Clayton Jacobson and Lee Anne McMillan v Ballina Shire Council

Bailey v Marinoff (1971) 125 CLR 529; DJL v The Central Authority (2000) 201 CLR 226; Emily Joan Harvey v Coralie Ngarita Phillips and Another (1956) 95 CLR 235; In re Newen; Carruthers v Newen [1903] 1 Ch 812; Lewis v Combell Constructions Pty Ltd (1989) 18 NSWLR 528; Logwon Pty Ltd v Warringah Shire Council (1993) 33 NSWLR 13; CASES CITED: Memel Holdings Pty Ltd v Pittwater Council [2000] NSWLEC 227; National Parks and Wildlife Service and Another v Stables Perisher Pty Ltd (1990) 20 NSWLR 573; Paino v Hofbauer (1988) 13 NSWLR 193; Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691; Starray Pty Ltd v Sydney City Council (2001) 112 LGERA 438; Tomlin v Standard Telephones and Cables Ltd [1969] 3 All ER 201; Waugh and Others v H B Clifford & Sons Ltd and Another [1982] 1 Ch 374; Woollahra Municipal Council v Ferella [2005] NSWLEC 402

APPLICANT C Jacobson & L McMillan (in person) LEGAL REPRESENTATIVES: RESPONDENT M Stevens SOLICITORS W J Grace & Co

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

CLAYTON JACOBSON & LEE ANNE McMILLAN Applicants

JUDGMENT Jagot J: Introduction 1 This is a notice of motion filed by the applicants in proceedings taken in class 2 of the Court's jurisdiction. The notice of motion seeks an order that: The purported consent orders made by this Court on 8 April 2005 and annexed at "A" be set aside. 2 The motion is supported by an affidavit sworn by each of the applicants, Mr Clayton Jacobson and Ms Lee Anne McMillan ("the applicants"). 3 The applicants commenced the class 2 proceedings on or about 23 November 2004. The proceedings related to an order dated 21 October 2004 issued by the Council on the applicants in their capacity as the owners of land known as 14 - 22 Smith Drive, West Ballina, being Lot 1 DP605260 (the "land"). The order was issued pursuant to s 124 of the Local Government Act 1993, item 22 of the Table. Section 124 and item 22 relevantly provides as follows: A council may order a person to do or to refrain from doing a thing specified in Column 1 of the following Table if the circumstances specified opposite it in Column 2 of the Table exist and the person comes within the description opposite it in Column 3 of the Table. … Column 1 Column 2 Column 3 To do what? In what circumstances? To whom? 22 To store, treat, process, collect, remove, dispose of or destroy waste which is on land or premises in the manner specified in the order, provided that it is not inconsistent with regulations made under the Protection of the Environment Operations Act 1997 Waste is present or generated on the land or premises and is not being dealt with satisfactorily, and is not regulated or controlled by, or subject to, a licence or notice granted or issued under the Protection of the Environment Operations Act 1997 Owner or occupier of land or premises, owner of or person responsible for the waste or for any receptacle or container in which the waste is contained

4 The s 124 order specified works required to be carried out with respect to the land. The works required were identified in the s 124 order as relating to the "southern most structure (industrial shed and associated caretaker's residence)" and the "northern most structure (industrial shed approved as part of BA5679)". The works required related to the management and treatment of "domestic wastewater". 5 The applicants exercised their right of appeal against the s 124 order under s 180 of the Local Government Act 1993 by commencing the class 2 proceedings. The applicants retained a solicitor for that purpose. The class 2 application identifies the solicitor as the relevant address for service of documents. The applicants' solicitor on the class 2 application was also identified on the Council's s 124 order as the addressee on behalf of the applicants. 6 The class 2 proceedings were discontinued by the entry of consent orders dated 8 April 2005. The consent orders are in the followings terms: (1) The Applicant discontinues these proceedings. (2) The Applicant shall comply with the Order of the Respondent dated 21 October 2004 made under S 124 of the Local Government Act, 1993 in respect to premises situated at Lot 1 DP605260, No. 14 Smith Drive, West Ballina, NSW within thirty (30) days. (3) The Applicant shall pay the respondent's party/party costs in the sum of $5,720.00 inclusive of GST and inclusive of disbursements within thirty (30) days. 7 On their face, the orders bear the signature of the respective solicitors for the applicants and the respondent. They also bear the seal of the Court and are stamped as filed in the Court on 18 April 2005. The signature of the Assistant Registrar appears above the same date, 18 April 2005. Submissions 8 The applicants' principal contention (founding the application to set aside the consent orders) is that they did not authorise their then solicitor to discontinue the proceedings or otherwise to compromise the appeal. The applicants submit that, at all times, they wished to have the opportunity to bring the merits of the s 124 order before the Court. The applicants contend that the s 124 order was misconceived and invalid in that item 22 concerns "waste" (a defined term in the Local Government Act 1993). The relevant part of the definition, according to the applicants, depends upon the presence of "human waste" (defined to mean "human faeces and urine"). The pits, tanks and other facilities referred to in the s 124 order, however, were for the management of "greywater" and not "human waste". 9 The Council opposes the making of the order setting aside the consent orders. It submits that:

(1) The Notice of Motion is incompetent. Any such application had to be by fresh proceedings.

