Baulkham Hills Shire Council v Brad Forrester And Another

APPLICANT Mr M A J Daley (Barrister) SOLICITORS Coleman & Greig LEGAL REPRESENTATIVES: RESPONDENTS Mr T G Howard (Barrister) SOLICITORS Massey Bailey

THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

40241 of 1998 Baulkham Hills Shire Council v Brad Forrester and BHA Properties Pty Limited

JUDGMENT 1 Talbot J: These proceedings have a long history. Initially, relief was sought by Baulkham Hills Shire Council ("the Council") against four respondents in relation to an alleged illegal placing of fill on land known as 197 Pitt Town Road, Kenthurst ("the land"). 2 By Notice of Motion dated 1 August 2002 the applicant moved the Court for a declaration that the first and second respondents were guilty of contempt of Court for failure to comply with Order 3 of Consent Orders made by the Court on 13 March 2000 and that the first and second respondents be punished accordingly. The Council is seeking an order that the first and second respondent pay its costs in respect of the Notice of Motion. 3 On 13 March 2000, by consent of the applicant and first and second respondent, the Court declared that the depositing of fill onto the land was in breach of the Environmental Planning and Assessment Act 1979 ("the EP&A Act). Consequential orders were made against the first and second respondents by consent, including Order 3 as follows:-

3. The First and Second Respondents shall carry out remediation works to the land in accordance with the Remediation Program annexed and marked "A" in accordance with the timetable set out in that Remediation Program

No order or declaration was made that directly implicated the first and second respondent in the placing of the fill. However the land is owned by the second respondent. The company is beneficially owned and controlled by John Kenneth Forrester, the father of the first respondent. John Kenneth Forrester lives on Norfolk Island and his son, the first respondent, has at all relevant times held the authority to act on behalf of the company 4 On 14 March 2000 the third respondent consented to an order to not cause, permit or otherwise allow the depositing of fill on the land without first having obtained the consent of Council. 5 Ultimately this phase of the proceedings was commenced by way of the Notice of Motion dated 1 August 2002, returnable 15 August 2002, whereby the Council sought a declaration that the first and second respondent were guilty of contempt of Court for failing to comply with Order 3 of the Consent Orders made on 13 March 2000 and consequential orders. 6 The statement of charge dated 1 August 2002 in support of the notice of motion for contempt provided the following particulars:- 3 . The First and Second Respondents are guilty of contempt of court in that, in breach of the L&EC Order, they have refused or neglected to carry out the "Remediation Program" at all. Particulars The First and Second Respondents have not:- (a) Submitted a site plan to Council, satisfactory to Council, within 28 days of the L&EC Order (as required by paragraph 1 of the Remediation Program), or at all;

