JCTW Savage v Newcastle City Council

Land and Environment Court (NSW)|1998-06-10|Before: Pain J

Introduction 1. The Applicant commenced Class 1 proceedings appealing against the deemed refusal by the Council of the Applicant's development application for the demolition of an existing two storey commercial building and the erection of a 15 storey mixed commercial and residential building and a separate three storey residential building and a common car park at 615 Hunter Street Newcastle.

By orders made in this Court on 7 April 2003 the matter was set down for hearing on 28 - 31 July 2003. On Friday 25 July 2003 the Applicant discontinued the proceedings without the consent of the Council. This was the last business day before the commencement of the hearing on 28 July 2003.

The amendments made to the DCP had the effect of reducing the maximum height limit of buildings from 45m to 36m in an area which includes the relevant site the subject of the development application. I note that the height of the Applicant's proposal was 45.5m. The amendments also introduced side setback controls of between 6m and 12m where no such requirement had existed previously. This also had a significant implications for the Applicant's proposed development.

I note that the original DCP came into effect on 25 January 1999. The Applicant lodged a development application with the Council in December 2001. The original DCP was under review by the Council between November 2001 and March 2003. A draft amended DCP was exhibited to the public between 24 March and 16 May 2003. While made by the Council on 27 July 2003, the amended DCP came into effect on 15 August 2003, some two weeks after the scheduled completion of the hearing.

It was the Applicant's view that, as a result of the DCP amendments, the only possible development on the site was a four storey building. The Council did not entirely agree that this was the only possibility.

The Council argued that, pursuant to: (a) s 69 of the Land and Environment Court Act 1979 and the broad discretion which the Court has under that section; and (b) Pt 11 r 5 of the Land and Environment Court Rules which deals with discontinuance; costs should be awarded in its favour.

It is clear from the evidence presented that the parties had proceeded with the full intention of the matter proceeding to hearing, with all necessary case preparation being undertaken, including expert witness reports being prepared, the holding of a joint conference of experts and the request, made in the final days before the hearing, that experts attend for cross-examination.

I note that the Applicant accepts that ordinarily the filing of a notice of discontinuance by an applicant without the consent of the respondent will entitle the respondent to an order for costs in accordance with Pt 11 r 5 of the Land and Environment Court Rules. The question then is whether costs should be awarded, given the Court's wide discretion having regard to the particular conduct of the respective parties, particularly the Applicant in this case.

The Council argued that as the litigation when discontinued did not have the character of a merit review, it was outside the scope of par 10 of the Practice Direction which generally applies to costs in Class 1 proceedings and the scope of the previous practice which par 10 sought to embody. The Council argued that given that these practice directions do not apply, it is therefore not necessary for the Council to demonstrate exceptional circumstances in order to obtain an order for costs. This argument was put by the Council relying on a recent decision of the Chief Judge in of Gee v Port Stephens Council [2003] NSWLEC 260 (17 October 2003).

For the reasons set out below I do not think that the outcome in this case is likely to be different if the approach in Gee is taken or if the approach previously followed in the Court, namely, that a discontinuance amounts to exceptional circumstances as contemplated by Practice Direction 10 is followed. I note that there are numerous cases where judges of this Court have held that a discontinuance amounts to exceptional circumstances which justify an order for costs in Class 1 proceedings. Amongst other cases, I was referred by the parties to Nahum v North Sydney Municipal Council (1994) 83 LGERA 200 , Manly Wharf Pty Limited v Manly Council (1997) 98 LGERA 245 and Kent Green Dural Pty Limited v Hornsby Shire Council (1999) 103 LGERA 219.

The Applicant argued that the facts of this case are unusual. The draft DCP could have been taken into consideration by the Court at the hearing as a matter of public interest only under s 79C(1)(e) of the Environmental Planning and Assessment Act 1979 (the EP&A Act). The adoption of the amended DCP by the Council on 22 July 2003 meant that there had been a significant change in the rules applying to the merit appeal. On the basis of Zhang v Canterbury Council (2001) 115 LGERA 373, the Applicant argued that the amended DCP would be a focal point for the Court's consideration. In this regard the Applicant notes that if the Commissioner hearing the matter did not hand down a judgment for two weeks, then the amended DCP would have been part of the binding statutory framework he or she would have had to consider.

