Port Stephens Shire Council -V- Grivas and Ors. [1999] NSWLEC 135

EX TEMPORE JUDGMENT DATE: 05/12/1999

APPLICANT: Mr J Maston, Barrister SOLICITORS: Sparke Helmore LEGAL REPRESENTATIVES: RESPONDENTS: Mr T Moore, Barrister SOLICITORS: Marshall and Partners

JUDGMENT: IN THE LAND AND Matter No. 40219 of 1998 ENVIRONMENT COURT OF Coram: Bignold J. NEW SOUTH WALES 12 May 1999

On 13 November 1998 Port Stephens Shire Council (the Council) commenced proceedings in this Court against the three Respondents, Mr and Mrs Grivas and their son, seeking a declaration that the Respondents were carrying out development upon property known as No 8 George Street, Fullerton Cove, without development consent and a consequential injunction restraining the Respondents from carrying out unauthorised development on the property. The proceedings were concluded save for the question of costs when orders were made by the Court by consent on 27 April this year.

The orders made by the Court were that the Respondents be restrained from carrying out or causing to be carried out development, being a truck depot, a truck and trailer parking storage area, a truck driving school and or a home industry for one or more of such purposes upon the aforesaid property until such time as development consent, pursuant to Part 4 of the Environmental Planning and Assessment Act 1979 from the Port Stephens Shire Council had been granted. That order, in the nature of a prohibitory injunction, reflects the relief claimed in an amended class 4 application served upon the Respondents on or about 18 March 1999 and the comparison between the originally claimed injunction and that claimed in the amended application and subsequently granted by the Court's consent orders is obvious inasmuch as the original claim was in respect of unspecified, unauthorised development, whereas the amended claim reflected in the consent orders particularises the offending development in the words that I have earlier mentioned, namely "truck depot, truck and trailer parking storage area, truck driving school and/or home industry for one or more of those purposes".

In making those consent orders the Court, also by consent, reserved the question of costs and it is that matter alone that has been argued before me today. The Council seeks an order for costs on the basis that it has been entirely successful in the proceedings inasmuch as relief granted to it by the consent orders, being the prohibitory injunction, entirely vindicated the Council's claim to injunctive relief as set forth in the original class 4 application and particularised more precisely in the amended application. In short, the Council's claim is that the Court should regard the outcome in the litigation, albeit one made by consent orders, as an outcome wherein the Council was the victorious party and that the usual costs order in class 4 proceedings in favour of the successful litigant be applied, that is, costs follow the event.

Mr Moore, on behalf of the Respondents has argued that such a result should not be granted and that in the circumstances this case, presently to be related, the appropriate order is that each party should pay its own costs. In this respect, he relies upon the statement in the judgment of McHugh J in Re The Minister for Immigration and Ethnic Affairs; Ex parte Qin (1997) 186 CLR at 622, and in particular, the passage at 625 where his Honour says:

If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continues to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean the court will make no order as to the costs of the proceedings.

This approach has been adopted in a large number of cases and his Honour, in footnotes, cites the relevant cases. That passage forms part of a detailed consideration by his Honour concerning the exercise of the discretion vested in a court to make orders for costs in circumstances where there is no adjudication on the merits of the case and his Honour's discussion of that situation and the relevant principles to be applied commences at p 624 of the law report.

In making this submission, Mr Moore relies upon what he says to be the unreasonable conduct of the Council in the litigation contrasted with what he claims to be the reasonable conduct of the Respondents in the litigation. In particular, he draws attention to a number of matters.

The first matter he relies upon is the fact that the proceedings were commenced by the Council on 13 November 1998 without any express warning letter having been given to the Respondents prior to the issue of that process in the court. Consideration of the documentary evidence indicates that the Council, in a letter dated 29 July 1998 to the Respondents, advising them that their development application for the conduct as a home industry of a truck parking depot at the aforesaid premises had been determined by the Council refusing the application, went onto express advice as to the use that might legitimately be made of the subject premises by the Respondents.

