Sunshine CC v. Cima [1989] 3 AATR 313

Stonnington CC v. Dixon [1996] 17 AATR 130

Yarra CC v. Rattray-Wood & Edwards [1999] VCAT 135

Statutory provisions: Section 109 Victorian Civil and Administrative Tribunal Act 1998

Lot 8 on Plan of Subdivision No. 22334 being the land in Certificate of Title Volume 8133 Folio 804.

An irregularly shaped, but generally rectangular piece of land on the south-east corner of the intersection of Esplanade with Finlayson Avenue with a splay at the corner of 9.14 metres, a frontage to the south side of Finlayson Avenue of 27.43 metres, a side abutment to the east side of Esplanade of 33.37 metres and an area of 970 square metres.

[2004] VCAT 1140

1. The Respondents Aldo and Rosemary Zumpano are ordered to pay the costs of the Requestor Donna Maria Brown of and in relation to this proceeding, such costs to be agreed between the parties or, in default of such agreement, to be taxed by the Registrar as between party and party on the basis of Scale "D" of the County Court Scale of Costs.

2. The application by the Responsible Authority for an order for its costs is refused.

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Ms. Michelle Quigley SC, barrister, appeared on the instructions of the firm of Deacons Lawyers for the Responsible Authority.

Mr. Gavin Rice, barrister, appeared on the instructions of the firm of Stidston and Williams Weblaw for the Requestor, Ms. Donna Brown.

Mr. Graeme Peake, barrister, appeared on the instructions of Simon Nixon solicitor for the Respondents, Aldo Zumpano and Rosemary Zumpano.

Each representative presented written and oral submissions.

Request under s.87 of the Planning and Environment Act 1987 (PE Act) for cancellation of a permit.

Residential 1 Zone and subject to a Design and Development Overlay (Schedule 3) and a Vegetation Protection Overlay under the Mornington Peninsula Planning Scheme.

1 The hearing on 7 May 2004 was to consider applications for costs made in relation to the substantive decision made in this case as recorded in our written determination and reasons published 25 November 2003 (Brown v. Mornington Peninsula SC, Zumpano & Anor. [2003] VCAT 1796). This was a fairly complex case. The circumstances, and our reasons for our decision, are given in our document dated 25 November 2003. It is not appropriate to repeat here all that was said in that document.

2 In brief, Ms. Brown sought cancellation of planning permit P992143 issued by the responsible authority to Mr. & Mrs. Zumpano on 18 October 2000. That permit allowed the construction of a two storey dwelling with swimming pool and associated works, together with some clearing of vegetation on their land on the south-east corner of the intersection of Esplanade with Finlayson Avenue at Mount Martha. Ms. Brown's proceedings were a request for cancellation of that permit, proceeded by an application for a stop development order. At the time of the commencement of her proceedings a substantial two storey house was under construction on the Zumpano land, substantially, but apparently not entirely, in conformity with the permit and the approved plans endorsed under that permit.

3 Ms. Brown, and other neighbours, had objected to the grant of the permit. The substantial point of objection was concerned that the proposed building would be so high as to mask west facing views obtained from the first floor of Ms. Brown's property, which adjoins the Zumpano property on its eastern side.

4 The concerns giving rise to these objections were allayed as a result of an informal meeting organised by a planning officer of the responsible authority, a Mr. Dafnomilis, to consider the concerns of objectors in relation to the height of the proposed new building, and its effect on west facing vies of Port Phillip Bay. There was no statutory requirement for such a meeting but those attending included Ms. Brown, Mr. Dafnomilis, Mr. Zumpano and his architect who had prepared the plans for his proposed house, a Mr. Cornetta. Mr. Zumpano is a builder of superior quality houses of some years experience, and who has previously dealt with Mr. Cornetta. The construction of a dwelling on this site, however, was not a business project, but intended to be the future home of Mr. & Mrs. Zumpano.

5 Mr. Zumpano was present with Mr. Cornetta, and sat beside him, during the relevant parts of the meeting.

6 In the course of the meeting it was stated by Mr. Cornetta, in the presence of Mr. Zumpano, that the top of the Zumpano house, in accordance with the proposed plans, would approximately be 0.7 metres below the first floor level of the adjoining property of Ms. Brown. He borrowed a scaling ruler from Mr. Dafnomilis, calculated the position of the top of the proposed Zumpano roof in relation to the house of Ms. Brown on the plans of her house which she had brought to the meeting, and recorded that level by ruling a red line on her plan to represent that height.

