Cumberland Council v Tony Younan; Cumberland Council v Ronney Oueik; Cumberland Council v; H & M Renovations Pty Ltd - [2019] NSWLEC 67 - NSWLEC 2019 case summary — Zoe

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Cumberland Council v Tony Younan; Cumberland Council v Ronney Oueik; Cumberland Council v; H & M Renovations Pty Ltd

[2019] NSWLEC 67

Land and Environment Court (NSW)|2019-03-04|Before: Robson J

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At a glance

Source facts

Court

Land and Environment Court (NSW)

Decision date

2019-03-04

Before

Robson J

Catchwords

[2006] FCAFC 199 Cumberland Council v Tony Younan
Cumberland Council v Ronney Oueik
(1992) 43 IR 257 Latoudis v Casey (1990) 170 CLR 534
[1990] HCA 59 Lenjade Pty Ltd v Randwick City Council [2017] NSWLEC 96 Lismore City Council v Ihalainen (No 3) [2015] NSWLEC 53

Source

Original judgment source is linked above.

Catchwords

[2006] FCAFC 199 Cumberland Council v Tony YounanCumberland Council v Ronney Oueik(1992) 43 IR 257 Latoudis v Casey (1990) 170 CLR 534[1990] HCA 59 Lenjade Pty Ltd v Randwick City Council [2017] NSWLEC 96 Lismore City Council v Ihalainen (No 3) [2015] NSWLEC 53(2015) 212 LGERA 222 Liverpool City Council v Hodge [2006] NSWLEC 21(2006) 143 LGERA 261 Manly Council v Leech (No 2) [2015] NSWLEC 204 Oshlack v Richmond River Council (1998) 193 CLR 72(2009) 165 LGERA 6 R v MooreEx parte Federated Miscellaneous Workers Union of Australia (1978) 140 CLR 470[1978] HCA 51 Southon v Gordon Plath on behalf of the Department of Environment and Climate Change [2010] NSWCCA 2922018/00139360 Cumberland Council (Prosecutor) Tony Younan (Defendant)

Judgment (25 paragraphs)

[1]

Background

For concision, I adopt and do not repeat the background facts detailed and abbreviations adopted in the principal judgment. Where relevant, I also adopt the terminology 's 125(1) proceedings' to refer to proceedings 2018/00139316, 2018/00139368 and 2018/00139380 and 's 125(3A) proceedings' to refer to proceedings 2018/00139360, 2018/00139374 and 2018/00139375.
The defendants were charged with offences pursuant to s 125(1) (as it was at the material time) of the EPA Act. Each of the six charges arose from the same incident relating to the erection of a mosque in 2014 with development consent but without a construction certificate, contrary to s 81A of the EPA Act.
On 29 June 2018, Moore J ordered that two preliminary questions, including whether the proceedings were commenced in time and whether the s 125(1) Summonses were bad for duplicity, be determined by way of a preliminary hearing. Despite the fact that s 125(3A) of the EPA Act came into force after the date on which the alleged offences took place, the s 125(3A) Summonses remained on foot with the possibility that they might be re-pleaded. This was because the defendants contended that the s 125(1) Summonses were duplicitous as they charged each of the defendants with the offence as both principal and, in the alternative, as accessory. As this contention was not pressed at the primary hearing by the defendants, the s 125(3A) Summonses were dismissed by consent on the first day of the hearing.
In relation to the remaining s 125(1) Summonses, as well as determining whether the proceedings had been commenced in time under s 127(5A) of the EPA Act, I considered the issue of accessorial liability. Given my finding that the s 125(1) Summonses were not commenced in time (and that each should be dismissed), the question regarding accessorial liability became otiose. However, as this issue was the subject of detailed argument, I considered the submissions and found that had the proceedings been commenced in time, the Court would have had jurisdiction to hear the charges in relation to accessorial liability. This was so despite the fact that the commission of the alleged offences preceded the introduction of s 125(3A) of the EPA Act which provides, inter alia, that a person who aids, abets, counsels or procures another person to commit an offence under the EPA Act is liable as a principal offender.
As recorded in the principal judgment, on the second day of the primary hearing, the prosecutor conceded that "evidence of an offence" had come to the attention of an authorised officer at least by 22 March 2016, more than two years before 3 May 2018 (the date these proceedings were commenced). However, the prosecutor argued that evidence of the identity of the defendants was also required for the time limit provided by s 127(5A) of the EPA Act to commence and that as at 22 March 2016, this had not occurred.
In the principal judgment, I found that on a proper reading of s 127(5A) of the EPA Act, the evidence required to be brought to the attention of an authorised officer was evidence capable of indicating that an offence had been committed. It did not require evidence of the identity of the offender to come to the prosecutor's attention.

[2]

