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[2025] NSWLEC 133
General information, not legal advice.
Land and Environment Court (NSW)
2025-11-25
Duggan J
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Source: NSW Caselaw (www.caselaw.nsw.gov.au). Converted to plain text by ZoeLaw. Not the official version.
Medium Neutral Citation: McElhone v Coordinated Logistics Pty Ltd [2025] NSWLEC 133
Hearing dates: 24 October 2025
Date of orders: 25 November 2025
Decision date: 25 November 2025
Jurisdiction: Class 4
Before: Duggan J
Decision: See orders at [65]
Catchwords: COSTS – application for costs in Class 4 proceedings – discontinuance of proceedings – Uniform Civil Procedure Rules 2005 (NSW), rr 42.1, 42.19, 42.20 – whether costs should be awarded in favour of the discontinuing party – Applicants to pay the Second Respondent’s costs
Legislation Cited: Environmental Planning and Assessment Act 1979 (NSW), s 4.15
Uniform Civil Procedure Rules 2005 (NSW), rr 12.1,
42.1, 42.19, 42.20
Kiama Local Environmental Plan 2011 (NSW)
State Environmental Planning Policy (Resilience and Hazards) 2021 (NSW), cl 4.6
Cases Cited: Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32
David McElhone v Coordinated Logistics Pty Ltd and Ors [2023] NSWLEC 90
Dincel Construction System Pty Ltd v Penrith City Council [2021] NSWCA 133; (2021) 247 LGERA 384
Enzo Developments Pty Ltd v Kiama Municipal Council [2025] NSWLEC 1092
McElhone v Coordinated Logistics Pty Ltd [2023] NSWLEC 22
Nadilo v Eagleton [2021] NSWCA 232; (2021) 250 LGERA 89
ONE.TEL Ltd v Deputy Commissioner of Taxation [2000] FCA 270; (2000) 101 FCR 548; (2000) 44 ATR 52; (2000) 171 ALR 227; (2000) 58 ALD 103; (2000) ATC 4229
Parlby v Blair [2013] NSWSC 100
Ralph Lauren 57 Pty Ltd v Byron Shire Council [2014] NSWCA 107; (2014) 199 LGERA 424
Re Harmony Homes Pty Ltd (in liq) [2023] NSWSC 300
Royal Motor Yacht Club (Broken Bay) Pty Ltd v Northern Beaches Council [2017] NSWLEC 56
Category: Costs
Parties: David McElhone (First Applicant)
Melissa McElhone (Second Applicant)
Coordinated Logistics Pty Ltd (First Respondent)
Enzo Developments Pty Limited (Second Respondent)
Kiama Municipal Council (Third Respondent)
Representation: Counsel:
C Ireland (Applicants)
Submitting appearance (First Respondent)
N Eastman SC (Second Respondent)
Submitting appearance (Third Respondent)
Solicitors:
Mark McDonald & Associates (Applicants)
Fishburn Watson O’Brien Lawyers (First Respondent)
Pikes & Verekers Lawyers (Second Respondent)
Marsdens Law Group (Third Respondent)
File Number(s): 2022/00343322
Publication restriction: Nil
The Applicants in these proceedings sought judicial review and civil enforcement of a development consent issued by Kiama Municipal Council (Council) to Coordinated Logistics Pty Ltd (First Respondent) for intensive plant agriculture and the erection of ancillary netting structure on land in Jerrara, NSW.
The Applicants now seek an order that the proceedings be discontinued and that Enzo Developments Pty Limited (Second Respondent) pay the Applicants costs.
On 10 September 2021, the Council issued the Second Respondent with a Development Control Order for the unauthorised construction of large steel structures (Perimeter Posts) to form a netting structure around an orchard on Lot 202 DP 1095943, known as 92 Jerrara Road, Jerrara, NSW (Lot 202) (DCO). The Second Respondent is the registered proprietor of Lot 202. The Applicants’ land adjoins Lot 202.
On 16 August 2022, the Council granted Development Consent DA 10.2021.344.1 to the First Respondent for intensive plant agriculture and ancillary netting structure (Development Consent) on Lot 202.
On 15 November 2022, these proceedings were commenced by way of Summons, seeking both judicial review and civil enforcement of the Development Consent (Class 4 Proceedings). On 14 December 2022, the Council and the First Respondent filed submitting appearances.
