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[2012] NSWLEC 118
Land and Environment Court (NSW)
2012-05-22
Pepper J, Mr P
Original judgment source is linked above.
The Council of the City of Sydney Seeks its Costs of a Notice of Motion in Class 1 Proceedings 1By notice of motion filed 11 April 2012, the Council of the City of Sydney ("the council") sought various costs orders against Hillsong Church Limited ("Hillsong") arising out of Class 1 proceedings in this Court's jurisdiction before Brown ASC (Hillsong Church Limited v Council of the City of Sydney [2012] NSWLEC 1059). 2Happily, prior to the hearing of the notice of motion the parties were able to resolve almost all of the costs orders sought. Unhappily, however, the issue of who should pay the costs of the motion itself remains outstanding. It is this issue that the Court must now determine. 3For the reasons that follow, I have decided that there should be no order as to the costs of the motion.
Hillsong Appeals the Refusal of a Development Application for a Place of Public Worship 4It is necessary to give a detailed recitation of the underlying factual background giving rise to this costs application because of the great emphasis placed by the council on this background. 5The framework to the appeal before the Acting Senior Commissioner is set out in the opening paragraphs of Hillsong Church Limited (at [1]-[8]). 6The procedural background and evidence of the negotiations between the parties leading up to today's application was contained in an affidavit of Mr Michael Winram sworn 8 May 2012, read on behalf of the council, and various correspondence tendered by both parties. In addition, both the council and Hillsong relied on excerpts of the transcript of the proceedings before Brown ASC. 7The proceedings before Brown ASC concerned an appeal from the refusal of development application D/2011/11 ("the DA") by the council for the use of a site in Alexandria as a place of public worship. 8The site formed part of a collection of buildings known as "Sydney Corporate Park" which is bounded by Bourke Road to the west, Doody Street to the north and O'Riordon Street to the east. A range of land uses is contained within the Sydney Corporate Park. These include industrial, warehouse and office/retail. The proposal was to convert the site to accommodate a number of key functional spaces comprising of an auditorium, meeting rooms, storage and preparation areas, a lounge room, a greenroom, toilet facilities and a parent room. The development was to be known as "Hillsong Church". The site was to be used Monday to Sunday, with the most frequent use on Saturday and Sunday for church services. 9On 31 August 2011, prior to the hearing before Brown ASC was due to commence on 5 September 2011, the proceedings were re-listed by the council because of amendments that had been made by Hillsong to its application. The council made it clear that it was not asking the Acting Senior Commissioner to vacate the hearing dates, rather, it was asking him to rule, in effect, on an application to amend the DA. Concern was raised by the council that the amendments could not be dealt with appropriately prior to the hearing commencing. 10Brown ASC stated (at T14.25) that he was not convinced the amendments were "that significant that they can't be dealt with in" the three working days prior to the hearing commencing. The Acting Senior Commissioner permitted the amendments and made consequential timetabling orders. 11The amendments effectively changed the location of the proposed parking and bus pickup areas and proposed a new traffic management plan. 12The hearing commenced on 5 September 2011. On 6 September 2011, however, it became apparent that some of the parking that Hillsong proposed to rely upon within Sydney Corporate Park could not be used. A further amendment was therefore proposed, altering the location of the parking and requiring a new traffic management plan and a new statement of environmental effects. Hillsong sought to amend the DA again and to adjourn the matter as a consequence. In doing so it offered the following terms (at T59.05): We would offer to pay the costs thrown away as a result of the adjournment. We would like to properly consider our position in relation to what parking is available and how the application should be reconstituted and we don't want to be in a position, if we don't have to, to decide that at this particular moment, we want to explore all the possibilities. 13Hillsong repeated the offer (at T59.25): So we would submit that we should be entitled to the adjournment given that we were prepared to pay costs thrown away. 14The council opposed the application arguing that the appropriate course was for Hillsong to discontinue the proceedings. 