Manly Council v Kelly

Byron Shire Council v MacAdam (2001) 116 LGERA 418; Jan Yee Australia Pty Limited v Woollahra Council & Anor (Bignold J, NSWLEC, 26 March 1997, unreported); Kurnell Lodge Pty Limited v Bourne & Anor [2004] NSWLEC 329; CASES CITED: Murray v Valaire [No. 2] [2001] NSWLEC 241; Newcastle City Council v Winwood [2005] NSWLEC 294; Re the Minister for Immigration and Multicultural Affairs of the Commonwealth of Australia; ex parte Lai Qin (1997) 186 CLR 622; Rockdale City Council v Rougalas [2005] NSWLEC 525

APPLICANT: Ms K Gerathy (solicitor) SOLICITORS: Abbott Tout LEGAL REPRESENTATIVES: RESPONDENT: Mr S Hopper (solicitor) SOLICITORS: Hopper & Co Lawyers

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

40804 of 2004 Manly Council v Christopher Brian Kelly

JUDGMENT 1 Her Honour: These are costs proceedings arising out of a Class 4 Application filed by Manly Council ("the Council") to enforce an order made by the Council in relation to the placement of car bodies and other materials at the Respondent's premises. The Council seeks an order pursuant to Pt 15 r 7 of the Land and Environment Court Rules 1996 ("the Rules") or alternatively, pursuant to s 69(2)(a) of the Land and Environment Court Act 1979 ("the Court Act") that the Respondent pay its costs of the proceedings. The Respondent opposes the order sought by the Council. Background 2 The Council tendered a chronology of events outlining the relevant background to these proceedings. The Respondent owns property located at Lot 4 DP 19148, known as 5 Redman Street, Seaforth ("the premises"). Council officers inspected the premises on 21 October 2003.

3 On 23 October 2003, the Council issued a Notice of Intention to Issue an Order pursuant to s 124 of the Local Government Act 1993 ("the Local Government Act"). The Notice of Intention to Issue an Order proposed the following:

Terms of Order

1. Remove the two motor vehicle bodies that are being stored on their side along the Southern boundary of the premises. REASON: The two motor vehicle bodies in mention are stored in a manner that has the potential to cause serious harm to members of the public, as well as structural damage to the property known as 3 Redman Street, Seaforth. …
2. All motor vehicle bodies, motor vehicle parts, and other motor vehicle paraphernalia which are stored within the yards of the premises are to be stored clear of the ground to a distance of at least 150mm. …

REASON: The motor vehicle bodies, motor vehicle parts, and other motor vehicle paraphernalia are being stored in a manner that may encourage the harbourage of vermin.

4 On 26 November 2004, the Council served an order pursuant to s 124 of the Local Government Act in accordance with the terms of order stated in par 3 above.

5 On 8 January 2004, Council officers attended the premises and observed that the terms of the order dated 26 November 2004 had not been complied with. On 9 February 2004, Council issued a second Notice of Intention to Issue an Order pursuant to s 124 of the Local Government Act in the same terms as the previous notice. On 17 February 2004, the Council served a second order pursuant to s 124 of the Local Government Act in accordance with the terms of order stated in par 3 above.

6 On 18 March 2004, Council officers attended the premises and observed that the terms of the Council's order dated 17 February 2004 had not been complied with. Subsequent to this, a letter was sent by the Council's solicitors to the Respondent dated 16 April 2004 stating that if the Respondent did not undertake to comply with the orders by 14 May 2004, the Council would bring proceedings in this Court and seek its costs of the proceedings.

7 On 8 July 2004, the Council filed a Class 4 Application seeking a declaration that the Respondent had not complied with the Council's orders dated 17 February 2004 and that the Respondent comply with the Council's order within 21 days.