(2) In any event, the powers of the Court to set aside a final perfected order are to be found in Pt 15 r 9 of the Land and Environment Court Rules 1996 or in the inherent jurisdiction of the Court.

(3) Neither Part 15 r 9 nor any inherent jurisdiction is enlivened by the circumstances of this matter.

(4) The applicants' solicitor had actual, implied and ostensible authority to compromise the proceedings in accordance with the consent orders and did so.

(5) Discretionary considerations, if relevant, favour the public policy inherent in the finality of litigation and the class 2 appeal was, in any event, lacking in any merit. Factual background 10 The factual dispute between the parties relevant to the present motion is limited to the instructions from the applicants to their (then) solicitor with respect to the consent orders, and the inferences I should draw about those instructions from certain documents produced under subpoena by the applicants' (then) solicitor. 11 The class 2 proceedings were commenced on or about 24 November 2004. The proceedings were commenced on behalf of the applicants' by their solicitor. On 2 February 2005, the applicants' solicitor served a statement of issues on the Council's solicitor. On 7 February 2005, a letter from the Council's solicitor to the applicants' solicitor records that there was a telephone call over before the Court at which the applicants' solicitor failed to appear and that certain directions were made. On 18 February 2005, pursuant to those directions, the Council's solicitor served on the applicants' solicitor a statement of basic facts. On 2 March 2005, the applicants' solicitor wrote to the Council's solicitor explaining and apologising for the failure to appear at the telephone call over. The letter referred to the likely need to request particulars and also stated as follows: We should also indicate that we are now taking measures to retain a liability consultant to provide an expert's report in support of our client's contentions which will be served in accordance with the time limits prescribed by the Rules. 12 By letter dated 4 March 2005, the Council's solicitor wrote to the applicants' solicitor and said in part: From the material you have advanced to date it is apparent that your clients' prospects in this appeal are less than negligible. In the circumstances we are instructed at this stage, to put the following offer to you: (1) Applicant discontinues the appeal. (2) Applicant to comply with the order of the respondent issued 21 October 2004 within thirty days. (3) Applicant to pay the Respondent's party-party costs as agreed or assessed. This offer remains open for a period of twenty eight (28) days and is made in accordance with the principles enunciated in the Calderbank case. If your clients' appeal is unsuccessful we shall tender this letter and seek indemnity costs on behalf of the Council from today's date. 13 At a callover on 7 March 2005, the class 2 appeal was fixed for hearing on 11 April 2005. 14 The applicants' solicitor requested particulars of the statement of basic facts on 10 March 2005. On the same date, the applicants' solicitor retained Greg Alderson and Associates, consulting engineers. The retainer letter indicated that a meeting was scheduled for 16 March 2005. The retainer letter noted, in part, that "...our client takes serious issue with the validity of the terms of the order in circumstances ... whereby local government approval is not required." 15 On the same date, the applicants' solicitor wrote to the applicants care of the applicants' business, Aero Marina Pty Limited, stating in part that: In essence Council alleges there to be two sewerage management facilities located on the property relevant to the order: - - an SMF at the southern most structure of the property; - an SMF serving northern most structure of the property. It is alleged that both facilities are failing for reasons previously particularised and non-compliant with relevant Authorities. We note you take issues with these contentions. We note in doing so you rely on the recommendations issued by NSW Health April 2000 regarding Greywater Reuse in Sewered Single Domestic Premises where in essence it is indicated that if both facilities are construed as greywater diversion services which simply divert greywater (excluding kitchen wastewater) without storage or treatment they do not require local government approval. It would appear from our preliminary discussions with Mr Greg Alderson, Consultant that he is not in agreement with these contentions. In the event that the appeal is going to be successful in the Land and Environment Court there will need to be satisfactory evidence to support these contentions provided by an expert Engineer. It is insufficient to simply say that you do not consider the requirements apply. In the alternative if the expert evidence confirms that approval is required measures ought to be taken to instruct the consultant to liaise with Council's offices to implement an appropriate procedure that complies with the recommendations of Council as particularised in the order. In the first instance we propose liaising with Mr Greg Alderson in respect of the relevant contentions with a view to adopting an appropriate strategy. 16 This letter also referred to the foreshadowed conference with Mr Alderson on 16 March 2005. 17 There is no dispute in the proceedings that the applicants controlled the entity Aero Marina Pty Limited and that Mr Jacobson dealt with the correspondence sent to Aero Marina. Nor was there any dispute that, of the two applicants, Mr Jacobson was primarily (but not exclusively) responsible for dealings with the applicants' solicitor with respect to the Council's s 124 order and the class 2. 