On 7 March 2023, Pain J delivered judgment in McElhone v Coordinated Logistics Pty Ltd [2023] NSWLEC 22, in relation to the Applicants’ Notice of Motion filed on 20 February 2023, to amend the Summons and to rely on expert evidence. Her Honour made the following orders at [36]:
36 The court orders:
(1) Applicants have leave to rely on the amended summons annexed to the Notice of Motion dated 20 February 2023.
(2) The Second Respondent’s costs as agreed or assessed in relation to prayer 2 of the Notice of Motion dated 20 February 2023 must be paid by the Applicants [Interlocutory Costs Order].
On 10 March 2023, the Applicants filed the Amended Summons, including, inter alia, the ground that the development approved by the Development Consent was development already carried out at the time the consent was granted by the Council (Amended Summons).
On 24 July 2023, Robson J delivered judgment in David McElhone v Coordinated Logistics Pty Ltd and Ors [2023] NSWLEC 90, in relation to the Applicants’ Notice of Motion filed on 14 July 2023. His Honour granted leave for the Applicants to further amend the Amended Summons and rely upon affidavit material: see [35].
On 27 July 2023, the Applicants filed the Further Amended Summons, including, inter alia, the ground that the Development Consent was granted contrary to cl 4.6 of the State Environmental Planning Policy (Resilience and Hazards) 2021 (NSW) (Resilience SEPP) (Contamination Ground).
On 2 August 2023, the Second Respondent conceded that the Development Consent was granted contrary to s 4.15(1)(a)(i) of the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act), in that a preliminary site investigation was required and was not considered by Council.
On 14 August 2023, the Second Respondent lodged Development Application DA 10.2023.109.1 with the Council in relation to the existing orchard on Lot 202 for the installation of netting and continued use of the orchard as intensive plant agriculture (2023 DA).
On 17 August 2023, the Second Respondent undertook not to rely on and to surrender the Development Consent (First Undertaking). The First Undertaking prevented the Second Respondent from carrying out the development the subject of the Development Consent until the grant of a further development consent.
On 18 August 2023, the Second Respondent submitted a Notice to Surrender a Development Consent to the Council. The Council subsequently issued a Notice of Surrender of Development Consent for the Development Consent dated 28 August 2023 to the Second Respondent.
On 20 March 2024, the Second Respondent commenced Class 1 proceedings in this Court against the Council’s deemed refusal of the 2023 DA Application (Class 1 Proceedings).
On 22 March 2024, Duggan J granted leave to the Applicants to further amend the Further Amended Summons in the form of the Second Further Amended Summons annexed to the Applicants’ Notice of Motion filed on 8 March 2024. On 4 April 2024, the Applicants filed the Second Further Amended Summons. This amendment included, inter alia, the restraint of development within the setback area, an area between the orchard on Lot 202 and the Applicant’s land (Setback Area).
On 5 July 2024, in accordance with the orders of Robson J, the Second Respondent gave a further undertaking on the terms extracted below (Second Undertaking):
The Second Respondent gives the following undertaking to the Court:
If upon final determination of Land and Environment Court proceedings 2024/106583 (Class 1 Proceedings) development consent is not obtained, the Second Respondent will consent to a Court order in these proceedings in the terms of Prayer 7 in the Second Further Amended Summons and will remove the Orchard development within 6 months of the date of the order, whereafter all activity for the purposes of the Orchard development shall cease.
If upon final determination of Land and Environment Court proceedings 2024/106583 (Class 1 Proceedings) development consent is only obtained in respect of part of the Orchard site (Consent), the Second Respondent will consent to a Court order in the terms of Prayer 7 in the Second Further Amended Summons and it will remove those parts of the Orchard development that are not the subject of the Consent, within 6 months of the date of the order. All activity for the purposes of the Orchard development shall cease at that time on the part of the Site not the subject of the Consent.
The undertaking noted in the third paragraph of the Short Minutes of Order dated 16 August 2023 (attached and marked "A") continues to apply and also applies to the Setback area.
Within 14 days, the Second Respondent will permanently remove the Setback area items.
…
On 20 February 2025, Commissioner Washington delivered judgment in Enzo Developments Pty Ltd v Kiama Municipal Council [2025] NSWLEC 1092 in relation to the Class 1 Proceedings. The Commissioner upheld the appeal and granted consent to the 2023 DA Application subject to conditions (2023 Consen****t): see [74].