The power of the Court to grant costs

Section 257C(1) of the CP Act empowers the Court to order that the prosecutor pay an accused person's professional costs (defined in s 257A of the CP Act) if the matter is dismissed or withdrawn. Each of the defendants seeks an order pursuant to s 257C that the prosecutor pay their costs of the proceedings as may be determined under s 257G of the CP Act on an indemnity basis, or in the alternative on the ordinary basis. The Court's discretion to award costs to the defendants under s 257C is subject to limits in s 257D. The relevant provisions provide: 257A Definition In this Division: professional costs means costs (other than court costs) relating to professional expenses and disbursements (including witnesses' expenses) in respect of proceedings before a court. 257C When professional costs may be awarded to accused person (1) A court may at the end of proceedings under this Part order that the prosecutor pay professional costs to the registrar of the court, for payment to the accused person, if the matter is dismissed or withdrawn. (2) The amount of professional costs is to be such professional costs as the court specifies or, if the order directs, as may be determined under section 257G. (3) Without limiting the operation of subsection (1), a court may order that the prosecutor in proceedings under this Part pay professional costs if: (a) the accused person is discharged as to the offence the subject of the proceedings, or (b) the matter is dismissed because the prosecutor fails to appear, or (c) the matter is withdrawn or the proceedings are for any reason invalid. 257D Limit on award of professional costs against a prosecutor acting in a public capacity (1) Professional costs are not to be awarded in favour of an accused person in proceedings under this Part unless the court is satisfied as to one or more of the following: (a) that the investigation into the alleged offence was conducted in an unreasonable or improper manner, (b) that the proceedings were initiated without reasonable cause or in bad faith or were conducted by the prosecutor in an improper manner, (c) that the prosecutor unreasonably failed to investigate (or to investigate properly) any relevant matter of which it was aware or ought reasonably to have been aware and which suggested either that the accused person might not be guilty or that, for any other reason, the proceedings should not have been brought, (d) that, because of other exceptional circumstances relating to the conduct of the proceedings by the prosecutor, it is just and reasonable to award professional costs. … 257G Calculation of costs The professional or other costs payable by a prosecutor or accused person in accordance with an order directing that the amount of costs is to be determined under this section are to be determined: (a) by agreement between the prosecutor and accused person, or (b) if no such agreement can be reached, in accordance with the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) (with or without modifications prescribed by the regulations).
In summary, the provisions empower the Court to invoke its discretion and order the prosecutor to pay professional costs only in circumstances where the Court is satisfied as to one or more of the matters provided for in s 257D(1)(a)-(d) of the CP Act.
The above provisions and similar provisions in other enactments have been considered by courts on a number of occasions. I respectfully adopt the analysis of Biscoe J in Pittwater Council v A1 Professional Tree Recycling Pty Ltd (No 3) [2009] NSWLEC 21; (2009) 165 LGERA 6 ('A1 Professional Tree Recycling') at [15] where, having reviewed a number of authorities with particular emphasis upon Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 ('Latoudis'), Fosse v Director of Public Prosecutions [1999] NSWSC 367, Cliftleigh Haulage Pty Ltd v Byron Shire Council [2007] NSWCCA 13, Halpin v Department of Gaming and Racing [2007] NSWSC 815, Wollongong City Council v Ensile Pty Limited; Wollongong City Council v Hogarth (No 9) [2008] NSWLEC 248, JD v Director of Public Prosecutions [2000] NSWSC 1092, Council of Kangan Batman Institute of Technology and Further Education v Australian Industrial Relations Commission (2006) 156 FCR 275; [2006] FCAFC 199 ('Kangan'), R v Moore; Ex parte Federated Miscellaneous Workers Union of Australia (1978) 140 CLR 470; [1978] HCA 51 ('R v Moore') and Kanan v Australian Postal and Telecommunications Union [1992] FCA 539; (1992) 43 IR 257 ('Kanan'), his Honour provided the following summary: ... (a) the onus is upon the defendant to bring the case within one of the exceptions to the general rule laid down by s 257D(1) that professional costs are not to be awarded in favour of an accused person: Fosse at [16]; Halpin at [43]; Wollongong at [6]; (b) the finding of a prima facie case may not negate the application of s 257D in the circumstances of the case; (c) the exceptions in s 257D(1)(a) and (c) are concerned with investigations, whereas the exception in (b) is concerned with the proceedings. A prosecutor's failure to interview an eye witness when it was not known what the witness' evidence might be, could satisfy the test in (a) but not the test in (c) because of the additional requirement: Wollongong at [7] [sic [12]]. (d) as to the exception in s 257(1)(a) (that the investigation was conducted in an unreasonable or improper manner) (i) the test is purely objective. The test is not whether the investigation fell "grossly below optimum standards": JD at [29] - [30]; Wollongong at [77]…; (ii) it is unnecessary in every case for the defendant to show that an investigation conducted in a reasonable manner would have suggested that the defendant might not be guilty or that the proceedings ought not to be brought: Cliftleigh at [21]; (iii) a conclusion that the investigation was conducted in an unreasonable manner does not impugn the general competence, far less the integrity, of those responsible for the investigation: JD at [31], Wollongong at [7]. (e) as to the exception in s 257D(1)(b) (that the proceedings were initiated without reasonable cause): (i) the failure of proceedings does not, of itself, mean that the proceedings were initiated without reasonable cause: R v Moore at 473; Wollongong at [9]; (ii) proceedings will be instituted without reasonable cause if, objectively assessed on the facts or the facts apparent at the time of initiating the proceedings, they had no real prospects of success or were doomed to failure: Council of Kangan at [60]; Kanan at 6; Wollongong at [9].
The relevant provisions have been considered, and the principles repeated in Manly Council v Leech (No 2) [2015] NSWLEC 204 at [4]-[6], Wehbe v Kogarah City Council [2015] NSWLEC 170 ('Wehbe') at [11]-[16], Lismore City Council v Ihalainen (No 3) [2015] NSWLEC 53; (2015) 212 LGERA 222 ('Ihalainen') at [26], Canceri v Taylor (1994) 123 ALR 667 ('Canceri') at 676 and Beatson v R [2015] NSWCCA 17 ('Beatson') at [14].
In Wehbe, at [14], Preston CJ of LEC expanded upon the proposition in A1 Professional Tree Recycling in relation to s 257D(1)(b) of the CP Act (that the proceedings were initiated without reasonable cause) as follows (citations omitted): …In evaluating whether proceedings are initiated without reasonable cause, it is important to examine the terms of the charge as pleaded. The relevant inquiry is whether the proceedings for the offences as charged were initiated without reasonable cause.
In Ihalainen at [26], Biscoe J further expanded upon s 257D(1)(b) in the following terms (citations omitted): …The question may be answered by reference to the quality of the evidence gathered, with an eye to the enquiries made and not made.
In Canceri at 676, Moore J adopted the approach of Wilcox J in Kanan at 264 as follows: It seems to me that one way of testing whether a proceeding is instituted "without reasonable cause" is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being "without reasonable cause". But where, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks reasonable cause.
In Beatson at [14], Hoeben CJ at CL (Johnson and Davies JJ agreeing) noted: The case law on applications under the [Costs in Criminal Cases Act 1967 (NSW)] does not provide a single bright line test as to when it would be unreasonable for a prosecution to have been instituted…
I adopt the above analysis insofar as it applies to these proceedings.

[6]

Prosecutor's evidence

Mr Ferguson deposed that he was the Council officer who provided instructions for the conduct of the proceedings and that he was aware in March 2018 that the limitation period under s 127(5A) of the EPA Act may have expired. He further deposed that because of this, Council sought the advice of senior counsel which was provided on or about 5 April 2018 and that after a conference discussing senior counsel's advice on 9 April 2018, he was satisfied that it was reasonable to commence proceedings. Although preparatory work had been undertaken in relation to a possible prosecution before senior counsel's advice had been received, no decision had been made as to whether the prosecution would proceed. Council's solicitors were subsequently instructed to commence proceedings between 9 April 2018 and 18 April 2018. Mr Ferguson deposed that the "concession" (referred to at [9] above and in the principal judgment at [48]) was made by senior counsel on his instructions and that he was aware of senior counsel's advice dated 4 April 2018 "...to the effect that Council only had sufficient knowledge when a relevant investigations officer became aware of the alleged offender's involvement. This would not expire until sometime in 2019." That is, evidence of the identity of the offender was required before the time limit to bring proceedings commenced.
In cross-examination, Mr Ferguson accepted that the advice of senior counsel indicated that prior to commencing proceedings it was necessary to identify any relevant investigation officer who might have had some knowledge of the facts concerning the construction of the mosque. He also accepted that senior counsel's advice acknowledged that in the process of commencing prosecution, it was necessary to give particulars of the date on which the evidence of the offences first came to the attention of any such investigation officer. Mr Ferguson stated that he had made enquiries in relation to the identities of investigation officers and while he was aware that three persons had been identified in a letter dated 28 June 2018 in response to a request from the defendants' solicitors, he now understood that that response was wrong. He stated that the task of identifying the officers as requested by the defendants was onerous due to the "amalgamation of the councils" with "separate databases, IT difficulties and HR records". Mr Ferguson stated that the further material provided to the defendants' solicitors by letter dated 24 August 2018 was prepared on his instructions and he was aware that Mr Dawes was one of the identified officers.
The affidavit of Mr Bilias (in particular par (9)) directed the Court's attention to discrete paragraphs in three affidavits read in the primary hearing (Shariq Khan sworn 11 April 2018, Mohammed Azeem sworn 11 April 2018, and Brad Ferguson, undated but filed on 3 May 2018). By these references, Mr Bilias sought to summarise "...the evidence that each defendant had committed an offence...". He also annexed the advice of senior counsel dated 4 April 2018 which Mr Bilias deposed was sought because in March 2018, Council became aware of a letter dated 17 September 2015 (principal judgment at [22]-[24]) from a private certifier informing it that works at the site had "clearly progressed beyond the scope that was approved under the Stage One Construction Certificate…". Mr Bilias further deposed that Council, acting on senior counsel's advice, adopted the position that evidence of each element of the offence, including the identity of the offender, was required to come to the attention of an authorised officer for the time to commence proceedings to begin to run.

