Lesnewski v Mosman Municipal Council & Anor

The Applicant filed an amended Points of Claim on 2 October 2002 ("the October 2002 Points of Claim"). The October 2002 Points of Claim contained a number of amendments to the June 2002 Points of Claim including adding one further item to the particulars provided at par 19 of the June 2002 Points of Claim. An amended Class 4 application filed by the Applicant in December 2002 ("the Amended Application") also sought declarations as to the validity of the construction certificate.

On 9 April 2003 I determined, as a preliminary point of law, that s 101 of the EP&A Act prevented the Applicant from challenging the development consent. As a consequence of this judgment a substantial part of the Applicant's case could not proceed in the way it had been argued in the October 2002 Points of Claim and. A Second Amended Points of Claim was filed by the Applicant on 23 April 2003 ("the April 2003 Points of Claim"). The particulars given for par 19 of the April 2003 Points of Claim were amended from those contained in the October 2002 Points of Claim, with four deletions and eight new additions being made.

Meanwhile, the Second Respondents had lodged a s 96 application with the Council, seeking modifications to the development consent originally under challenge. They appealed to this Court against the Council's refusal of that s 96 application. On 2 July 2004 this Court determined that the Second Respondents' appeal should be upheld and the modifications allowed. It was therefore necessary for further amendments to be made to the April 2003 Points of Claim and on 29 July 2003 the Applicant filed further Amended Points of Claim ("the July 2003 Points of Claim). The July 2003 Points of Claim deleted some of the matters in relation to which orders and relief were sought in the April 2003 Points of Claim. The July 2003 Points of Claim also further amended the particulars set out at par 19 by adding one further matter, bringing the matters relied on as being illegal works to a total of 15. Because of the s 96 application only eight matters remained under par 19.

At the hearing the Applicant relied on the eight matters particularised at par 19 of the July 2003 Points of Claim. Of these, only one, the height of the swimming pool concourse, appeared in the original June 2002 Points of Claim filed by the Applicant. In my judgment of 29 March 2004 I held that the Applicant's challenge to the construction certificate was unsuccessful but I found that the Second Respondents had carried out illegal works in relation to three of the eight matters alleged by the Applicant and granted relief in relation to one of those, being the installation of shutters (see par 2 above which sets out the orders and declarations made by me on that occasion). The matters in relation to which the Applicant ultimately succeeded were added to the Applicant's case by the April 2003 Points of Claim.

The issues relating to the validity of the construction certificate occupied the bulk of the argument and evidence in the hearing before the Court.

The Applicant's Submissions 10. The Applicant disputed the Second Respondents' claim that they were entitled to their costs and argued, in the alternative, that the Second Respondents should pay the Applicant's costs associated with the illegal works or that the Second Respondents should pay sixty per cent of the Applicant's costs. The Applicant argued that there was no "usual rule" as to costs which has been formally adopted by this Court and referred to the decision of Enfield J in Re Sanchez (1994) 49 FCR 326 to support her argument that costs should be determined in light of all the circumstance of the case. Further, the Applicant relies on the decision of Ritter v Godfrey (1920) 2 KB 47 to argue that where, as here, an unsuccessful applicant has acted reasonably in commencing the proceedings and the successful respondents, by their actions, led the applicant to believe that she had a good cause of action, the respondents are not entitled to their costs.

The Second Respondents' Submissions 11. The Second Respondents argued that this Court's usual practice, being that costs should follow the event and the unsuccessful party should bear the successful party's costs, should be applied in relation to these proceedings. The Second Respondents relied on the judgment of McHugh J in Oshlack v Richmond River Council (1998) 193 CLR 72, as applied by the Court of Appeal in Maule v Liporoni & Anor [No. 2] (2002) 122 LGERA 216, to argue that discretion as to costs granted to the Court by s 69(2) of the Land and Environment Court Act 1979 is usually exercised in favour of the successful party unless the conduct of the successful party is such that it disentitles them from the beneficial exercise of the discretion on costs.

