City Forum Pty Limited v Leichhardt Council

APPLICANT: Mr P Clay, barrister instructed by Mr P Saab, solicitor SOLICITORS: Macquarie Lawyers LEGAL REPRESENTATIVES: RESPONDENT: Ms J Walker, solicitor SOLICITORS: Pike Pike and Fenwick

THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

11084 of 2004 (Costs)- City Forum Pty Limited v Leichhardt Council

JUDGMENT Background 1 This is an application for costs by the respondent, in respect of an appeal in the matter of City Forum Pty Limited v Leichhardt Council [2004] NSWLEC 396 which was upheld by order of the Court, on 8 July 2005. That appeal under s 97 of the Environmental Planning and Assessment Act 1979, was against the deemed refusal by Leichhardt Council of a development application to demolish outbuildings and part of the existing building, remediate, excavate, alter and add to the existing dwelling to provide three (3) x two-storey attached dwellings over a basement car parking for three (3) cars, with associated works, and to strata subdivide the building into 3 lots at Lot 15, DP 921216, being No 28 Henry Street, Leichhardt. 2 In that case, I concluded that the proposal should be conditionally approved. Elaborate conditions were imposed concerning support of the footings of the adjoining dwelling and of the existing footings of the retained house on the land. 3 The salient issues in the case were vehicular access to the basement carpark including engineering solutions, other merit matters including, streetscape; form of development; internal amenity and lack of information supplied with the application. 4 The Court at first instance heard the appeal on 13 December 2004 and 5 July 2005 and the judgment was delivered on 8 July 2005 with the applicant being successful. 5 The respondent council, by notice of motion dated 15 July 2005, sought an order for costs in the following terms:

1. The applicant pay the respondent's costs of the proceedings from 14 December 2004 to 7 July 2005.
2. The applicant pay the respondent's costs of the notice of motion for costs. 6 I have concluded that the applicant should not be required to pay the respondent's costs of the proceedings from 14 December 2004 to 7 July 2005. However, the applicant should pay the legal costs of the respondent thrown away by reason of the adjournment of the hearing on 11 May 2005, brought about by late submission of amended plans. Also I have awarded a proportion of the costs of the respondent in the cost application. The basis for an application for costs 7 The power to award costs is found in s 69 of the Land & Environment Court Act 1979, which relevantly provides: 69(2) Subject to the rules and subject to any other Act: (a) costs are in the discretion of the Court; (b) the Court may determine by whom and to what extent costs are to be paid… 8 Prior to February 2004, it was the practice of the Court to award costs only where there were 'exceptional circumstances'. From that date the Land and Environment Court Rules (Amendment No 8) 2003 (the Rules) came into effect and amended the basis for costs in the Court's Class 1 jurisdiction. The relevant provision of Pt 16 Rule 4(2) now reads: (2) No order for the payment of costs will be made in proceedings to which this Rule applies unless the Court considers that the making of a costs order is, in the circumstances of the particular case, fair and reasonable.

9 This change to the Rules was accompanied by an amendment to the Land and Environment Court Practice Direction 1993 that relevantly reads in respect of costs in Classes 1 and 2: 10. Where an application for costs is made in proceedings that have been heard and determined by one or more Commissioners the application shall be made, to that Commissioner or those Commissioner's (as the case may be).

Where the Commissioner or Commissioners are of the opinion that a costs order should be made, the parties shall be informed of that decision and the reasons for it and shall be given the opportunity to make submissions to the Chief Judge on the question of whether he should give concurrence to the proposed costs order.

Normally, submissions shall be made in writing and must be within 14 days of publication of the reasons for decision by the Commissioner or Commissioners (as the case may be) of the proposed costs order. If any party wishes to make oral submissions in addition to any written submissions, application must be made to the Chief Judge within the 14-day period. If such an application is not made or written submissions are not provided, the Chief Judge shall, without further notice to the parties, decide whether to grant concurrence to the proposed costs order. If the Chief Judge concurs, the order for costs determined by the Commissioner or Commissioners shall be made pursuant to s 69(8) of the Land and Environment Court Act 1979 . The respondent's case 10 The respondent council filed its application for costs on 18 July 2005 and the matter was briefly argued before the Commissioner on the morning of 21 September 2005. Further written submissions of the respondent were received by close of business on 22 and 23 September 2005. 11 For the respondent, Ms Walker submitted that the council should receive its costs from the date of the hearing on 13 December 2004 up to and including the further hearing of this matter on 5 July 2005. Ms Walker, submitted that it would be 'fair and reasonable' to award the council its costs because:

