs in accordance with the restraint that they identify. The filing of a submitting appearance, except as to costs, or an equivalent step, can, at least in many cases, achieve a measure of protection against costs. Thus in Emory University v Biochem Pharma Inc (1998) 86 FCR 1 at [15], Lindgren J said: Although the [Federal Court] rules do not provide for submitting appearances a proper party who consented to, or did not oppose, the making of an order ... could protect its position as to costs by clearly so informing the applicant ... at the earliest stage that it wishes to take no active part in the present proceeding and that it will submit to an order ... but not to any order as to costs. In Sidney Harrison Pty Ltd v City of Tea Tree Gully (No 2) at [18] Debelle J said: There are steps by which a planning authority is able to minimise costs of any proceedings seeking to set aside the development consent. It may indicate to a plaintiff that it recognises that there are defects in the manner in which it has handled an application and might even be able to assist a court in framing appropriate orders with, of course, proper notice to the person who has the benefit of the development consent .

7 In the present case, there was no indication by the council to the applicant that there were defects in the manner in which it handled the development application nor any assistance provided by the council to the Court except that the council, in accordance with the Practice Note Class 4 Proceedings par 14, did make available to the other parties documents it said recorded matters relevant to its decision to approve the development application. It did not, however, make available to the parties or to the Court documents relevant to the complaint that was made to it by the applicants during construction to which I referred in my judgment. They were not produced until the hearing in response to a notice to produce. This is one of the aspects of the council's conduct which the other parties criticise in their costs submissions.

(i) There is both an expectation, and good reason, why a council declines to defend the validity of a consent which it issued (reference is made to the principles summarised in Cutliffe v Lithgow City Council in particular at [27] - [35]. (ii) Ordinarily, absence of participation will exculpate a party from the ordinary costs consequences which would or may otherwise flow from participation ( Our Town FM v The Australian Broadcasting Tribunal (No 3) (1987) 77 ALR 609 at 611-2). (iii) Whilst invalidity of the present consent is formally the council's fault (see separate argument at (ix) below, as to the role of Mrs Westgeest's shadow diagrams and Statement of Environmental Effects) the council did not argue in support of the consent. The overwhelming bulk of argument at trial was on discretion, as propounded by her. (iv) The council's liability for costs ought be limited to those costs which would have been necessarily incurred to obtain, by evidence and argument, a declaration as to invalidity ( Cutliffe , at [31]). (v) It cannot be said that the council caused Mrs Westgeest to incur the costs of the failed discretion argument; Mrs Westgeest's course was entirely of her own choosing and doing (at [21]). (vi) Hence, the council should not be liable to indemnify for those costs incurred pursuing the unsuccessful argument on discretion, in and for which it played no role. (vii) The applicants' success on the discretion argument arose from the Court's rejection of Mrs Westgeest's submission thereon; it did not arise from fault on the part of the council, or any unreasonable pleading on the council's part ( Cutliffe at [43]). (viii) If each respondent had defended the claim by the applicant of invalidity, and were equally unsuccessful, then (other things being equal) an order of equal responsibility (of each respondent) for the applicant's costs may have been appropriate. However, the pertinent circumstance here is that no defence was raised by the council or the other party to the consent (viz, Mrs Westgeest) - rather, there was a concession of invalidity by the parties at trial, and an implicit concession in the council's submitting appearance, and thereafter a hearing devoted to the issue of discretion. (ix) As to the costs the council should bear (per paragraph (iv) above) it is not irrelevant that a contributing cause (even if minor) to council's error was Mrs Westgeest's shadow diagrams and Statement of Environmental Effects. 9 The applicants and Mrs Westgeest's costs submissions criticise the conduct of the council in processing the development application, in dealing with the applicants' complaint after construction started, and during the proceedings. Their submissions, which I will generally amalgamate, are to the following effect.

10 First, they submit that the conduct of the council's officers in processing the development application fell well short of that which could be expected of reasonably competent officials in a number of respects. The applicants were not notified of the making of a development application; no inspection, or no adequate inspection, was made of the applicants' property in assessing the development application; the council officer Mr McCallum participated in the preparation of the Statement of Environmental Effects with Mrs Westgeest in a way that contributed to the failure to identify the severe impact that the proposed development would have on the applicants' property; and the council failed through proper assessment of material it had before it, including Mrs Westgeest's plans and shadow diagrams, to identify the severe adverse impact the proposed development would have on the applicants' property. I leave aside the question whether the council was obliged to notify the applicants of the making of the development application. Otherwise, I accept the submission. 11 Second, they submit that the conduct of council officers in dealing with the applicants' complaints was careless, unresponsive and misleading. The applicant Mr Barton was assured that a stop work request would be issued but it was not; the council's draft letter of 12 April 2007 requesting Mrs Westgeest to stop work, which only came to light at the hearing in response to a subpoena was never sent to her; and the fact that the letter was not sent was never communicated to the applicants. It is unnecessary to express any view as to the pejorative descriptions "careless" and "misleading". Otherwise, I accept the submission.

