Hunter Development and Brokerage Pty Ltd v Cessnock City Council [2005] NSWCA 169 | Case summary

4 In the result, as I have indicated, the Applicant was unsuccessful before me on this sole issue and the appeal was dismissed (see (2004) NSWLEC 454). 5 However, on appeal to the Court of Appeal, the Court of Appeal reversed my decision and held that the development consent granted in 1998 had not relevantly lapsed pursuant to the statutory lapsing provision. 6 Upon the remitter, the parties agreed as to the ultimate disposal of the case, save for the question of costs, and by consent, orders were made by me upholding the appeal and directing the issue of the construction certificate subject to agreed conditions. 7 However, the question of costs was not resolved on that occasion and by a subsequent motion the Applicant seeks its costs against the Council. The Council resists the order for costs. 8 The matter has been very helpfully argued and it is of course agreed that the source of power for the making of a costs order is found in Part 16 Rule 4 of the Land and Environment Court Rules which was a rule amendment made at the end of December 2003, although the rule amendment did not operate until 2 February 2004. 9 The relevant rule is subrule (2) which provides that " no order for the payment of costs will be made in proceedings to which this rule applies unless the Court considers that the making of a costs order is in the circumstances of the particular case fair and reasonable". 10 This rule replaced the then prevailing practice of the Court in planning and building appeals which had been reflected in par 10 of the Court's 1993 Practice Direction (which in turn reflected previous practice directions) and was to the effect that in planning and building appeals the ordinary costs consequence would be that no order for costs would be made, save for exceptional circumstances, and that practice had prevailed in the Court from the beginning of its life. 11 The making of the new rule, Part 16, Rule 4, although changing the verbal formulation of the relevant discretion (and relevantly being a rule qualifying the costs power conferred upon the Court by the Court Act, s 69 - vide subsection(2)) essentially perpetuates as the prevailing norm that no order for costs in such proceedings will be made unless the Court considers the making of a costs order " in the particular case, fair and reasonable". 12 The elucidation of whether there is any substantive difference between the relevant discretion conferred by the rule, as opposed to the previously prevailing practice direction, need not in this case be attempted. The words are different but the normative general approach is perpetuated requiring that there is to be no order for costs in such proceedings unless in the exercise of the discretion (formulated in the manner that I have indicated) the Court is of the opinion that it is " fair and reasonable for an order to be made". 13 In helpful and comprehensive submissions Counsel for the Applicant has drawn my attention to a number of cases which had been decided immediately prior to the rule coming into force (that is Part 16, Rule 4) and cases which had followed the commencement of the rule. 14 In particular, it is submitted by the Applicant that relevant principles were expounded in the decision of Chief Judge McClellan in the reported case Gee v Port Stephens Council, (2003) 131 LGERA 325, in which His Honour surveyed the various earlier decisions in this Court which had grappled with the question of whether costs should " exceptionally" be allowed, particularly, in planning appeals where a question of law had been raised for determination. 15 Historically the decisions in this Court by no means spoke with one voice but I am of the opinion, contrary to the view expressed by the Chief Judge in Gee, that the prevailing view was that the mere fact that a question of law was the subject of the decision in the planning appeal of itself was not determinative or demonstrative of the existence of " exceptional circumstances" justifying the making of a costs order. 16 That is a view that I had consistently taken in a number of decisions which view was contrary to a view taken by Justices Stein and Talbot. 17 The view that the identification and determination of a question of law in a planning appeal did not thereby, ipso facto, constitute exceptional circumstances was also the considered view adopted by Chief Judge Pearlman following her review of a number of cases in Outdoor Australia v Auburn Council (1996) 89 LGERA 365. 18 Although it is clear that Chief Judge McClellan preferred the view that had earlier been favoured by Justices Stein and Talbot, I would respectfully agree with the view of Justice Lloyd in a decision published after Gee to the effect that the prevailing trend of authority in this Court did not recognise as demonstrative of exceptional circumstances the fact that a planning appeal had raised, and been determined by reference to, a question of law: see Broadwater Action Group Inc v Richmond Valley Council (No 2) (2003) 129 LGERA 401 where Gee was cited but not followed. 