1. These costs were incurred mainly as a result of the failure of the Applicant to provide adequate engineering information and evidence in relation to construction of the proposed driveway on the boundary of the subject property.
2. This matter was raised as an issue by the Council in its letter of 4 August 2004 (Annexure A to the affidavit of Josie Walker) and was also raised as an issue in the Statement of Issues (Issue 4.2).
3. One of the reasons that the matter was adjourned on 13 December 2005 was to permit the Applicant to submit further engineering information in relation to the driveway and an amended geotechnical report.
4. The Applicant did submit further details and an amended geotechnical report on 24 January 2005, however Council judged these to be inadequate and was therefore put to further expense in engaging a geotechnical engineer, Mr Rod Jeffrey, to comment on the feasibility of the proposed driveway design. Mr Jeffrey's concerns were ultimately vindicated as the Applicant's engineering expert conceded under cross-examination that 450mm would be reasonable allowance to make between the boundary and inside wall of the proposed driveway, rather than 200mm as proposed by the Applicant.
5. It would have been unnecessary for the Council to incur this cost if the Applicant had provided adequate information on engineering matters from the outset, or immediately after the hearing of 13 December. The Applicant was repeatedly invited by the Council to provide this information.
6. Consideration of the engineering evidence occupied most of the Court time at the final hearing of the matter on 5 July.
7. Insofar as Council's costs were not related to the engineering issue, they were related to the Applicant's two sets of amended plans. The majority of these amendments were responsive to lack of detail in the original architectural plans rather than merit issues raised at the hearing.
8. Council's costs were further increased by the fact that after Council had lodged written submissions and reports on the first set of amended plans on 23 February 2005, the Applicant amended the plans without notice one day before the hearing date of 11 [May 2005].
9. Council accordingly claims its costs of $15,239.00 as itemised in the attached Schedule.

12 The issues referred to by Ms Walker in point 2 above are: 6. - The adequacy of the plans and supporting information submitted - in this regard: (a) It is unclear as to how the portions of the dwelling that are nominated to be retained will be retained. (b) A specific geotechnical report prepared by a suitably qualified geotechnical engineer, detailing proposed methods of excavation, shoring or pile construction, that details vibration emissions and any p0ossible damage which may occur to adjoining or nearby premises and the measures that are to be implemented to prevent or minimise structural damage to nearby premises has not been provided. (c) A review and assessment of the site-specific geotechnical report prepared by a further, independent qualified engineer or consultant has not been provided. (d) Shadow diagrams… (e) Boundary fencing… AND 4.2 - Engineering details - the application is deficient in that it does not contain adequate information to address the following matters: · the proposed method of excavation · the proposed method of construction (ie. shoring or pile)