15Brown ASC ruled that he would allow the adjournment "on the basis that the applicant pay the costs thrown away of the respondent" (at T60.20). 16Consequent upon Brown ASC's ruling, Mr Tomasetti SC, appearing for the council, "flagged" that "unless the parties agree by consent to the terms of an appropriate order, my client will need to make an application by a motion for a order for costs in accordance with the relevant section" (at T61.23). The reference to "the relevant section" was a reference to s 97B of the Environmental Planning and Assessment Act 1979 ("the EPAA"), prior to its amendment in February 2011. 17Section 97B of the EPAA relevantly stated that if the Court allowed an applicant to file an amended development application (other than to make a "minor amendment") then the Court "must make an order for the payment by the applicant of those costs of the consent authority that were incurred in respect of the assessment of, and proceedings relating to, the original development application the subject of the appeal". 18Leave was granted to allow a further amendment of the DA on 19 October 2011. The amendments again dealt with parking, the relocation of the bus pick up area, an additional access point to Bourke Road, additional use of traffic wardens and a reduction in the number of patrons using the venue. The amendments resulted in an amended statement of facts and contentions, a supplementary statement of environmental effects and an amended traffic report. Additional expert evidence on traffic and parking and statutory planning was required as a consequence. 19The hearing resumed on 12 December 2011. On the last day of the hearing, 15 December 2011, Brown ASC returned to the issue of costs. Brown ASC raised with Hillsong whether s 97B of the EPAA was inapplicable because Hillsong sought to characterise the amendments as "minor". Hillsong affirmed that this was its submission but repeated the costs offer made on 6 September 2011 (at T57.31): Yes, but what we are going to do first is make an offer that we are prepared to pay the respondent's costs thrown away by the amendments. We would have thought that's reasonable and fair. 20Discussion then ensued as to whether or not the Court could put a dollar figure on the costs payable under s 97B or whether the quantum should be left to the assessment process or the parties' agreement. The parties agreed that they would attempt to reach agreement on this issue and if this was not possible, to file further submissions in writing to the Acting Senior Commissioner. 21On 15 December 2011 at approximately 4.40pm a communication was sent from the solicitors for Hillsong to Michael Winram, a legal representative of the council, requesting the quantum of costs sought by the council so that Hillsong could consider its position. A reply was not forthcoming, and therefore, written submissions on the issue of costs were filed by the parties. 22On 19 December 2011, Mr Winram, on behalf of the council, sent a letter to the solicitors for Hillsong stating that the council would accept the following orders: (a) Hillsong was to pay the costs of the council incurred in respect of the assessment of, and proceedings relating to, the original development application the subject of the appeal up to 31 August 2011 as agreed or assessed, pursuant to s 97B of the EPAA; (b) Hillsong was to pay the council's costs thrown away as a result of the adjournment of the proceedings on 6 September 2011 as agreed or assessed. The council noted that the applicant had already undertaken to pay these costs; (c) Hillsong was to pay the costs of the notice of motion heard on 19 October 2011, as agreed or assessed; and (d) Hillsong was to pay the council's costs thrown away as a result of the amendment of the application for which leave was granted by the Court on 19 October 2011, as agreed or assessed. 23The letter went on to state that the council was not willing to go to the expense and time involved in estimating and negotiating its costs until it was agreed, or determined by the Court, which costs should be paid by Hillsong. 24On 16 March 2012, Brown ASC handed down the decision in Hillsong Church Limited. In relation to the issue of costs the Commissioner held that the amendments made on 31 August 2011 to the DA were not "minor" and that costs were payable in respect of these alterations pursuant to s 97B of the EPAA. In relation to the second set of amendments on 19 October 2011, the Commissioner held that, by reason of the first set of amendments on 31 August 2011, the original development application had been amended and was no longer "the original development application" for the purposes of s 97B(2) of the EPAA. Accordingly, the Commissioner had no power to order costs for the second set of amendments. This was because the original development application the subject of the appeal effectively no longer existed for the purpose of that provision (at [159]). 