On 18 July 2025, the Applicants filed a Notice of Motion seeking that the proceedings be discontinued pursuant to r 12.1(b) of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) and that the Second Respondent pay its costs proceedings (excluding the Interlocutory Costs Order) and the costs of the hearing on costs.
42.1 General rule that costs follow the event
Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.
42.20 Dismissal of proceedings etc
(1) If the court makes an order for the dismissal of proceedings, either generally or in relation to a particular cause of action or in relation to the whole or part of any claim, then, unless the court orders otherwise, the plaintiff must pay the defendant’s costs of the proceedings to the extent to which they have been dismissed.
6 The power to award costs is an important aspect of rendering justice between litigants. Underlying the general rule that costs follow the event, and the qualifications to it, is the idea that costs should be borne in a way that is fair, having regard to the responsibility of each party for the incurring by the other of the costs. The general rule reflects the notion that justice to a successful party is not achieved if it comes at the price of being substantially out-of-pocket, so that a party who is responsible for litigation should bear its costs. It is unjust that a plaintiff who has to come to court to vindicate its legal rights should have to bear the costs of doing so, just as it is unjust that a defendant who is wrongly sued should have to bear the costs of its defence. Costs follow the event generally because, if a plaintiff wins, the plaintiff was caused to incur costs by the defendant's failure otherwise to accord to the plaintiff that to which the plaintiff was entitled; while if a defendant wins, the defendant was caused to incur costs in resisting a claim for something to which the plaintiff was not entitled.
7 UCPR, r 42.20, does not create a presumption, but is merely a default position. It reflects the general rule that costs follow the event: prima facie, if proceedings are dismissed, the plaintiff has lost. In exercising the discretion to “order otherwise”, the general rationale for costs orders provides important context, as does whether the formal disposition of the proceedings by dismissal truly reflects “the event”. Thus one circumstance in which the discretion to “order otherwise” may be exercised is where a discontinuance or dismissal is consequent upon a plaintiff having obtained practical extra-curial success, rendering the further prosecution of the proceedings pointless.
8 In Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin, McHugh J said:
“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 (Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201). 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 (Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201). In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation.
…
Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried.
…
If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings.”
9 In ONE.TEL Ltd v Commissioner of Taxation, Burchett J explained that the approach endorsed in Lai Qin is applicable in cases involving compromise, where there is no clearly successful party, as distinguished from cases in which one party, after litigating for some time, effectively surrenders to the other, rendering further litigation unnecessary; and that in the latter type of case, the outcome is sufficient to justify an “order otherwise” without it being necessary to demonstrate unreasonableness:
“[6] In my opinion, it is important to draw a distinction between cases in which one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event or settlement so removes or modifies the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case, there will commonly be lacking any basis for an exercise of the Court's discretion otherwise than by an award of costs to the successful party. It is the latter type of case which more often creates problems, since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs. In Ex Parte Lai Qin, McHugh J was careful to state (at 624) that the principles with which he was concerned were those that “govern an application for costs when a party elects not to pursue an action because he or she has achieved the relief sought in the action either by settlement or by extra-curial means”. As his Honour recounted the facts, the instant case was one where the applicant had challenged a decision of the Refugee Review Tribunal denying her status as a refugee but, during the pendency of her action in the High Court, the Minister had exercised his special discretion in her favour under s 417 of the Migration Act 1958 (Cth). The question whether the tribunal had or had not erred in law thus became moot. Sun Zhan Qui v Minister for Immigration and Ethnic Affairs was a similar case. Following the decision of the Full Court in Sun v Minister for Immigration and Ethnic Affairs (1997) 81 FCR 71, the Minister exercised his discretion under s 417, with the result that an outstanding proceeding in respect of one of several decisions of the Refugee Review Tribunal lost any significance for either party. Beaumont J followed Ex parte Lai Qin. Gribbles v Health Insurance Commission was a variation on the theme. There, the Health Insurance Commission was sued by a pathologist because it declined to recognise particular services as eligible for the payment of Medicare benefits; but during the pendency of the proceeding, certain arrangements affecting the performance of the services were changed, with the result that the Commission reversed its decision. The original dispute thus ceased to have any significance, and the argument about the appropriate costs order had to take place in the absence of any determination of the merits. Again, in Australian Securities Commission v Aust-Home Investments Ltd and in Australian Securities Commission v Berona Investments Pty Ltd, as Cooper J put it in the latter case (at 777), “events had overtaken the proceedings”. The relief originally sought was no longer required, and the proceedings were terminated without any decision on the merits. Neither side had won or lost (see the former case at 202, and the latter at 777). Reddy v Hughes and Rizal v Minister for Immigration and Multicultural Affairs perhaps each turned even more clearly on an assessment of the reasonableness of a party's behaviour. In Reddy v Hughes, the respondent had offered the applicant a substantially complete remedy before the institution of proceedings, and Branson J held (at 415) that her Honour was “not able to be satisfied that the applicant acted reasonably in commencing the proceeding”. In Rizal, although the applicant achieved the result he sought by his proceeding in the Court, there was an “at least arguable” objection to the Court's jurisdiction to entertain the application, and a proposed amendment to overcome the jurisdictional problem would have required leave to file an application long out of time. That leave had not been granted when the proceeding became moot because of the Minister's plainly reasonable decision to reconsider the request the previous rejection of which was the subject and casus belli of the litigation.
