Meriden School v Pedavoli [2009] NSWLEC 208 | Case summary

EX TEMPORE JUDGMENT 1 Her Honour: I handed down judgment in Meriden School v Pedavoli [2009] NSWLEC 183 on 22 October 2009 and made orders setting aside a noise abatement order made by Burwood Local Court on 24 April 2009. I reserved the question of costs. The Applicant has filed a Notice of Motion dated 17 November 2009 seeking an order that its costs of the appeal be paid by the Respondent. As identified at [5] of the earlier judgment, this Class 1 appeal is pursuant to s 290 in Pt 9.2 of the Protection of the Environment Operations Act 1997 (the POEO Act). It is a Class 1 appeal by virtue of s 17 of the Land and Environment Court Act 1979 (the Court Act). In the substantive hearing of the appeal the parties filed new evidence and prepared a joint report so that this Court considered this matter anew on the basis of evidence that was not before the local court. 2 The parties agree that the relevant cost rule is that set out in r 3.7 of the Land and Environment Court Rules 2007 (the Court rules). Rule 3.7 provides: 3.7 Costs in certain proceedings (cf Land and Environment Court Rules 1996, Part 16, rule 4) (1) This rule applies to the following proceedings: (a) all proceedings in Class 1 of the Court's jurisdiction, (b) all proceedings in Class 2 of the Court's jurisdiction, (c) the following proceedings in Class 3 of the Court's jurisdiction: (i) appeals, references or other matters that may be heard and disposed of by the Court under the Crown Lands Act 1989 or Western Lands Act 1901, as referred to in section 19 (a) of the Land and Environment Court Act 1979, (ii) appeals under section 37 (1) of the Valuation of Land Act 1916, (iii) appeals under section 8E of the Rookwood Necropolis Act 1901 or clause 56 (2) of Schedule 8 to the Crown Lands Act 1989, (iv) appeals and applications under section 526 (including section 526 as applied by section 531) or 574 of the Local Government Act 1993, (v) appeals under section 202 of the Fisheries Management Act 1994, (vi) appeals under section 174, and references under section 175, of the Aboriginal Land Rights Act 1983, (vii) any other appeals, references or other matters referred to in section 19 (h) of the Land and Environment Court Act 1979. (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: (i) in one way was, or was potentially, determinative of the proceedings, and (ii) was preliminary to, or otherwise has not involved, an evaluation of the merits of any application the subject of the proceedings, (b) that a party has failed to provide, or has unreasonably delayed in providing, information or documents: (i) that are required by law to be provided in relation to any application the subject of the proceedings, or (ii) that are necessary to enable a consent authority to gain a proper understanding of, and give proper consideration to, the application, (c) that a party has acted unreasonably in circumstances leading up to the commencement of the proceedings, (d) that a party has acted unreasonably in the conduct of the proceedings, (e) that a party has commenced or defended the proceedings for an improper purpose, (f) that a party has commenced or continued a claim in the proceedings, or maintained a defence to the proceedings, where: (i) the claim or defence (as appropriate) did not have reasonable prospects of success, or (ii) to commence or continue the claim, or to maintain the defence, was otherwise unreasonable. 3 The list of circumstances for consideration by the Court set out in sub-section (3) of r 3.7 was introduced by the replacement of the Land and Environment Court Rules 1996 with the current Court rules in 2007. Applicant's submissions 4 The Applicant submits that it is fair and reasonable that its costs be paid in the circumstances of this case. It particularly relied on the Court of Appeal decision (per Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA concurring) in Thaina Town (On Goulburn) Pty Ltd v City of Sydney Council (2007) 71 NSWLR 230 as supporting its approach. That case held that the practice of the Court was not a presumptive rule and the approach to all Class 1 proceedings should not be the same. The appeals provided for in Pt 9.2 of the POEO Act are different to the appeals on their merits provided by s 97 and s 98 of the Environmental Planning and Assessment Act 1979 (the EP&A Act). 5 The Applicant submits that a costs order is fair and reasonable in the following circumstances: (a) the appeal involved, as central issues, questions of both fact and law. The order of the local court created an offence for the emanation of audible sound from the school premises; (b) The appeal was pursuant to Pt 9.2 of the POEO Act, wherein the Applicant was exposed to the risk of prosecution for a use of the premises in breach of the order notwithstanding such use was in conformity with development consent; (c) such circumstances have been distinguished by the Court of Appeal from other Class 1 merit appeals which involve a merits review of an administrative decision; (d) the Respondent acted unreasonably in the conduct of the proceedings by maintaining the erroneous position that the test of harm resulting from noise was subjective; and (e) the Respondent acted unreasonably in the conduct of the proceedings by filing and serving on the Applicant inadmissible expert evidence. 6 The hearing of the appeal involved questions of fact and law in relation to whether the noise from the school was offensive, the determination of which was determinative of the proceedings and which did not involve an evaluation of the merits of the appeal. It was unreasonable of the Respondent not to accept that the noise abatement order had to be set aside because of the failure of the magistrate to make a finding that noise from the school was offensive before making the noise abatement order. That should have been clear when the application to stay the order was heard by Sheahan J on 15 July 2009. The finding of offensive noise was a jurisdictional fact that had to be determined. 