25In addition to approving the DA as amended and subject to conditions, Brown ASC ordered (at [161]): The applicant is to pay the costs of the respondent that were incurred in respect of the assessment, and proceedings relating to the original development application the subject of the appeal up to 31 August 2011. 26On 29 March 2012 the lawyers for the council wrote to the lawyers for Hillsong enclosing a draft notice of motion in relation to the costs of the adjournment of the proceedings on 6 September 2011, the costs of the motion heard on 19 October 2011 and the costs thrown away as a result of the second amendment of the development application on 19 October 2011. Also enclosed were draft consent orders in the following terms: (1) that the applicant pay forthwith the respondent's costs thrown away as a result of the adjournment of the proceedings on 6 September 2011, as agreed or assessed. (2) that the applicant pay forthwith the respondent's costs of the notice of motion heard on 19 October 2011, as agreed or assessed. (3) that the applicant pay forthwith the respondent's costs thrown away as a result of the applicant's amendments of the development application on 19 October 2011, as agreed or assessed. 27The letter sought confirmation by close of business 3 April 2012 that the draft consent orders were acceptable. If not, the council stated that it would seek an order that Hillsong pay the costs of the notice of motion. The letter finally stated that the council required the orders to be settled and entered before it would discuss the quantum of costs with Hillsong. 28On 5 April 2012, lawyers for Hillsong unhelpfully responded stating that, unless the council provided further information, it was not in a position to obtain final instructions. The further information it wanted comprised the following: (a) the relevant facts upon which you rely in support of the orders sought in the draft motion; (b)(i) an estimate of the costs you claim including a general breakdown of those costs in terms of personnel, time spent and charge out; (b)(ii) confirmation that the amount claimed is on a party/party basis and excludes GST; and (c) information on how you propose to separate out the time and costs you will claim associated with the traffic and parking amendments from the other three major issues in this case. 29The council did not respond, but instead filed the notice of motion seeking costs together with a supporting affidavit of Mr Michael Winram on 11 April 2012. 30Subsequently, on 17 April 2012, the council sent a further letter to the solicitors for Hillsong responding to their letter dated 5 April 2012 and enclosing draft consent orders. In that letter the council stated: (1) As indicated in our letter of 29 March 2012, we are instructed that the council requires the form of the orders to be settled and entered before discussing the quantum of costs with the applicant. (2) You are already familiar with the facts upon which the council relies in relation to the orders sought. Specifically: (a) Order one is sought on the basis that the applicant agreed to pay the costs thrown away. This is recorded in the Acting Senior Commissioner's decision. (b) Order two is sought on the basis that the motion was necessary because of the applicant's request to vacate the hearing to file amended plans. (c) Order three is sought on the basis that the Commissioner declined to make a second section 97B costs order. The Acting Senior Commissioner indicated in his decision that this did not preclude the Council from seeking an order for its costs thrown away as a result of the amended plants. 31The letter went on to state that the council would not seek costs of the motion if Hillsong agreed to the attached consent orders. Those orders were as follows: (1) That the applicant pay forthwith the respondent's costs thrown away as a result of the adjournment of the proceedings on 6 September 2011, as agreed or assessed. (2) That the applicant pay forthwith the respondent's costs of the notice of motion heard on 19 October 2011 as agreed or assessed. (3) That the applicant pay forthwith the respondent's costs thrown away as a result of the applicant's amendment of the development application on 19 October 2011 as agreed or assessed. 