18 On 11 March 2005, Mr Jacobson sent a facsimile to his solicitor seeking to explain his contentions that the Council's s 124 order was misconceived. On 18 March 2005 the applicants' solicitor forwarded a further letter to the applicants which stated in part: In light of the above, we confirm our advice that currently the only issue before the Court is whether or not your appeal in respect of the Order issued from Council is warranted. The merits of the appeal are poor whilstever it is mandatory for Council approval to have been provided and it not having been obtained. The issue currently before the Court is not an assessment of the merits of any sewerage system, i.e. performance standards etc., whilstever the Council is not, at the present time, seeking to prosecute you in respect of any alleged failure, but merely the fact that approval has not been obtained. In these circumstances we reiterate that the appropriate approach to adopt is to defer the current proceedings and implement an appropriate waste management policy in conjunction with Greg Alderson, consultant, which Council is prepared to approve in respect of the relevant premises. It is our recommendation that you liaise with Mr Alderson with a view to devising an appropriate strategy policy that can be settled upon. Council should then be approached with a view to it giving due consideration to the proposal and negotiating the proposed terms incorporated in the Order that has issued. In the event that you wish to query any further aspect of this advice please immediately contact the writer. Otherwise, we await your further instructions. 19 A handwritten note from the file of the applicants' solicitor dated 16 March 2005 refers to a conference with the applicants' solicitor, Mr Jacobson and Mr Alderson. That handwritten note records: without prejudice to our rights on merits. appeal is misconceived. develop a strategy ... 20 Mr Jacobson does not have any particular recollection of that meeting. 21 The Council's solicitor requested particulars of the applicants' statement of issues on 17 March 2005. On 21 March 2005 there was a telephone attendance between the applicants' solicitor and one of the applicants, whom I infer to be Mr Jacobson. On 23 March 2005, the Council's solicitors wrote to the applicants' solicitor stating that: We have now reluctantly incurred further costs in this matter, receiving instructions and drafting answers to your prolix request for particulars. We state reluctantly because on any proper analysis you will find that the cost of the works required by the subject order in this matter will be far exceeded by the costs of this litigation. … As noted above on our instructions the cost of rectifying the systems is now to be far exceeded by the costs of these proceedings and in such circumstances we again advise that the Council shall seek indemnity costs in respect of this matter and a copy of this letter shall be tendered to support such application. 22 On 23 March 2005, the applicants' solicitors wrote to the Council's solicitors stating: Further to our letter dated 17 March 2005 and by way of update we advise as follows:- We are now instructed that our client's consultant, Mr Greg Alderson, will be instructed to liaise with Council in respect of addressing all relevant issues set out in the order issued by your client, dated 21 October 2004. In these circumstances we are now instructed to seek your client's consent to the filing of a Notice of Discontinuance which is now enclosed. Please seek your client's immediate instructions and advise. 23 This letter attached a notice of discontinuance signed by the applicants' solicitor. The letter was expressed to be "without prejudice except as to costs". I consider that, given the issue in dispute between the parties relating to the scope of the authority of the applicants' solicitor to settle the proceedings, this (and related) "without prejudice" communications are admissible in these proceedings. If the Evidence Act 1995 applied (which it does not - s 38(1) and (2) of the Land and Environment Court Act 1979 and s 8 of the Evidence Act 1995), then I consider that the evidence would be admissible under s 131(2) (e), (f) and (g) of that Act. It is well settled at common law that the court may examine "without prejudice" communications to ascertain whether a settlement has been concluded (Tomlin v Standard Telephones and Cables Ltd [1969] 3 All ER 201). I consider that principle must apply to the present circumstances where the applicants maintain that their solicitor was not authorised to conclude the settlement on their behalf. 24 On 4 April 2005, the Council's solicitor responded by stating in part that: Our client instructs us that it shall consent to your proposed Notice of Discontinuance on the basis that the consent orders provide that: (1) your client shall comply with the order the subject of the proceedings with thirty (30) days; and (2) your client shall pay the Council's party/party costs occasioned by the discontinuance . 25 On or about 6 April 2005, Mr Jacobson forwarded to his solicitor a copy of the Local Government (Approvals) Regulation 1999 marked with comments and underlining, which I construe as an attempt to explain his contention that no approval was required under the Local Government Act 1993 for the wastewater facilities on the land. The applicants' solicitor forwarded a facsimile on the same date to Mr Jacobson which, in part, stated "…we would strongly recommend that measures be taken to immediately discontinue the appeal so that ongoing costs are minimised". The letter sought urgent instructions from Mr Jacobson. 26 Correspondence continued between the solicitors. The applicants' solicitor wrote to the Council's solicitor on 6 April 2005, in a letter which in part stated: Thank you for your facsimile dated 6 April 2005 but with respect, the consent orders that you have submitted do not properly reflect the terms of settlement. We indicated our client was agreeable to paying your costs as agreed or assessed. There has never been any agreement on the part of our client to pay costs in the sum of $5,720 (incl GST) particularly in circumstances where to date we have not been provided with any particulars of the costs which are alleged to be incurred by the Applicant. Please amend Paragraph 3 of the consent orders to properly reflect the terms of the agreement, namely (3) The applicant shall pay the respondent's party/party costs as agreed or assessed We reiterate this matter is now settled and our client will not be responsible for any further costs associated with preparing the matter for hearing. 