7 Ms. Brown, and the other objectors, were satisfied with this position. They did not review a subsequent decision of the responsible authority, made in reliance on these representations, to grant a permit. We accepted that they would have done so if they had known the true position.

8 Unfortunately, these representations were a serious mistake relied upon, not only by Ms. Brown and the other objectors, but also by Mr. Dafnomilis and the responsible authority, in granting the permit. The true position was that the height of the Zumpano building as disclosed in the application plans would be to within about 0.5 metres of the roof of the property of Ms. Brown, and would more or less completely mask the west facing views from the picture window in the side wall of her living room and the adjoining kitchen portion of her house.

9 In the document of 25 November 2003 we set out our reasons for concluding that what happened amounted to a material mistake in relation to the grant of the permit, and a material misstatement of fact in relation to the application for a permit founding the grounds for Ms. Brown's request under s.87 of the Planning and Environment Act 1987 (PE Act).

10 Having been initially satisfied as a result of the mistake and misstated disclosures of the informal meeting, Ms. Brown took no further action until she realised that the partly constructed house on the Zumpano land was going to rise to a height that would mask her windows. She then promptly complained to the responsible authority and asked for its intervention.

11 By that stage Mr. Dafnomilis no longer worked for the responsible authority. The officer who dealt with the complaint checked the Zumpano construction against the endorsed plans, and found that the construction was consistent with the plans. He therefore assumed that all was well. At that stage the responsible authority did not propose to take the matter further. The officer was unaware of the error that had been made at the meeting, or the reliance upon that error by Mr. Dafnomilis and the responsible authority in granting the permit.

12 The failure of the responsible authority to act resulted in Ms. Brown instruction solicitors and obtaining a stop development order. Subsequently, we heard the request under s.87 PE Act and made an order cancelling the permit.

13 Ms. Brown was thus successful with her proceeding. She now seeks an order for the substantial costs she has incurred against Mr. & Mrs. Zumpano, or alternatively against the responsible authority, or both. She argued that she is the innocent, and wronged, party who was more or less compelled to take action and incur costs to prevent injustice and creating a worse situation.

14 The responsible authority argues that it should not be liable for the costs of Ms. Brown. Although it is true that it initially declined to take action on her complaint on the basis that it appeared that nothing was amiss, having regard to the circumstance where the building complied with the endorsed plans; nevertheless it promptly changed its attitude shortly afterwards when further investigation revealed that a material mistake had been made, and a permit had been issued which would (almost certainly) not have been issued if the true position had been understood. The responsible authority, at a very early stage in the proceedings, in fact in its statement of grounds, conceded the validity of the case brought by Ms. Brown. It supported her case, and was ready to consent to the stop development order and to the cancellation of the permit. The hearing of the merits of the application for cancellation occupied four days, and the time and expense involved in that hearing was entirely as a result of the refusal of the Zumpanos to likewise admit the validity of the claim of Ms. Brown and consent to the cancellation she sought.

15 All this is true, but does not contradict the proposition that Mr. Dafnomilis and the responsible authority made a mistake in relying on the mistakes made by Mr. Cornetta in the presence of Mr. Zumpano at the meeting. It was open to Mr. Dafnomilis, and other officers of the responsible authority, to check the plans. If that had been done properly, the error would have been revealed before it did any harm. It would have been prudent for that to be done. Nevertheless, it remains true that a substantial preponderance of the costs that have been incurred in this case have been incurred as a result of the determination of the Zumpanos to contest the case. An almost insignificant amount of costs would have been incurred had they adopted the position of the responsible authority at the time the responsible authority adopted it.

16 The responsible authority has also applied for an order for its costs against Mr. & Mrs. Zumpano, more or less on the basis that it was compelled to contest a lengthy and expensive case by the position they adopted.

17 The position of Mr. & Mrs. Zumpano is that the ordinary rule before this Tribunal should apply whereby each party must bear its own costs in accordance with s.109(1) of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act).