32On 19 April 2011, Hillsong responded by agreeing to the following orders: (1) That the applicant pay the respondent's costs thrown away being the costs unnecessarily incurred between 1 September 2011 and 6 September 2011 as a consequence of the adjournment of the proceedings on 6 September 2011, as agreed or assessed. (2) That the applicant pay the respondent's costs thrown away being the costs unnecessarily incurred between 7 September 2011 and 19 October 2011 as a consequence of the applicant's amendment of the development application on 19 October 2011 (including the costs of the motion on 19 October 2011, as agreed or assessed). (3) No order as to costs of the motion dated .. [sic] April 2012. 33This offer was rejected by the council later that day on the basis that the orders as proposed by Hillsong did not properly reflect the undertakings given by it during the hearing. 34The offer was framed in these terms because Hillsong was concerned with the prospect of the council seeking to "double dip" on the costs orders being made. The council assured Hillsong that it was not seeking to obtain double payment of its costs and stated that the orders as proposed by Hillsong were "confusing and unnecessarily restrained". The council indicated that it was open to consideration of further proposed orders on behalf of Hillsong, but would only agree to orders that properly reflected the undertakings already given in Court. It did not elaborate on the discrepancy. 35On 16 May 2012, the solicitors for Hillsong wrote by way of email to the solicitors for the council, replying to the email sent by the council on 19 April 2012 in response to Hillsong's email of the same date. The email stated "we strongly suspect that there is no real issue in principal between the parties and it is simply a matter of finding the right formulation of words". The following formulation was thus suggested by Hillsong: (1) The applicant is to pay the respondent's costs thrown away being the costs reasonably incurred and related to work done between 1 September 2011 and 6 September 2011 which have been wasted as a consequence of the adjournment of the proceedings on 6 September 2011 as agreed or assessed. (2) The applicant pay the respondent's costs thrown away being the costs reasonably incurred and related to work done between 1 September 2011 and 19 October 2011 which had been wasted as a consequence of the applicant's amendment of the development application on 19 October 2011 including the costs of the motion on 19 October 2011, but excluding costs the subject of order one above, as agreed or assessed. (3) No order as to costs of the motion dated 11 April 2012. 36The email went on to state that if these terms were not acceptable, the council should suggest alternate drafting. 37The email response that followed from the council was in the following terms: (1) The applicant is to pay the respondent's costs thrown away as a consequence of the adjournment of the proceedings on 6 September 2011, as agreed or assessed. (2) The applicant is to pay the respondent's costs thrown away as a consequence of the applicant's amendment of the development application on 19 October 2011 including the costs of the motion on 19 October 2011. (3) The applicant is to pay the respondent's costs of the motion filed 11 April 2012. 38The council also explained what the composite term "costs thrown away" meant. The email went on to state that the council would not agree to orders which were time limited in the way proposed by Hillsong. Having said this, the council accepted that it could not claim the same costs twice. The council noted that the costs assessor would not permit the council to recover costs that were recovered under a separate order. 39On 18 May 2012, a terse but succinct reply to the above email was sent by the solicitors for Hillsong. This solicited a similarly punchy response by the solicitors for the council on 21 May 2012 in these terms: (a) that the phrase "costs thrown away" was superfluous and therefore the council did not agree to those words being included in any consent orders; (b) that the council did not agree to limit the costs order in the manner indicated because, for example, after leave was granted on 31 August 2011 for Hillsong to rely on the amended development application, the council did work that afternoon which would not be recoverable if the order was limited to "1 September 2011 and 6 September 2011". To determine if there were any other amounts that would be recoverable would require a detailed and time consuming analysis of the council's costs which was not warranted; and (c) the council accepted that it could not "double dip" on any costs order. Accordingly, the council proposed to add the following additional order to the proposed costs orders: If an amount is recoverable by the Respondent from the Applicant under more than one costs order made in these proceedings, that amount is only recoverable once.