[7] By contrast with the decisions I have been discussing, the present matter involves a clear winner. The applicants, by their proceeding, sought to challenge the validity of certain notices, and to have them set aside. The respondent, after initially defending those notices, encountered at least an evidentiary difficulty, and acknowledged that they were to be set aside. That means that the applicants have succeeded, just as the respondent succeeded in Ahmetaj v Minister for Immigration and Multicultural Affairs [1999] FCA 332, where a proceeding failed by reason of the occurrence of an event that was always liable to occur and to defeat the proceeding; in those circumstances, Sackville J, when the hearing did not proceed, distinguished Ex parte Lai Qin and made a costs order. As in that case, so here, the result one party sought was achieved without a hearing, but not by a “settlement” in the ordinary sense, or as McHugh J used the word, and certainly not by what his Honour called “extra-curial means”.
[8] In any event, if, as the respondent contends, I should determine the question of costs by assessing whether, to borrow the language of McHugh J in Lai Qin at 625, “both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation [came to an end by the respondent's decision not to seek to uphold his notices]”, I would arrive at the same result. … ”
Rule 42.19(2) of the UCPR does not give rise to a presumption that costs will be ordered against the discontinuing party. There is a discretionary decision to be made as to whether the Court should order otherwise. There must be some sound positive ground or good reason for departing from the ordinary course: see Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32, per Hodgson JA with whom Basten and Tobias JJA agreed.
Both parties agreed as to the identification of the general costs principles, however, they disagreed as to the outcome of the application of such principles to the circumstances of this case.
The Applicants sought their costs of the Class 4 Proceedings (excluding the Interlocutory Costs Order).
The Applicants identified two distinct periods in the proceedings for the purposes of identifying the basis for their claim as to costs. The first being the period from commencement to the giving of the First Undertaking; and the second being from the giving of the First Undertaking until the discontinuance of the proceedings.
As to the first period, the Applicants contended that the Second Respondent:
Acted unreasonably
(a) prior to the commencement of the proceedings in respect of the issue of the DCO by the Council; and (b) after the commencement of the proceedings in that it defended the claim when it had no prospects of success, and in defence of the proceedings.
The surrender of the Development Consent was a capitulation by the Second Respondent indicating the Applicants’ practical success in the proceedings by reason of the giving of the First Undertaking.
As to the second period, the Applicants contended:
The continuation of the proceedings was necessary
(a) due to the breaches by the Second Respondent of the First Undertaking; and (b) the giving of the Second Undertaking did not resolve the entirety of the subject matter of the proceedings, namely prayer 8 of the Second Further Amended Summons.
Prior to the commencement of proceedings, the Second Respondent had acted unreasonably in that in establishing the orchard and erection of the steel structures around a significant portion of the orchard, it was contrary to planning law and in disregard to the impacts on the amenity of the Applicants. Following the DCO having been issued to the Second Respondent the existing steel structures remained in place. As a result, the Applicants had no choice but to commence the proceedings.
Once the proceedings were commenced the Second Respondent had no basis to defend the Summons after the first amendment to the Summons. The claim relating to the placement of the Perimeter Posts was one that was unable to be cured by the grant of a later development consent, as there was no power under the EP&A Act to grant development consent to development relating to the construction of a building where that development had already been undertaken: see Ralph Lauren 57 Pty Ltd v Byron Shire Council [2014] NSWCA 107; (2014) 199 LGERA 424 (Ralph Lauren) at [23]; Dincel Construction Sy**stem Pty Ltd v Penrith City Council [2021] NSWCA 133; (2021) 247 LGERA 384 at [99].
