"The point of preserving the width of the discretion which Parliament has created is that it maximises the possibility of doing justice in every case. But the need for consistency in judicial adjudication which is the antithesis of arbitrary and capricious decision making, provides an important countervailing consideration supporting the giving of guidance by appellate courts, whether in the form of principles or guidelines ."
10. I note that the passage of Latudis v Casey, to which I have referred, was not referred to by Handley JA. I say two other things about the decision of the Court of Appeal in Maurici. Firstly, it is a decision which only applies in its terms to cl 10A of the Practice Direction and in particular to a valuation appeal. It may be that the particular considerations that apply in valuation appeals, to which Handley JA extensively referred in his judgment, are not applicable to planning and building appeals. Secondly, even if cl 10 of the Practice Direction is struck down or is regarded as being of no force or effect, the principle described in that clause remains. This is because it was the practice of this court, long before the Practice Direction came into existence in its original form in about 1987, to make no order for costs in planning or building appeals unless the circumstances were exceptional, see McDonald Industries Ltd v Sydney City Council (1980) 43 LGRA 428 at 445. Moreover there is a long history of decisions, not only in this court but in the predecessors to this court, namely the Local Government Appeals Tribunal and The Land and Valuation Court, of not ordering costs in planning or building cases unless the circumstances were exceptional, see for example, the judgment of Else-Mitchell J in Rio Pioneer Gravel Company Pty Ltd v Warringah Shire Council (1969) 17 LGRA 153 at 174. There is thus a long history of judgments which give guidance to the exercise of the discretion on costs, not only in this court but in the predecessors of this court, to the effect that in planning appeals it is not appropriate to make orders for costs, particularly where the respondent council has acted reasonably and the applicant has acted reasonably.
11. In approaching the question of costs in this case I thus do so on the basis that the principal proceedings before the Commissioner were of the same genus as a building appeal and that the general guidance given by the Court in the past is that the Court's discretion as to costs should be one of no order as to costs unless the circumstances are exceptional.
12. As I have said the decision in Maurici does not refer to cl 10 of the Practice Direction. That clause requires that any notice of motion for costs must be made within fourteen days of publication of the judgment; hence the claim in par 1 of the notice of motion that the respondent be granted leave to seek costs in these proceedings. The applicant opposes the grant of leave. In support of the grant of leave the Council points to the fact that in correspondence it had entered into with the applicant before the hearing, that is, letters it sent to the applicant on 19 November 1999 and subsequently, it had warned the applicant that if the he persisted with his appeal the Council would make an application for costs. On the hearing of the matter before the Commissioner the Council again indicated, both to the Court and to the applicant, that it would be seeking its costs. As I understand the submission, the Council says that the applicant was put on notice that an application for costs would be made and he should not have been surprised when the motion was served upon him.
13. Mr I Hemmings, appearing for the applicant, submits that there is no evidence to explain the failure on the part of the Council to comply with the fourteen-day time limit. He submits that the purpose of the fourteen-day time limit is to achieve finality in litigation; and that, although the applicant might have been put on notice that an application for costs was to be made, when that time limit had passed he was entitled to assume that the Council had changed its position and no application would be made. Mr Hemmings further submits that the delay in filing the notice of motion was not in this case caused by any delay in obtaining a transcript of the reasons for the Commissioner's decision. The notice of motion was filed before those reasons became available.
14. In considering the question of whether leave should be granted I am bound by the decision of the Court of Appeal in Outboard Marine Australia Pty Limited v Byrnes (1974) 1 NSWLR 27 at 30. In that case the Court, comprising Reynolds, Hutley and Bowen JJA, in a single judgment, said:
We appreciate that the Rules of Court, particularly those relating to time, should never be allowed to be an instrument of tyranny. They do, however, have purposes, one of which is that the parties may know where they stand and regulate their affairs accordingly. It is also appreciated that where genuine issues ought to be litigated, if such can be done with fairness to all concerned, it is appropriate to take a benign view of applications to extend time.
15. No particular prejudice on the part of the applicant has been identified which would persuade me that I should not exercise my discretion and grant the leave sought in par 1 of the notice of motion. In my view the principles described in Outboard Marine are directly applicable here; and I therefore grant order 1 sought in the notice of motion.
