Ralph Lauren 57 Pty Ltd & Ors v Byron Shire Council & Minister for Climate Change and the Environment

Discontinuation and Costs 7Leave was granted by Pepper J on 17 June 2011 for both class 4 matters to be discontinued, with the question of costs reserved. Her Honour gave directions in respect to the filing of affidavits and submissions on costs, and set the question down for hearing. 8No Notices of Motion ('NOM') were filed by any of the three parties regarding costs. The Uniform Civil Procedure Rules 2005 establish, in r 42.19, a presumption that discontinuing party/ies must pay the respondent's costs unless the court "orders otherwise". The applicants in this case seek their costs of the discontinued proceedings, but Council does not seek its costs from the applicants. 9The applicants want the Council to pay all their costs of both discontinued proceedings, or, alternatively, they seek orders that Council pay all their costs of matter 40068, and that Council and the Minister each pay half of their costs of matter 40167. 10Both respondents argue that each party should pay its own costs of both proceedings, but the Council seeks its costs of the post-hearing dispute, the re-listings after 31 August, and the motion to reopen. (I had reserved all questions of costs in respect of the mentions on both 13 October and 2 November 2011.) 11The applicants seek from Council their costs "of and incidental to" the NOM for reopening.

The evidence and submissions 12At the hearing on 31 August 2011, all parties relied on comprehensive affidavits and annexed/exhibited documentation from their respective solicitors (Karen Coleman for the applicants, Samantha Kelly for the Council, and Ryan Verzosa for the Minister). 13There is some repetition among these materials, but in this judgment I will generally refer to only one source on each occasion. 14The applicants' counsel (Mr Cotman SC) also relied on two additional documents (tendered as Exhibits A1 and A2). 15On 12 October 2011, Ms Kelly filed a substantial bundle of correspondence, some of which was also among the annexures to Ms Coleman's later affidavit (of 31 October). 16On 3 February 2012, three further affidavits (two more from Coleman and one from her employed solicitor, Brent Michael) were read on the applicants' behalf. 17Coleman's four affidavits were dated 4 July, 2 August, 12 October, and 31 October, 2011. 18Extensive written submissions were made on both the primary costs issue, and the subsequent dispute about reopening.

Application to Reopen 19The NOM to reopen followed lengthy correspondence between the applicants and the respondent Council regarding submissions which had been made orally by Mr Ian Hemmings (counsel for the Council) at the costs hearing on 31 August. 20The parties were back before the court on 13 October 2011 and 2 November 2011, and, in the end, on 3 February 2012, I heard argument on the applicants' NOM (filed on 2 November) to reopen the evidence on costs, and make further submissions. 21The respondent Minister neither consented to, nor opposed, the applicants' NOM to reopen (T3.2.12, p28, LL31-37), but Council opposed it. 22The NOM relevantly seeks the following orders (apart from the usual prayers for costs of the motion, and "further or other orders", unspecified): 1 Order that the Applicants have leave to re-open their evidence on costs of the proceedings and to make further submissions if leave for further submissions has not already been granted. 2 Orders that the Applicants have leave to: (a) call on the Notice to produce served on the Respondent Council on 27 October 2011; (b) lead in evidence any tape and other documents produced by the Respondent Council in answer to the Notice to Produce, and a transcript of such tape verified as accurate; (c) in the event that the tape and transcript, the final form of recommendation or any other material that was provided to Byron Shire Council for purposes of the meting of 14 April 2011 are led in evidence, make submissions to be heard on the relevance of any and all such documents on the issue of cost in these proceedings, with the Respondent Council and the Respondent Minister also having leave to make submissions and be heard on those matters. 23The further evidence the applicants wish to lead, if/when the matter is reopened, includes documents upon which the Council seeks to claim legal professional privilege. Council has so far refused to produce the documents. 24The parties agreed on 3 February 2012 that if leave to reopen is refused, I should deal with all aspects of the matter in one judgment, but, if leave to reopen is granted, I should then hear argument on the privilege issues.

