Council's submissions
8 The Council submitted that because the declaration sought in these proceedings uses the word "including", it sought the use of Lot 151 for managing, letting and sales in premises in addition to the Palladium building. That is not an issue related to D/2006/1774 which was referred to in correspondence from the Applicant's solicitor dated 22 May 2007 before proceedings were commenced. Nor is it related to D/2007/9 which was modified under s 96 of the EP&A Act by deleting the time limitation in condition 3.
9 Further the latter consent was not referred to as relevant to these proceedings before they were commenced. The first time these were mentioned was in the Applicant's solicitor's letter sent on the same day the Notice of Discontinuance was filed on 13 February 2007. Further the application for modification was made after these proceedings were commenced on 30 August 2007. The s 96 modification is not a relevant supervening event which would deprive the Council of its costs. It is not an approval identical to the subject matter of these proceedings which rendered these proceedings futile in a legal sense.
10 The Applicant could have clarified the nature of the proceedings at any time and particularly following the Council's solicitor's letter of 21 November 2007. That letter stated that these proceedings and the modification of D/2007/9 were not related. The hearing could have been postponed, for example, to enable the modification application to be processed.
Applicant's submissions
11 The Applicant's solicitor submitted that the s 96 modification application in relation to D/2007/9 means that effectively there was no point in continuing these Class 4 proceedings once that was approved. That is a supervening event which has resulted in the proceedings being no longer necessary. The subject matter of the modification application and these proceedings is identical. Costs should not therefore be awarded to the Council.
12 It is clear that the declaration sought in the amended Class 4 application is related to use of Lot 151 only in connection with property management of units within the Palladium building and not in relation to other premises as the Council argued.
Finding
13 UCPR r 42.19 applies to the circumstances before me. In Australiawide Airlines Ltd v Aspirion Pty Ltd [2006] NSWCA 365 Bryson JA (McColl and Basten JJA concurring) held in relation to r 42.20(1) (which is similar to r 42.19) that Re Minister for Immigration and Ethnic Affairs and Anor; ex parte Lai Quin (1997) 186 CLR 622 is not readily applicable to decisions under that rule concerning McHugh J's observation that the proper exercise of the costs discretion where there is no "event" will usually mean that the Court will make no order as to costs, at [48]. His Honour also quoted Burchett J in One.Tel Ltd v Deputy Commissioner of Taxation (2000) 101 FCR 548 at 553 where he distinguished between cases where one party effectively surrenders to the other and those cases where there is some supervening event which removes the subject matter of the proceedings so that there may be difficulty in discerning how costs should be awarded. His Honour stated that the provisions of r 42.20 "enhance the initial disposition towards ordering the plaintiff to pay the defendant's costs; but there is no close control over the discretion of the Court to order otherwise…", at [54].
14 This decision suggests that r 42.19 provides an initial basis for consideration of the exercise of discretion but that the Court continues to have broad discretion to determine how costs should be awarded. The general discretionary matters considered in Kiama Council v Grant (2006) 143 LGERA 441 and the principles summarised at [80] are relevant in that consideration. In this case the Applicant discontinued without the Council's consent two days before the hearing. The Applicant argues there was a supervening event which removed the subject of the dispute (see Kiama at [80(b)]). The Council argues that r 42.19 suggests that the initial approach is that costs ought be paid in these circumstances unless discretionary factors suggest otherwise. There are no such discretionary factors. Further the circumstances here are the same as those referred to in Kiama at [80(a)] as the Applicant has discontinued without consent and should pay the Council's costs.
15 When the correspondence sent before and during the proceedings and the three development consents the subject of submissions (identified earlier in par 3) are considered the meaning of the declaration sought by the amended Class 4 application is unclear. The Council submitted the declaration sought approval to use Lot 151 for property management beyond the Palladium building because of the word "including". The Applicant argued that it was intended to seek approval for use for the purposes specified in it for the Palladium building only, effectively for an indefinite period. That interpretation is not reflected in the declaration or Points of Claim, not surprisingly perhaps, but nor is it clear from the correspondence sent before proceedings were commenced that that was the purpose of seeking the declaration.
16 A third interpretation is that the word "including" is seeking to clarify the office activities to be conducted in Lot 151 for the Palladium building only of "letting, general property management and sales service". As identified above, consent Z96-00095 did not provide any specific conditions for the use of the area now known as Lot 151 but it was described as an office/reception area on the plans approved by the Council as part of the grant of that consent. The correspondence sent by the Applicant's solicitor before the proceedings to the Council supports such an interpretation, particularly the letter dated 4 June 2007. However, the letter from the Council's solicitor dated 22 May 2007 referred to the limits in D/2006/1774. That consent was limited to activities in Lot 151 specified as "letting, property management and real estate sales" within the Palladium building and also was a limited twelve month consent.
17 Whatever the intended meaning of the declaration and the Points of Claim when these were filed, in the case argued on this costs application by the Applicant's solicitor the fundamental issue sought to be clarified by these proceedings is said to be the time limit on the consent in D/2006/1774 rather than the limit of property management activities including sales and letting within the Palladium building. That intended approach is unclear on the pleadings and was not specified in correspondence sent before proceedings were commenced.
18 Further the correspondence from the Applicant's solicitor sent before the proceedings made no reference to D/2007/9 as being a related consent. The first mention of that development consent as being connected to these proceedings is the Applicant's solicitors letter dated 13 November 2007 to which the Council's solicitor responded by stating that consent had no connection to these proceedings. The Applicant's solicitor's letter dated 13 February 2008, the same day that the Notice of Discontinuance was filed, referred to D/2007/9 and explains why the approval of the s 96 modification application was relevant to these proceedings. Given its lateness in the context of these proceedings, it cannot assist in determining the basis of the proceedings identified in earlier correspondence.