Equitibuild Pty Limited v Leichhardt Municipal Council

Land and Environment Court (NSW)|2004-10-28|Before: Mr P, Mr J

CITATION : Equitibuild Pty Limited v Leichhardt Municipal Council [2004] NSWLEC 599 APPLICANT: PARTIES : Equitibuild Pty Limited RESPONDENT: Leichhardt Municipal Council FILE NUMBER(S) : 10770 of 2003 CORAM: Watts C at 1 KEY ISSUES: Costs :- LEGISLATION CITED: Leichhardt Local Environmental Plan 2000, (LLEP) - State Environmental Planning Policy No 1, (SEPP1) - Residential Development Control Plan, (RDCP) CASES CITED: CSA Architects Pty Limited v Woollahra Municipal Council (No. 2) [2004] NSWLEC 234 DATES OF HEARING: 28/10/2004 DATE OF JUDGMENT: 10/28/2004

APPLICANT: Mr P Clay, barrister instructed byMr J Comino, solicitor SOLICITORS: Comino Prassas LEGAL REPRESENTATIVES: RESPONDENT: Mr G A Green, solicitor SOLICITORS: Pike Pike and Fenwick

10770 of 2003 - Equitibuild Pty Limited v Leichhardt Municipal Council

JUDGMENT Background 1 This is an application for costs by the respondent, in respect of the appeal in the matter of Equitibuild Pty Limited v Leichhardt Municipal Council [2004] NSWLEC 437 which was upheld by order of the Court, at first instance, on 12 August 2004. The hearing was against the refusal by Leichhardt Municipal Council of a development application to demolish most of the existing building, except for the façade and a party wall and to erect a mixed-use commercial/ residential development comprising three (3) commercial tenancies including a restaurant and five (5) dwellings, car park and strata subdivision at Lot 2, DP 655515 and Lot 3, DP 1080, being Nos 39 and 41 Booth Street, Annandale. 2 In that case, I concluded that the appeal should be upheld and that proposal described in the Option 2 plans be approved. Option 2 which deleted the attic floor, more closely conformed to the council's controls than any other option before the Court and resulted in the proposed floor space ratio, (FSR) more closely relating to the allowable FSR. I also considered that the bulk of the proposal would thereby be more appropriate within the conservation area. In respect of that Option 2, I upheld a State Environmental Planning Policy No 1 (SEPP1) objection to the maximum FSR standard. 3 The salient issues in the case were the SEPP1 in respect of the FSR, the height, bulk, scale and streetscape character of the proposal. 4 The appeal at first instance was heard on 18 June 2004 and 4 August 2004 and the judgment was delivered on 12 August 2004 with the applicant being successful in the appeal. However, I did not accept the applicant's submission that the Option 3 plans should be approved. 5 The respondent council, by amended notice of motion dated 10 September 2004, sought an order for costs in the following terms:

The applicant pay the respondent's costs of the proceedings from 11am, 18 June 2004 including consultant's fees from that time;
The applicant pay the respondent's costs in respect of appearances before the Court on 17 June 2004; and
The applicant pays the respondent's costs of the notice of motion for costs. 6 I have concluded that there should be no order for costs of the hearing at first instance or for the costs-application. The basis for an application for costs 7 The power to award costs is found in s 69 Land & Environment Court Act 1979, which relevantly provides: 69(2) Subject to the rules and subject to any other Act: (a) costs are in the discretion of the Court; (b) the Court may determine by whom and to what extent costs are to be paid… 8 Prior to February 2004, it was the practice of the Court to award costs only where there were 'exceptional circumstances'. From that date the Land and Environment Court Rules (Amendment No 8) 2003 (the Rules) came into effect and amended the basis for costs in the Court's Class 1 jurisdiction. The relevant provision of Pt 16 Rule 4(2) now reads: (2) No order for the payment of costs will be made in proceedings to which this Rule applies unless the Court considers that the making of a costs order is, in the circumstances of the particular case, fair and reasonable.