The Structure of this Judgment 25The rest of this judgment is structured as follows: Para B: The Statutory Framework for Coastal Protection 26 C: Factual Background to the proceedings, their discontinuance, and the primary costs argument 43 D: Events at the Costs Hearing on 31 August 2011 94 E: Summary of events post the 31 August 2011 hearing 112 F: The controversial correspondence 31 August-13 October, 2011 133 G: 13 October- 2 November, 2011 186 H: The primary arguments on costs 195 I: The Question of Reopening 218 J: Consideration 244 K: Conclusion/Orders 256

26The actions of the parties involved in these two proceedings must be viewed in the context of the statutory framework for coastal protection, namely the provisions of the Coastal Protection Act 1979, as amended, ("the Coastal Act"), and the Coastal Protection Regulation 2011 ("the Regulation"), which was made to coincide with the commencement of the amending provisions of the Act on 1 January 2011. 27Section 3 of the Act states its objects as follows: The objects of this Act are to provide for the protection of the coastal environment of the State for the benefit of both present and future generations and, in particular: (a) to protect, enhance, maintain and restore the environment of the coastal region, its associated ecosystems, ecological processes and biological diversity, and its water quality, and (b) to encourage, promote and secure the orderly and balanced utilisation and conservation of the coastal region and its natural and man-made resources, having regard to the principles of ecologically sustainable development, and (c) to recognise and foster the significant social and economic benefits to the State that result from a sustainable coastal environment, including: (i) benefits to the environment, and (ii) benefits to urban communities, fisheries, industry and recreation, and (iii) benefits to culture and heritage, and (iv) benefits to the Aboriginal people in relation to their spiritual, social, customary and economic use of land and water, and (d) to promote public pedestrian access to the coastal region and recognise the public's right to access, and (e) to provide for the acquisition of land in the coastal region to promote the protection, enhancement, maintenance and restoration of the environment of the coastal region, and (f) to recognise the role of the community, as a partner with government, in resolving issues relating to the protection of the coastal environment, and (g) to ensure co-ordination of the policies and activities of the Government and public authorities relating to the coastal region and to facilitate the proper integration of their management activities, and (h) to encourage and promote plans and strategies for adaptation in response to coastal climate change impacts, including projected sea level rise, and (i) to promote beach amenity. 28Relevant definitions may be found in s 4. 29Section 4 defines "coastal zone" as: a) the area within the coastal waters of the State as defined in Part 10 of the Interpretation Act 1987 (including any land within those waters), and (b) the area of land and the waters that lie between the western boundary of the coastal zone (as shown on the maps outlining the coastal zone) and the landward boundary of the coastal waters of the State, and (c) the seabed (if any) and the subsoil beneath, and the airspace above, the areas referred to in paragraphs (a) and (b). Note. The coastal zone consists of the area between the western boundary of the coastal zone shown on the maps outlining the coastal zone and the outermost boundary of the coastal waters of the State. The coastal waters of the State extend, generally, to 3 nautical miles from the coastline of the State. 30The definition of "Coastal Authority" in s 4 refers you to s 6, which provides as follows: (1) For the purposes of this Act, each of the following is a Coastal Authority: (a) the Minister, (b) the Minister administering the Crown Lands Act 1989, (c) a council whose area, or part of whose area, is included within the coastal zone or whose area includes land that adjoins the tidal waters of the Hawkesbury River, Sydney Harbour and Botany Bay, and their tributaries, (d) a roads authority (within the meaning of the Roads Act 1993) for a road within the coastal zone or on land that adjoins the tidal waters of the Hawkesbury River, Sydney Harbour and Botany Bay, and their tributaries, (e) a public authority that is the owner of, or has the care, control or management of, land within the coastal zone or land that adjoins the tidal waters of the Hawkesbury River, Sydney Harbour and Botany Bay, and their tributaries (other than a State owned corporation or a reserve trust within the meaning of Part 5 of the Crown Lands Act 1989). (2) A Coastal Authority: (a) may exercise the functions of an authorised officer, and (b) when exercising those functions, has all the immunities of an authorised officer. 31The "Coastal Panel" is defined in s 4 as the "NSW Coastal Panel established under Part 2A". Part 2A comprises only two sections (ss 12 and 13) which provide as follows: 12 Constitution of NSW Coastal Panel (1) There is to be a NSW Coastal Panel. (2) The Coastal Panel is to consist of 7 members appointed by the Minister of whom: (a) one is to be a person nominated by the Director-General, and (b) one is to be a person nominated by the Director-General of the Department of Planning, and (c) three are to be nominated by the Local Government and Shires Associations of New South Wales, and (d) one is to be a person nominated by the Chief Executive of the Land and Property Management Authority, and (e) one is to be appointed by the Minister with the concurrence of the Local Government and Shires Associations of New South Wales. (3) The person appointed under subsection (2) (e) is to be the Chairperson of the Coastal Panel. The person appointed under subsection (2) (a) is to be the Deputy Chairperson of the Coastal Panel. (4) A person appointed under subsection (2) (a)-(d) must have qualifications and experience relevant to coastal planning, coastal engineering, coastal geomorphology, coastal environmental management or estuary management. (5) The Coastal Panel is a NSW Government agency. Note. By virtue of section 13A of the Interpretation Act 1987, a NSW Government agency has the status, privileges and immunities of the Crown. (6) In appointing a member, the Minister is to have regard to the need to have a range of expertise represented among the Coastal Panel's members. (7) For the avoidance of doubt, the Coastal Panel is a public authority for the purposes of the Environmental Planning and Assessment Act 1979. (8) Schedule 2 contains provisions relating to the constitution and procedure of the Coastal Panel. 