This matter came before me by two notices of motion. The Applicants seek leave to discontinue the proceedings under Pt 12 r 12.1 of the Uniform Civil Procedure Rules 2005 ('the UCPR'). Leave of the Court is required because Council does not consent to the Applicants discontinuing its proceedings. However, Council does not oppose the Court granting leave to the Applicants to discontinue the proceedings, although it seeks an order that the Applicants pay its costs of the proceedings, in conformity with r 3.7 of the Land and Environment Court Rules 2007.
[2]
Costs in Class 1 Proceedings Generally
Rule 3.7 of the Land and Environment Court Rules 2007 provides that, for proceedings brought in Class 1, 2 and 3 of the Court's jurisdiction:
"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."
Rule 3.7(3) then provides a list of circumstances in which the Court might consider it reasonable to make an order for costs. The list is not to be considered exhaustive, but provides:
"(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."
Rule 3.7 creates a presumption that in matters to which the rule applies each party bears their own costs. This reflects what is commonly referred to as the non-discouragement principle. That is, parties should not be discouraged from bringing Class 1 merit appeals for fear of an adverse costs order. The circumstances outlined in r 3.7(3) and the body of case law on the award of costs in Class 1 merit appeals reflects that where a party is put to the unnecessary cost of conducting proceedings as a result of the unreasonableness of the other party, that cost should be reimbursed.
In outlining the nature of the non-discouragement principle and the presumptive rule that each party bear their own costs, in Arden Anglican School v Hornsby Shire Council (2008) 158 LGERA 224; [2008] NSWLEC 103 Biscoe J stated as follows:
"9 In the context of the presumptive rule that there will be no order as to costs in planning appeals, the power to make a costs order is in the broadest of terms, that is, what is "fair and reasonable in the circumstances". All rational considerations are relevant to the formulation of that judgment. In the end, the question is whether, in the opinion of the Court, they are of sufficient weight to overcome the presumptive rule.
10 One of the purposes of the costs follow the event rule in ordinary civil litigation is to encourage the parties to settle their disputes: Sansom at [26]; Thaina at [65]. In contrast, a no discouragement principle underlies the no costs rule in planning appeals, that is, that persons generally should not be discouraged from exercising their rights of appeal via the prospect of an adverse costs order: Sansom at [22] - [23]. This may be rationalised on the bases that a significant purpose of planning appeals is to improve the decision-making process and that those involved are not adversaries in the same sense as adversaries in conventional civil litigation."
[3]
Background
The Applicants commenced the substantive proceedings on 27 February 2017. On that date the Applicants filed a Class 1 application seeking to challenge the Respondent's refusal of building certificate application number BC-16-00073 relating to an unauthorised deck and awning constructed at the rear of their dwelling at 5 Glover Street, Quakers Hill ('the Site').
The Respondent filed its Statement of Facts and Contentions ('SOFAC') on 24 March 2017. The SOFAC raised town planning contentions relating to privacy and overlooking and visual impact.
On 10 April 2017, the Applicants' filed and served a SOFAC in reply.
The proceedings were listed for a conciliation conference pursuant to s 34 of the Land and Environment Court Act 1979, which was held on 20 June 2017 before Chilcott C. The s 34 conference was terminated by Chilcott C as the parties could not reach an agreement.
The Applicants did not seek orders at any time throughout the course of the proceedings to provide any evidence (including expert evidence) in response to any of the Council's contentions.
On 5 July 2017, by consent, the Respondent was granted leave to amend its SOFAC to include contentions relating to the structural stability of the unauthorised deck.
The Applicants did not seek orders to file any evidence (including expert evidence) in response to the new contentions.
The Respondent, rightly assuming that the proceedings would proceed to the scheduled hearing of 16 October 2017, prepared, filed and served individual expert reports in accordance with the Court's directions. This included the expert report of Mr Zelasko which was filed on 14 August 2017. This report supported the Respondent's contention that the unauthorised deck was structurally unsound.
The Applicants sought to discontinue the proceedings on 25 September 2017.
The hearing was listed for 16 October 2017, but that date was subsequently vacated.
[4]
Submissions
In submitting that it is fair and reasonable that the discontinuance be granted subject to a costs order being made, the Respondent relies in particular on the terms of rule 3.7(3)(d) and (f):
"(d) that a party has acted unreasonably in the conduct of the proceedings,
…
(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."
