Great Lakes Council v Wilkes

Introduction 1 His Honour: The applicant seeks the court's leave to discontinue these class 4 proceedings concerning a sawmill, so the only live issue remaining for determination is costs - each side now seeks an order in its favour, and, in the alternative, the respondents submit that each party should pay its own costs. Mrs Wilkes has played no real role in the proceedings so I will refer primarily to her husband as the contradictor of the Council's case. 2 It should be noted that one order for costs has already been made in the proceedings. On the motion of the respondents, but with the consent of the applicant, Pain J, on 20 March 2009, vacated the substantive hearing set down for five days commencing 30 March 2009, but ordered the respondents to pay the applicant's "costs thrown away" as a consequence of that order, along with its costs of the motion to vacate. 3 Put shortly, the proceedings were commenced on 17 March 2008, Points of Claim and Defence were exchanged in July 2008, with a Reply filed in November 2008, and the case was set down on 28 November 2008 for hearing over five days commencing 30 March 2009. The whole matter (save for costs) then resolved, without a hearing, after Council granted a consent on 23 July 2009. 4 However, as is so often the case in matters such as this, the respondents' substantive dispute with the applicant Council had some history, potentially as relevant to the determination of the question of costs as the chronology of the proceedings themselves. 5 As also often occurs when the substantive proceedings fall away and the question of costs becomes the contest, the court must tread a difficult path between broad assessment of the evidence and arguments advanced on each side, and conducting a hypothetical trial on the merits, a course prohibited by authorities such as the High Court's decision in Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin ("Lai Qin") (1997) 186 CLR 622, at 624, endorsing Australian Securities Commission v Aust-Home Investments Limited and Others (1993) 44 FCR 194, at 201. 6 At the costs hearing on 23 November 2009 the Council and the respondents relied on many of the affidavits and documentary evidence filed in the substantive proceedings. Both sides produced detailed chronologies supported by bundles of voluminous correspondence. There were several affidavits from the key Council officer and one each from eight other witnesses in its case. Council also tendered seven exhibits. The respondents read all six affidavits sworn by Mr Wilkes, and relied on one each from their six other witnesses. Oral submissions ran for an extended hearing day. Relevant History 7 Eric Wilkes was born in 1947 or 1948, and he and his wife (the two respondents) own and reside on a rural property of some 85.33ha located within the applicant council's area at 58 Possum Pie Road, Wootton (Lots 120 and 121 DP 43048). They obtained title to that property on 4 November 1996, Eric's father, William, having died in September 1996. William had purchased the subject land from Leonard Latham on 9 January 1964. Latham had bought it from Samuel Squires on 29 August 1950. Council approved a dairy on the land on 24 February 1954, but later use was more for grazing. As part of William's estate it was valued at $240,000. 8 In May 2005, the Council received a complaint about noise associated with the respondents' sawmilling activities on the land. (The Wilkeses assert that the complaint was made by a "cranky neighbour", or "a person with a personal grievance" against at least Mr Wilkes). Council's investigation commenced with an inspection by a senior and experienced regulatory officer, Mr Greg Pevitt, on 18 May 2005. As there was no record of a relevant development application ('DA'), Mr Pevitt directed, in a letter dated 31 May 2005, that all logging and milling activities on the land "cease immediately", otherwise proceedings would be commenced. 9 It is common ground that the sawmill use is permissible with Council's consent. On 13 June 2005, Wilkes sought Pevitt's permission to "complete orders" on hand before obeying the direction to cease. He foreshadowed submitting a DA. His request was refused by Pevitt on 20 June 2005, but it appears he ceased milling for a time anyway (possibly for about eleven months). 