Farah, A and Farah, S v Warringah Council and KSSLZ#13 Pty Limited and Ward,... [2006] NSWLEC 544 | Case summary

JUDGMENT 1 Talbot J: By judgment published 26 April 2006 I made a declaration that a development consent granted by the council in respect of the property known as 723 Warringah Road, Forestville in relation to development application No. 2003/09/09 is void and of no effect and a consequential order to the effect that the second and third respondents as the applicants for development consent and the owner of the land respectively be restrained from acting on the consent. 2 The Court has formally noted an agreement between the applicants and the first respondent that each of those parties bears their own costs of the proceedings. The applicants are the owners of the property immediately adjoining the land the subject of the grant of the development consent and their property shares a common driveway and mutual rights of way with the subject property. 3 The applicants were essentially unsuccessful in respect of any issues raised by them in the original points of claim. The proceedings were commenced in September 2005. The original Class 4 application and points of claim were amended in December 2005. Further amended points of claim were served in January 2006 following orders made by Pain J on 13 January 2006. A hearing before me commenced on 3 April 2006. On the second day of the hearing, namely 4 April 2006, I granted leave for the applicants to further amend the points of claim to include the additional ground that the council failed to determine the development application with the required certainty and finality. This was the only ground upon which the applicants succeeded. 4 There is a stream of authorities supporting the proposition that a successful party who has failed on certain issues may not only be deprived of its own costs in respect of those issues but could be made the subject to an order to pay its opponents costs. (Forster v Farquhar (1893) QB 564, Cretazzi v Lombardi (1975) 13 SASR 4, Hughes v Western Australian Cricket Association Incorporated and Others (1986) ATPR 40, 748, Proprietors of SP 133318 and SP 13555 v Lavender View Regency Pty Limited and North Sydney Council (unreported No. 40015A of 1996, 6 June 1997), Lesnewski v Mosman Municipal Council & Anor (No.2) (2004) 135 LGERA 359, Willoughby City Council v Randall Pty Limited t/as Monkey Bar Car Park [2005] NSWLEC 622). 5 The second respondent has filed a notice of motion seeking an order that the applicants pay the second respondent's costs of and incidental to these proceedings apart from those costs relating to the ground on which the applicants were successful, namely, whether the development application was finally determined. In the alternative the second respondent contends that each party should bear its own costs of the proceedings. 6 The applicants contend that as there has been no disentitling conduct by them the usual rule in relation to the exercise of the Court's discretion in respect of a costs order should be followed, that the costs follow the event so that the successful party is entitled to be compensated for its costs incurred in the proceedings (Latoudis v Casey (1990) 170 CLR 534; Oshlack v Richmond River Council (1998) 193 CLR 72; Smith v Madden (1946) 73 CLR 129; Mok v The Minister for Immigration (No2) (1993) 47 FCR 81; Centro Properties Limited v Hurstville City Council & Anor [2004] NSWLEC 718; Sanders v Snell (No2)(2000) 174 ALR 53). 7 Mr Tomasetti who appeared for the second respondent at the hearing did not oppose the amendment made to the application on 4 April 2006 subject to costs. 8 In this case the separate groups of issues raised for determination were clearly discernible as being those issues raised in the original and amended points of claim as distinct from the new ground raised by the final amendments made to the points of claim on the second day of the hearing. It is significant to note in this respect that no further evidence was required and all parties agreed that the new ground could be determined on the basis of the factual circumstances already relied upon. The new issue raised only an additional argument on a question of law. I accept nevertheless that not all of the evidence adduced in respect of the original issues, prior to the amendment, was necessary to support the ground upon which the applicants ultimately succeeded. The point was a narrow one and depended upon the construction of conditions of the consent that left matters in relation to the traffic impacts of the development undetermined. In that respect it was necessary to take into account the terms of a traffic management plan generated in response to a deferred commencement condition imposed by the council. 9 The second respondent submits that the applicants were unsuccessful in relation to four out of the five key issues effectively consolidated from the expansive points of claim at [34] of the judgment as follows:- The applicants' case In summary the applicants challenge the grant of the deferred commencement consent on the basis that:- 1. The development consent was not issued in compliance with the Environmental Planning and Assessment Act 1979 as it required both the use, and the constraint of the use, of the applicants' land; 2. The council failed to properly consider the impact of traffic assessed by Mr Dowsett; 3. As the deferral of the operation of the consent until a Traffic Management Plan was prepared and submitted to the council related to an issue of fundamental importance to the development application, the council failed to determine the development application with finality; 4. Procedural fairness was denied to the applicants by the Council in its consideration of the development application in that the applicants were not afforded an opportunity to be heard on the purported fulfilment of the deferred commencement conditions; 5. The consent purports to cut down and intrude upon the applicants' dominion over their land and is repugnant to proprietary rights conferred under the Real Property Act 1901. 