[7]

Submissions

Before considering the parties' submissions in relation to the elements of s 257D(1) of the CP Act, it is convenient to note the parties' principal positions.
The defendants submit that in addition to its conduct during its investigation, had the prosecutor undertaken the enquiries it ought reasonably to have conducted once the defects in its investigations had been pointed out by the defendants' solicitors (initially in a letter dated 6 June 2018), the costs associated with preparing and conducting the hearing would not have been incurred. The defendants rely upon correspondence between the parties noted at [24]-[25] above and the prosecutor's conduct as follows. 1. On 6 June 2018, after proceedings had commenced, the defendants' solicitors wrote to the prosecutor's solicitors: 1. raising concerns regarding duplicity in relation to the s 125(1) Summonses; 2. observing that s 125(3A) of the EPA Act was introduced on 31 July 2015, after the date of the alleged offences in the s 125(3A) Summonses and noting that those summonses should therefore be withdrawn or dismissed; 3. observing that the evidence served by the prosecutor, in particular the affidavit evidence of Mr Ferguson filed 3 May 2018 referenced a letter dated 17 September 2015 (referring to works progressing beyond the Stage One Construction Certificate), a meeting attended by one of the defendants, Mr Mooney and Mr Dawes on 22 March 2016, and notes thereof which recorded that unlawfully completed works had been discussed and, as such, indicated that the proceedings appeared to be time-barred; and 4. drawing attention to the requirements of s 125(5A) of the EPA Act and requesting a list of all investigation officers or authorised officers appointed by Auburn Council for the period commencing 1 January 2014 and ending 3 May 2016. 1. On 28 June 2018, the prosecutor's solicitors replied and asserted that there were (only) three investigation officers for the said period (a fact which the defendants submit was blatantly wrong); 2. On 3 July 2018, the defendants' solicitors again requested details of any other persons who had been appointed by Auburn Council as investigation officers, maintaining that the s 125(3A) Summonses should be dismissed and that the proceedings were likely to be time-barred; 3. On 12 July 2018, the prosecutor's solicitors responded and indicated inter alia, that the "task" of determining the identities of the officers who had been appointed by the "previous" Auburn Council was "onerous". 4. On 21 August 2018, the defendants' solicitors wrote to the prosecutor's solicitors again seeking similar information and nominating 28 categories of "designation"; 5. On 24 August 2018, the prosecutor's solicitors replied, identifying over 70 investigation officers including Mr Dawes who was identified for the first time as an investigation officer one business day before the commencement of the primary hearing; 6. In cross-examination at the primary hearing, Mr Dawes was shown an email sent to him on 10 March 2016 (detailed at [44] of the principal judgment) which had not been made available to the defendants' solicitors until 24 August 2018. He was unable to explain why the email had not been included in his affidavit; and 7. After Mr Dawes' evidence in cross-examination regarding the existence and receipt of the email, the prosecutor made the concession referred to at [48] of the principal judgment.
Based on the above facts, the defendants submit that they were put to significant expense because the prosecutor failed to carry out a "fundamental investigation task" both before commencing proceedings and after the defendants' solicitors had written to them on 6 June 2018 specifically identifying a meeting at Council on 22 March 2016 concerning "works completed unlawfully...". That is, Council had to identify (and converse with) its investigation officers. The defendants contend that this task was crucial for the prosecutor to be able to establish whether the proceedings could be and were brought within time.
The prosecutor submits that there were two legal arguments determined at the primary hearing, one being in relation to s 127(5A) of the EPA Act which was determined in favour of the defendants and one relating to accessorial liability which the defendants did not succeed on. Despite this, the primary position of the prosecutor is that it commenced proceedings on the advice of senior counsel which was obtained in circumstances where the prosecutor understood that there would be an argument as to whether the proceedings had been commenced within time. The prosecutor relies upon the following facts: 1. In June 2017, when Mr Ferguson became aware of a "flagrant breach of the EPA Act by the three defendants", it was appropriate to refer the matter to senior counsel for advice before the commencement of proceedings because the prosecutor knew that timing was an issue; 2. Senior counsel's advice was that the prosecutor only had sufficient knowledge for the two-year limitation period (pursuant to s 127(5A) of the EPA Act) to start running when a relevant investigation officer became aware of the defendants' identities, which on Council's instructions only occurred in 2017. On this view, although not accepted in the principal judgment, time would not expire until sometime in 2019; 3. At the primary hearing, neither party could assist the Court with any direct authority on the application of s 127(5A) of the EPA Act and accordingly, both the decision to commence proceedings and the concession made by the prosecutor were properly and reasonably made. The concession was only that Mr Dawes had evidence that an offence had been committed, being the commencement of development without a construction certificate on or by 22 March 2016 (but that he was not aware of the identities of those involved); and 4. There was a "plain public interest" based upon upholding the integrity of the planning system in New South Wales in the prosecutor seeking such advice in the circumstances.
In light of the above, the submissions made in relation to each of the subpars in s 257D(1) of the CP Act are now considered. Given that some of the parties' submissions in relation to the discrete subsections in s 257D(1) overlap, I have considered their submissions holistically and my findings are stated under the appropriate head.

[8]

(a) that the investigation into the alleged offence was conducted in an unreasonable or improper manner

The defendants rely upon the evidence of the prosecutor's conduct noted above and submit that the investigation into the s 125(1) proceedings was conducted in an unreasonable and improper manner in circumstances where investigations clearly should have been undertaken and were not. The prosecutor failed to make basic enquiries as to who its "authorised officers" or "investigation officers" were at the time of the alleged offences. Such enquiry was fundamental to the proper investigation of the time-bar issue (and thus to the jurisdiction of the Court to hear and determine the matter). That is, the prosecutor did not investigate what evidence of the alleged offences had come to the attention of any relevant officer or when. At the time the alleged offences were committed, Mr Dawes, who had not been identified by the prosecutor as an investigation officer until 24 August 2018, as well as Mr Mooney, had been working with Auburn Council for a long time. These officers must be taken to have been aware of the development consent that was granted in respect of the mosque.
The defendants further submit that the prosecutor declined to inform them who its own authorised or investigation officers were at the material time and insisted that the defendants direct the prosecutor to identify the relevant officers. Had the prosecutor done its own investigations, it would have found that the proceedings were likely to be or were time-barred.
The defendants submit that the concession made by the prosecutor only following the cross-examination of Council officers demonstrates that the prosecutor's investigation was objectively unreasonable. Further, the defendants submit that even to date it is unclear whether the alleged involvement of any of the defendants had come to the attention of any of the other 70 or so authorised officers who were (or had been) Council staff. This fact, the defendants contend, appropriately deals with Council's assertion that it was reasonable to rely upon senior counsel's advice that the identity of the defendants also needed to be known prior to commencing proceedings.
The defendants also remind the Court that as late as 28 June 2018, the prosecutor informed the defendants that the "only investigation officers" of the then Auburn Council were Glenn Francis, Monica Cologna and Karl Okorn.
The prosecutor submits that the defendants' submissions are fundamentally misconceived because s 257D(1)(a) of the CP Act relates to investigation into the alleged offences and that the defendants confuse investigations in relation to matters arising under s 127(5A) of the EPA Act, being the time limitation issue, with the investigation of the offences. The prosecutor submits that matters relating to when evidence of the offences first came to the attention of an authorised officer are not matters concerning the investigation into the alleged offences. As such, s 257D(1)(a) of the CP Act was not engaged and was not capable of being engaged.
The prosecutor submits that there was no failure in relation to the investigation of the alleged offences and that the matters which required investigation were that construction works had been commenced without a construction certificate being issued and that each of the defendants was involved in the erection of the mosque. The evidence is that Mr Ferguson conducted an investigation and determined that a building had been erected without a construction certificate being issued. Mr Ferguson determined in July 2017 that each of the defendants was involved in the relevant offences.