For example, in the second paragraph of the letter the Council stated that whilst the use of the site for the parking of a single prime mover notwithstanding a trailer, being the main source of transport to and from work by the owner is not prohibited, no storage of goods and/or materials and no loading/unloading of the vehicle shall be permitted. The vehicle must be confined to the site and be able to operate without causing disturbance or interference with adjacent properties. In addition, other than superficial washing and maintenance, no truck repairs or washing down of the vehicle shall also be permitted to occur from the site. No other vehicle is permitted to use the site under the home industry provisions.

Following that letter, the Council again wrote to Mr Peter Grivas by letter dated 24 August 1998 following a conversation between the latter and one of the Council's servants. The letter states:

It was agreed that you would write to the Council detailing your intended operations with regard to long distance trucking operations to obtain confirmation on allowable operations since the refusal of your application for the home industry truck parking depot by the Council on 21 July.

The letter proceeds to speak about the use of the site for the parking of a single prime mover and basically repeats the advice concerning legitimate use contained in the earlier letter. The letter continues:

….Please confirm current trucking operations that are being undertaken from the site within 14 days of this letter in order that an assessment can be made as to whether or not you are operating lawfully. If no response is received, Council will take appropriate steps to ensure lawful use of your land without entering into further correspondence.

The next letter in the documentary exhibit is a letter from the Council to Mr Peter Grivas dated 11 September 1998. That letter states:

Council has received your letter confirming the operation of two long distance trucks from the abovementioned site. It is intended to report this matter to the next available Council meeting, likely to be in October or November for Council to pass a resolution on an appropriate course of action to pursue. If clarification of the above information is required, please contact the Council's Development and Building Section."

That was the last letter to pass from the Council to the Respondents prior to the commencement of the proceedings on 13 November 1998.

In respect of Mr Moore's submission that the Council acted unreasonably in commencing the proceedings, without further warning letter advising of the commencement of the proceedings, I am unable to accept the submission, having regard to the correspondence that I have referred to emanating from the Council, from and including 29 July 1998, when the Council refused the Respondents' development application.

I interpose to say of that application that there is a history to it and the history commences with warning letters issued by the Council in July of the previous year, that is, 1997, concerning complaints as to the use of the premises for the purpose of the heavy vehicle driving training school and similar uses. That initiative taken by the Council, which included the threat of legal action originally made in October '97, obviously was the catalyst for the lodging of the development and building application on behalf of the Respondents. It was made in its original form in October 1997 and was amended in a comprehensive written submission by a planning consultant retained by the Respondents in his letter dated 15 May 1998.

Accordingly, although it is correct to recognise the refusal of the development application and the letters passing between the parties thereafter as a "commencing point" in understanding the litigation and its prehistory, in truth, the prehistory to the development application goes back an earlier year to the original warning letter issued by the Council to the Respondents threatening legal action in October 1997 in respect of unlawful activities conducted on the subject premises in relation to the trucking business.

The second matter relied upon by Mr Moore as evincing unreasonable conduct by the Council in the litigation concerns the manner in which the claims were propounded and their lack of particularisation. This is a matter that is referred to in the affidavit of Mr Brett Fatches, the Respondents' Solicitor, who swore his affidavit on 3 May 1999. In that affidavit, he draws attention to the fact that upon obtaining instructions from his client in early December 1998, he wrote to the Council's Solicitors seeking better particulars. In particular, he asked in his letter dated 10 December 1998:

What is the development allegedly being carried out by each of the Respondents upon the property?

In its reply the Council's Solicitors responded as follows,

1. The development being the use of the land, namely road transport depot and heavy vehicle driving training operation.

In my opinion, that particularisation cannot be regarded as inadequate, particularly given the history of the land use which relevantly commenced in 1997. That history was well understood to the Respondents and is amply attested by a considerable amount of correspondence passing between the Council and the Respondents from that time, down to the commencement of the litigation. It follows, in my opinion, that it cannot be said that the particulars provided by the Council's Solicitors, and they were provided on 15 December 1998 (five days following the request) can lead to the conclusion that the Council, in some fashion, has acted unreasonably in the litigation.