10 On 10 November 2005, Council issued a penalty infringement notice ('PIN') to Wilkes for using his land for sawmilling without consent. Wilkes apparently signed a "court election" and retained solicitors, Peter Evans & Associates ('Evans'), who wrote to Council on 30 January 2006 (1) asserting that Wilkes had continuing/existing use rights (Environmental Planning and Assessment Act 1997 ('EPA Act') s 107 and/or s 109), (2) denying any "intensification" of the use, and (3) requesting withdrawal of the PIN and confirmation that no development consent ('DC') would be required. Attached to the letter was a statement dated 16 January 2006 (Exhibit C1, fol 5A) from former neighbour, Trevor Squires, saying: " Growing up in Wootton in the 50's and 60's like most small communities, we all knew the value of working together. As children we often found ourselves helping our neighbours. When the Wilkes family came to Wootton on Possum Pie road, they needed timber for yards and so did Dad, so he taught Eric and I how to cut timber on an old mill that had been beside the barn on the Wilkes property for as long as I can remember. As a boy I recall Grandfather Squires and Uncles yarning about pulling logs into this mill with their bullock teams. Even when dairy farming was a large part of Wootton's productivity, the timber industry was always its backbone, because it is one of Australia's fastest natural timber growing areas. It is beyond my imagination why anyone would want to stop Eric milling, as it is such an asset to the community". 11 On 10 February 2006, Council's solicitors (Stacks Forster) disputed existing use rights and confirmed their instructions to "continue with prosecution of this matter" by Court Attendance Notice. On 13 February 2006, Evans asked Stacks for historical information regarding the planning regime, and DAs and DCs in respect of the Wilkes land. Some historical information was provided on 1 March 2006, and it would appear that the relevant date for "existing use" purposes would be 18 January 1963, when IDO No.1 came into force, or 15 May 1964 when IDO No.2 did. (The Applicant's Reply, dated 26 November 2008, nominated the later date, and, before me, the parties appear to have agreed upon it). 12 On 4 March 2006 (Exhibit C1, fol 11), Council's solicitors sought undertakings by Wilkes to cease logging and milling, and not to resume without consent. Court action would be deferred if a DA were lodged, but it was suggested that it would be in this court, not the local court (a penalty of $1.1M is noted). 13 On 28 March 2006, Evans again wrote to Stacks (1) asserting continuous use, no abandonment, and no change in location, (2) referring to on-site features in support of that assertion, (3) expressing concern about costly conditions that Council might impose on any DC, and (4) suggesting a "pre-DA"-type meeting to explore agreement on the terms of any consent. The respondents intended to resume milling, but an undertaking was offered to restrict hours of operation to minimise noise. 14 There was no response until 10 January 2007, when Council's solicitors wrote to the respondents' solicitors (1) rejecting any claim for existing use rights, (2) noting that the use continued, (3) threatening these class 4 proceedings, and (4) seeking confirmation of instructions to accept service. Evans responded next day, confirming they would accept service, repeating and seeking a response to the proposals made on 26 March 2006, and proposing also a mediation. 15 On 24 January 2007, Stacks declined to consider the respondents' "proposal" until the "illegal operation" of the sawmill ceased, pending the Wilkes' obtaining the necessary consent. Evans replied the same day pointing out that cessation "would be a giving up of the existing user rights", and seeking negotiations, on the basis of a temporary cessation of milling. 16 On 30 March 2007, Stacks replied, reiterating Council's non-acceptance of existing use rights, but giving the respondents till 30 April to demonstrate them with a documentary history, and requiring a temporary cessation for that period. The letter required payment of Council's legal costs ($10,102), but offered an undertaking not to enforce the PIN. Council was also prepared to participate in a mediation to avoid proceedings in this court, and the letter invited the nomination of a mediator. 17 Evans then took steps to arrange a mediation under the auspices of the Community Justice Centre ('CJC'). The Centre's Regional Co-ordinator wrote to the applicant on 17 April 2007 inviting a response (see Exhibit C1, fols 72-77). 18 On 28 April 2007, the respondents circulated to all Great Lakes Councillors a "without prejudice memo" in which they refuted all complaints and noted that Council's water tests did not reveal any pollution from milling activities. They sought to avoid further unnecessary legal expense, but received no responses. 19 On 8 and 10 May 2007, Mr Wilkes telephoned the CJC and "unilaterally withdrew" from the mediation. The Council's solicitors found out about this only when they called the CJC on 25 May 2007. 20 In June 2007 the Council changed to its present solicitors (Mallik Rees Lawyers), who wrote to the respondents' solicitors on 4 July 2007, confirming that they had instructions to commence proceedings, but giving the respondents 14 days to make a full disclosure of "all the facts, circumstances and evidence" said to support the alleged existing use rights. 