8 On 5 October 2004, the parties filed short minutes of order. By consent, the Court made the following orders:

1. The Respondent, by himself or his servants and agents, is to remove from Lot 4 DP 19148, known as No. 5 Redman Street, Seaforth ("the subject premises"), or cause to be removed from the subject premises, the two car bodies, marked "CB/1" and "CB/2" on Annexure "C" to the affidavit of Stephen Rodney Kinsela sworn on 7 July 2004 and filed in these proceedings, a copy of which is annexed to these orders and marked "1", within 10 months of the date of these orders.
2. From the date of these orders to the date on which the two car bodies referred to in Order 1 are removed, the said car bodies are to remain secured to the dwelling house by way of a cable, as shown in annexure "D" to the affidavit of Christopher Brian Kelly affirmed on 26 August 2004 and filed in these proceedings, which is annexed to these orders and marked "2".
3. At all material times when the Respondent is not engaged in restoring the two car bodies marked "CB/1" and "CB/2" on Annexure "1" to these orders, the Respondent is to ensure that the said car bodies are securely covered with tarpaulins, as shown in the photographs contained in annexure "C" to the affidavit of Christopher Brian Kelly affirmed on 26 August 2004 and filed in these proceedings, which are annexed to these orders and marked "3" and "4".
4. The Respondent, by himself or by his servants and agents, is to remove, or cause to be removed, all paper and rubbish located in the inside areas of the two car bodies located on the subject premises marked "CB/3" and "CB/4" on annexure 1, within 7 days from the date of these orders.
5. The Respondent is to close the windows of the car bodies marked "CB/3" and "CB/4" in annexure "A" and is to ensure that the said windows remain closed until such time as the said car bodies are removed from the subject premises.
6. The Respondent is to place, or caused [sic] to be placed, rodent poison within the car bodies marked "CB/3" and "CB/4" in annexure "A".
7. The Respondent is to check the rodent poison referred to in order 6 on a weekly basis and is to replace the said poison when and where required.
8. The Respondent is to cause a qualified pest manager to conduct an inspection of the subject premises, and prepare a pest management report(s), at 6 monthly intervals from the date of these orders, and is to submit, or cause to be submitted, the said reports to the Council, until such time that the car bodies "CB/3" and "CB/4" are removed from the subject premises.
9. The Respondent is to carry out, or cause to be carried out, any pest management action recommended in the report(s) referred to in order 8.
10. Costs reserved.

9 As consent orders were filed there has been no final determination of the merits of the matter by the Court. Relevant provisions 10 The power for the Court to make an order for costs is found in s 69 of the Court Act. Section 69(2)(a) of the Court Act provides: … costs are in the discretion of the Court.

11 Part 15 r 7 of the Rules provides: The Court may order the respondent to pay the costs of the proceedings where a respondent satisfies or causes to be satisfied the claim of the applicant after the proceedings have been commenced.

Evidence 12 The Council relied on affidavit evidence from: · Mr Stephen Rodney Kinsela, the Council's environmental health officer, sworn 7 July 2004; and · Mr Philip Lee Brown, the Council's solicitor, affirmed 7 July 2004.

13 The Respondent relied on affidavit evidence from: · Mr Christopher Brian Kelly, the Respondent, affirmed 26 August 2004; and · Mr Christopher Brian Kelly, the Respondent, affirmed 14 November 2005.

Council's submissions 14 The Council submitted that it should be entitled to its costs of the proceedings pursuant to Pt 15 r 7 of the Rules because the Respondent had satisfied the Council's claim in these proceedings. By agreeing to the short minutes of order dated 5 October 2004 the Council's Class 4 Application, seeking orders that the Respondent remove two motor vehicle car bodies and undertake activities to minimise the potential for harbourage of vermin, was satisfied.

15 In the alternative, the Council argued that it was entitled to its costs of the proceedings pursuant to s 69 of the Court Act. The Council submitted that as it was reasonably justified in bringing and continuing these proceedings and had been wholly successful it was entitled to costs.

Respondent's submissions 16 The Respondent submitted that the Council should not be entitled to its costs pursuant to Pt 15 r 7 of the Rules and disputed that the Council's claim was satisfied in these proceedings. The Respondent argued that there was a marked difference between what the Council sought in its Class 4 Application and what it obtained in the consent order. While the Class 4 Application sought to have the two motor vehicle car bodies removed forthwith, the short minutes of order provided that they be removed within 10 months from 5 October 2004. The Respondent also noted that there were a number of reasons that parties entered into consent orders, including personal and commercial reasons. Accordingly, it was not open for the Court to infer that as the Respondent had accepted a negotiated settlement of the proceedings that the Respondent had accepted the Council's allegations against him.

