Newcastle City Council v Wescombe

Autodesk Inc v Dyason [No 2] (1992) 176 CLR 300 Coombwood Pty Ltd v Baulkham Hills Shire Council (1995) 86 LGERA 319 De L v Director General New South Wales Department of Community Services [No 2] (1997) 190 CLR 207 CASES CITED: Hillpalm Pty Ltd v Heaven's Door Pty Ltd (2004) 220 CLR 472 Newcastle City Council v Caverstock Group Pty Ltd [2008] NSWCA 249 Newcastle City Council v Wescombe [2008] NSWLEC 301 Sahade v Mosman Municipal Council [2000] NSWCA 251 Thompson Australian Holdings Proprietary Limited v The Trade Practices Commission (1980) 148 CLR 150

APPLICANT Mr T Robertson SC with Mr M Fraser SOLICITORS Sparke Helmore LEGAL REPRESENTATIVES: RESPONDENT Mr G Carolan SOLICITORS Bilbie Dan

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

40471 of 2007 Newcastle City Council v Wescombe (No 2)

JUDGMENT ON NOTICE OF MOTION 1 Her Honour: The parties entered into consent orders on the first day of the hearing on 22 October 2008, being orders 1 and 2 made on that day. Those orders were made without admission of any liability for a breach of the Environmental Planning and Assessment Act 1979 (the EP&A Act) by the Respondent. The consent orders required the Respondent to undertake work on her property in accordance with an agreed engineering plan following work being undertaken on neighbouring land, and to submit a certificate from a geotechnical engineer certifying the completion of the work. A further order (order 3) made, not by consent, was to the effect that the proceedings were otherwise dismissed subject to the determination of costs. In light of the consent orders it was unnecessary for the Court to determine any of the substantive issues raised in the proceedings. 2 Both parties then applied for their costs. I delivered a judgment on costs, Newcastle City Council v Wescombe [2008] NSWLEC 301 (Wescombe No 1), on 27 October 2008 making findings that the Council must pay some costs of the Respondent. I did not make final orders at that stage as I required further advice from the parties before doing so. The Council has now filed a Notice of Motion dated 31 October 2008 seeking orders that the consent orders made by me on 22 October 2008 and the costs judgment delivered on 27 October 2008 be set aside, inter alia. No order awarding costs pursuant to my findings in Wescombe No 1 has been made at this stage as I was awaiting further advice from the parties before doing so. 3 The consent orders made on 22 October 2008 have not been finally entered so that r 36.16(1) of the Uniform Civil Procedure Rules 2005 (the UCPR) applies which provides that: (1) The court may set aside or vary a judgment or order if notice of motion for the setting aside or variation is filed before entry of the judgment or order.

As the costs judgment has not been the subject of final orders that can also be considered under the same rule.

Council's submissions 4 The consent orders made were without admission on the part of the Respondent that there had been any breach of the EP&A Act. The Court does not have power to make orders pursuant to s 124(1) of the EP&A Act unless it determines that there is a breach of that Act. That must apply to consent orders even where the Court is not called upon to determine the matters in issue between the parties. The parties cannot confer power on the Court to make orders which the Court lacks power to make and also enforce: Thompson Australian Holdings Proprietary Limited v The Trade Practices Commission (1980) 148 CLR 150 (Gibbs CJ, Stephen, Mason and Wilson JJ jointly, Murphy J dissenting) at 163.

5 In Coombwood Pty Ltd v Baulkham Hills Shire Council (1995) 86 LGERA 319 the Court of Appeal held that jurisdiction cannot be conferred on the Court by consent. In that case an order requiring the payment of interest was set aside because the Court had no jurisdiction to award interest. This was further confirmed by the High Court in Hillpalm Pty Ltd v Heaven's Door Pty Ltd (2004) 220 CLR 472 (McHugh ACJ, Hayne and Heydon JJ) at 488 and 489 where it was held that the Court's powers under s 123 to remedy or restrain a breach of the Act does not extend to making orders against persons who are not themselves in breach of the Act.

6 The costs judgment was wrong in awarding costs in favour of the Respondent because the Court's reasoning was based on there being no admission of liability in relation to a breach of the EP&A Act, the subject of the declaration sought in prayer 1 of the amended Class 4 application, and prayers 1 and 2 were unrelated factually or legally. The reasoning is wrong as a matter of fact and law. The Court's acceptance in the judgment that UCPR r 42.20 applies to order 3 (that the proceedings were otherwise discontinued) was also wrong because that order forms the legal basis for making the orders in prayers 1 and 2 by consent.