As a consequence of the adoption by the Council of the amendments to the DCP, the Applicant argues that it correctly formed the view that there was little point in the hearing proceeding. The Applicant argues that it promptly discontinued on 25 July 2003, once informed of the decision by the Council to adopt the amended DCP on 22 July 2003.

Particular reliance was placed by the Applicant on the decision of Lloyd J in the case of Menangle Sand and Soil Pty Limited v Wingecarribee Shire Council (2000) 108 LGERA 209 in which his Honour held that a relevant consideration in every case is whether the discontinuance was reasonable conduct on the part of the discontinuing party in the circumstances of the case, such as to negate the ordinary cost consequences of a discontinuance of the proceedings. A decision as to whether such conduct is reasonable may be based on some action by the other party to the litigation or some other supervening event beyond the party's control.

It was argued by the Council that the DCP did not absolutely prohibit development in this case as the amended DCP provided for flexibility and there was the possibility of a State Environmental Planning Policy No 1 - Development Standards (SEPP 1) variation being pursued. This was said by the Council to apply particularly in the case of the amended DCP which allows greater flexibility than would be the case in relation to a Local Environmental Plan. While this may be so, given the very significant change in planning requirements for the site resulting from the adoption of the DCP as amended, it is highly unlikely that there would be sufficient flexibility, either under the DCP or SEPP 1, to accommodate the proposed 15 storey development which the Applicant was pursuing.

The Council also argued that the issues relied on by the Applicant in suggesting its discontinuance was reasonable because of the making of the amended DCP, were already raised in the proceedings by the reference to the residential flat design code in the Amended Statement of Issues dated 12 May 2003. This code deals with the building separation distances at certain building heights. It was put by the Council that cl 30 of State Environmental Planning Policy No. 65 - Design Quality of Residential Flat Development requires that the Council take the residential flat design code into consideration in considering the development application.

The Council also suggested that the Applicant would have been aware well before the hearing of the likely impact of the amendments proposed to be made to the DCP controls on the proposed development, given that the Further Amended Statement of Issues dated 24 June 2003 filed by the Council had been amended to refer to the proposed amendments in more detail.

Consequently the Council argues that the hearing date should have been vacated and the Notice of Discontinuance filed much earlier than 25 July 2003, and on this basis, the Applicant was said to have acted unreasonably.

It was also put by the Council that the Applicant had known from November 2001 of the DCP review and possible amendment. None of this is disputed by the Applicant who clearly admits that it was so aware. The Applicant states that when the May and June amendments to the Statement of Issues were made, a hearing date had already been allocated, as I have already noted, on 7 April 2003. The Applicant states that it was not known to the Applicant, nor could it be known given that it was a matter completely in the control of the Council, when the Council would make the amended DCP. In those circumstances, the Applicant argues that it was reasonable for it to continue to prepare for the hearing. I agree. There is no suggestion by the Applicant that there is any disentitling conduct by the Council nor is this required for the purpose of the Applicant's argument.

I consider that as the DCP had been made at the time of the hearing, although not coming into operation until two weeks later due to the need to observe advertising requirements, the Court would have been highly likely to consider the DCP to be significant. If the Commissioner hearing the matter did reserve his or her decision for two weeks then the DCP would have had to have been a focal point of any decision as a legal requirement in any event, as is clear from Zhang .

I accept the Applicant's submission that the making of the amended DCP by the Council fundamentally changed the matters which would have been heard by the Court at the hearing of the matter if such a hearing had taken place. In the language of Lloyd J in Menangle Sand and Soil , the circumstances of the amended DCP amount to a supervening event, making the discontinuance of the Class 1 appeal reasonable.

I should note that in Gormick Constructions Pty Limited v South Sydney City Council, [2002] NSWLEC 130 (1 August 2002), a decision which the Council relied on, Bignold J awarded costs in circumstances where there was a discontinuance just before a merit hearing, which discontinuance was due in part to the supervening event of an LEP coming into force a short time before the hearing. His Honour's reasoning appears to be based partly on the circumstance that the proceedings were kept on foot for nearly four months after it was known to the applicant that the occurrence of the supervening event would take place. Bignold J also observed that the applicant should have been aware from the time it lodged its appeal of the council's processing of the LEP, so that the applicant, in his Honour's view, must have realised there was a real risk that the draft LEP would come into force prior to the hearing.