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

Where the Commissioner or Commissioners are of the opinion that a costs order should be made, the parties shall be informed of that decision and the reasons for it and shall be given the opportunity to make submissions to the Chief Judge on the question of whether he should give concurrence to the proposed costs order. The respondent's case 10 The respondent council filed its application for costs on 5 October 2004 and the parties were content for the Commissioner to make his decision on those costs on the papers. The respondent's application for its costs was initiated at the time that it announced that it would enter into consent orders if the plans were amended in accordance with the recommendations of the Court-appointed expert, Ms M D Laidlaw. She preferred a design that closely conformed to Option 2. 11 The respondent prepared a chronology of events in the case relevant to the costs application before the Court: 4 July 2003 Class 1 application lodged with the Land and Environment Court in respect of a deemed refusal of development application D/2002/728. 21 May 2004 Development application D/2003/835 substituted in proceedings by consent of both parties, by order of Justice Pain. 21 May 2004 Registrar Dixon fixed the matter for hearing on 18 June 2004 and appointed Ms M D Laidlaw as a Court-appointed town-planning expert, by consent of both parties. 9 June 2004 Ms Laidlaw furnished her expert report to the parties and filed same with the Court. 11 June 2004 The applicant's representative advised the council that given the recommendations in Ms Laidlaw's report, that the applicant may seek to have Mr T Moody give evidence in the proceedings. 14 June 2004 The council made a without prejudice offer to the applicant to vacate the hearing date of 18 June 2004 to allow the applicant to make the amendments suggested in Ms Laidlaw's report and to return to the Court for the making of consent orders at a convenient time. 16 June 2004 The council advised the applicant's representative by letter of 16 June 2004 that the position of Mr Moody was unclear given the new regime of the Court but that it is entirely inappropriate for one party to obtain additional independent evidence based on conclusions, but for the other party not to have that opportunity. That would occur unless the hearing dates in this matter are vacated. 16 June 2004 The council filed and served Notice of Motion to vacate hearing dates, dated 16 June 2004. 17 June 2004 Notice of motion to vacate hearing dates heard before His Honour Justice Talbot. Orders made that:

The applicant file and serve amended plans by 4.30pm 17 June 2004.
Direction that the parties meet at 10.30am in the Court to discuss the amended plans.
That the matter be fixed for case management by Commissioner Watts on 18 June 2004. Mr Green of our office made an open offer to the applicant in Court that the council would enter into consent orders if the amendments proposed in Ms Laidlaw's report were incorporated in the amended plans (see affidavit by Gary Andrew Green sworn 10 September 2004). Amended plans option "1" were served by 4.30pm that day. 18 June 2004 Case management/ hearing before Commissioner Watts including view of site. Orders as follows made:
That the applicant file and serve further amended plans by no later than 4.00pm on 25 June 2004.
Than an amended SEPP No 1 objection be lodged by 25 June 2004 and that that SEPP No 1 objection should not be a precis of Mr Moody's evidence.
That Ms Laidlaw respond to the amended plans and the amended SEPP No 1 objection.
That the matter be restored to the callover list of 2 July 2004.
That it is noted that Council reserves its position on the SEPP No 1 objection and the amended plans, especially in respect to advertising of those plans.
That it is noted that the Council reserves its position in terms of costs. 30 June 2004 Amended plans option "O" were served on Council. 02 July 2004 Amended SEPP No 1 objection served on Council. 16 July 2004 Supplementary report on option "O" plans received from Ms Laidlaw. 21 July 2004 Matter fixed for hearing on 4 August 2004 before Commissioner Watts. Registrar Dixon directed that the applicant was to file a notice of motion if leave was sought for Mr Moody to give evidence in the proceedings. 2 August 2004 Amended plans Options 1, 2 and 3 served on Council at 2.40pm. 3 August 2004 The council, by letter, requested that the applicant elect on which plans it relies. 3 August 2004 The council, by letter, put the applicant on notice that it must elect which development application it seeks consent for, and in the absence of same the only plans the council would consent to were option 2 being the plans reflecting the changes sought by Ms Laidlaw. 4 August 2004 Report prepared and submitted by Ms Laidlaw in respect to Options 1, 2 and 3. 4 August 2004 Hearing before Commissioner Watts. 12 August 2004 Judgment delivered by Commissioner Watts approving Option 2.