Where it can be demonstrated that a party would almost inevitably have succeeded, there may be no requirement there for that unreasonableness to be demonstrated: see Nadilo at [10].
Following the commencement of these proceedings, a number of offers to settle the proceedings were made by the Applicants to the Second Respondent, in which the first and second of these offers were ignored.
The Applicants contended that the Second Respondent breached the undertakings, in that it continued to carry out the orchard development to its commercial advantage. The Second Respondent’s approach to regularising the unauthorised development was met with delay, including in commencing the Class 1 Proceedings.
The surrender of the non-discontinuing party to the discontinuing party who seeks costs is a circumstance where costs may be ordered in favour of the discontinuing party: see ONE.TEL Ltd v Deputy Commissioner of Taxation [2000] FCA 270; (2000) 101 FCR 548; (2000) 44 ATR 52; (2000) 171 ALR 227; (2000) 58 ALD 103; (2000) ATC 4229 (ONE.TEL) at [6]. Where one party effectively surrenders to another party, usually there is no basis for an exercise of discretion other than to the successful party.
Up to and including the giving of the First Undertaking, the Applicants were successful by way of the surrender of the Development Consent and the restraint of development until a development consent was legally granted. A further measure of practical success was secured after the commencement of the Class 4 Proceedings, in that the Perimeter Posts were removed after the filling and service of the Amended Summons.
The surrender of the Development Consent and the undertakings gave the Applicants complete success in the judicial review component of the proceedings and extra-curial success being the equivalent of injunctive relief extending from 17 August 2023 to the grant of the 2023 Consent, making the Applicants the successful party in the proceedings and justifying a costs order pursuant to the principle in ONE.TEL at [6].
In relation to prayer 8 of the Second Further Amended Summons, the Applicants submitted the Second Respondent was on notice that it would be continued to be pressed and rejected the Second Respondent’s submission that it was successful on terms greater than its offer issued on 27 July 2023.
In the alternative and in addition to the grounds above, because of the Second Respondent’s unreasonable conduct in litigation in the period after 17 August 2023 and after 5 July 2024 the Applicants submitted that they should be awarded the costs of the proceedings as a whole (or in the alternative from 17 August 2023) because:
There where multiple breaches of the undertakings;
There were other examples of unreasonable conduct by the Second Respondent in litigation in this period; and
The Applicants’ discontinuance was justified in part, as the grant of the 2023 Consent rendered the continuation of the remainder of the proceedings as unnecessary.
Unreasonable conduct by a party in circumstances where proceedings are discontinued and where a party has achieved the relief sought in the action by settlement or by extra-curial means, is a basis for the award of costs as recognised in ONE.T**EL at [5], [6] and Ralph Lauren at [108], [109].
The Second Respondent did not comply with the undertakings amounting to unreasonable conduct and a reason to depart from the usual orders upon discontinuance. The Applicants were required to continue the proceedings because of the breaches of the undertakings. The breaches alleged were as follows:
The extensive pruning of trees in the orchard and picking of fruit post the First Undertaking;
The regular use of tractors in the orchard; and
The installation of cameras, signs and flags in the Setback Area after the First Undertaking amounting to ongoing carrying on the development, which were not removed within the time specified by the Second Undertaking.
Conduct by a defendant or respondent before litigation and a failure to approach the issues ultimately the subject of the litigation constructively also amounts to unreasonable conduct: see Parlby v Blair [2013] NSWSC 100 (Blair) at [16]-[20] and Ralph Lauren at [23]. This is also the case where a supervening event has removed or modified the subject of the proceedings so that there is no issue between the parties except for costs: see Re Harmony Homes Pty Ltd (in liq*)* [2023] NSWSC 300 at [5(h)]. For the following reasons, the Applicants submitted this had occurred:
The representation to Council prior to the grant of the Development Consent that the chestnut trees would be removed and not form part of the orchard, which was not fulfilled;
An extra 60 trees were planted in the Setback Area after the First Undertaking was given, resulting in the Second Further Amended Summons;
The Second Respondent engaged in bullying and threatening conduct towards the Applicants;
The erection of a metal shed relying on exempt development provisions, despite previous representations that such a structure would not be built; and
The installation of security camera poles and high temporary fencing on the western and northern boundary of Lot 202.