13 Ms Walker supported her client's case by reference to two decisions of the Court in relation to costs: Michael Barclay v Mosman Council (No 2) [2005] NSWLEC 291 a decision by myself, handed down on 3 June 2005 and Archiworks Architects Pty Limited v Sutherland Shire Council [2004] NSWLEC 690 a decision of Bly C handed down on 14 December 2004. She agreed that the decision of Bly C could be distinguished in that the changes in plans, in that case, did not arise as a result of any directions of the Court, as here. In this case I was particularly concerned that structural support be provided for the adjoining premises to the north at No 30 Henry Street and for the existing building on the land. 14 By facsimile dated 21 September 2005, Ms Walker attached a schedule of costs thrown away in consequence of the vacation of the hearing date of 11 May 2005. She applied a 25% discount on the amount of $8,343.00 and suggested that the appropriate figure would be $6,257.00 (GST exclusive). She also attached the invoices of Jeffery and Katauskas and City Plan Services. She disclosed in the same facsimile, that the filing fee paid by the applicant on the original development application was $1,277, with a $500 notification fee and a $55 scanning fee. 15 She also sought on behalf of her client $2,232 (GST exclusive) for the applicant to pay the respondent's costs of the cost motion. The applicant's case 16 The applicant claims that the council's primary submission is fundamentally and fatally flawed. Further written submissions of the applicant were received by close of business on 23 September 2005 and the respondent's summary of costs was objected to on the basis that the respondent has double charged and sought fees for Mr G Green and Ms J Walker. However, Mr Clay for the applicant recognised that verified costs thrown away by the respondent as a result of the adjournment of the hearing on 11 May 2005 could be borne by the applicant. This adjournment was brought about by the applicant submitting amended plans on around 10 May 2005 and the council required further time to assess these. 17 Mr Clay referred with approval to the decision of his Honour Talbot J in the costs application in Aldi Foods Pty Limited v Holroyd City Council [2005] NSWLEC 338. 18 He submitted that in the first instance this was a two-day case and the hearing on 13 December 2004, the first day, was an on-site hearing where the only issue before the Court was the form of the development. At that hearing, the Court requested the applicant to consider amendments to the building form, and raised the question of the support of the footings of the abutting property to the north near the proposed vehicular ramp. At that hearing the council had also raised issues of drainage and engineering and prepared additional evidence in this regard. The applicant had responded to this additional evidence and the Court's requests. 19 By reference to the transcript of 22 October 2004, the Chief Judge had considered listing matters, prior to the hearing on the merits of the application. Mr Clay submitted that at that time, the council had indicated to the Chief Judge that only planning, engineering and matter of merit needed to be addressed. As a consequence the Chief Judge had concluded that no planning witnesses needed to be called in the hearing. Thus, Mr Clay submitted, that if the council subsequently obtained the services of town planning experts it was at the council's volition and the council should not now be seeking costs for that advice from the applicant. Also, he submitted that, prior to the hearing, the council had not identified as being important, engineering and geotechnical issues. Thus, he submitted, the council's costs of expert evidence in that regard should not be borne by the applicant. 20 Mr Clay on behalf of the applicant also submitted that: The Applicant's development application responded appropriately to the criticisms of the previous application in Commissioner Watts judgment and was further refined after comments made by the Commissioner at the on-site hearing which eventually warranted approval by the Court. 21 The primary submission of the applicant was, that there should be no costs award, however, some costs for the adjournment of 11 May 2005 would be appropriate. The applicant sought orders that the costs application should be refused and the council be ordered to pay the applicant's costs of the costs application. 22 The applicant indicated that the applicant's costs for the motion as to costs on 21 September 2005 amounted to $3,575.00. Findings on costs 23 Pt 16 of the Rules states that "no order" for the payment of costs will be made unless the Court considers that the making of a costs order is, in the circumstances of the particular case, "fair and reasonable". 24 In the particular circumstances of this case, I accept the applicant's submission that it would not be "fair and reasonable" for the applicant to pay the respondent's costs of the proceedings from 14 December 2004 to 7 July 2005. 25 In coming to this conclusion, I accept the general thrust of Mr Clay's submission that: · An applicant is entitled to have its case heard and determined by a commissioner of the Court. · The council had not stressed the difficulty of constructing a vehicular ramp in close proximity to the adjoining property and was prepared to join in dispute with the applicant on the merit of the form of the proposal. · The Court sought clarification on the methods of structural support of the abutting premises, the existing building on the land and construction of the vehicular ramp and this generated the need for more evidence and greater costs for both parties. · The applicant should not be required to pay for the costs of the respondent of the proceedings from 14 December 2004 to 7 July 2005. · However the applicant should pay for the costs of the council thrown away by the adjournment due to late submission of amended plans.