10 The applicants were successful only in respect of ground 3. I made the following observation at [72]:- The parties requested that I defer any questions of costs until they have an opportunity to consider these reasons for judgment. It is pertinent to observe that the only issue upon which the applicants have been successful is the one relating to a lack of finality which was not raised until Mr McEwen was addressing the Court in the course of his opening. The applicants have not established entitlement to relief on any other ground. That will be a relevant matter to be taken into account before the Court exercises its discretion to make any costs order. 11 I accept the submission by the second respondent that the cost of the proceedings were in fact increased by the complicated and convoluted pleadings amended by the applicants on a number of occasions prior the commencement of the hearing. I also agree that the issues upon which the applicants have been unsuccessful are sufficiently significant to warrant a special order (Jamal v The Department of Health and Secretary of the Department of Health and Anor (1988) 14 NSWLR 252). Notions of fairness and justice where costs have been significantly increased by the ventilating of issues in respect of which a party totally fails justify the making of a special costs order (Lavender View Regency). It should not be a difficult task to distinguish those costs solely related to the issue of finality and certainty of the consent. It was not until the second day of the hearing that the applicants formally raised and obtained leave to rely on that issue although it was foreshadowed on the first day during opening by Senior Counsel appearing for the applicants. 12 The second respondent refers to the decision by Lord Justices Balcombe, Smith and Gibson in Beoco Limited v Alfa Laval Company Limited and Anor [1994] 4 All ER 464 where they held at [466]:- In the absence of any special reasons where a plaintiff made a late amendment which substantially altered the case the defendant had to meet and without which the action would fail, the defendant was entitled to the costs of the action down to the date of the amendment. 13 Although there is an argument in support of the second respondent's submission to that effect I am not sufficiently satisfied that a formal order should be made in those terms namely that the second respondent be entitled to its costs up to the date upon which the applicants were granted leave to amend their pleadings, being 4 April 2006. The apportionment of costs may require closer examination than such an arbitrary dissection. 14 Although the applicants can successfully argue that the issues upon which they failed could not be said to be unnecessary or unfounded in the sense of being unarguable nevertheless they were afforded ongoing opportunity to raise whatever issues they considered to be appropriate right up to the time of the commencement of the hearing. If the points of claim had not been further amended on the second day to include the additional ground of lack of finality and uncertainty they would have been wholly unsuccessful. Those circumstances can be distinguished from the factual situation considered by McClellan CJ in Centro Properties Limited where the issue of the late raising of a ground was not a relevant consideration. In the present case there were no change of circumstances that occurred between the date of the commencement of the proceedings and the hearing. Nevertheless I agree that the applicants are entitled to compensation for the costs of the proceedings in relation to the issue upon which they were successful. 15 I agree that there is reluctance on the part of courts to make an arithmetic or mathematical assessment on an issue by issue basis and that it is generally preferable to adopt a broad brush approach to making costs orders, when necessary, on a proportional basis. Further, I agree with the applicants' submission that prior to the hearing preparation was done to meet the issues upon which the applicant ultimately failed but that most of the preparation and evidence at the hearing related to a chronological history of the development application as it was processed and considered by the council and its officers, much of which was relevant to the finding on finality. 16 On balance and having considered the whole of the circumstances I am prepared to make an order that the applicants pay part of the second respondent's costs. The applicants are not entitled to recover the whole of their costs against the second respondent. My ultimate decision in relation to the proportion for which the second respondent should be responsible is complicated by the agreement between the applicants and the first respondent that each of those parties bear their own costs of the proceedings and that the third respondents effectively took no part in the proceedings and entered a submitting appearance (see Cutcliffe v Lithgow City Council [2006] NSWLEC 463 Biscoe J 2 August 2006 unreported). Given that the first respondent and the second respondent actively participated in the defence of the applicants' claims it would be unreasonable for the second respondent to suffer an order that it pay the whole of any costs to which the applicant is entitled. Moreover the cause of litigation is the error of the consent authority with whom the applicants have reached an accommodation in relation to costs. 17 Noting the agreement between the applicants and the first respondent and the submitting appearance entered on behalf of the third respondents I propose to order that the second respondent pay one half of the applicants' costs of and incidental to the proceedings limited to the issue on which the applicants were successful. I also propose to make an order that the applicants pay the second respondent's costs of and incidental to the proceedings apart from those costs relating to the ground on which the applicants were successful. Where the costs are common to both set of issues it its appropriate and intended that the applicants and the second respondent pay their own costs. It is appropriate that the parties pay their own costs in relation to the hearing on costs.

Farah, A and Farah, S v Warringah Council and KSSLZ#13 Pty Limited and Ward, T and Ward, M

At a glance

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Judgment (15 paragraphs)

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Cases Cited (11)

Cited By (6)