Gales Holdings Pty Limited v Tweed Shire Council

Aldi Foods Pty Limited v Holroyd City Council [2005] NSWLEC 338; Broadwater Action Group Inc v Richmond Valley Council (No.2) (2003) 129 LGERA 401 ; CASES CITED: Gee v Port Stephens Council (2003) 131 LGERA 325; Grant v Kiama Municipal Council [2006] NSWLEC 70; Nahum v North Sydney Municipal Council (1994) 83 LGERA 200; Pancho Properties Pty Limited v Wingecarribee Shire Council [2004] NSWLEC 620

APPLICANT Mr J Johnson (barrister) SOLICITORS Woolf Associates LEGAL REPRESENTATIVES: RESPONDENT Ms S Duggan (barrister) SOLICITORS Stacks Northern Rivers

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

10263 of 2005 Gales Holdings Pty Limited v Tweed Shire Council

10264 of 2005 Gales Holdings Pty Limited v Tweed Shire Council

JUDGMENT 1 Talbot J: Earlier this year the Court determined preliminary questions in both proceedings as to whether a species impact statement was required to complete the development applications lodged by the applicant with the respondent council. In both cases the Court decided that a species impact statement was required.

2 The respondent now seeks an order that the applicant pay its costs in relation to the hearing so far, that being a hearing confined to the determination of the preliminary questions.

3 Section 69 of the Land and Environment Court Act 1979 relevantly provides:- (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, and (c) the Court may order costs to be assessed on the basis set out in Division 6 of Part 11 of the Legal Profession Act 1987 or on an indemnity basis. 4 Part 16, Rule 4 of the Land and Environment Court Rules 1996 provides that:- (1) This rule applies to the following proceedings in classes 1, 2 and 3 of the Court's jurisdiction: (a) proceedings under Sections 95A, 96, 97, 98, 109K, 121ZK, 121ZM and 149F of the Environmental Planning and Assessment Act 1979, … (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.

5 It is the respondent's primary submission that absent a species impact statement neither development application was capable of being approved. The applicant distinguishes this question from the circumstances where the determination of a preliminary issue has the prospect of raising a complete bar to the grant of development consent (Gee v Port Stephens Council (2003) 131 LGERA 325 and Nahum v North Sydney Municipal Council (1994) 83 LGERA 200).

6 It has been the practise to exercise the discretion in relation to costs in accordance with general principles where the proceedings ceases to have the character of merits review and should be seen as an ordinary piece of litigation.

7 Any suggestion raise by Lloyd J in Broadwater Action Group Inc v Richmond Valley Council (No.2) (2003) 129 LGERA 401 that Gee was not correctly decided can be distinguished. In that case His Honour took the view that the determination of whether a species impact statement is required is a question of fact (Pancho Properties Pty Limited v Wingecarribee Shire Council [2004] NSWLEC 620). In Pancho Properties, I ordered the applicant to pay the costs of the proceedings on the basis that they were finally determined and completed by the resolution of preliminary points of fact and law without consideration of the merits.

8 In the present case I propose to adopt what was said in Aldi Foods Pty Limited v Holroyd City Council [2005] NSWLEC 338 as follows: The Rules make it plain that the approach to an application for an order for costs in class 1 proceedings is fundamentally unchanged from the historical position to the extent that the underlying principle is that there will generally be no order as to costs. Accordingly, unless it is in the circumstances of the particular case otherwise fair and reasonable, the Court will approach the exercise of its discretion on the basis that parties are to remain confident they may commence or defend proceedings without the onerous threat of incurring liability for costs other than their own, even if they are not the successful party. In other words costs will not be awarded in the proceedings referred to in Part 16, rule 4 unless it is fair and reasonable to depart from the underlying assumption in the circumstances of the particular case. Reasonableness is to be determined according to the ordinary sense of the word. The award of costs has to be fair as well as reasonable. Thus not only must it be reasonable for costs to be awarded but it must also be just and equitable.

9 In Grant v Kiama Municipal Council [2006] NSWLEC 70, the Chief Judge awarded costs in favour of the council on the basis that the applicant had failed to provide information on critical matters. That is not the case at present where both parties fully examined the factual issues regarding the threat to the relevant endangered species. Experts were retained by both parties and a court appointed expert was appointed in one set of proceedings. The Court has been provided with a wide ranging set of relevant facts and expert opinions elucidated by inspections of the sites. The evidence adduced for the purposes of determining whether there was likely to be a significant effect on endangered species will assist with the ultimate determination of the development applications following receipt of the species impact statements.

10 There is no evidence that the applicant acted unreasonably. Rather, at all times it relied upon cogent and generally well researched opinions from experts. Nevertheless sufficient uncertainty remained so that the Court applied the precautionary principle and directed that a species impact statement be obtained in each case.

11 In relation to one species the requirement for a species impact statement was not pursued. I am satisfied that it was both fair and reasonable for the applicant to test the Council's contention that a species impact statement was required. A perusal of the published reasons for judgment corroborates this view. Although concerns might be expressed regarding the quantum of costs incurred in contrast to the actual costs of preparing a species impact statement that does not of itself necessarily show that the applicant acted unreasonably. The fact that the applicant had expert advice contrary to the opinion of the council's expert entitled it to test the issues of fact thereby raised.

12 Ms Duggan on behalf of the council has made a submission that the preliminary determination in both proceedings was the antithesis to an assessment on the merits. I have already indicated that I disagree with such a proposition. In a way the determination of the preliminary question was a sub-set of the merits assessment process. It is not a black and white situation. There are issues of fact and degree, judgement, discretion and balance required to determine whether a species impact statement is required. Ultimately if doubt remains then the precautionary principle applies so that the Court errs on the side of caution. These are not matters that are capable of clear and precise definition and characterisation. 13 The decision does not result in prohibition. It is the failure to act on the decision that could act as a bar to the grant of development consent. That raises a distinction between those cases where the answer to the preliminary question determines the whole appeal on a question of law. Moreover, the factual material and opinion provided to the Court for the purposes of determination of the preliminary issue are in many respects common to the ultimate determination of the appeal on merit. This is particularly so in the case concerning the potential impact upon the endangered species of frogs where the development application has been amended to meet the emerging circumstances.

14 This has been a difficult application to decide but on balance I have formed the view, having regard to the whole of the circumstances, that there should be made no order for the payment of costs. The council has not established that it is fair and reasonable to depart from the underlying assumption in Rule 4(2). I am therefore not prepared to make the orders that the council seeks.

15 The determination of an application for costs adversely to a party is not a matter which has been regarded as falling within the principle of Rule 4(2) on the basis that an application for a costs order is more akin to ordinary litigation and not part of the determination of the merits of the appeal. It is appropriate therefore that the costs in relation to the notices of motion follow the event so that the applicant as a successful party would ordinarily will be entitled to an order for its costs in the exercise of the Court's discretion. There is no exceptional or unusual circumstance that would justify the Court making an order otherwise than in accordance with the normal practice. The council will be ordered to pay the applicant's costs on the notices of motion.

1. No order as to costs in proceedings 10263 of 2005 in relation to the determination of preliminary questions.
2. No order as to costs in proceedings 10264 of 2005 in relation to the determination of preliminary questions.

3. In proceedings 10263 of 2005 Notice of Motion 27 March 2006 is dismissed.
4. In proceedings 10264 of 2005 Notice of Motion 11 May 2006 is dismissed.
5. The respondent is ordered to pay the costs of the Notices of Motion in each of those proceedings.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.