(b) Submitted to Council a contamination report, satisfactory to Council, within 90 days of the L&EC Order, (as required by paragraph 2 of the Remediation Program), or at all; (c) Removed all unauthorised fill within 12 months of the L&EC Order, (as required by paragraph 7 of the Remediation Program), or at all; (d) Submitted to Council a landscape plan, satisfactory to Council, within 90 days of the L&EC Order, (as required by paragraph 11 of the Remediation Program), or at all: (e) Completed the landscape works set out in the landscape plan within 12 months, (as required by paragraph 7(c) of the Remediation Program), or at all. 7 On the return date of the Notice of Motion it had not been served and accordingly was stood over to 12 September 2002, when directions were made. The matter was adjourned on six further occasions until 21 February 2003 when it was set down for hearing on 1 and 2 July 2003. On the second day of the hearing the matter was adjourned to 23 July 2003 to allow relevant experts to confer, and if practicable, to agree on the appropriate method of remediation of the site. By that time it had become clear to both parties that the remediation program stipulated by Order 3 made on 13 March 2000 could not, as a matter of practicality, be implemented. 8 A joint expert report was filed on 17 July 2003 and was before the Court on 23 July 2003. The matter was again stood over to 20 August 2003 to facilitate a process where both parties were to formulate a form of appropriate orders to be made, together with a statement of reasons for disagreement in any respect. That process was not complete when the matter came before the Court again on 28 August 2003. Eventually more specific orders were made on 2 September 2003 to enable the preparation of an appropriate specification and schedule of work for the remediation of the property. 9 Various circumstances prevented completion of the work, including a lack of capacity to finance the project, until by consent on 11 December 2003 the remediation works were identified and the first and second respondents directed to carry out the remediation works by 31 March 2004. 10 On 29 July 2004 the Court was informed that the work had been completed and that the only outstanding issue that remained was a dispute in relation to costs. The hearing in relation to costs took place on 7 October 2004 following the formal dismissal of the applicant's Notice of Motion dated 1 August 2002. 11 There is no evidence that the first and second respondents either placed or consented to the placing of fill on the subject land by the third respondent or anybody else. The fourth respondent is the owner of the adjoining land over which the material was transported. A plea of guilty to the charge of contempt has never been entered on behalf of the first or second respondent. It is agreed that the first and second respondents have caused the remediation of the land to be completed to the satisfaction of the Council in accordance with the Report made by the experts following the joint conference on 15 July 2003. 12 Initially the respondents contended that each party should pay its own costs. However, in light of the Council's position they now seek an order that the Council pays their costs in respect of the two day hearing of 1 and 2 July 2003 and costs incidental to the applicants' Notice of Motion seeking an order for costs.

The argument 13 The primary fact upon which the applicant relies in support of its application for an order for costs in its favour, is that the evidence shows that there was no physical activity on the land between 13 March 2000 and 1 August 2002. The question therefore is whether the Council was justified in commencing the contempt proceedings by way of Notice of Motion dated 1 August 2002. Thereafter it is a question of whether the Council was justified in maintaining the proceedings pursuant to the Notice of Motion. 14 Prima facie the Orders made by consent on 13 March 2000 were not complied with on 1 August 2002, nor after that date. Although works have now been completed in a manner satisfactory to the Council and the Notice of Motion can be dismissed subject to the resolution of the question of costs, the works were never carried out in accordance with the Order made in March 2000. Consequently, according to Mr Daley who now appears for the Council, prima facie, it is appropriate for the Court to recognise that there is a case for the respondent to answer in respect of costs. 15 Mr Howard, on behalf of the respondents, has responded to this challenge by pointing to correspondence immediately following the months after the orders were made in March 2000 where the respondents were seeking clarification from the Council in relation to at least two important matters. Firstly, problems about access to the property for the purpose of removing the fill and restoration of the land and secondly, in relation to the selection of an appropriate consultant. On 11 August 2000 the Council replied to letters addressed to it by Mr Forrester on behalf of BHA Properties Pty Ltd on 11 May, 28 May and 10 June 2000 and apologised for the delay in replying, forwarding a list of appropriately qualified environmental consultants and requesting advice about the actions and documentation in relation to the remediation program.

16 Council again wrote to the first and second respondents on 10 May 2001 through its solicitors, noting the failure to comply with the Orders and seeking production of the required documents under the remediation program and a cheque for Council's costs. A non-committal reply was directed to the Council on the letterhead of BHA Properties Pty Ltd dated 18 June 2001, although apparently dispatched to the Council by fax on 21 May 2001. 17 In the further correspondence Mr Forrester denied receiving the correspondence from the Council in reply to his letters during 2000. He provided a detailed explanation of the problems associated with implementing the remediation plan, having regard to expert assessments and reports received. Mr Forrester suggested a strategic process be adopted that would enable a remediation plan to be carried into effect. 18 Negotiations continued intermittently through to August 2002 without resolution of the outstanding issues. 19 Following commencement of the present proceedings by way of Notice of Motion on 1 August 2002 applications were made on behalf of the first and second respondents to the Environment Protection Authority, Kenthurst Bushfire Service and the Council seeking relevant consents to the carrying out of aspects of remediation work. 20 In due course, matters came to a head on 5 June 2003 when the solicitors then acting for the first and second respondents, wrote to the Council's solicitors making a counter proposal to a Council offer to resolve the problems in relation to remediation, contained in a letter from the Council's solicitors dated 22 May 2003. The solicitors first reiterated the respondents long stated views that the Consent Orders made on 13 March 2000 were impossible to comply with and were in the circumstances inappropriate. However as a consequence of the Council agreeing with a proposed schedule of works put forward by the respondent's consultant, subject to minor qualifications, the respondents' solicitors made the following counter proposal, inter alia, in the following terms:-