18 It is true that this is the ordinary rule, although s.109(2) and (3) VCAT Act provides that the Tribunal may order a party to pay all or a specified part of the costs of another party if it is satisfied that it is fair to do so having regard to various criteria set out in subs.(3) of s.109.

19 In the course of her submissions on behalf of the responsible authority Ms. Quigley referred to Haouli and ors. v. Hobsons Bay City Council [2001] VCAT 422 where the Tribunal made reference to some difference of approach that has been adopted by the Tribunal in relation to enforcement proceedings, as compared to ordinary planning reviews. An enforcement application is, of course, not a review proceeding. It is a proceeding at first instance before the Tribunal. The same is true for an application under s.87 for cancellation of a permit like the current proceedings. It does not necessarily follow, because of that similarity, that the same view should be taken. In any event, the primary rule remains that parties are to bear their own costs unless the Tribunal is satisfied that it is fair, in the circumstances, to make an order. As was said in Bayside City Council v. Campbell (1999) 3 VPR 79, 82 at paragraph 17, there is no general rule that costs follow the event in enforcement proceedings, and each case must be judged on its merits. That was noted in Haouli, although the discussion in that case drew a distinction between review proceedings where it might be said that no body is "right" or "wrong" as compared with an enforcement proceeding which, like ordinary court proceedings, arises where one party alleges, and another denies, a particular state of facts or law and the Tribunal may be called upon to make findings of fact or law similar to a court. There was also reference to the early case of Svanosio v. Shire of Strathfieldsaye (1988) 2 AATR 26 where the Administrative Appeals Tribunal (then the relevant planning tribunal) drew a distinction between enforcement proceedings and ordinary reviews, and to the situation where contentious facts would be expected to be properly proved in the former.

20 We do not disagree with what was said in Haouli and Svanosio, but would prefer to refer to the City of Sunshine v. Cima [1989] 3 AATR 313 as an explanation of why, and the circumstances in which, orders for costs are more readily made in relation to enforcement applications. It is not simply because such proceedings are enforcement applications, but rather orders are more likely in an enforcement application where the respondent has well known of the contravention complained of and has ignored requests and warnings to rectify it so as to more or less compel the responsible authority, if it is to fulfil its public duty under s.14 PE Act, to commence proceedings and incur the costs involved. In those circumstances, it is appropriate that the recalcitrant respondent should bear those costs, rather than the rate payers of the municipality. However, the same considerations would not apply where there was, in effect, a test case, or at least a genuine and doubtful issue of fact or law to be tried.

21 Mr. Peake, on behalf of Mr. & Mrs. Zumpano, has sought to portray the situation that has arisen in this case as all very unfortunate from everyones point of view where mistakes have been made all round and he has sought to distribute blame for the situation all around. He submitted that, in the unfortunate circumstances of this case where all parties have been disadvantaged by a series of unfortunate mistakes, it is inappropriate to make an order for costs. In doing this, he has revived the point that the responsible authority had adopted and relied upon his client's mistakes without checking them and that Ms. Brown herself was to blame for not having checked the situation, or obtained expert advice when she knew she was not capable of reading the plans. We really dealt with the question of blame, particularly in relation to Ms. Brown, in our previous reasons. At paragraph 85 we said:

85. In this connection his (Mr. Peake's) first point is to seek to allocate blame. This problem was created by Mr. Zumpano's agent, Mr. Cornetta, in Mr. Zumpano's presence. We do not accept that blame attaches to Ms. Brown because she did not seek professional assistance at objection stage, although she did so readily enough immediately prior to commencing this proceeding when she realised there was a problem. That is the point. She obtained professional assistance when she realised there was a problem in relation to which she needed such assistance. She acted reasonably, in the circumstances, before and after obtaining such assistance. Although the primary cause of the problem is the misstatement inducing the mistake for which Mr. Zumpano either directly and/or through his agent is responsible, a careful examination and analysis of the plans by the Council planning officer could and should have lead him to realise that he had been mislead.