Costs in Proceedings of Class 1 of the Court's Jurisdiction 40In proceedings in Class 1 of the Court's jurisdiction, costs are governed by r 3.7 of the Land and Environment Court Rules 2007 ("the Rules"). In particular, r 3.7(2) states as follows: (2) The Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances. 41Rule 3.7(3) lists some, but not all, of the circumstances in which the Court might consider the making of a costs order to be "fair and reasonable": (3) Circumstances in which the Court might consider the making of a costs order to be fair and reasonable include (without limitation) the following: (a) that the proceedings involve, as a central issue, a question of law, a question of fact or a question of mixed fact and law, and the determination of such question: (i) in one way was, or was potentially, determinative of the proceedings, and (ii) was preliminary to, or otherwise has not involved, an evaluation of the merits of any application the subject of the proceedings, (b) that a party has failed to provide, or has unreasonably delayed in providing, information or documents: (i) that are required by law to be provided in relation to any application the subject of the proceedings, or (ii) that are necessary to enable a consent authority to gain a proper understanding of, and give proper consideration to, the application, (c) that a party has acted unreasonably in circumstances leading up to the commencement of the proceedings, (d) that a party has acted unreasonably in the conduct of the proceedings, (e) that a party has commenced or defended the proceedings for an improper purpose, (f) that a party has commenced or continued a claim in the proceedings, or maintained a defence to the proceedings, where: (i) the claim or defence (as appropriate) did not have reasonable prospects of success, or (ii) to commence or continue the claim, or to maintain the defence, was otherwise unreasonable. 42In St Marys Land Limited v Valuer-General of New South Wales [2011] NSWLEC 2 I described the operation of r 3.7, albeit in the context of Class 3 proceedings but nevertheless apposite here, in the following terms (at [54]-[55]): 54 I do not accept the interpretation given to the operation of r 3.7 by St Marys. As identified by Biscoe J in Agonic Holdings Pty Ltd v Lithgow City Council [2009] NSWLEC 34 and Arden Anglican School v Hornsby Shire Council [2008] NSWLEC 103; (2008) 158 LGERA 224, the rule may properly be characterised as a presumptive rule to the effect that ordinarily costs will lie where they fall (see also Port Stephens Council v Sansom [2007] NSWCA 299; (2007) 156 LGERA 125 at [50] where similar language was employed by Spigelman CJ). This is not to say that the Court does not retain a broad discretion to determine that an award of costs is appropriate if the circumstances are fair and reasonable. Once the Court's jurisdiction to award costs is enlivened, it clearly does. 55 The presumption may be displaced. Some of the factors that might rebut the presumption are set out in r 3.7(3). These are neither prescriptive nor exhaustive. I accept that, for example, the character of the litigation and the conduct of the proceedings by the parties are factors to which the Court may have regard in assessing whether, as a matter of fairness and reasonableness, the presumptive rule ought to be displaced. For the Court to have regard to these factors, including the character of the litigation, be it akin to ordinary litigation or to a merits appeal, is not, as the Court of Appeal in Sansom (at [53]) and Thaina Town (On Goulburn) Pty Ltd v City of Sydney Council [2007] NSWCA 300; (2007) 71 NSWLR 230 (at [68]) cautioned against, to adopt a principle or guideline which of itself is entitled to presumptive or determinative weight. This approach would lead to error. 43In Agonic Holdings Pty Ltd v Lithgow City Council [2009] NSWLEC 34 Biscoe J discussed the effect of the promulgation of the current Rules and, in particular, the enactment of r 3.7 and its operation (at [4] and [5]). I reiterate, without expressly repeating, his Honour's remarks and apply them to the present application. 44In the end, the issue is whether, in the opinion of the Court, the considerations relied upon by the council are of sufficient weight to displace the presumptive rule. 45The council submits, in summary, that it is fair and reasonable that it be awarded its costs of the motion because ultimately what Hillsong has agreed to in accepting the terms of the consent orders was that which was offered by the council from the outset in its proposed consent orders sent on 29 March 2012. Orders 4 and 5 of the consent orders do no more than clarify, for abundant caution, that it is not the council's intention to recover any more than the amount of costs to which it is entitled under the various costs orders made, or likely to be made, including the s 97B costs order given by Brown ASC on 16 March 2012. These orders were included by way of, in effect, appeasement and are ultimately unnecessary. 46The council particularly takes issue with the letter dated 5 April 2012 sent by the solicitors for Hillsong. The council submitted that the request for information was unnecessary and was designed to obfuscate and cause delay in the resolution of the outstanding costs issues. 