1. The applicant and the respondents acknowledge that order 3 made on 13 March 2000 has not been complied with because it was impossible for the respondents to comply with the order in its terms.
2. Paragraphs 1, 2 and 3 of the applicant's Notice of Motion dated 1 August 2002 be dismissed, with the balance of the motion adjourned generally with liberty to restore by either party on seven days notice.

3. ……………...
4. The respondents be relieved from compliance with order 3 made on 13 March 2000.
5. The respondents undertake to carry out the remediation in accordance with the schedule of works within 18 months of the date of the order.
6. The respondents to pay the applicant's costs up to 21 January 2003 and the applicant pay the respondent's costs from 21 January 2003 to date. 21 In response to that letter the Council's solicitors placed the following matters on the record by letter dated 20 June 2003:-
7. Neither of your clients took any positive action to comply with the consent orders although they had more than enough time to do so and although they were being requested to do so by Council.
8. Neither of your clients took any action to address the consent orders until they were served with Council's Notice of Motion.

3. Your clients response to Council's Notice of Motion has been that it is impossible to comply with the consent orders. Council does not accept this. 22 In further correspondence dated 25 June 2003 the respondents' solicitors expressed the view that to proceed with a full two day hearing on the contempt motion was premature for the following reasons:- (a) Our client has only been able to obtain, as of 20 June 2003, agreement in principle from the adjoining neighbours that our clients can have access over the neighbouring land. Our clients will require at least two weeks to obtain executed access agreements. (b) Without access, our client cannot formally, and in a practical sense, put into effect the proposed "Site Restoration Concept Plan" and "Proposed Work Plan" prepared by Mr Warren Newell in his report dated 10 April 2003. 23 They went onto to anticipate that the Court's view at the commencement of the hearing would be to appreciate that the primary focus of the parties ought to be on the remediation of the site. An offer to make consent orders was rejected by the Council. Accordingly the hearing proceeded on 1 July 2003 with the consequences referred to above and must I say generally as anticipated by the respondents' solicitors in the June correspondence. 24 I agree with Mr Howard's submission that the difficulties being experienced by the respondents in complying with the original orders were squarely raised prior to the filing of Notice of Motion dated 1 August 2002, although admittedly not in the same robust fashion that subsequently occurred after the commencement of the contempt proceedings and particularly in the period immediately prior to the hearing in July 2003. Nevertheless the hearing in July 2003 was truncated after two days to, in effect, allow the parties to do exactly what the respondents had been propounding through their solicitors immediately prior to the commencement of that hearing. 25 At the recommencement of the hearing on 2 July 2003, Mrs Kelly who appeared for the Council at that time indicated that she was not in a position to proceed, as documents required by the respondents could not be produced. Discussion followed and ultimately it became apparent that the Court's intervention was required in order to enable the matter to proceed on the basis that remediation be achieved. I made the following directions:- Pursuant to the expert witness practice direction, I direct that respective experts Warren Newell, Arawwalage Fernando, Andrew McGay and Craig Bourke confer for the purpose of drawing up a specification and schedule of works for remediation of the site and to prepare a statement a) of a written specification and schedule of work or, if they are unable to agree; b) a written statement of the matters upon which they agree; c) a written statement of the matters upon which they disagree; d) a statement in writing of the reasons for any disagreement. I direct that that the statement in writing - a joint statement in writing shall be filed in the court by 4pm on 16 July [2003]. I list the matter for mention and directions 9.30, 23 July [2003]. 26 In effect the matter did not proceed on 2 July as a consequence of the Council being unable to provide the necessary documentation to support its case. 27 The principal basis for the respondent's claim is that the applicant Council acted unreasonably in commencing and continuing to prosecute the Notice of Motion seeking orders for contempt up until 29 July 2004. This unreasonable conduct has the consequence that the Court should be able to conclude that the Council acted so unreasonably that the respondents should have an order for costs in their favour. The unreasonableness of the Council's action is confirmed by the ultimate realisation that the remediation program required by Order 3 could not be complied with and that it was necessary to reformulate the specification of the works to overcome the impossibility of satisfying the conditions originally imposed by the Court, with the consent of both parties. The Council effectively conceded that it was not possible for the respondents to comply with the remediation program, mandated by the Consent Orders, in the correspondence immediately prior to the hearing on 1 July 2003. 28 Once the default occurred, by failing to comply with the initial requirements of the timetable set out in the remediation program, the respondents were unable to recover their position (EPA v Alkem Drums [2000] NSWCCA 416, unreported). The evidence shows that the respondents were not in a position to submit a site plan within 28 days of the making of the Order because it was not practicable to finalise access arrangements with a neighbouring property within that time. Initially the respondents requested the assistance of the Council and its cooperation in dealing with the retention of a proper consultant without a positive result. Although it must be recognised that the respondents from time to time did little to assist their cause, with one possible exception, they consistently maintained their intention to resolve the problem of remediating the land in some practical way. 29 Moreover the implementation of the remediation program contemplated by Order 3 required the cooperation of the Council throughout by stipulating that work was to be carried out in accordance with the Council's approval or satisfaction. It was not made clear by the terms of the March 2000 Order and the incorporated remediation program how it was that the respondents were required to meet the requirements of the Council. 30 The competing arguments propounded by the parties are that the other was unreasonable in the circumstances.