22 Mr. Peake submitted that errors will inevitably occur in the planning process. He seems to imply that this is the reason by orders for costs should not be made, even if the errors are, as in this case, a result of serious carelessness committed by and on behalf of a party by persons with the expertise to deal with the matter properly, and whilst knowing that others are relying upon what they say. It is probably true to say that errors are inevitable if people are negligent.

23 In support of his argument about inevitable errors, Mr. Peake relied upon a decision of an experienced planning member, who nevertheless is not a qualified legal practitioner, in the case of City of Stonnington v. Dixon [1996] 17 AATR 130. In that case, a material mistake was made in relation to the notice of the permit application. The responsible authority subsequently realised the error and set about trying to put matters right. It did so by making a request under s. 87 in relation to the cancellation or amendment of the permit relying on its own admitted material mistake in relation to the grant of a permit. A ground was established, but when the Tribunal came to consider the merits of the proposal, after hearing objections raised against it, it determined that the decision to grant a permit was appropriate on the merits of the proposal and it therefore declined to cancel or amend the permit.

24 This was a somewhat unusual situation. It lead to an unusual application on behalf of respondents who were neighbours who had opposed the grant of a permit. At the end of the case counsel on their behalf applied for an order for costs in their favour arguing that this was particularly justified because the responsible authority should not have initiated the request for cancellation of the permit.

25 That submission having been made, the Tribunal dealt with it. The reasons that followed should be read in that light. The Tribunal was responding to the proposition that the responsible authority should not have initiated the proceeding.

26 The Tribunal disagreed with that proposition. It endorsed the action of the responsible authority, having realised that there was a problem, in deciding to take an appropriate action to address the problem and have it resolved.

27 It is true that the Tribunal went on to say that mistakes in procedures surrounding planning applications are inevitable noting they can create unresolved conflict and said that responsible authorities should find a mechanism which leads to a resolution of the conflict as quickly as possible and at least costs to the parties as possible. It is better, it was said, for such situations to be confronted, rather than that they should be left to fester away.

28 We do not wish to go so far as to say that mistakes are inevitable. It is highly desirable that they should be avoided, or if not entirely avoided, then kept to a minimum. When they do occur, we agree that it is appropriate for a responsible authority to take prompt action to have them rectified.

29 The Tribunal in that case did not say that there could never be an order for costs against a responsible authority where it had created costs and trouble by making mistakes. What the Tribunal said, at the top of page 137 included:

the Tribunal does not consider it appropriate to punish the responsible authority by an award of costs merely on the basis that it decided to actively confront the problem rather than leave it to some other party to work towards a solution. In all problems of this type, time is of the essence, if the issue is confronted quickly damage and delay can be minimised. It is in the public interest that responsible authorities take a lead in resolving procedural disputes. It is important that responsible authorities not ordinarily be exposed to punitive costs for taking action to resolve a procedural mistake, they may be exposed to both costs and damages if the procedural mistake is on their making.

30 It would be a distortion to argue that this means that the Tribunal was saying that mistakes are inevitable and therefore costs should never be ordered. What it was saying was that costs should not be ordered "merely on the basis" that the responsible authority is taking action to have the matter resolved. Furthermore, it does not deny that there may well be cases, even where it has taken action of that sort, for there to be an order for costs. It merely says that it is important they should "not ordinarily" be exposed to costs. We find it hardly surprising, in the circumstances of that case, that the Tribunal declined to make an order for costs against the responsible authority. In doing so, it took account of the circumstance that, if the mistake had not been made, it is probable that the merits of the proposal would have come before the Tribunal in any event, on appeal by the respondents who had sought an order for costs. In those circumstances they would have been up for the cost for contesting the merits of the proposal in any event.

31 We note, as was subsequently pointed out in the case of Yarra CC v. Rattray-Wood and Edwards [1999] VCAT 1935, the reference to "punish" and "punitive" in the above quoted passage is out of place. An order for costs ought to be compensatory, rather than a punishment.

32 The principal point we make about Dixon's case is that it is no authority for a proposition that says that costs should not be granted because a mistake is made and procedural mistakes are inevitable. We are not sure that the mistake in this case should be described as procedural, but the point is that the Tribunal, in Dixon, was rebutting a proposition that there should be an order for costs against the responsible authority because it had initiated the proceeding to put matters right. In the present case the proceedings were initiated by Ms. Brown. There is no basis for any order against her. The point being rebutted in Dixon's case simply does not arise in this case. No one is suggesting that an order should be made against the Zumpanos because they initiated proceedings. In fact, they did not do so.