27 On 6 April 2005, the applicants' solicitor forwarded another facsimile to the Council's solicitor (the sequence of these facsimiles is not apparent) stating: Thank you for your letter dated 4 April 2005, and we advise as follows- We are instructed to agree to the terms set out in your letter dated 4 April 2005. We now await receipt of executed Notice of Discontinuance on behalf of your client so that we can arrange for it to be filed with the Court. We now enclose copy of correspondence forwarded to the Court which is self-explanatory. 28 The enclosed letter to the Assistant Registrar of the Court stated: We refer to the abovementioned matter which we advise has now been settled. The parties are in the process of executing a Notice of Discontinuance which will be filed with the Registry shortly. In the circumstances we should be grateful if you could provide confirmation that the hearing date has been vacated. In the event that you have any query in respect of the matter set out herein please do not hesitate to contact the writer. 29 Correspondence continued between the Council's and applicants' solicitors with respect to the terms of the consent orders on 6, 7 and 8 April 2005, relating particularly to the issue and quantum of the Council's costs. Two versions of the consent orders were apparently forwarded in the same terms except for order 3 (which concerned costs). In one version, the costs were quantified and, in the other, the costs to be paid by the applicants were to be "as agreed or assessed." At the same time, communications continued between Mr Jacobson and the applicants' solicitor with respect to the requirements of the Local Government Act 1993 (for example, a file note of 7 April 2003 records that Mr Jacobson did not understand the solicitor's advice about the operation of the statute). 30 On 8 April 2005, a facsimile from the applicants' solicitor to Mr Jacobson records: Further to your telephone discussion with Kerren Thompson on 7 April 2005 we advise as follows:- In respect of the further clarification sought we reiterate that we are only relying on the provisions of the Local Government Act 1999. The amendments to the Act make no alteration to position in that the mandatory requirements of Section 68 still apply. Furthermore the amendments to the legislation does not alter the position in respect of DGTS and a GDD. In the event that you require any further clarification please immediately telephone the writer, otherwise we have arranged a further conference with the writer Wednesday to ensure that full instructions have been provided to the Waste Management Consultant and clarify any outstanding issues. This is in circumstances where an appeal needs to be stayed pending clarification of these matters . 31 On 8 April 2005, the solicitors for both parties signed the consent orders. Mr Jacobson raised a question whether the signature was that of the solicitor or his personal assistant. I consider that question to be immaterial as I am satisfied that the consent orders were signed by or under the authority of the applicants' solicitor. On the same day, the applicants' solicitor forwarded a facsimile to the Council's solicitor enclosing a communication to the Assistant Registrar of the Court attaching the signed consent orders and noting that he assumed that the matter had been removed from the list. 32 The communications between the applicant and the applicants' solicitor continued. Mr Jacobson sent two facsimiles on 14 April 2005 requesting information from his solicitor. Mr Jacobson gave evidence of a meeting on 13 April 2005 (which is also disclosed in the applicants' solicitor's bill of costs) with a Mr Chris Hill where he explained his arguments to the applicants' solicitor. This was, according to Mr Jacobson, the first occasion on which his solicitor understood Mr Jacobson's arguments. 33 The Council's solicitor served a sealed copy of the consent orders on the applicants' solicitor on 20 April 2005. The applicants' solicitor wrote to Mr Jacobson on 26 April 2005 stating, in part, that: In the circumstances, the issues discussed in conference ought now be the subject of further discussion with Greg Alderson and he should be provided with instructions to liaise with Council's consultants as regards complying with that part of the order which: · is valid and capable of being enforced and/or; · which has not been already adequately addressed and complied with. We reiterate that there is a need in the first instance for the consultant to be properly instructed and liaise with Council's staff. In the event that an issue in respect of compliance still arises you ought to reconsult the writer, and provide us with further instructions. 34 Further correspondence ensued between the Council's and the applicants' solicitors. That correspondence discloses that the agreement as to payment of the Council's costs as quantified in the consent order was in issue and that instead, according to the applicants' solicitor, the agreement was that a bill of costs (to be assessed) was required. 35 The Council's solicitor sought to arrange personal service of the consent orders on the applicants and, in correspondence to their solicitor, adverted to contempt proceedings if the applicants did not comply with the consent orders. This led to yet further correspondence between the solicitors. 36 On 29 April 2005, Mr Jacobson sent a facsimile to his solicitor referring to Mr Alderson "reviewing the documents" and noting the "errors" (which I infer to be errors in the documents) which Mr Jacobson said were manifest. The facsimile also contains a reference to "FOI" which I understand to be a reference to a freedom of information request that had been lodged by or on behalf of the applicants with the Council. 37 On 6 May 2005, the applicants' solicitor wrote again to Mr Jacobson stating in part that: We reiterate that your consultant, Greg Alderson, should be addressing the alleged non-compliance issues by way of report. That report needs to be prepared in a form consistent with the terms of an Environment Court Practice Note, a copy of which is enclosed. 