I accept Mr Moore's submission that until perhaps the amended class 4 application was received by the Respondents' Solicitors on or about 18 March 1999 wherein the claim to injunctive relief is particularised in the manner I have earlier indicated (compared with the general claim in the original proceedings) and until the service of the affidavits in support of the claim were received on 23 March 1999, that the Respondents' Solicitor may have been in some doubt or uncertainty as to the precise nature of the claims made against his clients. However, assuming any such uncertainty existed, (and I must say it is not deposed to by Mr Fatches in his affidavit), in my opinion, it could have been readily clarified by either a request for further and better particulars of the Council's Solicitors or taking better instructions from the Respondents.

There is nothing esoteric about the Council's action in this matter, nor is there anything unduly complicated about the factual issues so far as the Respondents' understanding of the claims of the Council made against them is concerned. In this respect, I should note in passing that the Respondents in their affidavit sought to draw considerable comfort from a letter received by the Council in October 1997 which contained the following advice:

I draw your attention to Council's correspondence forwarded to you on 17 July '97 requiring that driver training not be undertaken from the premises and that development consent be obtained if more than two trucks are to operate from the site in conjunction with the road transport business.

If that position had been maintained thereafter, there would be something in the suggestion that the Respondents were in genuine doubt (as was apparently their legal adviser) as to the nature of the Council's claim. However, that advice in the October '97 letter must be taken as having been superseded by the subsequent advices given by the Council, and in particular to the advice given concurrently with notice of the refusal of the development application on 28 July 1998 that only one vehicle might be parked in limited circumstances and subject to certain conditions on the subject premises.

In those circumstances, it is simply not credible to conclude that the Respondents or their legal adviser could have laboured under any misapprehension that the Council would raise no objection to the keeping of two trucks on the premises. In my view, the Council's letter dated October 1997 and the advice it contained were clearly superseded by the subsequent events, including the lodgement of the development application, the Council's determination of it by refusing, it and by the letter written by the Council to the Respondents informing them of what, if any, legitimate use could be made of their premises in connection with the trucking business.

Accordingly, Mr Moore has not been able to sustain the fundamental plank for his submission that the Respondents should be regarded as acting reasonably in the litigation by dint of their offer to settle the case on 14 April 1999, as contained in their Solicitor's letter to the Council's Solicitor. That submission would have assumed greater cogency had the foundations been laid that the Council's conduct in commencing the litigation without further warning and in failing to provide full particulars of its claim, constituted unreasonable conduct on its part. That foundation not having been successfully laid, the offer of settlement made on behalf of the Respondents in its Solicitor's letter of 14 April 1999, though obviously a reasonable response to the claim, cannot found the submission that it is manifestly reasonable and stands in stark contrast with suggested unreasonable conduct in litigation by the Council.

In my opinion, the Council's conduct in litigation was reasonable, both in commencing the litigation, given the long history of the matter in dispute, and in sustaining it. Clearly, the Respondents' willingness to settle the case indicated an acknowledgment by the Respondents and the Respondents' legal adviser that the case made against them was a formidable one. I do not need to say more of the case than that, but I should say this, that the submission made by Mr Moore that in the circumstances, the offer of settlement should be regarded as having been made without admissions of liability and without prejudice to the question of ultimate liability cannot be sustained. The inevitable inference to be drawn, both from the comparison of the orders made by consent and the claims to relief made by the Council in its originating process as amended, together with the supporting documentation that has been introduced into evidence, leads the inevitable inference that the Respondents, in suffering the injunction to go against them, acknowledge the strength of the Council's case. No more need be said about that because as the authorities indicate, it is not appropriate in a disputed costs application to hypothesise or speculate as to what would have happened but for the settlement.

This is a settlement which manifestly vindicates the Council by giving it all of the relief that it claimed and in those circumstances, it appears to me to be irresistible that the appropriate principle to apply is to regard the Council as having been victorious in the litigation. As such, and not being guilty of any misconduct in the litigation or otherwise guilty of any disqualifying conduct, it ought to receive the usual order for costs as the victorious party in the litigation.

For all the foregoing reasons, I order the Respondents to pay the Council's costs in the proceedings as agreed, failing agreement, as assessed. The order is made against all Respondents, jointly and severally.

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