16. That brings me to the question of costs itself. The respondent Council seeks costs, not only in the proceedings which were heard and determined by the Commissioner, but it also seeks costs in class 3 proceedings commenced by the applicant under s 181 of the Local Government Act. That section enables a claim to be made for compensation for expenses incurred by a person as a consequence of an order. Following the Commissioner's determination, the class 3 proceedings were then discontinued. It is appropriate to deal with the question of costs in relation to the class 3 proceedings separately from those in the class 2 proceedings because different principles apply.
17. The Council submits that there are exceptional circumstances in the class 2 proceedings. Firstly, by letter dated 27 January 2000, two days before the first day of the hearing before the Commissioner, the Council wrote to the applicant stating that it proposed to take no further action to enforce the order. Moreover, on the first day of the hearing the Council stated that in its view there had been both substantial compliance and satisfactory compliance with the order, nevertheless the applicant persisted with a hearing of the appeal. Secondly, it is submitted that a temporary solution to the problem of stormwater disposal was accompanied by an absence of bona fides on the part of the applicant; and reference is made to in particular this finding of the Commissioner which I quote:
[33] His [the applicant's] first letter written to Council (9 August 1999) stated that arrangements would be made "that the roof water would be temporarily connected to the stormwater system" however, in the Court's opinion there were no serious endeavours to even pursue that course of action .
18. Thirdly, is it is submitted that correspondence from the applicant to the Council was cryptic, an assertion that seems to have also been accepted by the Commissioner.
19. Fourthly, it is said that the applicant persisted with the appeal despite what was said in the Council's letter of 27 January 2000, namely that the Council proposed to take no further action to enforce the order.
20. Fifthly, it is said that the applicant misled both the Council and the Court, in relation to a report by an expert, Mr A Cassar, which was said to have been posted by the applicant to the Council in November 1996, a report which does not appear in any of the Council's files and which, according to the judgment of the Commissioner, appears to have been prepared without the authority of Mr Cassar or the consulting company for which he worked. The Commissioner noted that all copies of the report were missing both from the applicant's own records, from the Council's records and from those of Mr Cassar's consulting company. The Commissioner then noted that it was only at the end of the proceedings that the applicant admitted that the report was what might be described as a "re-hashing" of another document.
21. Sixthly, it is said that the applicant misled both the Council and the Court in relation to his claim for expenses incurred in giving effect to the order. These claimed expenses proved to be estimates only, given to the applicant orally.
22. The applicant, in response, says that there was disentitling conduct on the part of the Council. The Council had insisted, until the first day of the hearing before the Commissioner, that a condition of development consent, condition 18, was not in fact the condition which had been imposed on the grant of the development consent but another condition which it had erroneously assumed applied to the disposal of roof water from the premises.
23. Nextly, the applicant denies that the proceedings were inappropriately commenced. In his evidence, the applicant stated that he was concerned by the issue of the order because it did not seem to take into account the fact that the condition appeared to have been amended; and that he was concerned, even after receiving the Council's letter of 27 January 2000, that the letter did not go far enough: it did not indicate that the order had been sufficiently complied with - only that the Council proposed to take no further action to enforce the order. The applicant also stated that he was concerned about the impact that such an order might have on the value of the property in the minds of any purchasers of it in the future. Further, the letter of 27 January 2000 was the first time the Council had indicated a willingness in writing to vary the order. He said that the appropriate course for the Council to take if it thought that stormwater was now being dealt with appropriately was to revoke the order. It was for those reasons that he thought it necessary to pursue the appeal.
24. In the result the Commissioner made the following orders:
1. That the appeal be dismissed.
2. That the order issued by the Council had been sufficiently complied with.
25. There is some debate between the parties as to whether that was a win for the applicant or a win for the respondent. The applicant says that the declaration by the Commissioner that the order issued by the Council had been sufficiently complied with is stronger than that which had been asserted by the Council at the hearing; namely, that there had been substantial compliance or satisfactory compliance with the order; and is stronger than the Council's letter of 27 January 2000, namely, that the Council proposed to take no further action to enforce the order. It is submitted that in making the finding that there had been sufficient compliance with the order the Commissioner had given the applicant a result better than any of those which the Council was either contending for or willing to concede.