7 In this case the Council obtained the substantive relief it sought without admission of wrong doing. In those circumstances the Council should not go from the position prima facie of being entitled to costs to being exposed to the costs order proposed in Wescombe No 1.

8 Section 16(1A) of the Land and Environment Court Act 1979 (the Court Act) does not provide a basis for the Court's power to make the consent orders. Respondent's submissions 9 There is an important principle of finality of litigation to consider in the circumstances of this case. The Respondent has agreed to binding orders whereby the substantive relief sought by the Council will be undertaken by her as contemplated in orders 1 and 2 made by consent on 22 October 2008. There is no further utility in the proceedings continuing in any form given that circumstance. It is entirely a matter for the Court's discretion as to whether it should overturn its own orders, see De L v Director General New South Wales Department of Community Services [No 2] (1997) 190 CLR 207 at 215. There is a heavy burden cast on a party to show that an exceptional course is justified, see also Mason CJ in Autodesk Inc v Dyason [No 2] (1992) 176 CLR 300 at 303. The Council pursued a certain course and it should not be allowed to "unpick" that course of action as this motion seeks to do. 10 The approach of Stein J in Sahade v Mosman Municipal Council [2000] NSWCA 251 is relevant to the circumstances here where the Council opened its case and the Court was aware of the issues between the parties.

11 The Court has jurisdiction under s 16(1A) of the Court Act to hear and dispose of ancillary matters raised by its jurisdiction contained in s 20 of the Court Act. The consent orders 1 and 2 clearly concerned ancillary matters that fall within s 16(1A) of the Court Act. Newcastle City Council v Caverstock Group Pty Ltd [2008] NSWCA 249, a recent Court of Appeal decision of Spigelman CJ (Bell JA and Handley AJA concurring), suggests in obiter at [50] that the application of s 16(1A) is potentially very broad. Hillpalm is distinguishable on its facts.

12 The primary motivation of the Council in filing the motion is to reargue the costs decision of the Court in Wescombe No 1.

13 One option for the Court is to set aside the consent orders 1 and 2 but not order 3 which otherwise dismisses the proceedings. The costs judgment could stand as it addresses the balance of the proceedings not dealt with by the consent orders 1 and 2. Even if the orders made on 22 October 2008 are set aside there is an enforceable agreement in place as can be seen from the correspondence and the defence filed in the matter. The letter from the Respondent's solicitors dated 7 November 2008 (exhibit 1) confirms a willingness to enter into a binding deed of agreement that the work required to be done under the consent orders by the Respondent be carried out. As the work the subject of the proceedings will be carried out by the Respondent there is no utility in the matter continuing to another hearing. Finding 14 Following the Council opening its case and after lunch on the first day of the hearing, the parties entered into consent orders as identified above on 22 October 2008 and a further order was made, not by consent, that the proceedings be otherwise dismissed save as to costs. I have made a determination of costs based on the conduct of the proceedings as set out in Wescombe No 1. The Council's submission that in light of the High Court decisions in Coombwood, Thompson and Hillpalm (albeit concerning different facts) orders 1 and 2 made on 22 October 2008 would not be able to be imposed appear to be correct as a matter of general principle. Order 3 made on 22 October 2008 was within the Court's power to make and can stand regardless of any order I make in relation to consent orders 1 and 2. 15 The particular circumstances of this matter need to be considered however. As submitted by the Respondent, the findings of Stein J (Handley and Heydon JJA concurring) in Sahade at [5] where his Honour stated that, in making an order, the Court will need to be satisfied that the person bound by the order is in a position to remedy or restrain a breach of the Act, not that the respondent in the proceedings committed the breach, has application in this matter. In this case consent orders 1 and 2 and order 3 were not made until after lunch on the first day. The Council opened its case in the morning and the Court was informed by the parties about the matters in issue. In the course of opening, the Council had amended the orders sought in its application so that the Respondent was able to confirm to the Court that she was willing and able to comply with orders requiring her to undertake work on her property within a certain timeframe after the owners of neighbouring properties had undertaken work on their land. In these circumstances I was aware without determining the substantive issues in the matter that the Respondent was in a position to remedy or restrain any breach of the Act without making a finding that she was in breach. That suggests I could properly make the consent orders in these particular circumstances. 16 Alternatively, the Respondent has submitted that s 16(1A) of the Court Act provides a jurisdictional basis for making the orders. While I consider that is certainly arguable in light of the potentially wide application of that section, as recognised in obiter in quite different circumstances by Spigelman CJ in Caverstock, the findings of the High Court in Hillpalm suggest that cannot be correct in this case. 17 Even if I am wrong in holding at par 15 that I could properly make the consent orders, as argued by the Respondent I must exercise my discretion in determining whether I should set aside the orders made on 22 October 2008. There are two important considerations in relation to that exercise of discretion. Firstly, it is important to consider the utility (or lack thereof) in making the orders sought by the Council's Notice of Motion. The Respondent agreed that she must undertake the work identified in the consent orders. She has also offered, via her solicitor, to enter into a binding deed to that effect. In these circumstances there is no utility served by setting aside the consent orders as the relief sought in the proceedings has been agreed to by the Respondent. The lack of utility is particularly important given the circumstances of the settlement. It is likely that substantial costs were incurred in preparing for the hearing as the matter did not settle until after lunch on the first day and after the Council's counsel had opened his case. Expert witnesses were briefed and attended to give evidence. The usual costs of case preparation would have been incurred by both parties. 18 Secondly, there is the important principle of the finality of litigation as pointed out in the Respondent's submissions and as referred to in numerous cases. In De L Toohey, Gaudron, McHugh, Gummow and Kirby JJ considered the court's discretion to vacate earlier orders. While it was unnecessary to exercise discretion in that matter, their Honours said at 223: It is one thing to permit reopening of the orders to allow consideration of a matter accidentally overlooked so that it may be taken into account. It is another to provide relief where the party seeking it has, by its own confession, not done all that might have been done to raise the point when it was timely and appropriate to do so. Especially in this Court, judges are entitled to look to the parties, at least where they are legally represented, to defend their own interests and to alert the Court to any claimed immunities which rest upon legal provisions.