38 On 10 May 2005, the applicants' solicitors wrote to the Council's solicitors as follows: You will recollect that the correct Consent Order that should have been signed and adopted by us was that which was provided by you under cover of letter dated 7 April 2005. Our client's instructions at all times have been that it is agreeable to payment of the respondent's costs as agreed or assessed. You will no doubt acknowledge that there has never been any proper agreement in respect of the quantum of the costs. In the event that you are now intent on seeking to pursue the current orders we will need to make application to seek a variation of Order 3 to make provision for payment of costs as agreed or assessed. Please seek your client's urgent instructions and in the absence of the issue being resolved, we will take measures to relist the matter. 39 On 11 May 2005, Mr Jacobson sent a fax to his solicitor about the FOI documents and about Mr Alderson's status not being that of a Court appointed expert. The letter also repeated the request that he had earlier made for a copy of the brief to the barrister. 40 On 13 May 2005, the applicants' solicitor wrote to the respondent's solicitor stating: Further to our letter dated 10 May 2005 we advise as follows - We are now instructed to tender payment of what our clients consider to be a reasonable claim for the professional legal costs incurred by the respondent to date in the sum of $3,300 including GST. 41 Mr Jacobson gave evidence, as I understand it, that the applicants did not pay this amount. 42 On 16 May 2005, the applicants' solicitor wrote to Mr Jacobson in response to Mr Jacobson's 11 May 2005 facsimile. 43 On 15 June 2005, Mr Jacobson forwarded a facsimile to his solicitor stating: Mark - please review. Something very wrong has happened. Please call after review. 44 On the following day, 16 June 2005, Mr Jacobson forwarded a further facsimile to his solicitor stating: Mark, Asking again. Something very wrong has happened. Has my position been compromised, without recourse? What is our condition? This is unbelievable, what am I reading? Please advise post haste. This is very stressful. Report on inspection to follow. Clay. 45 Mr Jacobson gave evidence that he first became aware of the consent orders around the time that these two facsimiles were sent. 46 On 20 June 2005, the applicants' new solicitors wrote to the Council's solicitors as follows: We have received instructions to act for Lee Anne McMillan and Clayton Jacobson. Our clients were previously represented by Mark Flynn and Associates and you acted on behalf of Ballina Shire Council. We are in the process of obtaining our clients file from Mark Flynn. Court records indicate our clients application was discontinued by consent on 8 April 2005. Our clients instruct us to apply to the Court to set those consent orders aside. The principal basis of that application will be that the orders were signed by their solicitor without their knowledge or consent. The consent of Ballina Shire Council, as respondent, is sought. Please seek instructions and advise. In the event that we do not receive your response within fourteen days of the date hereof we are instructed to file the necessary motion and supporting material without further notice. 47 By letter dated 24 June 2005, the Council refused its consent to this request. 48 The notice of motion seeking to set aside the consent orders was filed with the Court on 30 June 2005 supported by affidavits from each of the applicants, sworn 28 June 2005. Both of the applicants said that they had not instructed their solicitor to discontinue the proceedings or enter into consent orders and that they were not aware of the consent orders until some time in June 2005. The applicants' former solicitor was not called to give evidence in the proceedings. I consider this fact to be irrelevant in the circumstances of this matter. I draw no inference from this fact one way or another. Findings 49 I find that the applicants retained a solicitor to represent them in the class 2 proceedings and that the solicitor had the usual authority which the solicitor- relationship entails. By this I mean that I am satisfied on the evidence before me that the applicants did not place any limitation on their solicitor in his capacity to represent them in the class 2 proceedings. 50 I am satisfied that the applicants' solicitor was of the view that the class 2 appeal had poor prospects of success, and was concerned about the costs likely to be incurred in running the appeal, the possibility of the Council obtaining a costs order against the applicants, and the proportionality of those costs when compared to the solicitor's understanding of the costs likely to be involved in complying with the Council's s 124 order. As such, the solicitor was of the opinion that the appeal ought not to proceed and that, instead, the applicants (through their engineer, Mr Alderson) should resolve the issues in dispute with the Council outside of the context set by the class 2 appeal. 51 It is apparent that the applicants (or Mr Jacobson at least) believed that his solicitor did not appreciate the significance or the consequences of the s 124 order. Mr Jacobson and his solicitor also disagreed as to whether approval was required for the installation of the wastewater facilities on the land and the method of wastewater management. 52 I accept that the applicants did not fully appreciate the substance and ramifications of their solicitor's advice with respect to the proceedings; namely, to enable Mr Alderson to develop a strategy for wastewater management on the land. That is, Mr Alderson would liaise with the Council with respect to that strategy, the negotiated strategy would be incorporated within the Council's s 124 orders and that, importantly, this would be done outside of the context of the class 2 appeal which was fixed for hearing on 11 April 2005, the proceedings being deferred, stayed or put to one side for that purpose. I also accept that the applicants were not aware of the specific terms of the consent orders until some time in June 2005. As explained below, lack of awareness of the terms of the consent orders is not the same as lack of awareness (or rejection) of the course recommended by the applicants' solicitor. 53 I make the following further findings on the evidence:

(1) There was a meeting between Mr Jacobson, his solicitor and Mr Alderson on 16 March 2005.

(2) In that meeting, I infer that the solicitor reiterated his advice that the appeal was misconceived.

(3) In that meeting, Mr Jacobson agreed upon a strategy that involved Mr Alderson liaising with the Council to address all relevant issues in the Council's s 124 order, outside of the context of the class 2 proceedings. This was seen by Mr Jacobson to be an alternative way of enabling the merits of the applicants' position to be assessed.

(4) I infer that Mr Jacobson was aware at that time, at the least, that the proceedings would need to be put to one side, deferred or stayed to enable the liaison between Mr Alderson and the Council officers to occur (a course to which Mr Jacobson agreed). I infer that Mr Jacobson did not at that time see the putting to one side of the class 2 appeal as inconsistent with his position about the operation of the Local Government Act 1993 on the basis that this issue could or would be part of the liaison between Mr Alderson and the Council officers.

(5) Mr Jacobson did not at that time (or at any time thereafter) place any limitation his solicitor's capacity to resolve the dispute with the Council's solicitor in order that the wastewater management strategy might be agreed and implemented. 54 I consider that these findings are consistent with the letter forwarded by the applicants' solicitor to the Council's solicitor on the day following the meeting (17 March 2005), as well as the other correspondence that I have quoted above. The findings, moreover, are consistent with the meeting that the applicants attended with their solicitor and a Mr Hill on or about 13 April 2005, and with facsimiles from Mr Jacobson to his solicitor on 15 and 16 June 2005. 55 By June 2005, the Council's interpretation of what the consent orders required was known (despite the liaison between Mr Alderson and the Council which was apparently then occurring). For the reasons given above, I do not infer from the 15 and 16 June 2005 facsimiles that the applicants were unaware until that time that the class 2 proceedings had been deferred, stayed or put to one side in some way (the hearing had been scheduled for 11 April 2005 and did not proceed). The applicants may not have appreciated how the proceedings had been deferred, stayed or put to one side (that is, by their discontinuance), or been aware of the Council's interpretation of the compromise which had been effected until June 2005 but, I find, the applicants (via Mr Jacobson) had authorised their solicitor to implement his recommendations for resolution of an agreed strategy for wastewater management prior to 8 April 2005. 56 I am satisfied on the evidence that a primary (if not the primary) concern of Mr Jacobson was whether or not the wastewater facilities on the land or sought to be installed on the land, required any approval of the Council. I accept that Mr Jacobson did not wish to compromise his position in respect of any requirement for approval and that he probably did not fully appreciate that the consequences of the adopted strategy might have that result (whether that result in fact is so or not is not relevant to the present matter). The objective of not compromising on that issue, however, is one that might have been achievable through implementing the strategy as recommended by the applicants' solicitor. An intention not to compromise with respect to whether approval for the facilities was required is not inconsistent with adopting the strategy that the applicants' solicitor had formulated. 57 Hence, I am satisfied that the applicants adopted their solicitor's recommended strategy, part of which involved the solicitor in arranging some form of compromise (even if only by deferral) of the class 2 appeal. 58 Moreover, I am not satisfied that the applicants' solicitor executed the consent orders contrary to his instructions or contrary to any limitation (express or implied) that the applicants placed upon his retainer to represent them in the class 2 proceedings. Rather, I am satisfied that the applicants placed no such limitation upon their solicitor. 59 It is not suggested that the Council or its solicitors were on notice of any limitation on the capacity of the applicants' solicitor to represent the applicants in the class 2 proceedings, including by way of the compromise of those proceedings. I find that the Council and its solicitors had no knowledge of any such limitation (if there had been any such limitation, which I am satisfied there was not). 60 Further, I find that the Assistant Registrar of the Court entered the orders under Pt 15 r 4 of the Land and Environment Court Rules 1996 on 18 April 2005. Hence, the notice of motion seeking to set aside the order was not filed before the signing and filing of the minute of the order as referred to in Pt 15 r 9(b). General principles 61 In Bailey v Marinoff (1971) 125 CLR 529 at 530, Barwick CJ stated: Once an order disposing of a proceeding has been perfected by being drawn up as the record of a court, that proceeding apart from any specific and relevant statutory provision is at an end in that court and is in its substance, in my opinion, beyond recall by that court. It would, in my opinion, not promote the due administration of the law or the promotion of justice for a court to have a power to reinstate a proceeding of which it has finally disposed. 62 DJL v The Central Authority (2000) 201 CLR 226 affirmed the principle that where the Court has entered final orders, it is generally not open to the Court to review or alter those orders. In DJL v The Central Authority the High Court held that the Family Court, being a statutory court, had no inherent or implied power to reopen perfected orders. 63 In National Parks and Wildlife Service and Another v Stables Perisher Pty Ltd (1990) 20 NSWLR 573 at 581 (a decision which pre-dates DJL v The Central Authority), Gleeson CJ held that there was an inherent or implied power in this Court to do all that was necessary to exercise its jurisdiction. 