Orders made 28 June 2002
14 Proceedings 40012/00 were dismissed by orders of the Court made on 28 June 2002. Those orders did not include any orders against the council. The orders noted an undertaking by the first respondents that they would refrain from carrying out any development in reliance upon consent No. 334/98. The orders also required the first respondents to carry out certain works including inter alia the demolition of various works namely a wall, planter box, concrete slab and effect alterations to the stormwater drainage system. Prior to the making of these orders the first respondents had already commenced demolition of the alleged unlawful structures.
Costs as between applicant and council in relation to proceedings 40012/00
15 The orders made on 28 June 2002 were not made against the council and accordingly the applicant has received no relief against the council. The Court did not determine the issues relating to the power of the council to issue the development consent and the building certificates, nor whether there was any breach of natural justice. The council did not object to the adoption of the Gleeson Report. The findings of the Gleeson Report did not impact upon the issue of reasonableness of council's decision to grant the development consent and the building certificates. Accordingly this is a circumstance which falls within the scope of the principles of Lai Qin.
16 Mr Preston SC, who appears for the council, raised various arguments refuting each of the challenges made by the applicant attempting to show that each challenge was doomed to failure. The detail of his submissions demonstrates that the issues were complex and did not lend themselves to summary resolution. Accordingly the Court cannot attempt to speculate as to the merits of each of the challenges or their likelihood of success. The Court determines that it cannot be said that either the council or the applicant was almost certain to have succeeded on any of the issues raised to the council's grant of the consent and the building certificates.
17 The Court must also consider whether the each party acted reasonably in their conduct of the proceedings. Council argues that the applicant's conduct created delays and unnecessary expense. The council points to the applicant's failure to comply with the Court's directions of 18 April 2000 concerning the preparation of affidavit evidence and points of claim.
18 The council also alleges the applicant failed to settle the substantive issues in the proceedings although he was given the opportunity to do so. Various mediations were held between the parties and all failed. The council and the first respondents maintain that the final mediation of 13 June 2002 was unsuccessful due to the applicant's steadfast refusal to accept any settlement which did not guarantee all his costs being paid. The applicant claims that he did not make any such ultimatum and that in fact he only required some of his costs be paid in any settlement that was reached. The Court heard evidence from several persons present at the mediation held on 13 June 2002 including the applicant, his secretary Ms Lynette Murphy, Mr Phillip Clay who appeared for the first respondents, Mr Peter Jackson instructing solicitor for the council and Ms Margaret Lyons of the council. The Court is satisfied that opportunities were available for the issues to be resolved. The applicant was not however prepared to entertain any settlement unless the respondents agreed to pay his cost in full as a condition precedent to mediation discussions.
19 Finally the council claims that the applicant served evidence which was voluminous although ultimately not relied upon. Council provides the example of an affidavit sworn 15 August 2000 by the applicant which contained four volumes of annexure, none of which were relied upon. Council claims it has expended significant expense in addressing such superfluous evidence. The Court cannot draw any adverse inference against the applicant in this respect, as the proceedings were discontinued and the applicant may have relied upon the affidavit if the litigation proceeded to a hearing.
20 Despite consent 334/98 having been surrendered by the first respondents the applicant continued to challenge the validity of such consent. The applicant's original application and accompanying points of claim were amended five times during the preliminary stages of the litigation. The fact that the applicant changed legal representatives during the conduct of the proceedings may explain amendments to pleadings and the failure to comply with the Court's directions. Furthermore, the substantive proceedings were settled without the need for a fully contested hearing. Although the applicant's conduct of these proceedings was inefficient the Court determines that it was not so unreasonable as to entitle the council to an order for costs.
21 Accordingly the Court determines that in proceedings 40012 of 2000 with regards to the costs as between the council and the applicant, there be no order for costs with the intention that each party should bear their own costs.
Costs as between applicant and first respondents in relation to proceedings 40012/00
22 The first respondents demolished a significant portion of the allegedly unlawful works on 22 March 2001. However, not all the works which were the subject of the challenge were demolished and these remaining works were dealt with in the consent orders made on 28 June 2002.
23 The first respondents submit that they conducted the demolition works in an attempt to avoid a contested litigation, and not as an admission of liability. However, the Court notes that the Gleeson Report prepared on 11 October 2000 found defects in the garage. The first respondents challenged the adoption of the report and were unsuccessful in their attempt to exclude it: see Gorczynski v Leichhardt Municipal Council & Ors [2001] NSWLEC 76.
24 Although these proceedings did not proceed to a final hearing on the merits, the orders made on 28 June 2002 and the adoption of the Gleeson Report have the combined effect that the applicant was successful in obtaining the orders it sought against the first respondents. Accordingly the ordinary rule that costs should follow the event will apply (see generally Oshlack v Richmond River Council (1998) 193 CLR 72). These costs will include the applicant's costs in relation to the appointment of the referee and of the Gleeson Report.