21 The respondents also changed solicitors at about that time, and those new solicitors (Moray and Agnew) sought an extension of the 14 days period by a further 21 days, to which Council's solicitors agreed by letter on 12 July 2007, in which letter they sought an arrangement for the payment of their costs. 22 Moray and Agnew wrote to Mallik Rees on 27 July 2007 offering that Mr Wilkes would retire from his sawmilling business, without any admission that he ever used his land unlawfully. "He maintains that the sawmilling operation has been lawfully and continuously carried out on his land since the 1960s and earlier". He would keep his equipment for occasional use "as part of his farming operations" only. It was submitted that the respondents should not be responsible for Council's costs. 23 On 6 August 2007, the respondents' solicitors advised the Council's that the NSW Department of Lands, Rural Affairs, and Regional Development was to investigate possible intervention "in this matter". The 27 July retirement proposal was withdrawn, pending that possible intervention. 24 On 7 August 2007, Mallik Rees confirmed that these class 4 proceedings would be commenced. The respondents reverted to their original solicitors at about this time, and Evans wrote on 8 August 2007, contending that commencing proceedings would be "precipitate", and asking that Council properly consider the information the respondents had earlier provided regarding existing use rights, rather than threatening the respondents with injunctive relief. 25 On 10 August 2007, Council's solicitors confirmed (1) their earlier offer that the respondents put before Council all the material upon which it relied to assert existing use rights, (2) that such material had not yet been provided, and (3) that the respondents had withdrawn from the agreed mediation. The letter alleged that the respondents were procrastinating, and confirmed Council's instructions to commence these proceedings, but not to seek ex parte relief. A copy of a letter to the Department's Minister (Hon A. Kelly MLC) was enclosed. The letter added that Council "does not intend to proceed with the prosecution foreshadowed previously in respect of the PIN …". 26 On 5 September 2007, the respondents' solicitors provided 15 witness statements (see now Exhibit C1, after fol 37), of which, the respondents admit, only four dealt with the use of the land for milling at a relevant time (ie prior to around 1964). The other 11 are in the nature of character references in support of Mr Wilkes, referring especially to his lifetime working "in the timber industry". 27 On 26 October 2007, the Council's solicitors indicated that Council was "not satisfied" of the existence of any existing use rights, and that proceedings would be commenced within seven days. 28 In fact, no proceedings were commenced until these were filed on 17 March 2008. The conduct of the proceedings 29 At their first return date on 11 April 2008, Jagot J noted on the file "alleged unlawful use - existing use rights issue likely". 30 On 16 September 2008, after points of claim and defence had been exchanged in May-July 2008, and the respondents' affidavit evidence had been served on 28 August 2008, Evans wrote to Mallik Rees offering (1) to permit Council to discontinue the proceedings on the basis that it acknowledge an existing use entitlement and pay 25% of the respondents' costs, and (2) to restrict sawbench use to 7am-4pm Monday-Friday only. 31 On 26 November 2008, the Council's solicitors indicated in writing (Exhibit C1, fols 40-41) that they would rely upon eight affidavits which had been filed and served, and on evidence to be given by three other witnesses on subpoena - Bon McArthur, Linda Gill, and Gregory Gill. A copy of a Record of Interview with McArthur was enclosed - he would testify that Wilkes' father was a dairy farmer who did not use the land for the purposes of a sawmill. The Gills would testify that the sawmill use commenced about 1999. The respondents were invited to reconsider defending the claim in the light of this evidence. Served with the letter was the Reply, which asserted that the respondents had not established continuance of use within the terms of s 109(1), and that Council would rely upon s 109(2). The respondents were invited to amend their defence to drop reliance on s 107(1). 32 On 28 November 2008, the matter was set down for a five-day hearing, to commence on 30 March 2009. It had been before the List Judge for directions on 11 April 2008, 4 July 2008, 15 August 2008, 19 September 2008, 30 October 2008, 31 October 2008, and 28 November 2008. 33 On 16 January 2009, Evans wrote to Mallik Rees, asserting that Council could not contradict the respondents' evidence regarding the "Marshall saw", one of several (perhaps as many as five) saws mentioned in the evidence, and offering Council the opportunity to withdraw the proceedings and pay 75% of the respondents' costs. The offer was to remain open for 14 days. On 28 January 2009, a counter offer was made - that the respondents consent to orders as sought and pay 75% of Council's costs on a party-party basis. 