Khouri v Burwood Council & Anor

The applicant sought to rely on amendments to the application in the appeal. In Khouri v Burwood Council and Anor [2001] NSWLEC 124 Talbot J rejected the amendments on the basis that the amended plans did not represent substantially the same development.

On 8 August 2001 the applicant notified the council and the Minister that the appeal would be withdrawn. On 21 August 2001 the council approved a second development application.

The Court may order the discontinuing party to pay the costs of any party against whom the discontinued claim was brought: Part 11 r 5(1) of the Land and Environment Court Rules 1996. Similarly, s 69 of the Land and Environment Court Act 1979 confers on the Court a discretion to award costs which is subject to the duty to act fairly: see Oshlack v Richmond River Council (1998) 193 CLR 72 and Save the Showground for Sydney Inc v Minister for Urban Affairs and Planning (1998) 105 LGERA 254.

However, in the class one jurisdiction of this Court the ordinary practice of the Court is to make no order as to costs unless there are demonstrated exceptional circumstances: see Land and Environment Court Practice Direction 1993 par [10] ("the Practice Direction").

In Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622 McHugh J (sitting alone) said at 624:- In most jurisdictions today, the power to award costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and as a general rule the successful party is entitled to his or her costs. Success in the action or on particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.

The test adopted by His Honour, and followed in this Court, is one of reasonableness (see Lai Qin at 625; and see also Hayden Theatres Pty Limited v Penrith City Council (1999) 105 LGERA 230 and Duncan v Moore (2000) 107 LGERA 430).

The test explained in Lai Qin was adopted subsequent to the decision of Bignold J in Manly Wharf Pty Limited v Manly Council (1997) 98 LGERA 245. However, the Court does not find any inconsistency between the approach of His Honour in Manly Wharf and later in Hayden Theatres. This is apparent in Manly Wharf when His Honour noted at 249:- However I would emphasis that although an order for costs will ordinarily flow from the discontinuance of the proceedings, it may be established that the discontinuance reflects, not a total abandonment of the applicant's claims, but a compromise or settlement of them, in which circumstances it may be just that there be no order as to costs following upon the discontinuance of the proceedings.

On 5 December 2000 the solicitors for the Minister had advised that the amended proposal was substantially different from the current proposal and that a fresh development application would be required. Accordingly, the initial hearing dates fixed for 10 - 12 January 2001 were vacated by consent.

Both the council and the Minister submit that in consequence of the decision of Talbot J in Khouri which was delivered on 6 April 2001 the continuance of the appeal from this date was unreasonable. They submit that costs have been incurred in the preparation of the appeal which was set down on 18 April 2001 for a hearing to commence on 20 August 2001.

The applicant submits that the continuing negotiations between himself, the council and the Minister justified the maintenance of the appeal after 6 April 2001. The applicant submits that the position was confused in that the Minister was supporting the amended plans for the development but the council continued to maintain its opposition. The applicant therefore submits that he acted reasonably in preserving his rights of appeal.

The appropriate consideration therefore remains one of reasonableness. If the parties have conducted the litigation in a manner that could be reasonably expected then it will generally be appropriate for the Court to make no order as to costs: see David Crane and Associates Pty Limited v Kogarah Council [1998] NSWLEC 121.

In this matter the applicant has not acted unreasonably in pursuing the appeal whilst negotiations were conducted with the Minister and with the council. The Court notes that the compromise achieved between the applicant and the council was most likely due to the negotiations undertaken by the applicant with the Minister with respect to the appeal. The Court can infer that it was the imminent date of a court hearing which concentrated the attention of all parties to reach an acceptable resolution. The resolution resulted in a fresh development application based upon new plans which was approved by the council without difficulty.

The litigation between the parties has accordingly been resolved. These proceedings were a necessary part of such resolution and in all of the circumstances the Court cannot treat the conduct of the applicant as unreasonable and therefore exceptional. The Court is satisfied that is appropriate that the Court make no order as to costs.

1. The notice of motion of the first respondent be dismissed with no order as to costs.
2. The notice of motion of the second respondent be dismissed with no order as to costs.

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