F & D Bonaccorso Pty Ltd v City of Canada Bay Council

F & D Bonaccorso Pty Ltd v City of Canada Bay Council - [2007] NSWLEC 569 - NSWLEC 2007 case summary — Zoe

[14]

JUDGMENT 1 HIS HONOUR: This is a costs application. The applicant was successful in obtaining relief going to the validity of a development consent granted in 2003 (2003 development consent) for the demolition of existing buildings and as to the status of Chapman Reserve as community land and an order for rectification of the Register under the Real Property Act 1900 to show the first respondent (council) as the registered proprietor of the lots comprising Chapman Reserve: F & D Bonaccorso Pty Ltd v City of Canada Bay City Council [2007] NSWLEC 159. 2 The applicant claims the following costs orders: (a) costs against the council for the whole of the proceedings; (b) indemnity costs against the council in relation to declaration 1 and order 1 after 27 September 2006; (c) indemnity costs against the council in relation to the preparation of evidence from 5 December 2006 and argument that Chapman Reserve was a public reserve within the meaning of the Local Government Act 1993 as at 1 July 1993; (d) costs against the second respondent ( Arinson ) of obtaining declaration 1 and order 1 up until the date a liquidator was appointed to Arinson on 8 March 2004; and (e) costs against the third and fourth respondents (jointly and severally Omaya ) of obtaining declaration 1 and order 1 from 6 July 2006 up until the date they filed a submitting appearance on 3 October 2006. 3 Council submits that the appropriate order, as between the applicant and the council, is that each party should bear its own costs of the proceedings, on the basis that this is a just result in light of the outcome of the proceedings and the conduct of the parties. Alternatively, the council submits that, if the Court considers that the applicant is entitled to a costs order to the extent that the applicant was successful, the Court should make the following orders (noting that Omaya are not liable for costs incurred after 3 October 2006 when they filed submitting appearances): (a) that the respondents pay on a party/party basis, the applicant's costs as they relate to the challenge to the validity of the 2003 development consent and Chapman Reserve, save that the applicant is not entitled to its costs incurred after 20 October 2006 relating to the challenge to the validity of the 2003 development consent; (b) that the applicant pay council's costs on a party/party basis to the extent that those costs relate to the challenge to the validity of the 2003 development consent after 20 October 2006; (c) that the applicant pay, on an indemnity basis, council's costs incurred on or after 25 August 2003 as they relate to the challenge to the validity of the development consent granted by council in 2002 ( 2002 development consent ); and (d) that the applicant pay the council's costs thrown away as a result of the late addition of the Registrar-General as a party to the proceedings. BACKGROUND 4 In order to understand the costs submissions (including the dates referred to therein), it is necessary to note the following.

[24]

It follows from the foregoing, and the primary judge acknowledged, that indemnity costs could only be awarded in the costs proceedings if there was found to be inappropriate conduct on the part of Hypec or Mr Watson in the conduct of the litigation itself. (emphasis added) 14 In Rosniak v Government Insurance Office (1997) 41 NSWLR 608 at 615 Mason P (Clarke AJA agreeing) referred to the case as one where the trial judge had held "this was a case where the plaintiff, properly advised, should have known that she had no chance of success on the [particular] issue". After referring to several authorities, Mason P said at 616: Later cases have emphasised that the discretion to depart from the usual party and party basis for costs is not confined to the situation of what Gummow J described as the ethically or morally delinquent party …Nevertheless the court requires some evidence of unreasonable conduct , albeit that it need not rise as high as vexation. This is because party and party costs remain the norm, although it is common knowledge that they provide an inadequate indemnity. (emphasis added) 15 Costs may be apportioned where there are multiple issues involved and the successful applicant fails on a particular issue or group of issues which is clearly dominant or separable. The apportionment principles are conveniently stated by the Court of Appeal in James v Surf Road Nominees Pty Ltd [No 2] [2005] NSWCA 296 at [32] - [36] (applied by the Court of Appeal in Roads and Traffic Authority (NSW) v McGregor (No 2) [2005] NSWCA 453 at [17]): 32. The effect of Pt 52A r.11 is that an unsuccessful party may be ordered to pay the entirety of the costs of the successful party, even though the successful party did not succeed on all issues. However, as is specified by the rule itself, the Court is entitled to make a different order. That may occur where there are multiple issues involved. This was the subject of comment in Waters v. P C Henderson (Aust) Pty. Limited (unreported CA(NSW) Kirby P, Mahoney and Priestley JJA, 6 July 1994) where Mahoney JA said: Where the proceedings involve multiple issues the application of the rule that costs follow the event may involve hardship where a party succeeds on some issues and yet fails on others. Particularly is this so where, for example, a defendant succeeds on issues that occupied the bulk of the time taken by the proceedings. Nevertheless, unless a particular issue or group of issues is clearly dominant or separable, it will ordinarily be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those particular issues on which it was successful and those on which it failed.