(3) The Tribunal may make an order under subsection (2) only if satisfied that it is fair to do so, having regard to -

(a) Whether a party has conducted the proceeding in a way that unnecessarily disadvantaged another party to the proceeding by conduct such as -

(i) failing to comply with an order or direction of the Tribunal without reasonable excuse;

(ii) failing to comply with this Act, the regulations, the rules or an enabling enactment;

(iii) asking for an adjournment as a result of (i) or (ii);

(v) attempting to deceive another party or the Tribunal;

(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceeding;

(c) the relative strengths of the claim made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law;

(e) any other matter the Tribunal considers relevant.

34 It should be noted that it is relevant, under paragraph (a) of subs.(3), for the Tribunal to consider whether a party has conducted the proceeding in a way that unnecessarily disadvantages another party, and the Tribunal is not limited to the examples in sub-paragraphs (i) to (vi). Furthermore, consideration (c) is not limited to a situation where a party has made a claim that has no tenable basis in law or fact. On the contrary, the Tribunal is to consider the relative strength of the claims of the parties, including whether a party has advanced an untenable claim. This consideration can still support or justify an order for costs even if untenability is not established. Furthermore, consideration (e) enables the Tribunal to have regard to any other matter that it considers relevant.

35 In the current case it was certainly open to the Zumpanos to contest these proceedings, and to seek to defend the permit they had relied upon. However, a right to do this does not imply that it is inappropriate to make an order for costs.

36 Ms. Brown was unnecessarily disadvantaged by the Zumpanos in relation to the material mistake that was induced, and the material misstatement of fact that was found. However, if the proceeding is to be taken as commencing when the request was made, these things occurred prior to the commencement of the proceeding. We do not wish to determine, at this stage, whether consideration (a) has to be excluded in relation to things that occurred prior to the commencement of the request proceeding. However, we do not propose to rely on that consideration in this case.

37 This was certainly a complex proceeding, but when all the circumstances were known, assessed and understood, we consider that Mr. & Mrs. Zumpano, on the relative strengths of the claims, had only a weak case. We do not go so far as to say that it was so weak as to be untenable in the sense of unarguable.

38 In the circumstances of this case we consider it to be very relevant to take into consideration the cause of the problem. That cause, as we have clearly found previously, and for reasons given previously, was the seriously careless mistake which we attribute to Mr. Zumpano both personally and through his agent in his presence, and for whom he is responsible, which misled the other parties at a meeting called to deal with the particular question involved, and in circumstances where it was known and expected that the others would (as they did) rely upon those representations.

39 We consider that Ms. Brown was an innocent party who acted reasonably throughout, and who was effectively compelled to take proceedings to protect herself. We consider that an order should be made for her costs, and that this order should be made against Mr. & Mrs. Zumpano.

40 While we recognise that Mr. Dafnomilis and the responsible authority were remiss in not checking the plans before issuing the permit, we also recognise that, when the proceedings were commenced by Ms. Brown, the responsible authority, when it investigated the matter she was really raising, immediately conceded the essential point and was willing to consent to orders for cancellation of the permit. In effect, it rectified the situation, so far as it was able, almost immediately, and so that any costs attributable to it would be kept to an insignificant amount.

41 In all the circumstances we are not satisfied that we should depart from the ordinary rule that each party bear its own costs, so far as they responsible authority is concerned, or that it would be fair to do so. We make no order against the responsible authority, or in its favour. In declining its application for an order for costs, we recall what we have said of its being remiss in accepting, without checking, what was said at the meeting.

42 We consequently conclude that an order should be made against Mr. & Mrs. Zumpano in favour of Ms. Brown for her costs in relation to this proceeding.

43 It was agreed, by all parties at the hearing on 7 May 2004, that the appropriate order, if one was to be made, was that costs should be as agreed between the parties concerned, and in default of agreement, to be taxed as between party and party on Scale D of the County Court Scale for Costs. That being agreed between the parties, we will adopt that course accordingly.

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