Ultimately I decided that notwithstanding what had transpired since the decision by Stein J his conclusion that clause 22 was relevantly a development standard was the correct one.

The applicant argues that the because the legal question had already been finally determined by Stein J in respect of the same specific provision in the LEP an order for costs should be made against the council for seeking to overturn that decision by rearguing the same questions. This the applicant says amounted to exceptional circumstances.

The decision in Ford Mirvac was referred to by the Court of Appeal in Mayoh. There was no suggestion raised by Mayoh that Ford Mirvac had been incorrectly decided. Indeed the reasoning in Mayoh which is partly referred to in my judgement in these proceedings at p 17 and following is consistent with the reasoning by Stein J in Ford Mirvac.

It is true that the Court of Appeal made no direct observations as to whether the decision in Ford Mirvac should stand in the future. Although the reference was only a passing one nevertheless a proper reading of Mayoh raised no doubt about the manner in which Ford Mirvac had been decided.

What Mayoh did, perhaps for the first time at that level of judicial consideration, was to consider in depth the distinction between a development standard and an absolute prohibition. However, I am not able to discern any revolutionary concept or change in the manner of approach to the determination of whether a particular provision is, or is not, a development standard, from any of the judgements in Mayoh.

It therefore falls for determination in relation to the question of costs whether the raising of the issues already concluded by the decision in Ford Mirvac meant that the council's actions were so unreasonable in the conduct of the litigation that there were exceptional circumstances in the relevant sense such that the applicant is entitled to an order for costs in respect of that part of the proceedings related to the arguments in respect of clause 22.

It is not alleged that the council acted in bad faith.

There is no question about any mistake on the part of the council or that it failed to take into account an obvious matter that would have influenced its decision.

The question to be asked is whether the action of the council in pursuing the issue relating to clause 22 was so unreasonable that in the circumstances it was exceptional.

It is not unreasonable for a council to seek clarification of the meaning of its own environmental planning instrument in circumstances where there is a real doubt. If the Court of Appeal had made some adverse reference to the reasoning followed by Stein J (which I hasten to emphasise it did not) or, if, even without doing so, its decision and the reasoning that lead to the decision warranted a reconsideration of the earlier conclusion then the council would have been undoubtedly justified in raising the issue.

There can be no doubt that if clause 22 had contained a prohibition the development application before the Court would have failed. That in itself is not a justification for raising an issue which has no basis in law and cannot be supported.

Mr Drury for the council points out that until Mayoh the permanent judges of the Land and Environment Court had spoken with a single voice against the reasoning of Holland J in Kruf V Warringah Shire Council (15 December 1988 unreported). Mr Drury then notes that Clarke JA agreed with the statements made by Holland J (see Mayoh at p 236 and 238). However on a proper reading of the judgement of Clarke JA he was only agreeing with a statement of principle expressed by Holland J subject to a minor reservation. No member of the Court of Appeal actually expressed an opinion about the ultimate decision that Holland J made in respect of the specific provision that was before him although Mahoney JA (dissenting) and Clarke JA were attracted to his approach to the meaning of "development standards".

In my opinion the council raised an issue in respect of clause 22 of the LEP which was unsustainable.

I am satisfied that exceptional circumstances applied and that the applicant is entitled to an order for costs in respect of that part of the proceedings applicable to the legal arguments raised in respect of clause 22.

The applicant submits in support of the present application for an order for costs that whether the development was prohibited by reasons of the provisions of clause 26 of the LEP was not raised as an issue between the parties until the issue of a notice of determination on the Friday before the commencement of the hearing. The previous Friday was in effect the last business day before the commencement of the hearing.

Upon receipt of the notice of determination the applicant assumed that the alleged prohibition against development pursuant to clause 26 was an issue in the proceedings. It is not necessary to resolve whether the issue was raised at an earlier time.

There was an issue raised in the Statement of Issues regarding whether this Court could give its consent to release, vary or modify a covenant imposed on the title as a consequence of a condition of development consent in respect of the subdivision of the land. When that issue was raised there was no assertion that there was a prohibition under the planning instrument.

The council contends that the effect of clause 26 was not specifically raised as an issue in the proceedings by it but rather by the applicant following receipt of the notice of determination and that the applicant elected to argue that point.

The applicant argued that the covenant or restriction could be ignored once the Court was satisfied on the merits that the development could take place contrary to the terms of the restriction and further that in any event clause 26(2) was void for lack of approval by the Governor.

It was necessary for the Court to consider as a matter of power whether or not the effect of clauses 26(1) and 26(2) presented a bar to the grant of development consent.

Whether the argument was raised by council or by the applicant does not, in the circumstances, in my opinion matter.

The coyness of the council in broaching clause 26 directly as an issue in the proceedings may have protected it from some embarrassment in regard to the argument whether or not exceptional circumstances exist, such as, to justify an order for costs.

As Mr Drury pointed out clause 26 was one of the hurdles in the environmental planning instrument which the applicant was required to jump. The issue had been raised obtusely in the Statement of Issues even though the issue, as framed in that statement, was not pursued at the hearing.

I am not satisfied that the circumstances relating to the argument regarding clause 26 of the LEP were exceptional circumstances such as to justify an order for costs against the council.

1. That the respondent pay the costs of the applicant in respect of the legal argument relating to the effect of the provisions of clause 22 of BLEP 1988 such costs to be in respect of preparation and presentation of legal submissions only.

2. No Order as to costs in relation to this notice of motion.

I HEREBY CERTIFY THAT THIS AND THE PRECEDING 5 PAGES ARE A TRUE AND ACCURATE RECORD OF THE REASONS FOR JUDGEMENT HEREIN OF THE HONOURABLE MR JUSTICE TALBOT