26. The applicant was not represented in the hearing before the Commissioner, but I do not think that that fact should bear on the question that is now before me. Both parties may be taken to have been aware of the Court's Practice Direction and to have proceeded with the hearing in the knowledge that the Court's Practice Direction applied; and that they could safely argue the case on the basis that there would be no order for costs unless there was some exceptional circumstance. In my opinion, in both commencing and persisting with the appeal, it could not be said that the circumstances were exceptional. The applicant was concerned about the continuing existence of the order; and the offer by the Council not to enforce it meant that the order was still in place and would have been apparent to any person conducting a search of Council's records for the existence of any such orders. Neither do I think that the suggestion that the applicant misled the Court and the Council is a sufficient exceptional circumstance in this case to attract an order for costs. There was no formal finding by the Commissioner as to the authenticity of the report of Mr Cassar; and the expenses claimed in relation to the work required in giving effect to the order were not explored in the light of the discontinuance of the class 3 proceedings. I have come to the view that there are no exceptional circumstances in this case to attract an order for costs in the class 2 proceedings.
27. The class 3 proceedings are in a different category. They are not covered by the Practice Direction. They consisted in a claim under s 181 of the Local Government Act for compensation for expenses incurred as a consequence of the order. Within a few days of the Commissioner's decision in the class 2 proceedings those proceedings were discontinued. The substance of the claim was not explored. If it be accepted that the ordinary discretion as to costs would apply, then, in my opinion, I should apply what was said by McHugh J in Re the Minister for Immigration and Ethnic Affairs; Ex Parte v Lai Qin (1997) 186 CLR 622. At 624-625 his Honour said:
The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action.
...
If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the Court will make no order as to the cost of the proceedings.
28. In my opinion there is nothing in the circumstances of the present case which suggests that one of the parties has acted so unreasonably that the other party should obtain the costs of the action. In promptly discontinuing the class 3 proceedings following the conclusion of the class 2 proceedings it seems that the applicant was acting entirely reasonably. I do not propose therefore to make any order for costs in the class 3 proceedings. Accordingly, the claim for relief in par 2 of the notice of motion is dismissed.
29. HEMMINGS: Your Honour applying your Honour's judgment in MacDonald v Mosman Municipal Council [No. 2] 107 LGERA 211, your Honour's finding at 216, par [18]. This cost application is an exceptional circumstance. Your Honour has previously held, and the Court has previously held, that the argument on costs itself amounts to exceptional circumstances so in terms of the class 2 proceedings, I'd seek my client's costs. In relation to class 3 proceedings exceptional circumstances don't apply and costs would follow the event on the motion, so I seek costs in both the class 2 and the class 3.
30. IRISH: Your Honour in all of the circumstances I submit that there was a reasonable question to be tried in the exploration of the exceptional circumstances in the class 2 and in the provision of an order for costs in the class 3. I would submit to you that it wasn't a frivolous application for costs in the circumstances. It has been a complicated matter in its own right and that the usual order as to costs in the Court's general practice in classes 1 and 2 should apply and that, given the modest amount of time that's been expended in relation to the class 3 that no order should be made on the costs of the motion in relation to class 3.
31. HIS HONOUR: The applicant seeks the costs of the notice of motion. The applicant has not, however, been entirely successful. The applicant was unsuccessful in opposing order 1 of the notice of motion; that is that the respondent be granted leave to seek the costs of these proceedings. The applicant was however, successful in relation to order 2 sought in the notice of motion, which was the claim for costs itself. Normally I would have thought that where the respondent is successful on one claim for relief and the applicant is successful on another claim for relief, the two would cancel each other out and there would be no order for costs. The bulk of the time in the case, however, was spent arguing the substantive issue of costs. In that even it is appropriate that there should be an order that the respondent pay half the applicant's costs. The formal orders are:
1. I make order 1 as set out in the notice of motion.
2. Order 2 set out in the notice of motion is dismissed.
3. The respondent is to pay half the applicant's costs of the notice of motion.
4. The exhibits may be returned.
I hereby certify that the preceding 31 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice Lloyd