The Applicants also submitted that there had been conduct in relation to the proceedings that had caused delay, unnecessary attendances and consequential costs. The Second Respondent exhibited an ongoing failure to properly engage with the offers to settle pursuant to the principle in Blair at [16]-[20].
The Second Respondent opposed the Applicants’ claim for costs, but consented to a determination of costs as follows:
The Second Respondent is to pay the Applicants’ costs, on an ordinary basis, from 24 July 2023 (being the date upon which the Applicants were granted leave to file the Further Amended Summons) to 18 August 2023 (being the date upon which the Second Respondent surrendered the Development Consent); and
Each party is to pay their own costs of the proceedings from commencement to 24 July 2023 and from 18 August 2023 to date, excluding the costs payable by the Applicants pursuant to order 2 of the orders made by Pain J on 7 March 2023.
The Second Respondent contended that the judicial review and civil enforcement component of the proceedings should be considered separately for the purpose of determining costs as:
The surrender of the Development Consent on 18 August 2023 represented effective surrender of the judicial review component of the proceedings and flowed directly from the addition of the Contamination Ground for which leave was granted on 24 July 2023. On that basis, the Second Respondent accepts that it is liable to pay the Applicants’ costs for the defined period;
The grant of the Development Consent on 20 February 2025 was a supervening event in the civil enforcement component of the proceedings and on that basis each party should pay its own costs for all but the defined period; and
The Second Respondent has acted entirely reasonably and the order of costs beyond the defined period would be punitive in the circumstances. The Applicants did no better than the offer which was made by the Second Respondent on 27 July 2023.
Given the grant of the 2023 Consent, the Second Respondent submitted that it would have succeeded in the Class 4 Proceedings had the matter proceed on the grounds pleaded in the original Summons.
In relation to the Amended Summons, the Development Consent did not approve development already carried out, rather it approved the use of the orchard for intensive plant agriculture. The Perimeter Posts where not “development” as defined in the EP&A Act as at that time there was no permanent connection to the land: see Royal Motor Yacht Club (Broken Bay) Pty Ltd v Northern Beaches Council [2017] NSWLEC 56. The Second Respondent would have continued to defend the ground, but for the Second Further Amended Summons.
The Second Respondent surrendered the Development Consent once the Contamination Ground was raised and accepts that it is liable to pay some of the costs arising. It should not be liable to pay for costs prior to the Contamination Ground being raised or from the time the surrender of the Development Consent was lodged.
The Second Respondent submitted that the amendment to prayers 7 and 8 in the Second Further Amended Summons has no impact on the determination of costs. Prayer 7 was addressed by way of the First Undertaking, preventing the Second Respondent from carrying out development until a further development consent was obtained. Following the First Undertaking, the Second Respondent submits that it had the understanding that Prayer 8 would be stayed pending the determination of the Class 1 Proceedings.
Once it was made aware that the Applicants proposed to pursue prayer 8 the Second Undertaking was given, which had the effect of rendering any future pursuit of the proceedings futile. The Second Undertaking was agreed to avoid further costs in the Class 4 Proceedings and was not an effective surrender.
The grant of the 2023 Consent on substantially the same terms as the Development Consent was a supervening event and each party should pay its own costs, except for the defined period. To the extent that the terms of the 2023 Consent differ from the terms of the Development Consent, they are no more favourable to the Applicants than the offer made by the Second Respondent on 27 July 2023.
The Second Respondent submitted that it acted reasonably in its conduct of the litigation. The planting of trees on Lot 202 was undertaken on land zoned RU2 Rural Landscape and on which extensive agriculture is permitted without consent and this was not carried out in disregard of the planning system.
The Second Respondent’s conduct throughout the proceedings has been reasonable with undertaking given to minimise costs. The Second Respondent was ultimately successful with respect to prayer 8 on terms more favourable than the offer it made on 23 July 2023.
The Applicants’ allegations of breaches of the undertakings are unfounded. There are no further orders, contempt proceedings or injunctions brought or proven by the Applicants, because:
In relation to the signage, fencing and security cameras the Second Respondent had real concern due to earlier trespass and poisoning of plants;
The ongoing maintenance of vegetation, extensive agriculture is permitted without consent under the Kiama Local Environmental Plan 2011; and
The metal shed erected is exempt development and remains in place.
In the circumstances of this case, I find that there is no discretionary consideration that arises that would justify the making of an order for costs in favour of the Applicants.