34 Meanwhile, a DA seeking approval for the contentious operations conducted by the respondents had been lodged with Council on 19 January 2009, expressly "without prejudice to the assertion … of an existing use right", dating back "before 1963 and which is currently the subject of proceedings before the L&E Court" (Exhibit C1, fol 43). 35 Correspondence continued between the solicitors regarding the scheduled 30 March hearing. On 28 January 2009, Council's solicitors offered to settle the matter on the basis that the respondents would consent to orders and pay 75% of Council's costs. 36 Mallik Rees appears to have learned of the respondents' DA only just before 9 February 2009, and wrote to Evans to enquire about the respondents' intentions regarding the hearing of the proceedings. Correspondence continued between the parties, as did the Council's preparation for hearing. 37 Evans proposed, on 26 and 27 February 2009, a neutral evaluation of "the likely outcome of the proceedings", but Mallik Rees was not prepared to recommend such a course to Council. By 2 March Council had decided that "it does not see any worthwhile purpose being served" by it. 38 On 9 March 2009 the respondents' solicitors forwarded drafts of (1) a further affidavit from Mr Wilkes, and (2) Amended Points of Defence. 39 On 12 March 2009, Evans notified Mallik Rees that the Notice of Motion to vacate was being filed. (It was filed on 13 March 2009). 40 On 20 March 2009, Pain J heard the Notice of Motion. It was not opposed by the applicant Council, and the hearing dates were vacated by Her Honour. As already noted, the respondents were ordered to pay the applicant Council's "costs thrown away", as occasioned by that vacation. 41 Consent was granted by Council, on a deferred commencement basis, on 23 June 2009, the condition precedent being that the respondents surrender any claimed existing use rights in respect of the subject land. 42 After the DC, Evans wrote to Mallik Rees on 25 June 2009 advising that the respondents were "prepared to take up the consent and surrender their existing use rights on the basis that each party pay their (sic) own costs of the proceedings". Council was put on notice that, if it made an application for costs, the respondents would do so too. On 26 June 2009, the applicant's counsel asked me as List Judge, to stand the matter over while the parties negotiated. 43 Evans' arguments in support of the respondents' position on costs were set out in Evans' lengthy letter to Mallik Rees of 29 June 2009, repeating the 25 June "each pay own" offer (Exhibit C1, fols 61-64). Evans noted that the respondents' costs to that date as "in the order of $65,000". 44 On 10 July 2009, Mallik Rees offered to conclude the matter on the basis: (a) respondents surrender any purported existing use rights in accordance with the consent; (b) respondents pay 85% of Council's costs as agreed or assessed; (c) On agreement to (b), Council discontinue. 45 On 13 July 2009, Mallik Rees declined to conclude their case on costs in response to that put by Evans on 29 June 2009. They estimated their costs (including those "thrown away", already ordered - see [2] and [40] above) at $133,000. 46 On 17 July 2009, I, as List Judge, stood the matter over again, until 24 July 2009. 47 On 21 July 2009, Mallik Rees wrote to Evans in these terms (Exhibit C1, fol 68): " We confirm that notice of surrender will be treated as given without prejudice to your client's argument as to the costs in the Class 4 proceedings and to that end - namely for the purposes of any argument on costs in those proceedings - the notice will be treated as without prejudice to your client's contention that, but for the notice, he would continue to enjoy continuing use rights as pleaded in the proceedings. However, it should be clearly understood that the surrender will operate as an unconditional surrender from the date of its acceptance by the Council and that any claim that your client may have in relation to continuing use rights (which claim is disputed by the council) will be extinguished on that date." 48 On 22 July, the "surrender" of rights was notified, and, on 12 August 2009, Council confirmed that the DC would operate from 3 August 2009. 49 The possibility of the court determining costs "on the papers" was canvassed by Evans in his letter of 23 July 2009. It had been put to me in open court on 17 July 2009, and again on 24 July 2009, when I made the following direction: " On 2 October 2009 each of the parties is to notify the Court whether the party consents to the costs application being determined on the papers or whether the party requires the application to be determined by hearing. If either party requires the application to be determined by hearing, the matter is to be listed before the Registrar on 6 October 2009 to fix a date ." 