64 In Logwon Pty Ltd v Warringah Shire Council (1993) 33 NSWLR 13 (a decision which also pre-dates DJL v The Central Authority) Sheller JA, at 27, referred to the power a court has "simply because it is a court of a particular description". At 30, Sheller JA (with whom Powell JA relevantly agreed) held that the then equivalent provision to Pt 15 r 9 of the Land and Environment Court Rules 1996 was not the exclusive power of this Court to set aside or vary a final order. At 28 to 29, Sheller JA explained the applicable principles as follows: A superior court has power to review, correct or alter its judgment at any time until its order is perfected: see Texas Co (Australasia) Ltd v Federal Commissioner of Taxation (1940) 63 CLR 382 at 457. There is no reason to suppose that the Land and Environment Court does not have such power. It is assumed by Pt 13, r 7(b) of the Land and Environment Court Rules 1980. The occasion for exercising such a discretion is discussed in Smith v New South Wales Bar Association (1992) 176 CLR 256 at 265. By contrast, as a general rule, a perfected judgment cannot be recalled or varied: see Bailey v Marinoff (1971) 125 CLR 529 at 530, 531-532 and 535 and Gamser v Nominal Defendant (1977) 136 CLR 145. However a judgment even though perfected may be impeached on grounds of fraud and there is an inherent jurisdiction to alter an order where its form as entered or filed does not express or clearly express the intention of the court or where having been made ex parte, procedural fairness demands it: see Taylor v Taylor (1979) 143 CLR 1 at 6-7 and 16, where Mason J, as he then was, observed: "A jurisdiction to set aside its orders is inherent in every court unless displaced by statute." In Permanent Trustee Co (Canberra) Ltd (As Executor of Estate of Andrews) v Stocks and Holdings (Canberra) Pty Ltd (at 48), Brennan J, sitting as the Supreme Court of the Australian Capital Territory, gathered the exceptions to the general rule into three classes: "… those which are founded upon the inherent jurisdiction of the court to ensure that its procedures do not effect injustice; those which are authorized by statute; and those which override the general rule in order to give relief where the judgment is obtained by fraud or by an agreement which is void or voidable". 65 The question whether Pt 15 r 9 is an exhaustive statement of the jurisdiction of this Court to set aside or vary an order has subsequently been considered in Memel Holdings Pty Ltd v Pittwater Council [2000] NSWLEC 227 and Woollahra Municipal Council v Ferella [2005] NSWLEC 402 and, in contrast thereto, Starray Pty Ltd v Sydney City Council (2001) 112 LGERA 438. I am prepared to consider the applicants' claim for relief on the basis of both Part 15, r 9 and the existence of an implied or inherent jurisdiction of this Court as described in Logwon. 66 I do not accept the Council's submission that the notice of motion is incompetent merely because the relief should have been claimed in fresh proceedings. Consistent with the observation of Sheller JA in Logwon at 30, although I appreciate the desirability of that course for the reasons identified in Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691 at 699, I am of the opinion that the filing of a notice of motion rather than fresh proceedings is a "procedure of convenience" and is not fatal to the application. Part 15 r 9 67 Part 15, r 9 of the Land and Environment Court Rules 1996 provides: 9 Setting aside, varying order The Court, may, on terms, set aside or vary an order in any of the following cases: (a) if the order has been made in the absence of a party, whether or not the absent party is in default of appearance or otherwise in default, and whether or not the absent party had notice of the motion for the order, (b) if notice of motion for the setting aside or variation is filed before the signing and filing of the minute of the order under rule 4, (c) if the order was obtained by fraud, (d) if the order is interlocutory, (e) if the order does not reflect the intention of the Court, ( f) if the party in whose favour the order was made consents. 68 I am satisfied that none of the sub-paras of Pt 15 r 9 are available on the facts of this case. I thus turn to the inherent jurisdiction to set aside a perfected order. The potentially relevant foundations of any such jurisdiction are to be found in the capacity of a court to ensure its procedures do not effect injustice, and the setting aside of an agreement which is void or voidable. Inherent jurisdiction 69 The jurisdiction to ensure that the court's procedures are not used to effect injustice or to enforce a void or voidable agreement must be considered in a principled context. 70 In re Newen; Carruthers v Newen [1903] 1 Ch 812 Farwell J observed that: It is said that Mr Ryley had no authority to settle the matter at all. Now it is clear from the case of Prestwich v Poley (1) that a solicitor has a general authority to compromise an action on behalf of his client. Sir Montague Smith's judgment expresses the general principle very plainly. He says (2) "The attorney is the general agent of the client in all matters which may reasonably be expected to arise for decision in the cause. Every one must reasonably expect that a cause may not be carried to its natural conclusion and that it is proper and usual, and often necessary, to compromise. The authorities seem to me to establish clearly that the attorney has power to compromise the action in a fair and reasonable manner." Chown v Parrott and Latuch v Pasherante are to the same effect. It is plain therefore that a solicitor has a general authority to compromise. 71 In Waugh and Others v H B Clifford & Sons Ltd and Another [1982] 1 Ch 374 Brightman LJ traced the history of the law with respect to the authority of solicitors and counsel to compromise proceedings. At 387 he said: The law thus became well established that the solicitor counsel retained in an action has an implied authority as between himself and his client to compromise the suit without reference to the client, provided that the compromise does not involve matter 'collateral to the action'; and ostensible authority as between himself and the opposing litigant to compromise the suit without actual proof of authority, subject to the same limitation; and that a compromise does not involve 'collateral matter' merely because it contains terms which the court could not have ordered, by way of judgment, in the action. 