7 The nature of a noise abatement order is that failure to comply wit it is an offence under s 269 of the POEO Act meaning that the Applicant had to comply with the order or appeal the order made in the local court. This suggests that it is fair and reasonable that the Court order the whole of the costs of the Applicant be paid. 8 The Respondent acted erroneously and unreasonably in the proceedings by maintaining that the test of offensiveness was to be determined on a subjective basis not an objective one. The Court ultimately held that the test was objective and rejected the evidence of the psychologist the Respondent sought to rely on. The Respondent's erroneous approach caused the Applicant to incur costs unnecessarily and unreasonably. 9 Further, the Respondent relied on unnecessary expert evidence. It relied on two experts, Mr Koikas and Mr Cooper, up until the hearing when Mr Koikas was then not relied on. This caused additional costs to be incurred by the Applicant in dealing with his evidence. The reliance on two experts was contrary to Court's Practice Note: Classes 1, 2 & 3 Miscellaneous Appeals proceedings at par 30. The Applicant's costs of preparing evidence in reply for that expert were "thrown away" as a direct consequence of the Respondent acting unreasonably. 10 The costs of the Notice of Motion seeking the stay of the noise abatement order heard on 15 July 2009 are also sought. A stay of the order was extended on that day by Sheahan J following an initial stay being granted on 12 June 2009. Costs of the stay application were reserved. Respondent's submissions 11 The Respondent opposes the making of any costs order in the Applicant's favour. He seeks his costs of the Notice of Motion on costs but otherwise considers the appropriate order is that each party pay its own costs. The Applicant has appealed against an order made in the local court as provided for in s 290(1) of the POEO Act. There is no right of appeal provided under the POEO Act to an applicant for an order in the local court, in this matter the Respondent. 12 The successful party in Class 1 proceedings has to overcome the basic rule that costs would not be ordered unless the Applicant can identify circumstances which make it fair and reasonable to do so, Port Stephens Council v Sansom [2007] NSWCA 299. Costs awards under s 98 of the Civil Procedure Act 2005 (the CP Act) are subject to the rules of Court. 13 The appeal did not involve a question of law or fact or mixed law and fact which was determinative of the proceedings or which was preliminary to an evaluation of the merits of the application. The Respondent acted reasonably in the proceedings in bringing forward evidence of harm to the Respondent in the psychologist's report tendered at the hearing. 14 At the time Thaina Town was decided there was no relevant Court rule such as r 3.7 dealing with costs in Class 1 proceedings concerning appeals under the POEO Act. The Respondent has not acted unreasonably in the proceedings before this Court given that he was successful in obtaining a noise abatement order in the local court. 15 The Applicant also claims that the Respondent acted unreasonably by submitting unnecessary expert evidence. In this regard the Respondent notes both parties relied on the expert evidence of two experts each in the local court. The hearing before this Court was a rehearing. Mr Koikas undertook most of the measurements and data collection relied on by the other experts. Finding 16 The Court must exercise its discretion in determining whether it is fair and reasonable to make an order for costs under r 3.7(2) in the particular circumstances of a matter. This is the first time the issue of costs has arisen in relation to an appeal against a noise abatement order made in the local court where the Court has had to determine whether the local court order ought be confirmed or set aside. In Chen v Virgona [2008] NSWLEC 281 the costs issue concerned whether an appeal against a noise abatement order was competent and there was no hearing on whether a noise abatement order ought be made. Part of the relevant framework for considering costs in matters of this type under the POEO Act is identified in Thaina Town. That case was considering a costs order made in this Court in relation to an appeal under s 289 of Pt 9.2 of the POEO Act against a prevention notice issued by a council under s 96 of that Act. According to the judgment at [3], the relevant costs provision at the time of the Court decision the subject appeal was the general discretion to award costs under s 69 of the Court Act (now repealed). There was no rule applicable to the determination of costs in proceedings under the POEO Act. 17 Spigelman CJ stated as follows: [11] The appeal in the present case arises under s 289 of the POEO Act, found in Pt 9.2 of that Act. That Part makes provision for appeals from decisions about the grant of licences (s 287), appeals with respect to notices relating to work at premises (s 288) and appeals with respect to noise control notices or noise abatement orders (s 290). Section 96 of the POEO Act, set out above, is found in Ch 4 of the Act entitled "Environment Protection Notices". That Chapter makes provision for clean-up notices in Pt 4.2, prevention notices in Pt 4.3, prohibition notices in Pt 4.4 and compliance cost notices in Pt 4.5. However, Pt 9.2 creates an express right of appeal only with respect to a prevention notice.