50 Evans also reiterated the respondents' "each party pay its own" offer on 24 July 2009, to remain open until 17 August. 51 On 3 August 2009, the respondents having satisfied the deferred commencement condition, the consent was taken up. 52 On 6 October, counsel for both parties told the Acting Assistant Registrar that the applicant required that the costs issue be heard, and she listed it for hearing on 23 November 2009. She noted that Mr Wilkes would be required for cross-examination. 53 On 30 October 2009, subpoena disputes were also stood over to that hearing. The Competing Cases on Costs 54 Before me Council accepted that the respondents had "an arguable case" on their continuing use point, but submitted that it also had a strong case against it, certainly in respect of intensification of any such use, and possibly in respect also of abandonment. Council drew attention to the fact that of the 15 witnesses whose statements the respondents submitted on 5 September 2007, only very few provided affidavits. 55 Council had put the respondents on notice in May 2005 that it considered their operation was unlawful and should be regularised by the usual DA/DC process, and complained (1) that the respondents unreasonably delayed pursuing that process until just before the appointed hearing of the enforcement proceedings, and (2) that they provided inadequate particulars of their claim (Exhibit C5), especially in respect of the area of the subject land so used prior to the commencement date of the relevant planning instrument (either 18 January 1963 or 15 May 1964 - see [11] above). 56 On 28 November 2008, Council's solicitors detailed the evidence upon which Council would rely. Council intended to rely upon expert aerial photogrammetric evidence (from Bernie Moriarty) concerning depictions of the subject land between 1953 and 2006, which evidence, Council says, clearly shows no working sawmill until at least 1997, when Wilkes acquired a licence from the Joneses, and a significant increase in activity by 2001. The respondents' claim appears to have been put in respect of an area of 500m2, but the applicant produced some evidence which supported sawmilling occupying some 3300m2 by 2006. 57 Council argues that its eyewitness evidence shows that Mr Wilkes' father used the land only as a dairy until the respondents commenced milling in the late 1990s, and continuously expanded that operation until the investigation brought about a cessation from mid 2006 till early 2007. It had evidence (1) that William Wilkes declared in a rating document in 1993 that his land was being used only for "grazing", with no other "purposes" indicated (despite the opportunity on the form to "tick" the "milling" box, or some such); (2) that Eric Wilkes was paid a special redundancy package under a forestry industry restructuring scheme in 1997, on the basis that he submitted that his only future income would be derived from agisting cattle on the subject land (Mrs Wilkes having a separate income from nursing work at the time); and (3) that Eric Wilkes did not, until 1997, obtain a sawmill operator's licence (apparently required by law since 1916). 58 Council says that it tried from May 2005 to have the respondents seek DC, and that it persisted in negotiating with them for almost three years before commencing these proceedings (in March 2008), and thereafter until January 2009, when the respondents submitted their DA. That DA and Council's decision to grant DC mean that the Council was "successful" in the proceedings, either because the respondents effectively "surrendered", or the consent was a "supervening event" which rendered pursuit of the action otiose. Kiama Council v Grant ("Kiama") (2006) 143 LGERA 441, at [80]. 59 On the other hand, the respondents argue that, despite loss of documentary evidence in a fire and the subsequent clean-up, they could prove: (1) that timber was milled and sold on the subject land from the time of the Lathams (1950-1964), if not much earlier (see Trevor Squires at [10] above); (2) that, when Leonard Latham sold to William Wilkes sawmilling equipment was included in the sale, as it was, later, included in the transmission of the land to Eric and his wife on William's death; (3) that several local identities had observed milling and sale of timber dating back well before May 1964; and (4) that the Wilkes family always milled some timber to generate a supplementary income. 60 In all these circumstances, the respondents argue, it was unreasonable for the Council (1) to commence the proceedings, (2) not to investigate the respondents' evidence more closely, and (3) to continue the proceedings in the face of that evidence, and on the basis of less cogent and relevant evidence from later residents. 