Malass v Strathfield Municipal Council (No 2)

Texts Cited: Nil

Category: Costs

Parties: Sarah Malass (Applicant)
Strathfield Municipal Council (Respondent)

Representation: Counsel:
M Seymour SC (Applicant)
G Farland (Respondent)
Solicitors:
Bartier Perry (Respondent)
New South Lawyers (Applicant)

File Number(s): 2024/385895

Publication restriction: Nil

JUDGMENT

1. The Applicant (Mrs Malass) has commenced a Class 1 development appeal of the refusal of a development application lodged in 2024 (2024 DA) by Strathfield Municipal Council (Council) for premises in Boden Avenue Strathfield (the property). The Council filed a notice of motion seeking summary dismissal of the Class 1 appeal on the basis of an abuse of process due to the 2024 DA’s similarity to an earlier development application lodged in 2020 (2020 DA). I dismissed that motion on 9 May 2025 in Malass v Strathfield Municipal Council [2025] NSWLEC 44 (May judgment). Mrs Malass now seeks her costs of that notice of motion relying on subrules 3.7(3)(a) and (d) of the Land and Environment Court Rules 2007 (NSW) (LEC Rules). The parties have relied solely on the judgment to support their respective submissions.

2. The consideration of costs arises under rule 3.7 which states:

3.7 Costs in certain proceedings

(1) This rule applies to the following proceedings:

(a) all proceedings in Class 1 of the Court’s jurisdiction

…

(2) The Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances.

(3) Circumstances in which the Court might consider the making of a costs order to be fair and reasonable include (without limitation) the following:

(a) that the proceedings involve, as a central issue, a question of law, a question of fact or a question of mixed fact and law, and the determination of such question:

…

(d) that a party has acted unreasonably in the conduct of the proceedings,

3. In Dunford v Gosford City Council (No 3) [2015] NSWLEC 96 at [30], Sheahan J accepted the following as the “key principles” operating when considering the award of costs:

4. Rule 3.7(2) creates a basic rule where there is a presumption against the making of an order for costs; Port Stephens Council v Sansom [2007] NSWCA 299; (2007) 156 LGERA 125 at [48] (Sansom).

5. The effect of the basic rule in r 3.7(2) is that, in the ordinary course, costs will lie where they fall; Agonic Holdings Pty Ltd v Lithgow City Council [2009] NSWLEC 34 at [5] per Biscoe J.

6. The question then is whether, despite the basic rule, it is "fair and reasonable" that a party should be reimbursed for the costs it incurred; Sansom at [50].

7. The formulation "fair and reasonable" calls for a judgment to be made, rather than as a discretion to be exercised, but in any event the evaluative process can be accurately described as conferring a wide discretion; Sansom at [51].

8. Rule 3.7(3) identifies, without limitation, some circumstances in which the Court might consider the making of a costs order to be fair and reasonable; Pet Carriers International Pty Ltd v Botany Bay City Council (No 2) [2013] NSWLEC 150 at [4] per Preston CJ.

9. The circumstances identified in r 3.7(3) may rebut the presumption in r 3.7(2) and may inform the Court's discretion but are neither prescriptive nor exhaustive; Pepperwood Ridge Pty Ltd v Newcastle City Council [2008] NSWLEC 196; 160 LGERA 164 at [73] per Biscoe J; Hillsong Church Limited v Council of the City of Sydney (No. 2) [2012] NSWLEC 118 at [55] per Pepper J.

Mrs Malass’ submissions

4. The commencement of the application and its continuation were unreasonable conduct of the Council such that an order for costs of the motion should be made in Mrs Malass’ favour under r 3.7(3)(d).

5. The motion involved a question of law or mixed fact and law attracting subr (3)(a). While the approach that costs follow the event does not apply in these kinds of matters, a costs order is generally considered acceptable when the question involved is a legal one given subr (3)(a).