17 The Respondent also submitted that the Council should not be entitled to its costs on the basis that its actions were unreasonable. The Respondent noted that while the Council was not obliged to do so, it had not obtained an expert report to determine if the Respondent's premises posed a health and safety risk. If the Council had obtained an expert report confirming its position before commencing proceedings, the Respondent would have complied with the orders dated 17 February 2004 and the need for Court proceedings would have been avoided.

Finding 18 The Council has sought its costs in these Class 4 proceedings relying on Pt 15 r 7 of the Rules and s 69 of the Court Act. The Court has a broad discretion, to be exercised judicially, to award costs under s 69 of the Court Act.

19 In Re the Minister for Immigration and Multicultural Affairs of the Commonwealth of Australia; ex parte Lai Qin (1997) 186 CLR 622, McHugh J stated at 624 that: In most jurisdictions today, the power to order 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.

In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action…

20 In Jan Yee Australia Pty Limited v Woollahra Council & Anor (Bignold J, NSWLEC, 26 March 1997, unreported) Bignold J considered that a reasonable basis for a costs order in favour of a council would exist where: … the proceedings were justifiably commenced, justifiably continued, justifiably settled, and in all probability would have succeeded… 21 The Court was referred to a number of other cases in this Court, such as Byron Shire Council v MacAdam (2001) 116 LGERA 418, Murray v Valaire [No. 2] [2001] NSWLEC 241, Kurnell Lodge Pty Limited v Bourne & Anor [2004] NSWLEC 329, Newcastle City Council v Winwood [2005] NSWLEC 294 and Rockdale City Council v Rougalas [2005] NSWLEC 525 where the Court considered whether costs orders should be made in situations where the proceedings were resolved prior to the hearing. Ultimately each case must be considered on its own facts.

22 It is not appropriate that I engage in any assessment of the merits of the case, there having been no final determination of these. There is a dispute between the parties as to whether the two car bodies leaning against the wall of the house were secured by a cable at the time the Council officer inspected as required by order 2 of the short minutes of order. The Respondent ultimately filed as evidence in the proceedings an affidavit with a statement from a structural engineer stating the cars were not a structural danger to the adjoining property in the short to medium term, and a pest inspector's report stating that he did not see any vermin but suggesting remedial action.

23 The Council was clearly justified in instituting these proceedings on 8 July 2004. It issued two Notices of Intention to Issue an Order and two orders that the Respondent remove two motor vehicle car bodies and undertake activities to minimise the potential for vermin. The Council also wrote to the Respondent advising him that Court proceedings would be commenced if the Respondent did not comply with the orders. The Respondent was tardy in responding to the Council having only responded by letters dated 14 January 2004 and 27 January 2004 to the first order issued on 26 November 2003. Following this correspondence the Council issued the second Notice of Intention to Issue an Order to give the Respondent further opportunity to make submissions. The Respondent also continued to maintain that a Council officer had undertaken to provide an expert report to him even when told by letter dated 9 February 2004 that the Council officer did not consider he had given any such undertaking. In addition, if the terms of the Class 4 Application and the short minutes of order are compared the Council succeeded in large part in achieving what it set out to do in these proceedings. Given the matters in dispute between the parties I am unable to conclude that the Council would have completely succeeded at the hearing. Accordingly, the Council is entitled to some but not all of its costs.

24 The principal argument of the Respondent is that the Council acted unreasonably in that it did not provide expert evidence to the Respondent to support its decision to issue an order under s 124 of the Local Government Act and therefore its actions were unreasonable. I am not satisfied that in failing to obtain an expert report that there was any disentitling conduct on behalf of the Council. The Local Government Act does not require council officers to justify a decision to issue orders and indeed to require this to be done would make the issuing of orders more onerous than the requirements of the Local Government Act. Council officers are empowered under the Local Government Act to issue orders if satisfied of relevant matters. There is an appeal right to this Court if a person is dissatisfied with the terms of the order, which avenue was not pursued.

25 The Council has provided evidence of its costs of the proceedings of $11,912.50 which is not disputed by the Respondent's solicitor. The Council is also seeking its costs of its application for costs which are estimated at $2,500. Taking into account all the matters before me I consider an award of costs in the Council's favour of $9,000 is appropriate.

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