47Hillsong, on the other hand, states that the course of correspondence it engaged in with the council was necessary in order to clarify the ambit of the costs orders it was being requested to agree to. Its behaviour was in no way unreasonable and certainly not such that the presumptive rule contained in r 3.7(2) was displaced. Hillsong contends that when proper consideration is given to the terms of the costs orders now consented to, they reflect the combined position of both parties, reached after appropriate compromise on both sides. 48In relation to the letter dated 5 April 2012, Hillsong submits that the request for information should be construed as no more than an attempt by it to obtain sufficient particulars of the quantum of the council's costs so that costs fixed in a particular sum could be ordered by the Court, thereby obviating the need for any further expenditure by reason of having to engage in costs assessment. 49While I am not prepared to draw the wholly benign inference urged upon me by Hillsong as to the intended purpose of the letter dated 5 April 2012, this letter alone does not give rise to conduct that would render the costs order sought by the council fair and reasonable in all the circumstances. 50Viewing the correspondence and conduct of the parties as a whole, I do not consider that the conduct of Hillsong is sufficient to displace the presumptive effect of r 3.7(2). In my view, the actions of the parties set out above demonstrate a genuine attempt by both to resolve the outstanding costs issues. 51I do not believe, as was described by the council, that Hillsong's concerns over the council "double dipping" were "nitpicking" or somehow illegitimate. In fact, these concerns resulted in the inclusion of orders 4 and 5 in the consent orders; consent orders that are not, contrary to the submissions of the council, the same as those offered by it on 29 March 2012 prior to filing its motion. A comparison between the two sets of orders demonstrates this fact. 52The correspondence the Court was taken to does no more than demonstrate, in my opinion, the usual type of negotiations engaged in by parties leading up to the resolution of outstanding costs issues. I do not consider that the negotiation process became "unduly complicated" by the conduct of Hillsong in a manner that would warrant the Court making an order for the payment of the costs of this motion. 53I also reject the suggestion by the council that Brown ASC was enticed to permit the various amendments to the DA on the basis of unqualified offers by Hillsong to pay the costs thrown away by these amendments, only to have Hillsong renege on the terms of the offers by the later clarification that it sought as to the temporal ambit of the costs orders proposed by the council, especially in light of the Commissioner's s 97B order. This has not been demonstrated on the evidence before me. 54It further follows that I do not accept the council's submission that Hillsong has acted unreasonably in the circumstances leading up to the commencement of the hearing of this notice of motion, or that it has acted unreasonably in the conduct of this notice of motion (see r 3.7(3)(c) and (d) of the Rules respectively). 55At no point did Hillsong seek to resile from the undertakings it had given in Court or indicate that it was not liable for the costs at the core of orders 1, 2 and 3 of the costs orders agreed to today. 56In these circumstances, I do not consider that ordering Hillsong to pay the whole or any part of the council's costs of the motion would be fair and reasonable, and therefore, I decline to make the costs order sought by the council.
Orders 57The orders are as follows: (1) the applicant is to pay the respondent's costs thrown away as a consequence of the adjournment of the proceedings on 6 September 2011, as agreed or assessed; (2) the applicant is to pay the respondent's costs thrown away between 31 August 2011 and 19 October 2011 as a consequence of the applicant's amendment of the development application on 19 October 2011, as agreed or assessed; (3) the applicant is to pay the respondent's costs of the motion on 19 October 2011, as agreed or assessed; (4) if an amount is recoverable by the respondent from the applicant under more than one of the costs orders made in the proceedings, including the costs order made pursuant to s 97B of the Environmental Planning and Assessment Act 1979 by Brown ASC on 16 March 2012, then that amount is recoverable only once; (5) the Court notes the agreement of the parties that, for the purpose of these orders, the term "costs thrown away" means costs that have been reasonably incurred and relate to work done that has become wasted in the circumstances; (6) the notice is motion is otherwise dismissed with no order as to costs; and (7) the exhibits on the motion are to be returned.
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. Decision last updated: 23 May 2012
Hillsong Church Limited
Council of the City of Sydney
(2008) 158 LGERA 224
(2007) 156 LGERA 125
(2007) 71 NSWLR 230