6. The notice of motion was maintained in ‘otherwise unreasonable circumstances’ and/or was general unreasonable conduct, subr (3)(d). Various factors contribute to such a finding. Firstly subr 3(d) is ‘backward looking’ in that the Applicant’s success informs the Court’s consideration. Secondly the Council bore a heavy onus so that being arguable alone is insufficient, which the Council should have weighed up in deciding to commence proceedings. Thirdly the test articulated by Stein JA in Russo v Kogarah Municipal Council [1999] NSWCA 303; (1999) 105 LGERA 290 at [9] is that a development application giving rise to abuse of process must be exactly the same as an earlier one. This test should have been applied by the Council in its consideration of whether to commence proceedings. Fourthly the Applicant sought to raise a new argument that it need not apply pursuant to cl 4.6 of the Strathfield Local Environment Plan 2012 (NSW) for variation of the floor space ratio (FSR) controls for the 2024 DA (I note the Council only became aware of this at hearing of the motion). Fifthly the Council sought to rely on matters beyond the Class 1 appeal relating to the civil enforcement proceedings which the Court did not consider relevant. Sixthly, it is out of the ordinary for any party to attempt to invoke summary judgment in the Court’s merits jurisdiction. Seventhly, the Council’s motion unreasonably delayed any proper attention being given to the merits of the application.

Council’s submissions

7. No basis exists in the judgment for finding that the Council acted unreasonably in commencing or continuing with the motion. The Council quite reasonably sought to avoid a repetition of various matters considered in the 2022 appeal of the 2020 DA (Malass v Strathfield Municipal Council [2022] NSWLEC 1160) (the 2022 appeal) with consequential costs being incurred.

8. The Applicant impermissibly seeks to apply a ‘costs follow the event’ approach. The outcome does not inform the conclusion on costs. It is not relevant to state that provisions in r 3.7(3) are ‘backward looking’.

9. The Council acted expeditiously before a statement of agreed facts was prepared because it sought for all parties to avoid the costs of a contested merit appeal which on the evidence of Mr Loether will duplicate what occurred at the hearing of the 2022 appeal.

Consideration

10. I am determining in the exercise of discretion whether costs ought be awarded in the Applicant’s favour in relation to the Council’s unsuccessful motion, in light of r 3.7(2) and in the context of but not limited by r 3.7(3). In summary there is a presumption that each party pay its own costs unless the Court considers it fair and reasonable to award costs. As costs do not ‘follow the event’ that a party is successful alone does not suggest a particular outcome in relation to costs.

11. It is useful to first address the nature of the decision I made in my May judgment in considering the application for summary dismissal based on an abuse of process argument. The Applicant made a valid point that in determining whether the Council had established abuse of process I was undertaking an evaluative exercise leading to a binary decision whether to make such a finding or not. Such a decision is to be contrasted with making a discretionary decision with multiple potential outcomes, the appellate review of which is confined to the House v King standard (see House v King [1936] HCA 40; (1936) 55 CLR 499). This distinction was usefully highlighted in Cooke v Tweed Shire Council [2024] NSWCA 50 by Basten AJA at [34] clarifying the scope of appellate review of decisions of this Court. Because the outcome of the motion was binary, in that I could find abuse of process established or not, the more accurate description of what I did was evaluative in contrast to an exercise of discretion as expressed in [47] of my May judgment. The Applicant submitted that this distinction assisted in its arguments in relation to the application of subr (3)(a) in particular in that the issue was one of law or mixed fact and law. I accept that distinction more accurately reflects what I did in my May judgment. The matter requiring determination was one of mixed fact and law.

12. In my May judgment at [6] I identified the agreement of the parties as to the extent of difference between the 2020 DA and 2024 DA. As a result it was unnecessary for me to determine what the extent of difference was. The parties agreed the quantitative difference was minor. Their town planning experts disagreed that the qualitative difference was meaningful and the parties also agreed that I did not need to resolve that matter in order to determine the motion. I set out the lengthy chronology of litigation concerning the development of a house at the property in Class 1 and Class 4 of the Court’s jurisdiction since September 2020. I considered the decision of the Senior Commissioner in part in relation to the 2022 appeal inter alia. I identified additional evidence in the affidavit of Mr Loether solicitor to the effect that the 2024 DA will give rise to the same contentions as the 2020 DA, the 2024 DA will require re-agitation of the same arguments regarding FSR as the 2022 appeal (which took 4 days before the Senior Commissioner) and that the costs that will be incurred will duplicate the costs in the 2022 appeal. I set out the parties’ arguments. In my consideration I identified the relevant principles to consider in abuse of process applications including that the council bore a heavy civil onus. From [40]-[46] I identified the various matters raised in argument and concluded that in the weighing up exercise I was undertaking the Council had not established an abuse of process sufficient to warrant summary dismissal.