26 His Honour Talbot J in the costs application in Aldi Foods Pty Limited v Holroyd City Council [2005] NSWLEC 338 at para 7 states: …the rules make it plain that the approach to an application for an order for costs in class 1 proceedings is fundamentally unchanged from the historical position to the extent that the underlying principle is that there will generally be no order as to costs. Accordingly, unless it is in the circumstances of the particular case otherwise fair and reasonable, the Court will approach the exercise of its discretion on the basis that parties are to remain confident they may commence or defend proceedings without the onerous threat or incurring liability for costs other than their own, even if they are not the successful party. In other words costs will not be awarded in the proceedings referred to in Part 6 rule 4 unless it is fair and reasonable to depart from the underlying assumption in the circumstances of the particular case. Reasonableness is to be determined according to the ordinary sense of the word. The award of costs has to be fair as well as reasonable. Thus not only must it be reasonable for costs to be awarded but it must also be just and equitable. 27 There is no issue that the applicant made an ambit claim or that the development proposal was unreasonable by being outside the planning controls. On the contrary, the applicant in seeking consent for the latest proposal was responding to the refusal of an earlier proposal that was outside the building location zone, (BLZ). By containing the proposal within the BLZ the issue of constructing the alterations and additions in close proximity with adjoining premises and the existing dwelling on the land came into prominence. Because of the need to consider more carefully those designs that are cheek by jowl with other premises the appeal was more protracted than would otherwise be the case and more expensive to both parties. After further amending the plans the applicant was ultimately successful and the development was granted conditional approval by the Court on 8 July 2005. 28 There is nothing unusual that would cause me to award costs against the applicant here. Thus I consider being fair and reasonable in the circumstances of the case, that there should be no order for costs against the applicant as to the respondent's costs of the proceedings from 14 December 2004 to 7 July 2005. 29 However, I consider the applicant should pay the reasonable costs of the respondent thrown away by the vacation of the hearing on 11 May 2005, as a result of late submission of amended plans. These costs were calculated to be in the amount of $ 6,257.00 (GST exclusive). I award the respondent these costs for preparation of its case on 11 May 2005 and I accept that there was no double counting as alleged by the applicant. 30 In Michael Barclay v Mosman Council (No 2) [2005] NSWLEC 291 I awarded costs against the successful applicant as there the applicant was reluctant to bring the proposal more into compliance with the landscaped area provisions of the local environmental and development control plans applying to the land. As a result of the adjournment obtained by the applicant on 14 October 2004, "…the council was put to further expense in assessing the amended plans and incurred further legal expenses in relation to these matters…" The distinction is that the council had consistently pursued the line that the landscaped area should be increased. This was not difficult to achieve, yet the applicant did not immediately respond to these requests. In that case, I considered it was fair and reasonable to award costs against the applicant. 31 In Archiworks Architects Pty Limited v Sutherland Shire Council [2004] NSWLEC 690 Bly C awarded, against the unsuccessful applicant, the respondent's costs thrown away by the vacation of the hearing dates and the respondent's costs arising from the applicant's reliance on amended plans. In that case, the commissioner could not accept "…that the applicant did not have the means and opportunity to deal with these issues prior to the commencement of the hearing…" and to have prepared amended plans in a timely fashion. The commissioner considered it fair and reasonable to award costs against the applicant in that case. 32 It is necessary to consider each request for costs on its own facts. That is why it is appropriate for commissioners to consider costs applications for those matters decided by them. 33 Both parties sought costs of the costs application. 34 In Aldi at para 18 his Honour stated: The applicant has been successful in resisting the council's notice of motion seeking an order for costs. The applicant seeks an order for costs in its favour in respect of the costs application. In my view the position previously adopted under the former Practice Direction 1993 paragraph 10A prevails, namely that the cost of the hearing for the costs motion are separate costs incurred in relation to the power conferred by s 69 of the Land and Environment Court Act 1979. 35 I consider, in the circumstances of this case, that the respondent should be awarded a greater part of its costs of the costs motion, as it has been largely successful in regard to costs. I award the respondent council $2000 for its costs for the costs motion. 36 In coming to this conclusion I have taken into account that the applicant conceded at the hearing into costs, that it should pay the costs thrown away by the adjournment on 11 May 2005. Had the applicant agreed earlier to this course, the need for the costs application might not have arisen or that the hearing and submissions after the event might have been shortened. 37 The applicant's motion for costs of the cost motion is dismissed. 38 In accordance with cl 10 of the Land and Environment Court Practice Direction 1993, the parties are to advise the Registrar within fourteen (14) days whether they wish to make further submissions to the Chief Judge in relation to costs in this matter. Orders 39 My orders are:

1. The applicant pays the respondent's costs of $6,257.00 (GST exclusive), thrown away by the vacation of the hearing on 11 May 2005.
2. The respondent's application for the respondent's costs of the proceedings from 14 December 2004 to 7 July 2005 is dismissed.
3. The applicant pays the respondent's costs of the costs-application of $2,000 (GST exclusive).
4. The applicant's application for costs of the costs-application is also dismissed.

05/10/2005 - (2) added in title to distinguish this costs matter from the merit appeal - Paragraph(s) Title

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