[9]

Consideration

The essential question is whether there was a failure to make enquiries as to who Council's authorised or investigation officers were at the time of the alleged offences and if so, whether this was sufficient to render the investigation into the offences unreasonable or improper.
I agree with the prosecutor that the investigations were not conducted unreasonably or improperly. My reasons may be shortly stated. While there may be some overlap between ss 257D(1)(a) and 257D(1)(c) of the CP Act, (a) refers to investigation into the alleged offences being conducted unreasonably or improperly whereas (c) refers to unreasonable failure to investigate any relevant matter with an additional requirement regarding the consequences of same. Unlike s 257D(1)(c), s 257D(1)(a) does not require the defendants to prove that the prosecutor's unreasonable failure to investigate or investigate properly would have suggested that the defendants might not be guilty or that the proceedings ought not to have been brought. As such, despite their submissions in this regard, I find that the defendants did not need to establish that had investigations been properly undertaken, the prosecutor ought to have realised that the proceedings were time-barred and ought not to have been brought to fall within the exception in s 257D(1)(a). Further, I note that the defendants themselves submit that no finding is necessary concerning what the prosecutor would have learned if it had interviewed each of the investigation officers (as per the defendants' reply on costs at par (24)).
Concerns in relation to the time-bar issue in s 127(5A) of the EPA Act may inform consideration of s 257D(1)(c) of the CP Act (being "any relevant matter of which [the prosecutor] was aware or ought reasonably to have been aware and which suggested either that…the proceedings should not have been brought"), but in my opinion they have little or no bearing on s 257D(1)(a).
Properly understood, the issue is whether, objectively viewed, the prosecutor's investigation into the alleged offences contained in the s 125(1) Summonses (and relevantly in this regard the s 125(3A) Summonses) was conducted in an unreasonable or improper manner. Put simply, the relevant question is: what should the prosecutor have done? It is useful to consider the prosecutor's investigation in light of the following facts from the principal judgment: 1. On 6 September 2016, after receiving a complaint from a property adjoining the site regarding the "height of the approved brick boundary fence", Mr Mooney conducted an inspection and subsequently sent an email to Mr Khan in which he advised that there was no construction certificate for the boundary fence. After a conversation with Mr Saad and a search of Council's records, he determined that no construction certificate had been issued in respect of any of the above-ground works: principal judgment at [35]; 2. On 7 September 2016, there was a second inspection of the site carried out by officers of the prosecutor and on 8 September 2016, the prosecutor issued an order to AICC, signed by Mr Mooney, requiring that the AICC "cease all building works": principal judgment at [36]; and 3. On 1 June 2017, Mr Ferguson, an officer of the prosecutor, interviewed Mr Khan. This interview was followed by other interviews, as a result of which Mr Ferguson was provided with a bundle of documents making clear the alleged involvement of each of the defendants in the works: principal judgment at [38].
On a purely objective basis and noting that the Court is not required to find that the investigation fell "grossly below optimum standards" (as per Biscoe J in A1 Professional Tree Recycling at [15]), and accepting that there could have been matters which may have resulted in an earlier determination, I am not satisfied that Council's investigation into the alleged offences was conducted in an unreasonable or improper manner. While investigations could have been more thorough in relation to determining who Council's investigation officers were at the time of the alleged offences, noting inter alia that the prosecutor overlooked a single email sent by Nasr Atie, an employee of CADPlans retained by the AICC, to Mr Dawes on 10 March 2016, in all the circumstances I do not find that the investigation was conducted unreasonably or improperly. The prosecutor sent a letter on 23 March 2016 to Mr Saad seeking an urgent response in relation to whether the works were approved (see principal judgment at [29]). Further, as stated above, the prosecutor inspected the site, determined that no construction certificate had been issued for the above-ground works after a search of its records, and conducted interviews which revealed the involvement of each of the defendants in the alleged offences (albeit out of time).
In making this finding, I do not deny that the prosecutor could have undertaken further, and indeed earlier enquiries. However, I do not need to be satisfied that if those enquiries had been undertaken, they would have suggested that the defendants might not be guilty or that the proceedings ought not be brought as this is a matter for s 257D(1)(c).
Further, I find that the concession made by the prosecutor on day two of the primary hearing is not indicative of an objectively unreasonable investigation for two reasons: first, it is clear that evidence unfolded (albeit through cross-examination of the prosecutor's witnesses) which indicated that Council had knowledge that an offence had been committed at least by 22 March 2016 but this did not detract from Council's position that the identity of the defendants needed to be known; and, second, Council acted in accordance with the advice of senior counsel which it sought because of its concern regarding the expiration of time to commence proceedings.

[10]

(b) that the proceedings were initiated without reasonable cause or in bad faith or were conducted by the prosecutor in an improper manner

The defendants discretely submit that each of the s 125(3A) proceedings were initiated without reasonable cause because they relied upon a provision which had no application to the alleged offences (that is, had no basis in law). Further, the defendants contend that the s 125(1) proceedings were initiated without reasonable cause because they were time-barred. It follows, although not specifically submitted, that the s 125(3A) proceedings were also time-barred.
In relation to the conduct of the proceedings, the defendants refer to the correspondence from their solicitors from 6 June 2018 and submit that despite the contents thereof, the prosecutor "continued in its failure to investigate the alleged offence and when evidence of that offence first came to the attention of any investigation officer". The defendants again note that the prosecutor only identified three people as investigation officers for the relevant period and relied solely upon the evidence of Mr Ferguson, thereby failing to consider and/or identify many other investigation officers who may have known about the alleged offences.
The defendants further submit that it was only consequent upon the cross-examination of Council witnesses, Messrs Khan, Ferguson, Mooney and Dawes at the primary hearing that it became clear as to when evidence of the alleged offences first came to the prosecutor's attention. The defendants submit that the prosecutor's later position (after commencement of proceedings) that evidence of the identity and involvement of the defendants needed to come to the attention of an investigation officer before the time commenced to run was without any legal foundation or authority. Further, it was only on 20 August 2018, when the prosecutor provided its submissions at the primary hearing, that the prosecutor maintained that time only commenced in June 2017 (when evidence of the identity and involvement of the defendants first came to the attention of Mr Ferguson whilst interviewing Mr Khan). The defendants contend that this indicates that the prosecutor's position "shift[ed]" during the proceedings and that it was the defendants who were left to elicit the evidence giving rise to the concession made by the prosecutor. The defendants submit that this conduct indicates that the proceedings were conducted in an improper manner.
In response to the defendants' submissions in relation to the s 125(3A) proceedings, the prosecutor accepts that s 125(3A) of the EPA Act came into force after the commission of the offences. However, the prosecutor indicates that at the first directions hearing, an appropriate concession was made to this effect and that it was only because the defendants maintained an argument as to duplicity in relation to the s 125(1) Summonses that the s 125(3A) Summonses needed to remain on foot with the possibility that they may be re-pleaded. The prosecutor contends that the effect of this conduct was that the defendants would have been on notice if they had maintained their claim regarding duplicity. The prosecutor submits that an amendment in such circumstances would not be exceptional, referring to Director of Public Prosecutions v Barnes [2010] NSWSC 1040 at [51].
The prosecutor further points to the fact that in correspondence it had offered to withdraw the s 125(3A) Summonses if the defendants accepted that the s 125(1) proceedings were not duplicitous. The prosecutor also notes that it was not until the first day of the hearing that the defendants abandoned their position in relation to duplicity. Thus, where the Court found in the principal judgment that it had jurisdiction to hear the charges relating to accessorial liability, the prosecutor submits that the "mistaken" reference in the summonses to s 125(3A) caused no relevant prejudice to the defendants and repeats that the summonses were able to be amended to delete references to s 125(3A) but still charge accessorial liability.
The prosecutor again submits that it enjoyed success in relation to the accessorial liability aspect of the case which involved submissions that were lengthy and complex.
The prosecutor submits that while the Court found that the proceedings were time-barred, this was not of itself sufficient to demonstrate that the proceedings were instituted without reasonable cause.
Further, the prosecutor submits that "without reasonable cause" relates to matters concerning the guilt or otherwise of the defendants and in this case, it suggests that the defendants were "plainly guilty".
As to the allegation that the proceedings were conducted in an improper manner, the prosecutor notes the defendants' reliance upon exchanges of correspondence in relation to the identity of Council's investigation officers and the defendants' submission that had the prosecutor become aware of the identities of all of the investigation officers earlier, it would have inevitably realised that the proceedings were time-barred. The prosecutor submits that this is "simply not correct". The prosecutor submits that the decision to prosecute was based upon the advice of senior counsel which was to the effect that because the identity of the offenders had to be known to the relevant officer, time to commence proceedings on the facts instructed did not expire until a date in 2019.