I consider that the circumstances before me are different to those in Gormick as the draft LEP has a different statutory basis under s 79C of the EP&A Act, warranting different considerations to that accorded to a draft DCP. A draft LEP is specifically referred to in s 79C(1)(a)(ii) of the EP&A Act. It is debatable whether a draft DCP has as much weight as a draft LEP under s 79C(1)(e) of the EP&A Act which refers to public interest considerations, although I accept the Council's argument that there is no weighting as between the various factors referred to in s 79C. Further, there was delay on the Applicant's part in Gormick which I do not consider exists here.

In the circumstances of this case I prefer to adopt the reasoning of Lloyd J in David Crane & Associates v Kogarah Council [1998] NSWLEC 121 (10 June 1998) to which I was referred by the Applicant. In that case his Honour said: Ordinarily the filing of a notice of discontinuance without consent will satisfy the requirement for an exceptional circumstance or operate as an established exception to the practice direction (Manly Wharf Pty Limited v Manly Council, Bignold J, 22 October 1997, unreported). This is because the discontinuance usually represents an abandonment of the applicant's claim, thereby leading to the result that costs incurred by the other party are necessarily wasted or thrown away. Whilst these principles generally govern the making of an order for costs in cases such as this, they are not hard and fast rules. If they were, then that would be contrary to the provisions of s 69(2) of the Land and Environment Court Act 1979, which give the Court an unfettered discretion as to costs. They are merely principles which the court has adopted as a guide to the exercise of the discretion which exists under that section. Moreover, the facts in each case are seldom the same. There may be special facts or circumstances which might justify a departure from these principles in any particular case. 25. Accordingly, it is necessary to examine the particular facts and circumstances which gave rise to the filing of the notice of discontinuance in this case.

In David Crane & Associates the applicant discontinued proceedings because of changes in the applicable law under SEPP 5 and the issue arose as to whether the respondent's costs should be payable by the applicant as a result of that discontinuance. Lloyd J held that it was reasonable for the applicant to do what it did. There was therefore no exceptional circumstance within the meaning of cl 10 of the practice direction which would displace the usual practice of the Court in making no order for costs in planning and building appeals.

While there is reference in the judgment to the fact that the applicant was not abandoning its claim entirely, which does not arise here, the general approach is, in my view, nevertheless appropriate to the case before me. I think it is appropriate in all the circumstances that each party pay its own costs in these proceedings as the Applicant's behaviour in discontinuing the matter was reasonable in the circumstances.

I therefore refuse to make the orders sought in the Council's Notice of Motion and order simply that each party pay its own costs of these proceedings. Orders 29. The Court makes the following order:
1. Each party is to pay its own costs in relation to these proceedings.

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.

CITATION : JCTW Savage v Newcastle City Council [2003] NSWLEC 431 APPLICANT PARTIES : JCTW Savage RESPONDENT Newcastle City Council FILE NUMBER(S) : (1)0481 of 2002 CORAM: Pain J KEY ISSUES: Costs :- exercise of Court's discretion to award costs in Class 1 proceedings - proceedings discontinued because of amendments made to Development Control Plan - whether discontinuance reasonable in circumstances Environmental Planning and Assessment Act 1979, s 69, s 79C, Land and Environmental Court Rules, pt 11 r 5 LEGISLATION CITED: State Environmental Planning Policy No 1 - Development Standards State Environmental Planning Policy No. 65 - Design Quality of Residential Flat Development Development Control Plan 40 David Crane & Associates v Kogarah Council [1998] NSWLEC 121 (10 June 1998) ; Gee v Port Stephens Council [2003] NSWLEC 260 (17 October 2003); Gormick Constructions Pty Limited v South Sydney City Council [2002] NSWLEC 130 (1 August 2002); CASES CITED: Kent Green Dural Pty Limited v Hornsby Shire Council (1999) 103 LGERA 219; Manly Wharf Pty Limited v Manly Council (1997) 98 LGERA 245 ; Menangle Sand and Soil Pty Limited v Wingecarribee Shire Council (2000) 108 LGERA 209 ; Nahum v North Sydney Municipal Council (1994) 83 LGERA 200; Zhang v Canterbury Council (2001) 115 LGERA 373 DATES OF HEARING: 24/11/03, 25/11/03 EX TEMPORE JUDGMENT DATE : 11/25/2003

(1999) 103 LGERA 219

(2000) 108 LGERA 209

(2001) 115 LGERA 373

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Cases Cited (9)