12 Third, they submit that the council's conduct during the proceedings fell short of that which might be expected from a model litigant in the following respects. It failed to produce all relevant documents promptly and informally in accordance with the Court's practice; it refused to make its officers available for interview as requested by the applicants' solicitors; and it did not itself bring evidence forward that it would have assisted the Court in understanding the basis upon which the council's decision to approve the development application had been made. Those steps were left to the applicants as the parties bearing the onus of proof. The council did not contest the submission that it should have acted as a model litigant. A consent authority has public interest regulatory responsibilities and should "be anxious to ensure that it has made the correct decision": Port Stephens Council v Sansom at [71]. Strictly speaking, in my view, the council did comply with the practice note concerning production of documents. Otherwise, the submission has some weight.

13 Fourth, they submit that whether there was delay on the part of the applicants in putting Mrs Westgeest on notice of their intentions was central to the discretionary argument advanced at trial in relation to the proposed demolition order. The Court found that it was unable to criticise the applicants' delay prior to 15 May 2007, finding that the applicants were impeded by council's lack of urgency for most of April 2007. They submit that had the council, consistently with its obligations as a model litigant, advised the parties of the existence of the draft letter of 12 April 2007 early in the proceedings, the relevant factual matrix to the discretionary argument would be quite different to that which the applicants and Mrs Westgeest understood up until the trial when the document was produced. Mrs Westgeest submitted that it is conceivable that she may have come to a similar view to that ultimately reached by the Court, that the delay in putting her on notice until 15 May 2007 was in the context where the applicants had been told by the council that the council had put her on notice, and that Mrs Westgeest may have concluded that the discretionary argument was not worth pursuing. Put shortly, she submits, the hearing may not have occurred if that fact were known. The council argues in reply in relation to its draft letter of 12 April 2007 that it was overtaken by events, namely, a letter written by Ms Westgeest's solicitor on 16 April 2007. That letter indicated that at that stage she was not prepared to cease activity, had a valid approval and was intending to proceed. I do not accept the council's submission. On 17 April 2007, the applicant Mr Barton was told by a council officer that the council was going to send a letter requesting Mrs Westgeest to stop building while the objections were investigated. The applicants were never told that this had not happened. Indeed, the applicants' solicitor's letter of 15 May 2007 to Mrs Westgeest stated that they have been informed that council had previously requested her to stop work. I accept the applicants' submission.

14 Fifth, they submit that the council's submission that Mrs Westgeest contributed in a minor way to the invalidity by reason of the Statement of Environmental Effects and shadow diagrams submitted with the development application should be rejected. The evidence was that that document was completed by Mr McCallum (the officer who also determined the application). Whilst the shadow diagrams were deficient in one respect they nonetheless showed the overshadowing that would occur. I accept the applicants' submission.

15 In my view, the submissions of the applicants and Mrs Westgeest, to the extent that I have accepted them, are of sufficient weight as to lead to the conclusion that, in the circumstances, the council should pay their costs of the proceedings in the way indicated in the costs orders set out below.

ORDERS 16 The orders of the Court will be as follows: 1. Declaration that development consent No 20 of 2007 granted by the first respondent to the second respondent on 14 February 2007 ("DA 20/2007") for alterations and additions to the existing dwelling constructed on the land being Lot 100 DP 1107586 known as 315 Lords Place, Orange ("the premises") is void and of no effect. 2. Order that subject to order 4, the second respondent by her servants or agents demolish or cause to be demolished all alterations and additions made to the premises in purported reliance upon DA 20/2007; 3. Order 2 be suspended for a period of six (6) months from the date of these orders; 4. Order that If within six (6) months of the date of these orders the second respondent obtains a development consent to carry out further alterations and additions to the premises, the second respondent shall have liberty to apply to the court for orders 2 and 3 to be vacated or varied. 5. Order the parties to have general liberty to apply on seven (7) days' notice including for extension of the time referred to in Order 4. 6. Order that the first and second respondents pay the applicants' costs of the proceedings. 7. Order that the first respondent indemnify the second respondent in respect of her liability for costs to the applicants. 8. Order that the first respondent pay the second respondent's costs of the proceedings.

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.