[28]

Where the court does exercise its discretion to apportion costs, the apportionment itself involves the exercise of discretion. As Gummow, French and Hill JJ recognised in Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261: Where there is a mixed outcome in proceedings, the question of apportionment is very much a matter of discretion for the trial judge. Mathematical precision is illusory and the exercise of the discretion will often depend upon matters of impression and evaluation. 16 When considering apportionment of costs, a balance has to be maintained between not discouraging litigants from canvassing all material issues and not rewarding them for unreasonable conduct in the pursuit of issues. In GPT Re Ltd v Wollongong City Council (2006) 151 LGERA 174 at 178 [9] I said: [9] The three principles enunciated by Toohey J in Hughes were cited by the Full Federal Court in Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane Industries Pty Ltd (1993) 26 IPR 261 at 271: The propositions enunciated in that case are subject to the further consideration that justice may not be served if parties are dissuaded by the risk of costs from canvassing all issues that might be material to the decision in the case: Cretazzo v Lombardi (1975) 13 SASR 4 at 12. In Trade Practices Commission v Nicholas Enterprises Pty Ltd (No 3) (1979) 42 FLR 213; 28 ALR 201, Fisher J regarded the discretion to apportion costs as one to be exercised only in the most exceptional circumstances. Nevertheless he accepted that where a considerable part of the trial is taken up in determining issues upon which a party fails, it is a proper exercise of the discretion to reduce the costs allowed to that party. Generally speaking, and notwithstanding the considerations referred to by Toohey J and the other authorities mentioned above, the demands of the community for greater economy and efficiency in the conduct of litigation may properly be reflected in a qualification of the presumption that a successful party is entitled to all its costs. 17 Similarly, in Stena Rederi Aktiebolag v Austal Ships Sales Pty Ltd [2007] FCA 1141 at [12] Tamberlin J commented that: "When apportioning costs, however, a Court should be mindful not to discourage litigants from canvassing all material issues for fear of an adverse costs order…Equally, litigants should not be rewarded for the injudicious pursuit of issues without substance". COSTS ORDERS SOUGHT BY COUNCIL AGAINST APPLICANT 18 It is convenient to address first the orders sought by the council set out earlier at [3].

[32]

25 However, there are other considerations. In the applicant's written submissions dated 25 October 2006, the first day of the hearing, after noting that the 2002 consent had been formally surrendered, the following appears: "In anticipation therefore that it will not be in dispute at the hearing that the consent to the 2002 DA is now no longer of any effect, the relevance of the challenge to that consent is now limited to the extent to which it was relied upon in the consent to the 2003 DA". This is consistent with maintaining reliance on the matters pleaded in paragraphs 116 and 117 of the applicant's pleading. Furthermore, early in his opening oral address on the same day, senior counsel for the applicant said in relation to the 2002 development consent that "it has in fact ceased to be of particular relevance, it having been surrendered some little time ago although its circumstances and the processes which it generated have some residual background significance for the present application". The applicant now relies upon that statement for the submission that it did not abandon its claim relating to the 2002 development consent and that it continued to rely upon council's errors relating to that consent in relation to the making of the 2003 development consent. The applicant draws attention to paragraphs 116 to 117 of its pleading linking the alleged invalidity of the 2003 development consent to the invalidity of the 2002 development consent. The applicant's counsel inform the Court, in their written submissions, that the applicant had intended to rely upon the evidence in respect of the 2002 development consent in its challenge to the 2003 development consent but that due to the council's late concession that the 2003 development consent was invalid, this was not necessary. 26 At the hearing the applicant continued to press other grounds of challenge to the 2003 development consent. When the applicant filed written submissions on 6 March 2007 for the resumed hearing, there was no reference to the allegations in paragraphs 116 and 117 of its pleading. The grounds of invalidity which the applicant pressed, apart from the advertising ground, were not resolved because, as stated earlier, I decided on the fourth day of the hearing that there was insufficient utility in the applicant further agitating additional grounds of invalidity. 27 In my view, it was not unreasonable for the applicant to maintain a claim of invalidity of the 2002 development consent in the context of paragraphs 116 and 117 of its pleading, notwithstanding that otherwise there would have been no utility in doing so after it had been surrendered. What happened to the claim in that context at the hearing is not crystal clear. I have concluded that although it was pressed in the applicant's written submissions of 25 October 2006, it was not pressed at the hearing. Reference to the 2002 development consent at the hearing was consistent with it being treated as only of "residual background significance", as senior counsel for the applicant put it in his opening address. Significantly, the applicant's counsel, in their submissions on this costs application, assure the Court that the applicant had intended to rely upon the evidence concerning the 2002 development consent in its challenge to the 2003 development consent, but that this was unnecessary due to council's late concession that the 2003 development consent was invalid.

[49]

Applicant's claim for costs against council for whole of proceedings 43 The applicant claims costs against the council for the whole of the proceedings. The council submits that there should be excepted from such an order the applicant's costs of obtaining an injunction against the second, third and fourth respondents to prevent works to demolish heritage items on the site. Council points to the fact that in the applicant's notice of motion seeking the injunction and in the notice of motion as amended from time to time, the applicant never sought costs against the council but only against other respondents. In oral submissions the applicant conceded this point. It seems that this was understood by council to be conceded from the outset because council in its written submissions noted that it appeared that the applicant, properly, did not seek to recover those costs from council. Accordingly, when making an order that the council pay the applicant's costs for the proceedings, I propose to make an exception in relation to the costs of obtaining the injunctions. COSTS ORDER SOUGHT BY APPLICANT AGAINST ARInSON 44 The applicant seeks an order for costs against Arinson of obtaining declaration 1 and order 1 up until the date a liquidator was appointed to Arinson on 8 March 2004. Arinson was not represented at the trial on the costs hearing. 45 Arinson filed Points of Defence to the applicant's claim as it related to the 2002 development consent in April 2003. On 1 July 2003 council granted the 2003 development consent. It was a condition of that consent that Arinson surrender the 2002 development consent which it did on 7 August 2003. The applicant claim against Arinson on the basis, as I understand it, that the Court should be satisfied that the 2002 consent was invalidly granted. In my view, it is quite inappropriate to embark on an inquiry as to the validity of the 2002 development consent on a costs application particularly when no relief in respect of that issue was pressed nor was the issue determined in the substantive proceedings. I reject this costs claim.

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Cases Cited (22)