12 The respondent claims: · That the parties agreed to a Court-appointed expert in this matter, Ms Deborah Laidlaw. Ms Laidlaw is an experienced and competent town planner whom the parties agreed to engage on the basis of their confidence in her abilities. · Ms Laidlaw prepared a report (dated June 2004) on the development application, which concluded it was capable of approval subject to a number of amendments. Those amendments were tabled in her report. · The Council, by its representatives, informed the applicant both in open Court before Justice Talbot on 17 June 2004 and Commissioner Watts on 18 June 2004 and outside of the Court that if the applicant accepted the recommendations of Ms Laidlaw and prepared plans and details consistent with those recommendations that the Council would agree to issue development consent immediately. It was made clear, both on and off the court record that if the applicant did not agree to that course of action and as a result the Council incurred further unnecessary costs, an application for costs would be made by the Council. · No clearer case could be made of an applicant being put on notice. · The costs incurred out of the unwillingness of the applicant to accept Ms Laidlaw's recommendations, which were ultimately accepted by the Court, are costs outside costs normally incurred in class 1 proceedings. We note that Commissioner Hoffman in Mullins & Mullins v Mosman Municipal Council [2004] NSWLEC 414 at paragraph 19 found that the Council in that case would be able to recover the costs of experts and attendances as a result of amended plans, as an earlier response by the applicant could have led to an earlier resolution of the dispute. We consider that the decision by Commissioner Hoffman in that matter is analogous to this matter as the delay was incurred by an unwillingness to meaningfully negotiate with the Council. The applicant's case 13 The applicant claims that the council's submission is fundamentally and fatally flawed. It also claimed that the submission of the respondent council plainly evidences a failure to understand the role of a Court-appointed expert, the nature of the exercise of the power to award costs, and indeed, some of what transpired at Court in any event. 14 The applicant also claimed that the council's submission does not purport to be comprehensive in its chronology. 15 The applicant submitted that following matters of fact are important: a. The development application had been assessed by an external consultant on behalf of the council and had been recommended by her for approval; b. The proposal was always going to breach the floor space ratio control, it was only a question of by how much and in what form; c. The Commissioner, on site, disagreed with Ms Laidlaw with her recommendation as to the setback to the lane and proposed changes were recorded at the time; d. In response to a question from the Commissioner, Ms Laidlaw accepted on site that there may be design options whereby an attic level could be acceptable; and e. On site it was generally agreed that thought should be given to an alternate design of the interface between the subject proposal and its neighbour to the north. 16 The applicant also submitted that: · At the time of the first day of hearing, therefore, on 18 June 2004, there was open disagreement with some of the evidence of Ms Laidlaw, and acceptance that some design issues needed to be explored further. It was also accepted that it was intended that the Court would in any event grant a consent, it was a question of the form of that consent. · The Applicant ultimately prepared three options for the further hearing on 4 August. Two options were expected by the Court and the Council - one reflecting the amendments arising out of the site inspection together with the remaining Laidlaw recommendations, and the other, the Applicant's preferred proposal. · The three options presented to the Court were: Option 1 - total attic with a revised interface with the building to the north; Option 2 - the amendments agreed on site plus the remaining Laidlaw recommendations; and Option 3 - an alternative attic design - with half the attic removed. · All options included the amendments discussed on site and which had been agreed at that time. · At the hearing, the applicant pressed option 3 as its preferred option rather than option 1. · It should be stressed again that option 2 was NOT a plan simply reflecting the changes recommended by Ms Laidlaw. As a matter of fact, the assertion by the Council that option 2 was plans reflecting the changes sought by Ms Laidlaw is plainly and absolutely wrong. In any event, for the reasons set out below, it matters not whether or not the plans do reflect the original submission with the Laidlaw recommendations alone.

