Gauci Developments (Qld 1) Pty Ltd v Bundaberg City Council

[3] In the result, Gauci brought these proceedings and on 21 May 2008 his Honour Judge Griffin SC made a Directions Order, of the kind common in this Court, setting a timetable for interlocutory steps leading to a hearing. Paragraph 1 of that order required Council to provide either particularised grounds of refusal, or conditions of approval, by 6 June 2008. It did not do so. Although no material was filed on Council's behalf its solicitor Mr O'Brien appeared by telephone and explained the delay as something attributable to the merger of this Council with three other nearby local authorities, and the election which accompanied that process. He said that this has lead to staffing changes and administrative problems which meant his client had simply been unable to deal with the matter expeditiously. Mr O'Brien's submissions about these matters were supported by correspondence and emails attached to an affidavit filed by the appellant which show he has been pressing his client to comply with the directions order.

[4] Between 6 and 20 June the solicitors exchanged written messages about the time when Council might meet to consider the matter. Ultimately Mr O'Brien advised that there would be a special Council meeting on Monday 23 June when the matter would be addressed. At the hearing on 20 June the bulk of the orders made by his Honour Judge Griffin SC on 21 May were, for reasons of obvious necessity, vacated and replaced with a timetable involving later dates. Gauci seeks the costs associated with the hearing on 20 June (which followed its application in a pending proceeding filed on 18 June). The application sought those costs on an indemnity basis but the draft order provided by Gauci's solicitor Mr MacNaughton simply referred to '... costs in making this application'. I did not ultimately understand Mr MacNaughton to be pressing for costs on anything other than the standard basis. In any event, for reasons which follow, I think the latter is the appropriate course.

[5] IPA s 4.1.23(1) provides that each party to a proceeding in the court must bear the party's own costs for the proceeding. Subsection (2) provides, however, that the court may order '... costs for the proceeding ...' as it considers appropriate in certain defined circumstances. Here, the relevant circumstances include:

(e) A party has incurred costs because another party has defaulted in the court's procedural requirements

(i) An applicant, submitter, referral agency, assessment manager or local government, or coordinating agency for a master plan application does not properly discharge its responsibilities in the proceeding.

[6] In Sherringham Holdings Pty Ltd v Maroochy Shire Council [2006] QPEC 115; [2007] QPELR 217 it was suggested that the costs of an interlocutory application may not, in fact, be governed by s 4.1.23 but, rather, by the Uniform Civil Procedure Rules. No argument of that kind was ventilated before me, and it would be inappropriate to address the matter in that vein. In any event it does not appear, with respect, that the learned Judge who remarked on the matter in Sherringham was referred to other judgments touching the question[2].

[7] Certainly s 4.1.23 refers to costs '... for the proceeding' and, because IPA does not define that term it might at first blush be thought to apply, in instances like the present, only to the appeal in toto. The discretion arising under subsection (2) has, however, been construed on a number of occasions to apply to interlocutory matters including applications within proceedings[3]. That is unsurprising, for two reasons: first, some of the nine instances adumbrated in the subsection plainly refer to part, rather than the whole, of the proceeding (subsection (2)(e) is an obvious example. I do not think the particular reference to 'part' of the proceeding which appears only in subsection (2)(b) tells against this conclusion. The second reason concerns the wide nature of the discretion which subsection (2) obviously intends to give the court - as the phrase '... as it considers appropriate' plainly envisages.

[8] The question was considered in some detail in Burdekin Shire Council v Pioneer Sugar Mills Pty Ltd and The State of Queensland [2005] QPELR 13, at 15-6:

[8] The costs sought by Pioneer only relate to part of the "proceeding", ie the Crown's application. The word is not defined under IPA but, pursuant to the Planning and Environment Court Rules 1999 [footnote omitted] means "... an appeal and a proceeding started by an originating application". Neither term properly describes an application brought within a proceeding and IPA otherwise contains no provisions specifically dealing with these kinds of interlocutory applications (although the Court does have the power to give directions about a particular case: s 4.1.11(3)). Under the Acts Interpretation Act 1954, however, a "proceeding" means "... the legal action or proceeding" and that is plainly wider.

