Brown v Randwick City Council

Land and Environment Court (NSW)|2012-02-08|Before: Preston CJ

A Dispute about costs of judicial review proceedings 1On 14 September 2011, I upheld a judicial review challenge brought by the applicant, Mr Brown, and declared invalid a development consent granted by Randwick City Council, the first respondent, to Mr and Mrs Sandilands, the second and third respondents: see Brown v Randwick City Council [2011] NSWLEC 172; (2011) 183 LGERA 382. At the request of the parties, I reserved the question of the costs of the proceedings. That question has now been heard today. 2In short, the applicant seeks an order that the respondents pay the applicant's costs of the proceedings. Where an order for costs is made against unsuccessful respondents, each of the respondents is jointly and severally liable for the costs. In practice, however, the effect in this case would be that the Council, as one party, and Mr and Mrs Sandilands as another, would be liable to pay half each of the applicant's costs. 3The applicant submits that he should have an order for all of his costs, notwithstanding that he did not succeed on all of his grounds of challenge. The applicant submits that no case has been made out for apportionment on the facts of this case. Alternatively, if there is apportionment, the applicant submits it should only be for around 10 to 15 per cent, as the issues on which the applicant did not succeed represented a small proportion of the preparation and hearing time. 4Mr and Mrs Sandilands submit that the applicant should only receive 50 per cent of his costs on the basis that he only succeeded on about half of his grounds of challenge. They also submit that only the Council, and not Mr and Mrs Sandilands, should be ordered to pay the applicant's costs for three reasons: first, they could not have capitulated without jeopardising any future claim they may wish to make against the Council if the Court were to hold that the consent was invalid; second, the Council was responsible for the errors upheld by the Court; and third, their continued defence of the applicant's claim was not unreasonable. Finally, Mr and Mrs Sandilands seek an order that the Council pay Mr and Mrs Sandilands' costs of the proceedings, again on the basis that the Council was responsible for the errors upheld by the Court. 5The Council similarly submitted that the respondent should pay only 50 per cent of the applicant's costs, on the basis that the applicant only succeeded on about half of his grounds of challenge. The Council accepts that it should be liable to pay the applicant's costs but submits that so too should Mr and Mrs Sandilands be liable. Hence, the Council submits all of the respondents should be jointly and severally liable to pay the applicant's costs. The Council also submits that Mr and Mrs Sandilands' application that the Council pay their costs should be dismissed. Mr and Mrs Sandilands chose to defend the applicant's claim, including after the applicant added the ultimately successful claim concerning the lack of the Council's power to grant consent. Mr and Mrs Sandilands should be responsible for both the applicant's costs (with the Council) and also their own costs of defending the applicant's claim. 6The issues for determination are therefore threefold: whether there should be apportionment of the applicant's costs; who of the respondents should be liable for the applicant's costs; and whether the Council should be liable for Mr and Mrs Sandilands' costs.