[16] It does not seem accurate to characterise the position of the Court, in an appeal under the POEO Act, as standing in the shoes of the decision-maker. This is a significant respect in which the POEO Act differs from other merits review or Class 1 proceedings in the Land and Environment Court. Insofar as the practice in that Court of not awarding costs is based on the fact that, on a merits review, the tribunal is equated with the original administrative decision-maker, this does not apply to Pt 9.2 of the POEO Act. 18 Thaina Town distinguished between the more common merits review matters provided for in appeals under the EP&A Act from the less common appeals provided under Pt 9.2 of the POEO Act. In Thaina Town Spigelman CJ considered at [140] that the appropriate costs order was that the council pay the costs of the recipient of the prevention notice because it had to either incur considerable expense in complying with the notice or appeal against the notice given that it was an offence to be in breach of the order. At [141] he considered it was significant that the proceedings did not concern an application for a consent but was a party resisting the imposition of a burden placed on it by a council which the Court found was unjustified. Spigelman J held that it was just and reasonable for the council to pay costs in those circumstances. Since that decision r 3.7 has been introduced and the parties agree it is applicable to the determination of costs in this matter. 19 A noise abatement order can be made by a local court under s 268 if the local court is satisfied on the balance of probabilities that offensive noise exists. Such a finding would generally ensue after a hearing where there is a contest between the parties with relevant evidence considered by a magistrate. The making of a noise abatement order is unlike a prevention notice which is issued by a council solely on its own cognisance. The Respondent was successful in the local court in obtaining a noise abatement order. These differences between the statutory processes for making a noise abatement order and the issuing of a prevention notice by a council should also be considered in determining the most appropriate order under r 3.7. 20 The essence of the matter I had to determine in the Class 1 appeal was whether the noise from the school was offensive as that is the basis for the making of a noise abatement order under s 268 of the POEO Act. While there was no relevant finding on this issue by the local court, that did not alter the circumstance that I had to consider that matter as a question largely of fact. This suggests that, contrary to the Applicant's submission (par 5), it was not unreasonable of the Respondent not to concede that the order made in the local court must be set aside in the course of preparing for the hearing of the Class 1 appeal. 21 The issue of whether the noise was offensive required consideration of extensive expert evidence, in a hearing lasting three days. The matter took four days in the local court. That determination of whether the noise was offensive was not preliminary to an evaluation of the merits of the making of an order but was the substantive issue in the appeal. That circumstance does not support a finding that it is fair and reasonable to award costs in favour of the Applicant on the basis that there was a determination of a preliminary matter of fact or law separate to the merits of an application (r 3.7(3)(a)). 22 The Applicant also argued that the Respondent behaved unreasonably in the conduct of the proceedings (r 3.7(3)(e)). The Respondent argued a position in relation to the test for harm arising from the noise from the school that I held to be incorrect. That the Respondent sought to rely on the evidence of a psychologist concerning harm to the Respondent which I held was largely inadmissible as a result was erroneous, not unreasonable, conduct. The Applicant did not seek to adduce any evidence in reply so that no such costs were incurred. The issue occupied little time at the hearing. I consider the costs incurred in dealing with the psychologists report would not have been substantial in any event. 23 The Applicant also submitted that the fact that the Defendant had commenced other Class 4 proceedings to challenge a development consent was relevant because costs should be awarded as a disincentive to the commencement of further proceedings by the Respondent. This submission appears to be contrary to Latoudis v Casey (1990) 170 CLR 534 where McHugh J held at 543 that costs awards were compensatory, not punitive. Further, I consider that is an irrelevant factor as in this costs matter I must consider the nature and conduct of the proceedings before me. 24 The Applicant also seeks costs thrown away due to the decision of the Respondent not to rely on Mr Koikas, acoustic expert, at the hearing prompted by my request that the Respondent identify his primary case. As submitted by the Respondent, Mr Koikas had undertaken a large amount of data collection on which the other experts relied. While that is the case, his expert opinion concerning the acceptable level of noise from the school was more stringent than either Mr Cooper, the other expert relied on by the Respondent, or Dr Tonin, relied on by the Applicant. Mr Koikas did prepare a report and participate in joint conferencing with other experts some of which material became irrelevant at the hearing because his evidence was not relied on. I consider that some of the Applicant's costs were thrown away as a result of Mr Koikas not being relied on at the hearing and that it is fair and reasonable that some of these be paid. It is desirable that the parties reach agreement on an amount payable if at all possible.

Meriden School v Pedavoli

At a glance

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Before

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Judgment (15 paragraphs)

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Cases Cited (5)