61 The respondents argue that they did not "surrender" in a way that Council could be said to have "succeeded" in the proceedings. Council accepted the respondents' DA on the "without prejudice" basis upon which it was submitted and then imposed a condition on the consent requiring the respondents to surrender their claim to existing/continuing use rights (which "the Council said [they] didn't have" - T6, LL44-45). 62 Mr McEwen SC submitted that in view of the agreement reached on the satisfaction of the condition (see letter 21 July 2009 at [47] above), the Council cannot "approbate and reprobate" (T6, L50) on the concept of "without prejudice". The Council submits (pars 12ff of submissions in reply) that the "without prejudice" remark in the DA documents is a "unilateral, self-serving statement" beyond the requirements of the EPA Act and regulation, but the respondents submit that for the Council not to respect the basis of the respondents' actions in this regard amounts to "disentitling conduct". Consideration 63 The appropriate rules, principles and authorities are well-known and need not be set out again in full - I adopt and apply here what I wrote in Monaghan v Holroyd City Council; Holroyd City Council v Monaghan ("Monaghan") [2009] NSWLEC 112; (2009) 167 LGERA 321, at [74]-[84]. Many key authorities - such as Kiama, and One.Tel Ltd and Others v Commissioner of Taxation ("One.Tel") [2000] FCA 270; (2000) 101 FCR 548 were referred to by both sides, reinforcing that each case turns on its own facts. 64 In this case there is no request for indemnity costs and no real submissions that either party has been guilty of "disentitling" conduct (apart from the discrete matter in [62] above). As discontinuance is the appropriate way to conclude the substantive proceedings, and the court should not conduct a "hypothetical trial" of them to determine the question of costs, the court needs to review the reasonableness of the parties' conduct during the course of the litigation. 65 If both sides are found to have acted reasonably in commencing, defending and conducting the proceedings until their further prosecution became futile, the appropriate exercise of the judicial discretion on costs is to make "no order as to costs", especially where in the absence of a trial the court cannot be confident of what the result would have been. See Lai Qin, at 625, Beilby v Viney Pty Ltd (2000) 113 LGERA 450, at [44], and the cases cited in those judgments. 66 When Council first pressured Mr Wilkes about alleged illegal milling he said that milling had occurred on the land for "years and years", and later said he had been advised by named persons that, accordingly, no consent was required. However, he was cooperative with Council until refused any latitude to fill current orders. 67 Having then obtained advice, he began, in January 2006, asserting existing use rights, and saw no reason either to incur the costs of making an unnecessary DA, or to risk the costs of complying with possibly stringent conditions imposed by/on any DC. He would not resile from his assertion of existing use rights, even when attempting to reach an agreement in July 2007 to "retire" from milling, or when threatened by the word "prosecute", and/or a possible $1.1M fine. 68 Council consistently denied his existing use rights, from at least January 2007, and became quite intransigent, despite Wilkes' provision of witness statements, etc. 69 Class 4 proceedings were foreshadowed as early as March 2006, and formally threatened from 4 July 2007, but not commenced until March 2008. Mr Wilkes' witness statements, recalling circumstances back as far as the 1950's, were peremptorily rejected, and the proceedings were vigorously pursued on both sides. 70 Wilkes explored mediation in 2007, but "got cold feet". He also asked the elected Councillors to intervene in his dispute with Council because he found Pevitt "threatening". He sought assistance from the State Government. He continued to seek a negotiated resolution of the dispute. He proposed a neutral evaluation, but Council and its solicitors rejected that suggestion. Whereas Wilkes explained why he pulled out of the proposed CJC mediation, the Council advanced no reason for rejecting the idea of a neutral evaluation. 71 I consider that, once it became intransigent in its rejection of the respondents' claims of existing use rights, it was reasonable, and not "precipitate", for Council to commence these proceedings, putting the respondents to proof of their claim (Monaghan ). It could, however, be said to be unreasonable for Council to have persisted in the proceedings once the respondents' sworn evidence was put on, in August and December 2008. 