Apportionment issue 7Part 42 r 42.1 of the Uniform Civil Procedure Rules 2005 provides that costs should follow the event unless it appears to the Court that some other order should be made as to the whole or any part of the costs. 8Here the applicant was successful in the event: the applicant was successful in establishing, and obtaining a declaration, that the Council's exercise of power to grant development consent was invalid. 9One circumstance where the Court may consider it appropriate to make a different order as to costs is where multiple issues are involved and the successful applicant fails on one or more of the issues which are discrete from the issues on which the applicant succeeded. 10The principles governing apportionment have been summarised in a number of judicial decisions, including in the Court of Appeal in James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [32]-[36]; in this Court by McClellan CJ in Centro Properties Limited v Hurstville City Council [2004] NSWLEC 718 at [12]-[20]; by Biscoe J in F & D Bonaccorso Pty Ltd v City of Canada Bay Council (No 3) [2003] NSWLEC 569 at [15][17] (restated in F & D Bonaccorso Pty Ltd v City of Canada Bay Council (No 5) [2008] NSWLEC 235 at [8]) and in Australians for Sustainable Development Inc v Minister for Planning (No 2) [2011] NSWLEC 70 at [13][19]; by Craig J in Friends of Turramurra Inc v Minister for Planning (No 2) [2011] NSWLEC 170 at [15]-[17]; and by Pepper J in McCallum v Sandercock (No 2) [2011] NSWLEC 203 at [46]-[49]; and by other courts in the other cases referred to in these decisions. 11What is clear from these summaries of principles is that the mere fact that an applicant does not succeed on all issues raised in the proceedings is not sufficient by itself for the Court to depart from the usual rule and instead award costs only with respect to the issues on which the applicant did succeed. The issues on which the applicant did not succeed need to be "clearly dominant or separable" or "clearly discrete" from those on which the applicant did succeed: James v Surf Road Nominees (No 2) at [32] and [34] respectively. In determining the discreteness of the issues, it is relevant to consider whether the time taken on each issue, at the hearing and in evidence, can be identified or realistically estimated: James v Surf Road Nominees (No 2) at [35]. It may also be relevant to consider whether the issues on which the applicant did not succeed lacked real merit: see Centro Properties Ltd v Hurstville City Council at [21] and [23] and similar comments in the dicta quoted in [14], [16] and [20] and in McCallum v Sandercock (No 2) at [49(e)]. 12In this case, I do not consider that the issues on which the applicant did not succeed are clearly dominant or separable; occupied such a significant time at the hearing that separate identification and estimation of the time spent on the issue is realistic; or lacked any real merit. 13As I found in the principal judgment, the applicant's primary ground of challenge was that the Council lacked power to determine the development application by granting consent because the Council by its delegate had already determined the development application by refusing consent. This primary ground of challenge was disputed by Mr and Mrs Sandilands but was also met by them with a defence that such a challenge was precluded by the privative clause in s 101 of the Environmental Planning and Assessment Act 1979. The applicant succeeded both in rebutting the s 101 defence and in establishing its claim that the Council lacked power. This claim and defence to this claim were the dominant issues at the hearing and occupied most of the time. 14In the alternative, if the Council had power to determine the development application, the applicant claimed the exercise of power miscarried in three respects: first, the Council failed to consider relevant matters under the applicable statutory instruments; secondly, the Council's decision to grant consent was manifestly unreasonable; and thirdly, the Council failed to notify the development application in accordance with its Notification Development Control Plan. The evidence in support of the relevant matters and manifest unreasonableness grounds was the same and consisted of the Council's file including the development application and supporting documents, the Council's assessment of the development application and the Council's resolution. The applicant succeeded, on this evidence, in establishing that the Council failed to consider one of the relevant matters (a clause in the Dwellings Development Control Plan), but not other relevant matters (another clause in the Dwellings Development Control Plan and clauses in State Environmental Planning Policy 71 - Coastal Protection and the Randwick Local Environmental Plan 1998) or that the decision was manifestly unreasonable. I consider that the relevant matters and the manifestly unreasonable grounds on which the applicant did not succeed are "inseparable" from, or "at least sufficiently linked" to ( James v Surf Road Nominees (No 2) at [34]) the relevant matters ground on which the applicant did succeed. All of the grounds concern the Council's consideration of the development the subject of the development application. The development application, supporting documents, the Council officers' planning assessment reports and the Council's consideration at the meetings, all evaluated the merits of the development, considering the relevant matters, at the same time and as part of the same process. 15Further, the time taken on each of the relevant matters and manifest unreasonableness grounds at the hearing cannot be identified or realistically estimated. The whole case finished in just over a day. It is not realistic to identify what saving in time could have been achieved if not all of the relevant matters and manifest unreasonableness grounds had been run by the applicant. However, I do not consider it would have been much. 16I also do not consider that the relevant matters and manifest unreasonableness grounds on which the applicant did not succeed were without any real merit or that the raising of those issues by the applicant was so unreasonable that it would be fair and reasonable to make an apportionment order. 17This leaves the notification ground of challenge. This ground was a distinct administrative law ground of review from the lack of power ground and the relevant matters and manifest unreasonableness grounds of challenge. Nevertheless, it was sufficiently linked to the other grounds in that it was directed to the same exercise of power to grant development consent that was challenged by the other grounds on which the applicant was successful: it was simply another way in which the exercise of power to grant consent may have miscarried. 18The notification issue did involve different evidence. Nevertheless, there was some linkage with the evidence for the other grounds but where it was different it did not extend the evidence unduly. 19Some of the evidence comprised documents from the same council file on the development application that was tendered for the other grounds of challenge on which the applicant was successful. The documents were few in number. They were part of the Council's file on the development application and added little to the bulk of the documentary evidence. 20The other evidence on the notification issue was affidavit evidence of four of the nine persons to whom notification letters were supposed to have been sent. The affidavit evidence was intended to prove that the letters were not received by those persons and, therefore, the inference should be drawn that the notification letters were not in fact sent. I found that I was not able to draw that inference on that affidavit evidence. Hence, the applicant did not succeed on this ground. Nevertheless, the affidavit evidence was short. The affidavits were read at the hearing. The deponents were not required for crossexamination and no oral evidence was called. The submissions on the notification issue were brief. In short, the notification issue added little time to the hearing. 21Viewing the applicant's case as a whole, the notification issue cannot be said to be clearly dominant. It was a minor part of the applicant's challenge. 22I am not persuaded that the notification issue was so clearly dominant or separable that it would be appropriate to attempt to differentiate that issue from the other issues on which the applicant was successful. 23As with the other unsuccessful issues, I do not consider that the notification issue lacked any real merit. I made a finding that I could not draw an inference from all of the evidence that the notification letters were not sent. This was the reason the applicant did not succeed on this ground. However the raising of that issue, on that evidence, was not so unreasonable that it would be fair and just to make an apportionment order in respect of that issue. 24Overall, therefore, I do not consider that the respondents have established sufficient circumstances to depart from the ordinary rule that costs should be awarded to the successful applicant without attempting to differentiate between those particular issues on which the applicant was successful and those on which it failed.