12. The Second Respondents argued that, as the Applicant was unsuccessful: (a) in relation to her contention that the development consent was invalid; (b) in relation to her contention that the construction certificate was invalid; (c) in obtaining declarations in relation to the majority of works alleged to have been built without consent; and (d) in obtaining any order, other than in relation to the shutters, for the demolition or substantial renovation of works alleged to have been built without consent; the Applicant was unsuccessful on all of the critical issues and it was appropriate that costs for the whole proceedings be awarded in favour of the Second Respondents. In this regard the Second Respondents argued that the orders I made in relation to the illegal work were minor, given the context of the whole case and that the Applicant's claim in this regard had, in any event, been raised late in the proceedings. The Second Respondents relied on the decision of Cretazzo v Lombardi (1975) 13 SASR 4 to support their argument that while they were not successful on every ground, they ought to be awarded the costs of the proceedings unless there were exceptional circumstances which justified the making of a different order. The Second Respondents denied that they engaged in any disentitling conduct in encouraging the Applicant to believe that she had a valid case. They relied on the contents of the letters forming exhibits 11 and 12 where both the Second Respondents' solicitors and the Council's solicitors wrote to the Applicant shortly after the Applicant commenced proceedings advising that s 101 of the EP&A Act precluded the Applicant from challenging the development consent.

Finding 13. Under s 69(2) of the Land and Environment Court Act 1979 I have a broad discretion in deciding how costs should be awarded. The usual practice of this Court is that costs follow the event unless there is disentitling conduct on the part of the successful party. The Second Respondents have been largely successful in these proceedings but I have made orders against them in relation to a relatively small part of the case in terms of the time occupied during the course of the hearing by the claim of illegal work.

14. In Ritter v Godfrey Atkin LJ stated that disentitling conduct on the part of a successful party would exist if: … there is evidence that the defendant (1) brought about the litigation, or (2) has done something connected with the institution or the conduct of the suit calculated to occasion unnecessary litigation or expense, or (3) has done some wrongful act in the course of the transaction of which the plaintiff complains. It does not appear to me that, in this case, there is any evidence that the Second Respondents have conducted themselves in any way identified in Ritter v Godfrey so as to disentitle them to costs on that basis.

15. The Applicant was entirely unsuccessful in relation to the preliminary issue of law concerning the application of s 101 of the EP&A Act and I think the Second Respondents should have their all costs up to this point, being my judgment dated 9 April 2003.
16. In relation to the remainder of the proceedings the Applicant was generally unsuccessful and, in the usual course, would be liable for all the Second Respondents' costs. In this regard I note that it is not generally desirable to weigh up the outcome of every issue argued and to apportion costs accordingly on a costs application. However, it is necessary to consider whether the orders made against the Second Respondents preclude them from getting their costs for this part of the proceedings.

17. In my view the Second Respondents have not been entirely successful in relation to the rest of the hearing, heard by me on 28 to 29 July 2003 and 27 November to 1 December 2003, as is clear from the orders made against them on 29 March 2004. As I said at par 62 of my judgment of 29 March 2004, failing to comply with the relevant approvals granted by a Council is serious and that is why I made the declarations of illegal work which I did. While I decided in the circumstances before me that only limited relief ought be granted, I do not think that should be interpreted as meaning that the carrying out of the illegal work is so minor that this should be disregarded for cost purposes. In other words I do not accept that the Second Respondents should be considered as wholly successful in these proceedings and they should not get all of their costs. I do not consider the approach in Cretazzo v Lombardi entirely apposite in the circumstances before me. I will award the Second Respondents seventy per cent of their costs for this part of these proceedings, that is from after my judgment dated 9 April 2004.

18. The Applicant was largely unsuccessful in her case and there is accordingly no basis for an award of costs in her favour. While orders were made against the Second Respondents, viewed in the totality of the litigation this was not a substantial part of the Applicant's case nor was she largely successful in relation to it, given that only three matters out of eight were the subject of orders and these matters could not be considered particularly significant in the context of this case.
19. In terms of the costs for this application for costs, the Applicant should pay the costs of the Second Respondents. Orders
20. I make the following orders: 1. That the Applicant is to pay the Second Respondents' costs, as agreed or assessed, up to and including 9 April 2003. 2. That the Applicant is to pay seventy per cent of the Second Respondents' costs for the period commencing after 9 April 2003. 3. That the Applicant is to pay the Second Respondents' costs of their Notice of Motion seeking costs dated 18 May 2004.

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