72 The strength of Mr Wilkes's convictions (about how long milling had continued), and concerns (about how much any capitulation to Council's position might cost him), was plain for all to see. I consider it not unreasonable for him to have left it so late to submit his DA - as a layman he could not have been expected to understand earlier the nuances of doing so "without prejudice", and it would be understandable that he became very concerned about the costs implications for him of not succeeding at trial. 73 It could, however, be said to be unreasonable for the respondents not to have taken steps to ensure that the fact of their DA was made known to the solicitors for the parties immediately it was lodged, so that expensive preparation for the hearing could be suspended and consideration given to whether an adjournment should be sought. 74 In all the circumstances surrounding the progressing of the litigation, the costs order made by Pain J on 20 March 2009, against the respondents and in favour of Council, in respect of the successful motion for vacation of the hearing, was entirely appropriate, and I will formally confirm it. 75 However, the just, fair and reasonable disposition of all other liability for the costs of the substantive proceedings is not so clear. 76 The court cannot be "confident" of any particular outcome of the contest between these parties if it had proceeded to trial. 77 Initial acquiescence by the respondents in the suggestion that they obtain consent, and their apparent failure to hold the appropriate licence before 1997, are not conclusive against them. The onus was on them in the proceedings to prove use fifty years before, on the balance of probabilities, and they marshalled independent evidence to do so. 78 On the other hand, the Council also had strong evidence in support of alleged intensification, and, possibly, abandonment, of the use. The respondents met that evidence, in terms, including with evidence explaining how Moriarty's evidence from the air could be contradicted by evidence "on the ground". 79 Once the Council determined that the DC and its conditions (including one requiring surrender of any existing use rights) was the appropriate outcome of its dispute with the Wilkes, it could not be said that it had achieved the outcome it actually sought in its class 4 application (closure of the mill and removal of all machinery, logs, etc). I am not satisfied that this case can be described as a "surrender", or a "supervening event" situation. 80 Despite the fact that the "event" of discontinuance often results in a positive costs order, I have concluded that the most appropriate order in all the circumstances of this case is that each party pay its own costs of the substantive proceedings (save for the costs captured by Pain J's order). 81 In this respect I emulate the course adopted by Cowdroy J in Sydney City Council v Doltone House Wharf Pty Ltd & Ors ("Doltone House") [2006] NSWLEC 81, and reject the submission made by Mr Howard that Burchett J's decision in One.Tel in some way requires that I not do so. The Doltone House case has many similarities to this case. See also the discussion by three Lord Justices of Appeal in J T Stratford & Son Ltd v Lindley & Ors (No.2) [1969] 1 WLR 1547; [1969] 3 All ER 1122, to which Mr McEwen referred the court. 82 All that remains is the question of the costs of the costs hearing. 83 Costs figured largely in all the correspondence that attended the ongoing negotiations between the parties. The amounts quoted must seem extraordinary to people like the respondents. Once they obtained DC they proposed, on at least three occasions in June-July 2009, that each party pay its own costs. The Council refused. 84 To save further costs, the respondents then suggested that the costs issue be determined "on the papers". Again the Council refused, and gave the court no explanation (see Mallik Rees' letter to the Registrar 2 October 2009), despite the fact that its written submissions, filed on 7 September, appear to proceed on that assumption. 85 After a contested hearing and a lengthy period of consideration I have come to the order which the respondents had proposed in their correspondence. 86 In those circumstances it is appropriate that, in a variant on the Calderbank principle (see Monaghan at [75]), I order the Council to pay the respondents' costs from 25 June 2009 onwards, on a party-party basis. Orders 87 Therefore, the orders of the court are: 1. The Council is granted leave to discontinue the proceedings. 2. Pain J's order of 20 March 2009 that the respondents are to pay the Council's " costs wasted by the hearing being vacated and the costs of [the notice of] motion " to vacate is confirmed. 3. In respect of all other costs of the proceedings up to and including 24 June 2009, each party is to pay its own costs. 4. In respect of the period on and from 25 June 2009, the Council is ordered to pay the respondents' costs on a party-party basis, as agreed or as assessed according to law. 5. The exhibits are returned.