[9] As Mr Houston of Counsel for Pioneer submitted it would be an odd result, and an unattractive construction of IPA if a party obtaining leave to join a proceeding and thereby being, for example, the effective cause of the adjournment of a hearing could nevertheless avoid or limit the consequences of its actions because the costs rules would only apply to its conduct after the formal order for joinder was made. To her credit, Ms Brian of Counsel for DMR did not make that submission.

[10] There are other indicia that s 4.1.23 should not be construed in that way. Subsection 4.1.23(2)(b), refers specifically to a part of a proceeding and is plainly intended to thwart an argument of that kind, at least in respect of proceedings which are frivolous or vexatious; and the Court of Appeal in Mudie v Gainriver Pty Ltd (No 2) [2002] QCA 546; (2003) 2 Qd R 271 rejected the notion that costs were an "all or nothing" issue under the equivalent section in the preceding legislation, the Local Government (Planning and Environment) Act 1990 s 7.6(1A).

[11] In Mudie McMurdo P and Atkinson J said, at 282:

'Although the interpretation contended for by the respondents is arguably open on a literal interpretation of the words in section 7.6(1A) (A) the interpretation which achieves the purpose of the Act is to be preferred, especially where the literal interpretation produces an odd result.'

Any construction of IPA s 4.1.23(2)(a)-(i) other than one under which an award of costs for part, but not necessarily the whole, of a proceeding could be awarded would be surprising, and as their Honours went on to say at 282-3 :

'The legislature must have intended to give the courts a discretion to award costs when any party conduct the proceedings in a way that is frivolous or vexatious; it could not have intended that respondents who behave in such a way should be immune from a costs order against them. To accede to the respondent's contention would mean that a wealthy and powerful respondent could vexatiously and oppressively prolong proceedings causing the financial ruin of a worthy but less wealthy and less powerful appellant or applicant ... section 7.6(1A)(a) should (not) be interpreted as limited to instances where the conduct of the entire appeal or proceedings is vexatious or oppressive; it extends to awarding costs to reflect a party's conduct of proceedings which is in part frivolous or vexatious ...' (my emphasis)

[12] The principle ought to be applied, when necessary, in respect of the various subsections in s 4.1.23(2). All other constructions carry the risk that conduct which offends one or more of the subsections might unmeritoriously escape sanction in costs.

[9] Those technical matters aside, it is plain that the respondent did not comply with the order of 21 May 2008. It promptly defaulted in compliance with the very first order and, by the time of the application, signified it could not comply until some considerable time later. That plainly necessitated vacation of the bulk of the orders made by his Honour Judge Griffin SC and their replacement with a new, postponed timetable. On any view this is a plain default '...in the court's procedural requirements'. The only countervailing factor raised on Council's behalf is the unsurprising administrative problems which, I accept, are likely to arise and did arise from the merger of large institutions like local authorities. That said, the particular factor which supports the applicant's arguments here is Council's apparent acceptance of the timetable placed before his Honour Judge Griffin SC and the absence of any subsequent application by it to vary that timetable. These things might not have the weight they do were it not that Council has had the appellant's code assessable application for a long time - almost a year.

[10] These elements dictate the conclusion that the discretion ought be exercised in the appellant's favour. I do not think, however, that this is a case for indemnity costs. Mr O'Brien was diligent in keeping Mr MacNaughton informed about Council's plans to address the matter, albeit in a way which ignored the original directions order. That level of default falls short of the more serious misconduct usually found when indemnity costs are attracted. The order will be, then, that the respondent Council pay the costs of and incidental to the application filed by the appellant on 18 June 2008 (including the costs of the appearance on 20 June), assessed on the standard basis.

[2] Eg, Mudie v Gainriver Pty Ltd (No 2) [2002] QCA 546; (2003) 2 Qd R 271, per McMurdo P and Atkinson J at 282-3

[3] See Mun Wha Education (Masan College Australia) Pty Ltd v Gold Coast [2007] QPEC 115, and the cases cited at paragraph [10]