Conclusion 31 Having regard to the whole of the circumstances and the long and sorry history of the conduct of this litigation and particularly the unfortunate position in which the respondents initially found themselves through, as they contend, no fault of their own, it is difficult to find that either one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In many respects the behaviour of the parties is mutually exclusive in the sense that neither of them can be regarded as totally free of blame for the unsatisfactory state of affairs that has prevailed, until recently, since March 2000. 32 In Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia: Ex Parte Lai Qin (1997) 186 CLR 622 the High Court, particularly in the judgment of McHugh J, enunciated the principle that where both parties acted reasonably in commencing and defending proceedings and the conduct of the parties continued to be reasonable until the litigation became futile, it would usually mean that the Court would make no order as to costs. However if one of the parties has acted so unreasonably that the other should obtain the costs of the action then a costs order may be made accordingly. Applying that principle to the circumstances in this case it appears to me that both parties have acted unreasonably in various respects. 33 At the time it commenced the contempt proceedings by way of Notice of Motion the Council had done little to satisfy itself about the real state of affairs and the underlying problems associated with complying with Order 3. On the other hand, the respondents had allowed matters to drift on without taking the initiative with Council and seeking to resolve the problem in a pragmatic and utilitarian way. Ultimately the prosecution of the contempt motion became futile as the parties were able to reach an accommodation which resulted in the object of having the land remediated in a satisfactory way being achieved, albeit by a laborious process. It was only after they set about their respective tasks to solve their differences by devising a satisfactory result for the site, that the issues could be resolved. In my view neither party is entitled to an order for costs and it is appropriate that they each bear the burden of their own costs. The respective applications for a cost order will be dismissed. 34 The formal orders of the Court are:-

1. Applicant's Notice of Motion seeking an order for costs is dismissed.
2. Each party is ordered to pay their own costs, including the costs of the hearing on 7 October 2004.

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