Homemakers Supacenta-Belrose Pty Limited v Warringah Council and Anor

KEY ISSUES: Costs :- exercise of discretion to award costs in class 4 proceedings - whether making of s 25C order under the Environmental Planning and Assessment Act 1979 confirming that development consent valid is the event costs should follow

Civil Procedure Act 2005 s 98 LEGISLATION CITED: Environmental Planning and Assessment Act 1979 s 124 Land and Environment Court Act 1979 s 25B, s 25C, s 25E Uniform Civil Procedure Rules 2005 Part 42

GPT Re Ltd v Wollongong City Council (2006) 151 LGERA 116 Homemakers Supacenta-Belrose Pty Limited v Warringah Council and Anor [2008] NSWLEC 54 CASES CITED: Liverpool City Council v Roads and Traffic Authority and Interlink Roads Pty Ltd (1992) 75 LGRA 210 Swadling v Sutherland Shire Council (1994) 82 LGERA 431 Warringah Shire Council v Sedevcic (1986) 57 LGRA 335

APPLICANT Mr M Staunton SOLICITORS Landerer & Company FIRST RESPONDENT LEGAL REPRESENTATIVES: Mr I Hemmings SOLICITORS Wilshire Webb Staunton & Beattie SECOND RESPONDENT Mr R Lancaster SOLICITORS Curwoods Lawyers

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

40745 of 2007 Homemakers Supacenta-Belrose Pty Limited v Warringah Council & Anor (No 2)

JUDGMENT ON COSTS 1 Her Honour: The Applicant challenged the grant of a development consent to the Second Respondent by the Council on several grounds. In Homemakers Supacenta-Belrose Pty Limited v Warringah Council and Anor [2008] NSWLEC 54 I held at [25] that the grant of development consent was invalid. As required by s 25E of the Land and Environment Court Act 1979 (the Court Act) I had to consider if orders should be made under Part 3 of the Court Act. I held that they should be and issued orders pursuant to s 25B of the Court Act on 15 February 2008. I made further orders pursuant to s 25C of the Court Act on 5 March 2008 confirming the validity of the development consent. The issue of costs now arises.

2 The Points of Claim filed by the Applicant raised six grounds. As identified at [9] of my judgment, grounds 1, 2 and 3 were closely related and concerned an invalid delegation of the Council's power to the general manager to approve a development consent. Those grounds were admitted by the Council and the Second Respondent in light of the findings in GPT Re Ltd v Wollongong City Council (2006) 151 LGERA 116. The fourth ground raised the failure to take into account a relevant consideration being economic impact, and the fifth ground raised the failure to take into account a relevant consideration of a covenant registered on the title. Grounds 4 and 5 were not pressed at the hearing. Ground 6 raised as an issue a failure to take into account a relevant consideration being an additional species impact study (SIS) provided by the Second Respondent to the Council after the invalid delegation to the general manager occurred. That was not pressed in relation to invalidity of the consent but was pressed in relation to whether a s 25B order ought be made.

3 The Second Respondent seeks its costs from either the Applicant or the Council. But for this costs application the other parties agreed that the order should be that each party pay its own costs. In light of the Second Respondent's costs application the Council argued that its costs should be paid by the Applicant. The Applicant argued that its costs should be paid jointly by the Respondents. The Second Respondent argued that if the Court ordered that the Applicant's costs ought be paid then the Council should pay those costs. The Council argued that both Respondents should pay the Applicant's costs if that was the order made. Second Respondent's submissions 4 The Second Respondent submitted that the usual rule is that costs follow the event in Class 4 proceedings. The Applicant filed proceedings seeking a declaration of invalidity of the development consent and has been unsuccessful in obtaining that declaration. Rather, by the application of s 25B and s 25C the consent has been declared valid. That is the relevant event and the basis on which costs should be determined. The Applicant was unsuccessful in obtaining the relief it sought and is therefore liable for the Second Respondent's costs. Council's submissions 5 The Council also argued that the relevant event or result in the proceedings was the making of the s 25B and subsequent s 25C orders. The Applicant was therefore unsuccessful. The discretionary considerations on costs are the same as have always applied in relation to s 124 of the Environmental Planning and Assessment Act 1979 (EPA Act) which provided the Court with broad discretion as to whether or not it should grant relief. The usual order in Class 4 proceedings where an applicant is unsuccessful is for the applicant to pay a respondent's costs. A respondent that successfully opposes a declaration of invalidity by exercise of the Court's discretion would normally be entitled to its costs, see Warringah Shire Council v Sedevcic (1986) 57 LGRA 335 at first instance. In Liverpool City Council v Roads and Traffic Authority and Interlink Roads Pty Ltd [No 2] (1992) 75 LGRA 210 Cripps J held that a breach of s 112 of the EPA Act was established but declined relief in the exercise of his discretion under s 124 of the EPA Act. He ordered that the applicant pay costs. A similar approach should be taken in this matter.