13. The ‘test’ in Russo relied on by the Applicant does not require that an abuse of process argument can only arise if a later DA is identical to an earlier DA. Importantly the Council was only advised at the hearing of the notice of motion that the Applicant intended to make a new submission in relation to the 2024 DA not made in relation to the 2020 DA, namely that no cl 4.6 variation of the FSR controls was required relying on Landcorp Australia Pty Ltd v The Council of the City of Sydney [2020] NSWLEC 174; May judgment at [42]. That a new argument was to be made was one of the matters that I weighed up.

14. I made no observations about the Council’s submissions lacking any basis or being unreasonable and nothing I stated provides a basis for any such submission in my view. I do not accept the Applicant’s submissions that there was anything unreasonable in the Council’s commencement or conduct of the proceedings based on my findings and ultimate conclusion.

15. The circumstances surrounding development of the property are unusual given the lengthy history of enforcement proceedings and the history of the 2020 DA. The notice of motion in the circumstances was not ‘outside what can reasonably be expected in the usual conduct of a class 1 appeal’; Marinkovic v Rockdale City Council [2007] NSWLEC 71; (2007) 151 LGERA 385 (Marinkovic*)* at [23] contrary to the Applicant’s submissions. The circumstances in Marinkovic were entirely different relating to multiple amendments of plans in any event. That abuse of process motions are infrequent in the Court’s merits jurisdiction can be accepted but that is a neutral matter in my view.

16. It follows that I do not consider the various factors relied on by the Applicant warrant the application of subr (3)(d).

17. The Applicant did not ultimately press a submission, appropriately, that there is an established practice in relation to the award of costs where the ‘event’ is an application to summarily dismiss. As is often the case in these kinds of cost applications, cases were provided where costs were awarded, and others where they were not, in similar legal circumstances. The Applicant referred to Anglican Retirement Villages*, Diocese of Sydney v Wollongong City Council (No 2)* [2013] NSWLEC 50 where Craig J stated in obiter that it ‘may be thought that an unsuccessful summary dismissal application would, self evidently, supplant the presumptive position’. I note that in that case no order for costs was sought and no such order made. In Nikolaidis v Pittwater [2009] NSWLEC 227 the parties agreed that the costs position to be adopted was that the costs ought follow the event so that was not a matter that the Court had to determine. In Edwards v The Hills Shire Council [2009] NSWLEC 187 costs were not awarded following an unsuccessful motion to summarily dismiss an appeal. Biscoe J’s finding at [16] included taking into account that the council there acted expeditiously in order to avoid the costs of preparing for a hearing, an observation that could apply equally to the Council in this matter. Stroud v CMZZJ Investments Pty Ltd (No 2) [2025] NSWLEC 72 considered an application for costs under the Trees (Disputes Between Neighbours) Act 2006 (NSW) following the dismissal of proceedings in which Robson J declined to make a costs order.

18. Ultimately, each case must be determined on its own facts and circumstances as to whether the award of costs is fair and reasonable in light of the principles articulated in Sansom inter alia.

19. The Applicant stressed that the motion raised questions of law or mixed fact and law and so subr (3)(a) applied. Taking into account the circumstances of the application, which I consider to arise from unusual events, and the necessary weighing exercise I had to undertake I do not consider an order for costs is fair and reasonable in the circumstances of this case.

20. The costs of the costs application must also be determined. As I identified in CBUS Property Pty Ltd v North Sydney Council [2024] NSWLEC 47 at [75] no rule informs the awarding of costs of costs applications. The approach in Drake v Randwick City Council [2021] NSWLEC 97 is one possible approach. I determine that each party should bear its own costs of this costs application.

Order

21. The Court orders:

22. The Applicant’s application for costs of the Council’s notice of motion seeking summary dismissal is dismissed.

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