[11]

Consideration

Although the defendants made submissions regarding the prosecutor's inadequate investigations, which I have considered with respect to ss 257D(1)(a) and 257D(1)(c) of the CP Act, s 257D(1)(b) is concerned with initiation and conduct of the proceedings, not investigations (as per Biscoe J in A1 Professional Tree Recycling at [15]).
In relation to the s 125(3A) Summonses, for the reasons which I will shortly state, I find that the defendants are entitled to their costs associated with the commencement of those proceedings. It is common ground between the parties that s 125(3A) of the EPA Act came into force on 31 July 2015 which is after 2014, the date upon which the alleged offences were committed. For this reason, as I found at [9] of the principal judgment, the charges relying on s 125(3A) could not be maintained.
As I noted in the principal judgment, the s 125(3A) Summonses were "maintained" by the prosecutor as it was contended by the defendants that the s 125(1) Summonses were duplicitous (because each summons charged the respective defendant with the offence as principal and, in the alternate, as an accessory). I do not consider that this is reasonable either on the basis of the investigation of the offences or any relevant matter (as per subpars (a) and (c) of s 257D(1)). In considering whether the s 125(3A) proceedings were instituted "without reasonable cause", it is appropriate to ask whether, from the facts apparent at the time of instituting proceedings, there was no substantial prospect of success (as per Kanan at 264). Put simply, I find that there was no substantial prospect of success in proceedings based upon a section that was inoperative at the relevant time.
While I accept that the prosecutor was concerned with the contention regarding duplicity adopted by the defendants, the commencement of criminal proceedings against each defendant, even considered against the background or context of what may be considered collateral proceedings commenced under s 125(1) of the EPA Act, is significantly more than "a mistake" (either typographical or otherwise) as submitted by the prosecutor. The fact is that there was no maintainable charge as pleaded in the s 125(3A) Summonses. It is important to "examine the terms of a charge as pleaded" (as per Wehbe at [14]) in determining whether the proceedings were initiated without reasonable cause and although it was apparently accepted by the prosecutor at an early stage that there may need to be a re-pleading (presumably to delete reference to s 125(3A)), this was not done and the charges based upon a section that was not operational were maintained.
At the time of the alleged offences, s 125(3A) was not in force and could not be relied upon as a pathway to convict the defendants: Lenjade Pty Ltd v Randwick City Council [2017] NSWLEC 96 at [30], [73]. There was simply no warrant for a charge that read "an offence contrary to section 125(3A) of the Environmental Planning and Assessment Act 1979 in that [he] aided, abetted, counselled or procured the commencement of the erection of a building...", as claimed in each of the s 125(3A) Summonses. As such, I am satisfied that the s 125(3A) Summonses were initiated without reasonable cause.
Although it can be said that most, if not all of the criticism levelled at the prosecutor's conduct regarding the s 125(1) Summonses equally applies to the s 125(3A) Summonses (for example, in relation to the prosecutor's alleged failure to investigate properly and/or interrogate investigation officers), as I have found that both sets of summonses were time-barred, the essential difference is that in relation to the s 125(3A) Summonses, there was simply no charge available.
While I have found that this Court would have had jurisdiction to hear the charges in relation to accessorial liability (which were pleaded in the s 125(1) Summonses) had the proceedings been commenced in time, I do not consider the defendants' success in this respect relevant to the costs application presently before the Court.
I am not satisfied that the s 125(1) proceedings were initiated without reasonable cause. To the extent that the defendants raise concerns regarding the adequacy of Council's investigations, I repeat my consideration and findings at [40]-[46] above. While there is no "single bright line test" (as per Hoeben CJ at CL in Beatson at [14]) to determine whether proceedings were unreasonably commenced, I find that the defendants cannot successfully argue that the s 125(1) proceedings were initiated without reasonable cause because they were time-barred. In determining whether proceedings were initiated without reasonable cause, reference may be had to the "quality of the evidence gathered, with an eye to the enquiries made and not made" (as per Biscoe J in Ihalainen at [26]). I am satisfied that in seeking the advice of senior counsel when it became aware of a likely concern as to the expiration of time for the commencement of the proceedings, Council could not be said to have initiated the s 125(1) proceedings without reasonable cause.
The conduct of the prosecutor must be seen in all the circumstances. While the defendants rely significantly upon the considered concerns raised by their solicitors, primarily in the correspondence commencing on 6 June 2018, I consider it is relevant that Council had already obtained senior counsel's advice in April 2018 in relation to its concern regarding the time-bar issue.
Council marshalled evidence capable of grounding the s 125(1) charges. Despite senior counsel's expressed concern as to the correct application of s 127(5A) of the EPA Act (noting there was a risk that a court may take a different approach) and, as noted above, even accepting that the defendants criticised Council's conduct, I find that the proceedings were not initiated without reasonable cause and were not conducted in an improper manner. Moreover, it is relevant to note that the prosecutor (indeed both parties) were content for the discrete concerns raised by the defendants to be adjudicated as a preliminary question. This is not indicative of the proceedings being conducted in an improper manner.
While the prosecutor did not succeed on the time-bar issue, as noted by Gibbs J in R v Moore at 473, a party cannot be said to have commenced proceedings without reasonable cause simply because its argument proves unsuccessful. Further, in cases where success depends upon the resolution in the prosecutor's favour on one or more arguable points of law, to adopt the words of Wilcox J in Kanan at 264: "it is inappropriate to stigmatise the proceedings as being 'without reasonable cause'".
In accordance with the approach adopted in Kangan at [60] and Kanan at 6, on the facts apparent to the prosecutor at the time of instituting the s 125(1) proceedings, it could not be said, and I am not satisfied, that there was no substantial prospect of success or that the proceedings were doomed to fail.
In response to the prosecutor's submission that "without reasonable cause" concerns or raises the guilt or otherwise of the defendants, and in this case it suggests that the defendants were "plainly guilty", it is important to note that there has been no plea entered, no final hearing and therefore no finding of guilt in this matter. Despite this, I do not find that the prosecutor's submissions went so far as to "malign the defendants to avoid a compensatory costs order against it" as contended for by the defendants. While the prosecutor may have raised a strong prima facie case, I do not consider this to be of significance in relation to costs.
Finally, although the prosecutor's conduct in informing the defendants of the investigation officers' names was delayed, and indeed it was the prosecutor who had suggested that the defendants' solicitors provide a list of the designations of potential investigation officers, I do not consider this, on its own, or in the context of the overall conduct of the matter, to be compelling. The circumstances surrounding the amalgamation of Auburn, Holroyd and Parramatta councils and the consequences thereof as stated by Mr Ferguson (see [27] above) provide some context for justifying Council's position that the task of identifying the investigation officers was onerous, and possibly explains Council's delay in responding to the defendants' requests. Further, despite this delay, and the fact that I have a residual concern that the prosecutor could not, with alacrity, identify all relevant investigation officers over the relevant period, in all the circumstances, I do not consider this a determinative matter.