6 The Applicant gave no notice to the Council before filing the Class 4 proceedings so that there was no opportunity provided to the Council to regularise the matter given the invalid delegation. Notice that grounds 4 and 5 were not pressed was not given by the Applicant's representative until the hearing. Applicant's submissions 7 The Applicant asserts that it is entitled to costs as it brought before the Court a serious breach of the EPA Act and it was necessary to bring these proceedings to remedy the identified breach (see Swadling v Sutherland Shire Council (1994) 82 LGERA 431 at 438 per Talbot J). The failure of the Council to properly delegate its functions was significant. It was successful in the proceedings, as identified in [25] of the first judgment where I held that relief should be granted contrary to submissions from the Respondents that no relief ought be granted.

8 It was necessary for the parties to put before the Court the Council's consideration of the development application and this was done in an agreed bundle of documents being tendered. None of the parties filed additional material. No unnecessary costs were incurred as a result of the Applicant not pressing two grounds at the hearing.

Finding 9 Under s 98 of the Civil Procedure Act 2005 an award of costs is at the discretion of the Court subject to any rules of a court. Part 42.1 of the Uniform Civil Procedure Rules 2005 provides: Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs. 10 The Respondents have argued that the relevant event by which costs should be determined is the decision of the Court to make an order under s 25B of the Court Act. That resulted in this case in an order being made under s 25C declaring that the development consent under challenge was valid. Hence the Applicant was unsuccessful as it did not obtain a declaration of invalidity.

11 There has not yet been a decision, the parties inform me, about costs in the context of an order being issued under s 25B of the Court Act. As submitted by the Applicant, the Court only considers the application of s 25B if it has determined that there is a relevant breach of the EPA Act giving rise to invalidity of a development application. In my view, that conclusion as to invalidity is the event which costs might be said to follow. 12 I do not accept the submissions of the Respondents that the decision of the Court to apply s 25B and ultimately declare a development consent valid under s 25C is the event which determines the costs outcome of a particular matter. Rather that circumstance is a matter the Court will take into account in weighing up all the particular circumstances of a case in order to determine whether and how costs are payable. 13 As has been stated in many cases the particular circumstances of a case must be considered in determining whether costs ought be awarded on the basis that costs follow the event. One example of a decision where costs were awarded against an applicant who was successful in obtaining a finding of a breach of the EPA Act is Liverpool Council v Roads and Traffic Authority. That approach is dictated by the circumstances of that case. 14 Further, I do not agree with the Council's submission that the operation of the Court's discretion in relation to the application of s 25B is the same as the broad discretion under s 124 of the EPA Act. Under s 25E the Court is required to consider whether orders under s 25B should be made, so that the Court's discretion to apply s 25B is not at large.

15 The Applicant succeeded in bringing an application which gave rise to a finding that there was a breach of the EPA Act giving rise to invalidity of the Second Respondent's development consent. That circumstance suggests costs ought be awarded in its favour subject to there being disentitling conduct. It did not give any notice to the Council of its intention to commence the proceedings before the Class 4 application was served so that other options that may have been available to avoid litigation were not explored before the Class 4 proceedings were commenced. That is not a practice to be encouraged. At the hearing without prior notice it did not press grounds 4 and 5 in relation to the invalidity of the development consent so that the substantive issue was only in relation to invalid delegation, dealt with in the related issues 1, 2 and 3. The Respondents admitted those grounds of invalidity. Ground 6 concerning an additional SIS was raised in relation to whether a s 25B order ought be made. Taking into account that issue I determined that a s 25B order ought be made. In these circumstances the Applicant should not be awarded its costs. 16 The other parties have also sought their costs on the basis that such orders are compensatory and the Applicant was unsuccessful. I have held the Applicant was successful in terms of the finding of invalidity made. Weighing up all these circumstances the most appropriate order is that each party pay its own costs. Each party should also pay its costs of the costs hearing.

Orders 17 The Court orders that: 1. Each party pay its own costs of the proceedings. 2. Each party pay its own costs of the costs hearing. 3. The exhibits 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.