19 The discretion now vested in the Court by Part 16 Rule 4, in my view, is to be exercised in the particular circumstances of the case and the costs order is only justified where the Court concludes that it is fair and reasonable that a costs order be made. 20 In opposing the order for costs in the present case Counsel for the Council has drawn attention to the fact that when the proceedings were commenced they were commenced in class 1 of the Court's jurisdiction (as of course they ought to have been because it was an appeal against the Council's refusal to issue a construction certificate) but that the Applicant chose to proceed and to persist with the class 1 proceedings even though the Council had put in issue before the appeal was filed the question of whether the 1998 development consent had relevantly lapsed pursuant to the statutory lapsing provision, five years after it had been granted. 21 Moreover, the evidence indicates that the Council's Solicitor had invited the Applicant's Solicitor to promote the disputed question in appropriate class 4 proceedings (as interestingly enough, appears to have happened in Gee). In Gee the Council had raised or disputed the existence of relevant existing use entitlements necessary to promote the development considered in that case and during the currency of the hearing of the class 1, separate class 4 proceedings were launched identifying the question of whether an existing use entitlement existed and that separate proceeding was determined in favour of the Applicant by an appropriate declaration being made, virtually by consent because, as his Honour's reported decision in the planning appeal makes clear, the Council in the course of that proceeding ultimately conceded the existence of a relevant existing use of entitlement: see at par 12. 22 The factual circumstances of Gee's case bear little or no resemblance to the facts of the present case and, accordingly, anything said in that case by the Chief Judge is distinguishable on the facts of the two cases but, in any event, I have already expressed my view as to the differences of opinion in this Court on that rather vexed issue, which but for its revival in Gee, I would have thought had been resolved by the decision some eight years earlier in Outdoor Australia. 23 In opposing the application for costs Counsel for the Council has strongly relied upon the unwillingness of the Applicant to propound and proffer the issue in appropriate class 4 proceedings that could have been taken for a declaration of right. 24 But that submission has been met by a powerful submission advanced on behalf of the Applicant that if that were the case it should have been raised during the proceedings and indeed, reference has been made to the fact that I raised it at the outset of the hearing, but that the Council did not demur to the issue being raised and requiring adjudication in the class 1 proceeding. 25 That approach involved a range of disadvantages, forensic and otherwise, which I briefly adverted to in my reasons for judgment but, as Counsel for the Applicant has pointed out, the case nonetheless proceeded to proffer that single issue and the parties obtained an adjudication on it at first instance, and then an appellate adjudication of it when the matter went to the Court of Appeal and, as Counsel for the Applicant says, it seems to be too late in the day to put the clock back, to oppose the question of costs on the ground that the Applicant ought to have propounded the issue in separate class 4 proceedings and, in his written submissions he asks rhetorically, what would have been the difference, since Counsel for the Applicant retorts " we would have got our costs in those class 4 proceedings". 26 The Council submits that, in limiting the issue to the four corners of the class 1 proceedings the Applicant also, no doubt advisedly, got the benefit of the court's prevailing practice (both before and after the making of Part 16, Rule 4) that the normative approach is no order for costs in such proceedings and that circumstance should be considered by the Court now as cutting both ways on the disputed question of costs in these class 1 proceedings. 27 In my opinion it is relevant that the Applicant did deliberately propound the issue and keep it confined to the class 1 proceedings and in that context (particularly from the point of view of costs) it is not really relevant to say, as has been put on behalf of the Applicant that " if we had instituted the class 4 proceedings and we had won, as we ultimately won in the Court of Appeal, we would have got our costs anyway". 28 The point is simply this, that the Applicant advisedly proceeded by way of class 1, when the Council had raised the issue as to whether or not the consent had lapsed, and that manner of proceeding inevitably invoked the Court's established practice in respect of costs in planning appeals. 29 That led to a related submission on behalf of the Council that that disputed issue could only be resolved by an adjudication by the Court on the basis of evidence which primarily lay exclusively in the mind and possession of the Applicant. This is merely to acknowledge that the statutory lapsing provision contained in s 95 of the Planning Act does require, in order to avoid lapsing " the carrying out of certain work" and, as this case and many other cases where the issue is raised, demonstrate, it is the Applicant seeking to preserve the consent that should have, and normally does have, full knowledge of the facts and in ordinary litigation when that issue arises, that person carries the onus of proof, especially if seeking a declaration of right (but perhaps not so clearly so when defending a civil enforcement case brought by the Council in respect of work that the Council would contend no longer has the benefit of a current consent by virtue of its statutory lapse, and similarly in the context of a class 1 proceeding). 