[12]

(c) that the prosecutor unreasonably failed to investigate (or to investigate properly) any relevant matter of which it was aware or ought reasonably to have been aware and which suggested either that the accused person might not be guilty or that, for any other reason, the proceedings should not have been brought

The defendants repeat their submissions summarised above and submit that the prosecutor unreasonably failed to investigate properly the identity of and knowledge of relevant investigation officers as to when evidence of the offences first came to their attention and that such investigations would have suggested that the proceedings should not have been brought.
In response, the prosecutor again submits that the proceedings were based upon the advice of senior counsel that the relevant date ran from 2017, when the identity of the defendants became known as a result of investigations commenced by Mr Ferguson. Despite this, the prosecutor accepts that its solicitors, by letter dated 28 June 2018, gave incorrect information in response to a request to identify the relevant investigation officers. However, the prosecutor submits that this had no bearing on the reasonableness of acting upon the advice of senior counsel because that advice was given on the basis that Council knew that the works had progressed beyond that provided for in the Stage One Construction Certificate but that the investigation officer, Mr Mooney, was aware of a second construction certificate and wrongly assumed that this covered the above-ground works and took no action (principal judgment at [26]).
The prosecutor again submits (and so conceded on the second day of the primary hearing) that later in time, being at least by 22 March 2016, "evidence of an offence" had come to the attention of Mr Dawes, an authorised officer, but he was not aware of the identity of the defendants. Thus, the investigation which the defendants say should have established those facts would not have changed the decision to prosecute because the decision to prosecute was based upon the advice of senior counsel that until the identity of the offenders was known, time did not run. In those circumstances, it was reasonable to rely on senior counsel's advice, particularly because there was no direct authority on the unusually worded limitation provision in s 127(5A) of the EPA Act.
In response to the defendants' criticism of its investigations, the prosecutor submits that by correspondence on 12 July 2018, the prosecutor's solicitors noted that the defendants did not accept the list of authorised officers previously provided. Accordingly, the prosecutor's solicitors asked the defendants' solicitors to take steps to identify the persons sought by name or designation and that the defendants provided this list on 21 August 2018. Also, on 21 August 2018, the defendants sought to inspect and copy Council's records in relation to the site between 2014 and 31 May 2016. This material was provided on Friday 24 August 2018 (prior to the primary hearing on 27 August 2018) and upon the commencement of the hearing, there was no application by the defendants for any adjournment or additional time to consider the material provided.
The prosecutor submits that all appropriate disclosures of officers and delegations were made, putting aside the timing of the production of the material. This did not amount to an unreasonable or improper investigation of the proceedings. The prosecutor further submits that the matters on which the defendants succeeded were based upon material properly disclosed by the prosecutor.
Therefore, while the prosecutor accepts that it provided incorrect information on 28 June 2018 and that this was only corrected on 24 August 2018, such conduct did not have the effect that the defendants contend. That is, even if the prosecutor had been aware at an earlier time that Mr Dawes was an investigation officer, that would not have suggested the proceedings should not be brought given the advice of senior counsel that time did not run until the identity of the offenders was known.
The prosecutor submits that the only real question which arises on this application for costs is whether, on an objective basis, the advice of senior counsel was reasonably arguable. In circumstances where there was no direct authority on the question, the prosecutor submits that it was reasonably arguable that the critical words in s 127(5A) of the EPA Act required evidence relating to the identity of the offenders as well as evidence that construction work had commenced in the absence of a construction certificate.

[13]

Consideration

To meet the threshold in s 257D(1)(c) of the CP Act, I need to be satisfied that the prosecutor failed to investigate the identity of and knowledge of relevant investigation officers in relation to when evidence of the offences first came to their attention, that such failure was unreasonable and that such investigations would have suggested that the proceedings should not have been brought. As noted above, while there may be some overlap, an essential difference between ss 257D(1)(a) and 257D(1)(c) of the CP Act is that the latter is broader in scope and pertains to an additional requirement in relation to the consequences of an unreasonable failure to investigate.
Despite the fact that the prosecutor's reliance upon the receipt of senior counsel's advice somewhat misunderstands the defendants' primary position that the unreasonable failure to investigate took place earlier, it does not necessarily follow that proceedings should not have been brought. While the identity and knowledge of relevant investigation officers may be a "relevant matter", it does not necessarily follow that such investigation would have suggested that proceedings should not have been brought. For example, although not determinative, if Mr Mooney had been identified, the prosecutor's position would not have changed as he was under the impression, albeit wrongly, that a second construction certificate had been issued which he assumed covered above-ground works.
I am not satisfied that had the enquiries suggested by the defendants been undertaken and greater detail elicited from Council officers at an earlier stage, it would have indicated to the prosecutor that proceedings should not have been brought given the prosecutor's reliance on senior counsel's advice which indicated that time to commence proceedings did not run until the identity of the defendants became known.
I do not consider the investigation into the alleged offences by Council (including what might be seen as an early oversight in 2015 when Mr Mooney on becoming aware that the building works may have progressed beyond that provided for in an early construction certificate, considered Council's records and assumed, albeit wrongly, that a construction certificate for the above-ground works had been obtained), which is not beyond some criticism, was conducted in an unreasonable manner. Even if I found that the prosecutor unreasonably failed to investigate or investigate properly any relevant matter (which I do not find), this is not determinative because it does not follow that proceedings should not have been brought in circumstances where the prosecutor sought and relied upon the advice of senior counsel in relation to the time-bar issue.