72 At 398, Brightman LJ continued: I think it would be regrettable if this court were to place too restrictive a limitation on the ostensible authority of solicitors to bind their clients to a compromise. I do not think we should decide that matter is "collateral" to the action unless it really involves extraneous subject matter ... So many compromises are made in court, or in counsel's chambers, in the presence of the solicitor but not the client. This is almost inevitable where a corporation is involved. It is highly undesirable that the court should place any unnecessary impediments in the way of that convenient procedure. A party on one side of the record and his solicitor ought usually to be able to rely without question on the existence of the authority of the solicitor on the other side of the record, without demanding that the seal of the corporation be affixed; or that a director should sign who can show that the articles confer the requisite power upon him; or that the solicitor's correspondence with his client be produced to prove the authority of the solicitor. Only in the exceptional case, where the compromise introduces extraneous subject matter, should the solicitor retained in the action be put to proof of his authority. Of course it is incumbent on the solicitor to make certain that he is in fact authorised by his corporate or individual client to bind his client to a compromise. In a proper case he can agree without specific reference to his client. But in the great majority of cases and certainly in all cases of magnitude, he will in practice take great care to consult his client, and I think that his client would be much aggrieved if in an important case involving large sums of money he relied on his implied authority. But that does not effect is ostensible authority vis-à-vis the opposing litigant. 73 The High Court referred to Waugh v H B Clifford & Sons in Emily Joan Harvey v Coralie Ngarita Phillips and Another (1956) 95 CLR 235, a case in which the opposing party did not rely on any apparent or implied authority of counsel to settle (see at 241). At 243 the Court refers to the capacity of a client to withdraw or limit an implied authority of counsel to settle proceedings. See also Lewis v Combell Constructions Pty Ltd (1989) 18 NSWLR 528 at 536-537 and the cases cited therein (a case where, unlike the present matter, the order had not been entered). In Harvey v Phillips, however, the client had given an actual authority to settle albeit short lived and under duress. 74 In Paino v Hofbauer (1988) 13 NSWLR 193 at 198 McHugh JA (with whom Samuels and Clarke JJA agreed) said that the residual discretion to set aside a consent order where the underlying contract could not be set aside, was one that would only be exercised in an exceptional case. See also the judgment of Clarke JA at 200-201. Conclusions 75 The findings of fact which I have made lead to the following conclusions. 76 In entering into the consent orders of 8 April 2005, the solicitor for the applicants (at the least) was acting pursuant to his implied authority to settle the proceedings that he had been retained to conduct. 77 Whatever the precise nature or extent of the applicants' lack of understanding about the means of implementing the strategy they had agreed with their solicitor, the applicants had agreed that the strategy be implemented, and did not impose any limitation on their solicitor's authority to compromise the proceedings to that end. The applicants' solicitor (at least) had implied authority to enter into the consent orders. The agreement effected by the consent orders is thus not one vitiated by any relevant circumstance. 78 The Council and its solicitor were not on notice of any limitation on the authority of the applicants' solicitor to compromise proceedings (had there been such a limitation - which there was not). The applicants' solicitor thus also had ostensible authority, vis-à-vis the Council's solicitor, to effect the settlement through the consent orders. 79 The compromise agreement reflected in the consent orders is confined to the matters in dispute between the parties, and does not extend beyond the subject matter of the retainer or the scope of the implied authority of each solicitor. The consent orders do not contain any matter collateral or extraneous to the substance of the class 2 proceedings. 80 I do not consider that refusing to set aside a consent order, executed by the solicitors for the parties pursuant to (at least) an implied authority to do so and duly entered and sealed by the Court, involves any injustice. To the contrary, as the principles discussed above disclose, injustice would be effected by setting aside the consent orders in these circumstances. 81 For these reasons, I am satisfied that, as between the applicants and the Council, the consent orders are binding in accordance with their terms. In expressing this conclusion, I make no comment relevant to the terms of order 3 in the consent orders relating to costs (where it appears that the Council and the applicants' former solicitor may have agreed that the order did not reflect the agreement reached - namely that the applicants pay the Council's costs as agreed or assessed). I consider that issue has no impact on my conclusion that the consent orders which have been entered effected a final and binding compromise of the proceedings which cannot now be set aside by the Court by reference to either Pt 15 r 9 of the Land and Environment Court Rules 1996 or to any inherent or implied jurisdiction in the Court. 82 For the reasons which I have given, the orders of the Court are:

(1) The applicants' notice of motion filed on 30 June 2005 is dismissed.

(2) The costs of the notice of motion are reserved. ****************************

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