19 With respect to reopening final orders, their Honours cited authority, including Autodesk v Dyason, indicating that: a heavy burden is cast upon the applicant for reopening to show that such an exceptional course is required "without fault on his part", ie without the attribution of neglect or default to the party seeking reopening (footnotes omitted). 20 Autodesk refers to final orders. In this case as already noted, the consent orders in issue, while finally made, have not been entered. It is nevertheless significant that the parties chose to conduct their case, and settle, on the basis of certain orders. As a result the case, which was set down for three days of hearing, was settled on the first day. In addition the parties had the opportunity to check the final form of orders. The parties provided handwritten orders to the Court on the day of settlement. I provided typed orders to them to enable final checking. Both parties were legally represented and had ample opportunity to consider the form of the orders made. The statements of the High Court in De L set out in par 18 are directly applicable. These circumstances, together with the consideration that the substantive relief sought has been achieved, suggests that I should not exercise my discretion to set aside the consent orders. The Council has not overcome the "heavy burden" it bears of convincing me to the contrary given the course of action it adopted. 21 I do not consider I should exercise my discretion to set aside the consent orders 1 and 2 made on 22 October 2008. Another reason not to do so is that at the time the consent orders were made the parties believed the orders were binding on the Respondent to undertake the work specified. That situation should continue. For abundance of caution the Council could enter into the deed of agreement offered by the Respondent's solicitor in the letter in exhibit 1.

22 As stated in par 14, order 3 made on 22 October 2008 stands. The Council's motion also seeks to set aside the costs judgment in Wescombe No 1 which has resulted in the Council being liable for some of the costs of the proceedings. While the Council has argued that the costs order cannot stand because it is based on an incorrect factual and legal premise I do not agree. The costs judgment was determined by considering closely the conduct of the proceedings as between the parties and is directed to the order for dismissal made (order 3). The costs judgment was made on a valid legal and factual basis, contrary to the Council's submissions. I do not consider Wescombe No 1 should be set aside. 23 The Council's Notice of Motion is dismissed.

Costs of the motion 24 As the Council has been unsuccessful on the motion it should pay the Respondent's costs on the usual basis in Class 4 proceedings that costs follow the event.

Orders 25 The Court makes the following orders:

1. The Applicant's Notice of Motion dated 31 October 2008 is dismissed.
2. The Applicant must pay the Respondent's costs of the motion.

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