The proceedings were discontinued as a consequence of the events that occurred during the course of the litigation. It is inappropriate to seek to determine which party would have been successful in the proceedings unless there is a clear basis for finding that success was inevitable. In this case, I accept that the Second Respondent had a reasonable basis upon which to defend the proceedings until the amendment to the Summons which raised the Contamination Ground. The issue of whether the Perimeter Posts were development that had already been undertaken was capable of dispute. The outcome of such dispute is incapable of resolution without hearing evidence from both parties and deciding that matter on the facts, which is not appropriate in the circumstances of a discontinuance.
The Second Respondent acted reasonably and promptly once it became apparent that the defence of the proceedings was untenable, and offered the First Undertaking, which was accepted by the Applicants. The suggestion that the Second Respondent breached such undertaking is also disputed. It is not apparent on the material before me (apart from some assertions as to events) that what is alleged to have occurred was in fact a breach of the First Undertaking. Again, the asserted conduct of the Second Respondent in its actions on the land after the giving of the First Undertaking cannot be determined without a hearing as to the facts of the asserted breaches, which exercise is inappropriate in the context of this costs hearing.
The giving of the First Undertaking was sufficient to ensure the retention of the status quo pending the determination of the parallel Class 1 Proceedings. To the extent that there remained a reason to continue the prosecution of the proceedings after the giving of the First Undertaking and the surrender of the Development Consent the Applicants does not appear to have identified a basis other than a remaining issue that would ultimately be determined by the Class 1 Proceedings, that is, in the event a development consent was not granted, the manner in which the works undertaken on the land would be treated. To that extent, once the Applicants’ concern was sufficiently identified the Second Respondent resolved that issue by the giving of the Second Undertaking.
Upon the giving of the Second Undertaking the only prayer of the Summons that remained outstanding was prayer 8. I am not satisfied that such a prayer in its current pleaded form was capable of being made. I am further not satisfied on the evidence adduced that the resolution of the Class 1 Proceedings and the grant of the 2023 Consent addressed the issues that would arise as a consequence of the determination of prayer 8.
I do not consider that the determination of the Class 1 appeal was an extra-curial victory for the Applicants’ such that it would sound in costs in these proceedings. The Class 1 Proceedings were determined on its merits. Whilst conditions were imposed upon that consent, the proceedings related to and relied upon the grant of an earlier consent that was surrendered. The grant of the subsequent development consent controlled future conduct, these proceedings related to past conduct. In the circumstances, the grant of the consent in the Class 1 Proceedings has not been demonstrated to be sufficiently related to the relief sought in these proceedings, particularly the remaining prayer 8 so as to warrant the making of a costs order in these proceedings either in whole or in part.
As to the asserted conduct prior to the commencement of the proceedings, for the same reasons I found above as to the reasonableness of the Second Respondent’s defence of the proceedings prior to the amendment to the Summons to raise the Contamination Ground, I consider that conduct was not unreasonable in the context of the litigation. There were clear disputes between the parties, and the maintenance of the competing positions was not unreasonable in the time period leading up to the commencement of litigation. The issuing of the DCO by the Council and the Second Respondent’s response was reasonable and was a matter unrelated to the commencement of these proceedings by these Applicants such that I do not consider that it is a matter that would relevantly inform the exercise of the cost discretion in the circumstances of this case.
For the reasons outlined above, I accept the submissions made by the Second Respondent and will make orders accordingly.
Both parties agreed that the costs of the hearing of the Notice of Motion for costs should follow the event. As the Second Respondent has been successful in the Motion, I will order that the Applicants pay its costs of the costs hearing.
I note that at the hearing of the Notice of Motion the Court granted leave to the Applicants to discontinue the proceedings.
The Court orders:
The Second Respondent is to pay the Applicants’ costs, on an ordinary basis, from 24 July 2023 to 18 August 2023;
Each party is to pay their own costs of the proceedings from commencement to 24 July 2023 and from 18 August 2023 to date, excluding the costs payable by the Applicants pursuant to order 2 of the orders made by Pain J on 7 March 2023; and
The Applicants are to pay the Second Respondent’s costs of the hearing of the Notice of Motion for costs.
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McElhone
Coordinated Logistics Pty Ltd [2025] NSWLEC 133
(2021) 247 LGERA 384
(2021) 250 LGERA 89
(2000) 101 FCR 548
(2000) 171 ALR 227
(2014) 199 LGERA 424
(1993) 44 FCR 194
(1997) 81 FCR 71