Liability for applicant's costs issue 25Ordinarily, where both the consent authority that grants a development consent or makes a decision and a beneficiary of the development consent or decision are joined as necessary or proper parties to a successful judicial review challenge to the development consent or decision, the successful applicant's costs will be awarded against both the consent authority and the beneficiary. As Biscoe J stated in Cutcliffe v Lithgow City Council [2006] NSWLEC 463; (2006) 147 LGERA 330 at [50], the award of costs against the consent authority is because its error is the cause of the litigation. The consent authority cannot immunise itself from costs by entering a submitting appearance because then a successful applicant cannot be properly compensated in costs. The award of costs against the beneficiary who chooses to defend proceedings and take an active part in them is because of that choice. If a beneficiary wishes to avoid costs, it must choose not to defend the proceedings. 26In this case, the Council made a submitting appearance and Mr and Mrs Sandilands chose to actively defend each of the applicant's grounds of challenge and add their own s 101 defence and an argument that if a breach be established, the Court should decline relief in the exercise of its discretion. 27I do not consider that Mr and Mrs Sandilands have made out a case for departing from the usual position that both the Council as the consent authority that made the errors that caused the litigation, and Mr and Mrs Sandilands as beneficiaries of the consent who chose to actively defend the proceedings but were unsuccessful in the event, should be liable to pay the applicant's costs. I therefore agree with the applicant and the Council, and reject Mr and Mrs Sandilands' argument, that all of the respondents should be ordered to pay the costs. However, in case there is a dispute arising from the fact that there are three respondents, I should make clear that the liability should be equal between the Council on the one part and Mr and Mrs Sandilands on the other part, that is to say, 50 per cent is to be paid by the Council and 50 per cent by Mr and Mrs Sandilands.

Council's liability for beneficiaries' costs issue 28The final issue is whether the Council should pay Mr and Mrs Sandilands' costs. I do not consider Mr and Mrs Sandilands have made out a case in the circumstances for an order that the Council pay their costs of the proceedings. True it is that the Council's errors caused the litigation. However, the Council did not continue to defend the applicant's claims; it filed a submitting appearance. Mr and Mrs Sandilands chose to defend the proceedings, as they were entitled to do. But having made that choice, the costs of the applicant in preparing for and conducting the hearing, and Mr and Mrs Sandilands' costs of defending the applicant's claim before and at the hearing, were a consequence of their choice actively to defend the proceedings. It would not be fair and just to order the Council to pay the costs of Mr and Mrs Sandilands' choice actively to defend the proceedings.

Costs of the costs applications 29The parties accept that the costs of the various applications for costs should be costs in the cause. I agree.

ORDERS 30The Court orders the first respondent, and the second and third respondents, pay the applicant's costs of the proceedings, including the costs of the applications for 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. Decision last updated: 28 February 2012

(2011) 183 LGERA 382

(2006) 147 LGERA 330

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