30 In my opinion these considerations raised by the Council are important in the determination by me, in the exercise of discretion as to whether it is fair and reasonable in this case to make an order in favour of the party that was ultimately successful in the Court of Appeal (although it failed before me at first instance). Of course, in determining the question now before me, I have to determine it on the basis that the Applicant would have been successful before me if I had had the benefit of the Court of Appeal's judgment reversing my findings. 31 However, at this point again I see great force in the submission of Counsel for the Council that the decision of the Court of Appeal was a decision in an area of the law where the matter had not been fully enunciated or settled by numerous previous Court decisions (either this Court or the Court of Appeal) where the same issue had oftentimes been before either Court. 32 In my own judgment I relied significantly on the decision of Chief Judge Cripps in a 1984 case Smith v Wyong Council (1984) 53 LGRA 170. 33 In my view that decision had generally prevailed in this Court for something like twenty years, undisturbed notwithstanding opportunities in several appeals to the Court of Appeal in other cases where the Court of Appeal has had occasion to consider that case. 34 Significantly, no earlier decision has cast any doubt on the decision in Smith v Wyong until the decision of the Court of Appeal in the present case where, at best, its authority survives only as reinterpreted by the Court of Appeal and, at worst, it too has been overruled. 35 This is a significant matter in the present case because it indicates in a very important area of this law on a very important aspect of the operation of the Environmental Planning and Assessment Act that the Court of Appeal's decision has now authoritatively established that mere survey work will avoid statutory lapsing and that there is no such doctrine as " merely preparatory works", as distinct from and not qualifying as " physical works" (which would avoid statutory lapsing). 36 In my opinion the Council, in defending the proceedings at first instance and on appeal, was acting upon a prevailing view of the law which was prima facie in its favour and was acting in relation to a state of affairs where, from a practical and forensic viewpoint, the Applicant was required to establish the relevant facts in order to avoid the consequence of statutory lapsing by virtue of the expiry of the five year period after the consent had been granted. 37 Counsel for the Applicant says rightly that the conduct of the unsuccessful party does not reflect on the proper disposition of the question of costs. 38 I agree, but what I have said indicates that an important issue of planning law has only been settled at the appellate level in a manner which essentially changes more than twenty years of generally settled law and practice. 39 It is true, as Counsel for the Applicant has pointed out (and as my judgment at first instance recognises), that in recent times there have been different opinions expressed in recent judgments of judges of this Court on this issue but they did not purport to, nor in fact did they, disturb the prevailing decision of Smith v Wyong Council . 40 In my view, the issue being of considerable importance to the administration of an essential provision of the Planning Act and having regard to the state of the law in this Court at the time that the matter was before me favouring the position advanced by the Council, no circumstances have been demonstrated (notwithstanding the ultimate success of the Applicant in the Court of Appeal) which would make it " fair and reasonable" to order costs in favour of the Applicant in these proceedings. 41 The Applicant received an order for costs, unexceptionally in the Court of Appeal where costs do follow the event. But here they do not, and although the principle that costs compensate the successful party and not to punish the unsuccessful party is fundamental to an understanding of the operation of the ordinary costs power, nonetheless, the Court's costs power circumscribed by s 69 is materially moderated and circumscribed by the relevant Rule of Court which requires the making of a costs order in these types of proceedings exceptionally (in relation to the normative order that there be no order for costs) only where in the particular case the Court considers it fair and reasonable so to do. 42 In the exercise of that discretion I am satisfied that the Applicant has not demonstrated that the facts of this particular case render it " fair and reasonable" that an order for costs should be made in its favour and the normative rule that costs in planning appeals not ordered, should in my view, be applied. 43 For those reasons I order that the Applicant's Motion be dismissed and that each party pay its own costs in the proceedings.

Hunter Development and Brokerage Pty Ltd v Cessnock City Council

At a glance

Court

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Before

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Judgment (17 paragraphs)

Parties

Cases Cited (5)

Cited By (26)