[14]

(d) that, because of other exceptional circumstances relating to the conduct of the proceedings by the prosecutor, it is just and reasonable to award professional costs

In relation to exceptional circumstances regarding the conduct of the proceedings by the prosecutor, the defendants again point to the correspondence and conduct summarised at [30] above and say that the prosecutor admitted that it failed to undertake the necessary enquiries before it commenced proceedings given that it initially identified only three investigation officers for the relevant period. The defendants submit that this was an "extraordinary admission".
In these circumstances, the defendants contend that the prosecutor was under a duty to investigate reasonably where both ss 127(5A) and 127(5B) of the EPA Act create an evidentiary presumption in favour of the prosecutor based on information that is uniquely within the prosecutor's knowledge, possession and control.
The defendants submit that the prosecutor's assertion that evidence linking each of the defendants to the offences needed to come to the attention of an investigation officer before time commenced to run was without legal foundation or authority and was not reasonably arguable on an objective basis. The defendants further submit that the adoption of this incorrect assumption had no bearing on the "fundamental delinquency" exhibited by the prosecutor in failing to interview its authorised or investigation officers. Even if the prosecutor was required to know the facts of the offences as well as the identity of the defendants, the prosecutor could not know when these things first came to the attention of an investigation officer without interviewing its officers. It appeared that no interviews were carried out as the prosecutor did not know the identity of the officers until 24 August 2018, the Friday before the primary hearing commenced.
The prosecutor submits that the advice of senior counsel contained two essential elements: first, that the proceedings would not be time-barred until "sometime in 2019"; and, second, that it was possible that the Court would hold that time began to run upon the receipt of the 17 September 2015 letter from the original certifier or the 4 May 2016 letter from the certifier who issued a second construction certificate. In these circumstances, the Court found that the concession made (and referred to in the principal judgment at [48]) had been properly made and the outstanding issue related to the construction of s 127(5A) of the EPA Act.
The prosecutor accepts that had it discerned the significance of the date of 22 March 2016 and possibly 10 March 2016, the proceedings could and undoubtedly would have been brought before those dates. Mr Ferguson became aware of the involvement of each of the defendants in July 2017. Pursuant to senior counsel's advice, proceedings could have been commenced within two years from that time. Failure to do so enabled the defendants to obtain protection in relation to offences allegedly committed in 2014 by virtue of the time limitation provided in the EPA Act. Any relevant error of the prosecutor was to the defendants' advantage.
The prosecutor submits that evidence which emerged during the primary hearing which led to the concession at [48] of the principal judgment was not easily demonstrable of an improper prosecution in circumstances where the Court found that the concession was properly made. In any event, the decisive issue, that being whether s 127(5A) of the EPA Act required identification of the offender, still required determination. The fact that this issue was resolved in favour of the defendants does not of itself entitle the defendants to costs.

[17]

Indemnity Costs

As I have found that the defendants are entitled to costs confined to the s 125(3A) proceedings, I will now consider the defendants' contention that these costs should be awarded on an indemnity basis as the prosecutor's conduct after commencement of the proceedings was "sufficiently unreasonable".
As noted above, there is dispute as to whether this Court has power to award costs on an indemnity basis. For the reasons that follow, I find that this Court does not have such power. Further, even if it did, I do not consider that the prosecutor's conduct was such that it would be appropriate in the exercise of my discretion to order that the costs awarded be determined on an indemnity basis.
The defendants contend that in considering when professional costs may be awarded to an accused person in s 257C of the CP Act, subs (2) provides that the amount is to be such professional costs as the Court specifies or, if the order directs, as may be determined under s 257G . Although set out above, for convenience, these sections provide: 257C When professional costs may be awarded to accused person (1) A court may at the end of proceedings under this Part order that the prosecutor pay professional costs to the registrar of the court, for payment to the accused person, if the matter is dismissed or withdrawn. (2) The amount of professional costs is to be such professional costs as the court specifies or, if the order directs, as may be determined under section 257G. (3) Without limiting the operation of subsection (1), a court may order that the prosecutor in proceedings under this Part pay professional costs if: (a) the accused person is discharged as to the offence the subject of the proceedings, or (b) the matter is dismissed because the prosecutor fails to appear, or (c) the matter is withdrawn or the proceedings are for any reason invalid. 257G Calculation of costs The professional or other costs payable by a prosecutor or accused person in accordance with an order directing that the amount of costs is to be determined under this section are to be determined: (a) by agreement between the prosecutor and accused person, or (b) if no such agreement can be reached, in accordance with the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) (with or without modifications prescribed by the regulations).
The defendants submit that s 257G of the CP Act empowers the Court to make an indemnity costs order and distinguishes statements to the contrary made by Bignold J in Owen v Willtara Construction Pty Ltd (unreported, 11 December 1998) ('Owen') and Liverpool City Council v Hodge [2006] NSWLEC 21; (2006) 143 LGERA 261 ('Hodge') in relation to an earlier legislative scheme.
In support of their claim that on the face of the legislative scheme, the Court is empowered to make an indemnity costs order, the defendants cite rr 42.2 and 42.5 of the Uniform Civil Procedure Rules 2005 (NSW) ('UCPR'). Those rules relevantly provide: 42.2 General rule as to assessment of costs (cf SCR Part 52A, rule 32; DCR Part 39A, rule 10; LCR Part 31A, rule 6) Unless the court orders otherwise or these rules otherwise provide, costs payable to a person under an order of the court or these rules are to be assessed on the ordinary basis. 42.5 Indemnity costs (cf SCR Part 52A, rule 37) If the court determines that costs are to be paid on an indemnity basis: … (b) in any other case, all costs (other than those that appear to have been unreasonably incurred or appear to be of an unreasonable amount) are to be allowed.
The defendants also rely on the definition of "legal costs legislation" in s 3A of the Legal Profession Uniform Law Application Act 2014 (NSW) ('LPULA Act') as follows: 3A General definitions for other legislation … legal costs legislation means: (a) Parts 6 and 7 of this Act, and (b) Schedules 1, 2 and 6 to this Act, and (c) Part 4.3 of the Legal Profession Uniform Law (NSW), and (d) regulations or rules made under or for the purposes of the provisions referred to in paragraphs (a)-(c). …
The defendants contend that s 257C of the CP Act specifically picks up s 257G of the CP Act which references "the legal costs legislation". The defendants submit that the legal costs legislation confers discretion on the Court to award indemnity costs.
The defendants further rely on s 75 of the LPULA Act (located in Pt 7 of that Act) and s 172 of the Legal Profession Uniform Law (NSW) ('LPUL') (located in Pt 4.3 of that Act) which respectively provide: 75 Conduct of costs assessments of ordered costs (1) An assessment of ordered costs must be made in accordance with: (a) the terms of the order, rule or award under which the costs are payable, and (b) the rules of the relevant court or tribunal that made the order for costs, and (c) any relevant regulations, and (d) any order made for interest on costs under section 101 of the Civil Procedure Act 2005. (2) If a court or tribunal has ordered that costs are to be assessed on an indemnity basis, the costs assessor must assess the costs on that basis, having regard to any relevant rules of the court or tribunal and any relevant regulations. 172 Legal costs must be fair and reasonable (1) A law practice must, in charging legal costs, charge costs that are no more than fair and reasonable in all the circumstances and that in particular are - (a) proportionately and reasonably incurred; and (b) proportionate and reasonable in amount. … (3) In considering whether legal costs are fair and reasonable, regard must also be had to whether the legal costs conform to any applicable requirements of this Part, the Uniform Rules and any fixed costs legislative provisions. …
The prosecutor submits that it is not open to the Court to award indemnity costs given that provisions of the UCPR do not apply to orders made under s 257G of the CP Act in the context of Class 5 proceedings. While there is an explicit power to award indemnity costs in relation to civil proceedings under s 98 of the Civil Procedure Act 2005 (NSW) ('Civil Procedure Act'), indemnity costs cannot be awarded in these proceedings absent a statutory foundation to do so. The prosecutor contends that the reasoning in Owen and Hodge continues to be applicable.
I do not find that the aforementioned statutory provisions empower this Court to award indemnity costs in these proceedings. My reasons may be shortly stated.
First, I find that s 75 of the LPULA Act does not provide for the making of a costs order, but merely relates to the assessment of costs once an order has been made. As such, it has no bearing on my decision to make an order for costs in these proceedings. Secondly, I do not see the relevance of s 172 of the LPUL. While it establishes that legal costs must be fair and reasonable, it does not appear to relate to the Court's power to award indemnity costs. Thirdly, s 257G of the CP Act does not reflect or incorporate provisions of the UCPR as the Civil Procedure Act, under which the UCPR was made, clearly states in s 3(1) that civil proceedings refers to any proceedings other than criminal proceedings. Fourthly, in any event, I consider that r 42.5 of the UCPR is not a power to award costs, but merely defines indemnity costs where a court in civil proceedings has determined that costs be paid on an indemnity basis. Further, while r 5.2(2) of the Land and Environment Court Rules 2007 (NSW) states that certain provisions of the UCPR apply, insofar as applicable, to proceedings in Class 5 of the Court's jurisdiction, the rules relied upon by the defendants (rr 42.2 and 42.5 of the UCPR) are not included in this provision. I find that on a proper reading of s 4(1) and Sch 1 of the Civil Procedure Act, s 98 has no application in relation to criminal proceedings.
In Owen, Bignold J considered this Court's power to award costs under s 52 (now repealed) of the Land and Environment Court Act 1979 (NSW) ('LEC Act') and cl 7A (now repealed) of the Land and Environment Court Regulation 1994 (NSW). In Hodge, the applicable legislative framework was ss 41 and 69 (now repealed) of the LEC Act, s 253 (now repealed) of the CP Act and Pt 16 r 5 (now repealed) of the Rules of Court inserted by the Land and Environment Court Rules (Amendment No 16) 2005 (NSW). While I accept that the legislative scheme has changed since the decisions in Owen and Hodge, I am not of the view that it is appropriate to depart from his Honour's findings in the present circumstances as no relevant change has conferred power on this Court to award indemnity costs. The fact that the provisions considered by Bignold J have largely been repealed does not thereby empower this Court to award indemnity costs.
The general rule at common law is that the Crown neither receives nor pays costs: G E Dal Pont's Law of Costs (4th ed, 2018, LexisNexis Butterworths) ('Dal Pont') at [24.2]. The prosecutor submits, and I accept, that derogation from this principle requires a statutory provision to that effect. Indemnity costs are not at large absent a clear statutory provision similar to s 98 of the Civil Procedure Act and provisions in the UCPR cannot be relied upon in these proceedings to fill this void. Accordingly, I have formed the view that this Court is not empowered to award indemnity costs in these Class 5 proceedings.
As noted above, even if I found that the Court had power to award indemnity costs, I would have found that an award for costs in respect of the s 125(3A) Summonses on an indemnity basis would not have been appropriate.
The principles in relation to the awarding of indemnity costs (albeit in relation to in civil proceedings) are well-established and are appropriately summarised in Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd (No 7) [2008] NSWSC 199 ('Ingot Capital Investments') at [24]-[26] where McDougall J considered a number of authorities including White ACT (in liquidation) v G B White [2004] NSWSC 303 at [5]-[11] and Colgate-Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 ('Colgate-Palmolive') at 256-257. However, as McDougall J pointed out, it is important to bear in mind that the principles distilled in the various authorities are guides to the exercise of the Court's discretion. They neither define the circumstances in which the Court's discretion is to be exercised, nor limit its width.
It is accepted that some "relevant delinquency" is required to award costs on an indemnity basis: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11. This requires a delinquency that bears a relevant relation to the conduct of the case, not moral delinquency or some ethical shortcoming: Ingot Capital Investments at [24]. Further, an award of indemnity costs should be compensatory and not punitive: Latoudis at 543, 563, 567 and Hamod v New South Wales [2002] FCA 424; (2002) 188 ALR 659 at [20].
In considering whether to award indemnity costs, the relevant conduct must be in connection with the litigation and not anterior to it: Dal Pont at [16.48]. In this way, different factors may be relevant to the Court's determination under s 257D of the CP Act and its determination as to whether to order indemnity costs.
The defendants rely on the unreasonable conduct of the prosecutor after commencement of the proceedings as grounds for an indemnity costs order. Although the defendants' submissions were made in relation to all the proceedings, being both the s 125(1) proceedings and the s 125(3A) proceedings, given my finding above (that the defendants are entitled to costs in relation to the s 125(3A) proceedings only), I consider their submissions in this light.
The defendants submit that if the prosecutor conducted the enquiries it ought reasonably to have conducted, particularly once the defects in their investigations had been pointed out by the defendants in the letter dated 6 June 2018, the costs involved in preparing for and running the hearing over several days would not have been incurred.
Although I have found that the conduct of Council (only in respect of the s 125(3A) Summonses) was such as to warrant an order for costs, after careful consideration, I do not consider the prosecutor's conduct to be relevantly delinquent to the extent which is otherwise required to award costs on an indemnity basis. While the Court has considered matters such as "when the justice of the case might so require" in relation to civil proceedings, I do not consider that the facts in this case warrant the exercise of the Court's discretion to award indemnity costs even if I had found that the power to make such an award was available. Despite being satisfied that the prosecutor's conduct in relation to the s 125(3A) Summonses was such as to satisfy s 257D(1) of the CP Act, I do not consider that the conduct, when considered in the context of the s 125(1) proceedings and the matters noted at [50]-[51] above, was so egregious and/or of a type as otherwise to have warranted an award of costs on an indemnity basis as considered by Sheppard J in Colgate-Palmolive at 257.