The Respondent submits that the Applicants were unreasonable in continuing to press a position in the proceedings that was unsupported by evidence. In that respect, the Respondent draws to my attention to the fact that the Applicants' SOFAC in reply and amended SOFAC in reply consisted of denials of the Respondent's contentions and offered no justification or technical analysis to support the basis for their denials.
In this regard, the Applicants' SOFAC in reply and amended SOFAC in reply provided no assistance to the Court or the Respondent to understand the Applicants' case for pursuing their claim.
In its submissions, the Respondent highlighted that the Applicants also chose not to rely on any evidence to support their denial of the Respondent's contentions.
The Applicants' submit that their failure to file any evidence is not evidence that they acted unreasonably at any stage of the proceedings. To support this position, the Applicants' solicitor relies on ss 149D(3), 149D(5) and 149F(3) of the Environmental Planning and Assessment Act 1979 which state that:
"149D Obligations of council to issue building certificate
…
(3) The reasons must be sufficiently detailed to inform the applicant of the work that needs to be done to enable the council to issue a building certificate.
…
(5) Nothing in this section prevents the council from informing the applicant of the work that would need to be done before the council could issue a building certificate or from deferring its determination of the application until the applicant has had an opportunity to do that work"
149F Appeals with respect to building certificates
…
(3) On hearing the appeal, the Court may do any one or more of the following:
(a) it may direct the council to issue a building certificate in such terms and on such conditions as the Court thinks fit,
…"
Relying on these sections, the Applicants adopted a passive position and submitted that they intended to rely on the decision of the Court and comply with the works the Court (in the role of the decision-maker) required to be carried out in order to issue a building certificate.
Given that this was the Applicants' appeal and the nature of the contentions put to them by Council, I consider this an unreasonable position to have adopted for the conduct of these proceedings.
This is a merit appeal commenced at the Applicants' volition, and despite engaging solicitors, by their own submission, the Applicants made no attempt at any time to assist the Court or the Respondent to understand or elucidate the merits their claim and why it should succeed.
It was submitted by the Applicants that up until the filing of Mr Zelasko's report on 14 August 2017, they believed that their application had a reasonable prospect of success.
However, there is no evidence before the Court supporting the basis for this belief, or that this belief was reasonable.
The Applicants also submit that the modest cost of constructing the unauthorised structures and the Applicants' likelihood of being wholly unsuccessful should the matter proceed to hearing have led the Applicants to seek a discontinuance with no order as to costs.
The Applicants' solicitor also made the submission that his clients were overseas, and this also contributed to the delay in seeking to discontinue the proceedings.
However, these are not matters for consideration with respect to costs.
The Respondent submitted that the Applicants' conduct, detailed above, has caused the Respondent to go to the full extent of preparing for a final hearing and, accordingly, that it is fair and reasonable in the circumstances, for the Applicants pay the Respondent's costs.
In the matter Adams v Fairfield City Council [2010] NSWLEC 81, the Court made an order for costs against an Applicant in Class 1 proceedings where the Applicant had not retained experts and had led the Respondent Council to prepare for hearing before filing a Notice of Motion to discontinue shortly before the hearing was to occur.
The Applicants were formally made aware of the engineering contentions raised by the Respondent in its Notice of Motion seeking the leave of the Court to amend its SOFAC, filed 27 June 2017. On 5 July 2017, at the return of that Motion, the Respondent was granted leave from the Court to amend its SOFAC by including contentions relating to the structural stability of the unauthorised deck.
As set out in my findings above, I consider the position adopted by the Applicant in the conduct of these proceedings to have been unreasonable (r 3.7(3)(d)). I also find that the Applicants continued their claim, at least from 14 August 2017, where there were no reasonable prospects for success (r 3.7(3)(f)).
As such, I find that the Respondent has clearly been put to unnecessary costs from 14 August 2017 and that it is fair and reasonable for it to be awarded costs from that date.
[5]
Orders
The Court orders:
1. The Applicants are granted leave to discontinue the proceedings.
2. The Applicants are to pay the Respondent's costs of the proceedings from 14 August 2017, as agreed or assessed.
Sarah Froh
Registrar
[6]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 14 December 2017