17 The primary submission of the applicant is, that there should be no cost penalty. It submitted that if an applicant (or indeed a council) chooses to proceed to a hearing on the merits notwithstanding that that party's position differs from the opinion of a Court-appointed expert, provided that the position on the merits taken by a party is not entirely without a rational basis, no costs order should flow. 18 The applicant sought orders that the costs application should be refused and the council be ordered to pay the applicant's costs of the costs application. Findings on costs 19 Pt 16 of the Rules states that no order for the payment of costs will be made unless the Court considers that the making of a costs order is, in the circumstances of the particular case, "fair and reasonable". 20 In the particular circumstances of this case, I accept the applicant's submission that it would not be "fair and reasonable" for a costs order to be made against the applicant. 21 In coming to this conclusion, I accept the general thrust of Mr Clay's submission that: · The report of a Court-appointed expert is evidence - no more and no less. It is to assist the Court to reach its decision. · The opinion of a Court-appointed expert is an opinion, which may be accepted or rejected by the Court, in whole or in part. · Whilst the fundamental reason for the appointment of Court-appointed experts is an attempt to increase the prospect of objectivity from an expert, there remains in most, if not all cases, elements of subjectivity in planning matters, and the need to form opinions based upon relevant material. · The opinion of a Court-appointed expert is but one opinion. · Whether the Court forms the same opinion or not, is a totally separate and independent matter, and obviously a matter for the Court. · An applicant is entitled to have its case heard and determined by a Commissioner or Judge of the Court. · If an applicant were pressing a position, which was entirely "…without, a rational basis", then that may well be 'unfair and unreasonable' (cf. CSA Architects Pty Limited v Woollahra Municipal Council (No. 2) [2004] NSWLEC 234 para 13). · In this case the applicant came to the Court after lengthy negotiations with the council's officers and ultimately achieved a recommendation from them for approval. Despite that recommendation, the elected councillors refused consent. A Court-appointed expert formed an opinion contrary, to the recommendation to the elected council. · The Court assessed the evidence before it, including all that which is observed on a site inspection and concluded that the application comprising option 2 plans be approved. Despite that having elements of the council's desired outcome as evidenced by Ms Laidlaw, that is the normal exercise of a merit assessment by the Court. 22 Whilst it is normally the case that an applicant would select one option for the Court to assess, the selection of two or more options is not precluded by the Act. 23 In this case, the position put by the applicant as evinced by the various options was not entirely without a rational basis and it is reasonable for the applicant to pursue the option that it preferred. The fact that the applicant was not ultimately successful in that pursuit, I am satisfied is not a reason to award costs against the applicant. 24 In this case, I assessed the evidence, including that provided by the Court-appointed expert, that gained on the site inspection, and after considering the merit of the various alternative designs put forward by the applicant, I decided on option 2. This was after a full consideration of the application under s 79C of the Environmental Planning and Assessment Act 1979. 25 The respondent does not persuade me, that costs should be made against the applicant in this case. 26 However, I do not accept the applicant's position that the respondent is seeking to punish the applicant for failing to accept the opinion of a Court-appointed expert or that it is seeking to deny an applicant as opportunity for a hearing. I understand that the respondent is seeking to receive payment for the work done by it in assessing the various options. Conclusion 27 For the foregoing reasons, I am of the opinion that there should be no order as to costs of the hearing at first instance, against the applicant,. 28 Both parties sought costs of the costs-application. Those applications are also dismissed. 29 In accordance with cl 10 of the Land and Environment Court Practice Direction 1993, the parties are to advise the Registrar within seven (7) days whether they wish to make further submissions to the Chief Judge in relation to costs in this matter. Orders 30 My orders are:

The respondent's application for costs of the hearing at first instance is dismissed.
The respondent's application for costs of the costs-application is dismissed
The applicant's application for costs of the costs-application is also dismissed.
The papers are retained.

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