Legislation Cited (9)

Criminal Cases Act 1967(NSW)

Land and Environment Court Regulation 1994(NSW)

Criminal Procedure Act 1986(NSW)ss 257A, 257C, 257D, 257G

Civil Procedure Act 2005(NSW)ss 3, 4, 98, Sch

Environmental Planning and Assessment Act 1979(NSW)ss 81A, 125, 127

Land and Environment Court Rules 2007(NSW)r 5.2

Uniform Civil Procedure Rules 2005(NSW)rr 42.2, 42.5

Legal Profession Uniform Law Application Act 2014(NSW)

Land and Environment Court Act 1979(NSW)

Cases Cited (35)

ongong City Council v Hogarth (No 9) [2008] NSWLEC 248 Texts Cited: G E Dal Pont Law of Costs (4th ed, 2018, LexisNexis Butterworths) Category: Costs Parties: In proceedings 2018/00139316; 2018/00139360 Cumberland Council (Prosecutor) Tony Younan (Defendant)

Judgment

On 21 September 2018, I dismissed the summons in each of proceedings 2018/00139316, 2018/00139368 and 2018/00139380, having earlier dismissed the summons in each of proceedings 2018/00139360, 2018/00139374 and 2018/00139375 on 27 August 2018: Cumberland Council v Tony Younan; Cumberland Council v Ronney Oueik; Cumberland Council v H & M Renovations Pty Ltd [2018] NSWLEC 145 ('principal judgment'). In each matter I reserved the question of costs.
Each of the successful defendants, Mr Tony Younan, Mr Ronney Oueik and H & M Renovations Pty Ltd now seeks costs orders against the prosecutor, Cumberland Council, pursuant to s 257C of the Criminal Procedure Act 1986 (NSW) ('CP Act') on an indemnity basis, or in the alternative on the ordinary basis.
The prosecutor and the defendants filed written submissions and the costs hearing proceeded for one day on 4 March 2019.
For the reasons below, I find that the defendants are entitled to an award of professional costs (calculated on the ordinary basis) limited to the s 125(3A) proceedings (which were dismissed at the commencement of the primary hearing) and such costs to include 50 per cent of their costs of this costs application.

[2002] FCA 424

Cited By (1)

Secretary, Department of Planning and Environment v Goodman Property Services