13 Functions of Coastal Panel (1) The Coastal Panel has the following functions: (a) to provide advice to the Minister on any matter referred to the Coastal Panel by the Minister relating to the coastal zone or otherwise in connection with the operation of this Act, (b) to provide advice to local councils in relation to such other matters as the Minister determines and notifies to the Coastal Panel, (c) such functions conferred or imposed on it by or under the Environmental Planning and Assessment Act 1979 relating to the granting of development consent, (d) any other function conferred or imposed on it by or under this Act, the Environmental Planning and Assessment Act 1979 or any other Act. (2) In exercising its functions, the Coastal Panel is to have regard to the objects of this Act. (3) The Coastal Panel may delegate the exercise of any function of the Coastal Panel under this or any other Act (other than this power of delegation) to: (a) any member of staff of the Department, or (b) any person, or any class of persons, authorised for the purposes of this section by the regulations. (4) Despite subsection (3), the Coastal Panel may only delegate a function conferred or imposed on it by or under the Environmental Planning and Assessment Act 1979 relating to the granting of development consent with the concurrence of the Minister and the Minister administering that Act. 32Section 4 defines "coastal zone management plan" ('CZMP') simply as a CZMP made under Part 4A of the Act, which comprises ss 55A to 55L. 33Section 55A requires that the Minister have regard to the objects of the Act in exercising his or her functions under Part 4A. 34Section 55B sets out the following relevant requirements for CZMPs: (1) A council whose area, or part of whose area, is included within the coastal zone may, and must, if directed to do so by the Minister, make a coastal zone management plan in accordance with this Part. ... (4) A coastal zone management plan may be made in relation to the whole, or any part, of the area included within the coastal zone. (5) A council must, if directed to do so by the Minister, review the council's existing coastal zone management plan and make a new plan in accordance with this Part to replace the existing plan. (6) A council required under this section to review its existing coastal zone management plan and make a new plan to replace that existing plan must do so: (a) within 12 months after being directed to do so by the Minister, or (b) within such longer period as may be agreed to by the Minister. (7) If a council fails to comply with this section, the Minister may: (a) review the council's existing plan and make a new plan to replace that existing plan, and (b) recover from the council the costs of doing those things, and (c) publish the new plan in the Gazette. Such a new plan is taken to have been made by the council in accordance with this Part. (8) For the avoidance of doubt, the Minister may give a direction under subsection (1) or (5) in relation to part of an area included within the coastal zone. ... 35Section 55C lists matters to be dealt with in CZMPs. Several of these matters, namely pars (d)-(g) of subsection (1), were added to the section when amendments came into force on 1 January 2011, and the requirements presently stand as follows: (1) A coastal zone management plan must make provision for: (a) protecting and preserving beach environments and beach amenity, and (b) emergency actions carried out during periods of beach erosion, including the carrying out of related works, such as works for the protection of property affected or likely to be affected by beach erosion, where beach erosion occurs through storm activity or an extreme or irregular event, and (c) ensuring continuing and undiminished public access to beaches, headlands and waterways, particularly where public access is threatened or affected by accretion, and (d) where the plan relates to a part of the coastline, the management of risks arising from coastal hazards, and (e) where the plan relates to an estuary, the management of estuary health and any risks to the estuary arising from coastal hazards, and (f) the impacts from climate change on risks arising from coastal hazards and on estuary health, as appropriate, and (g) where the plan proposes the construction of coastal protection works (other than emergency coastal protection works) that are to be funded by the council or a private landowner or both, the proposed arrangements for the adequate maintenance of the works and for managing associated impacts of such works (such as changed or increased beach erosion elsewhere or a restriction of public access to beaches or headlands). ... (3) Despite subsection (1), the Minister may give a direction under section 55B that a council make a coastal zone management plan that makes provision for only one or more of the matters referred to in that subsection as specified in the direction. 36Section 55D provides as follows: Guidelines for preparation of draft coastal zone management plans (1) A council is to prepare a draft coastal zone management plan in accordance with the Minister's guidelines. (2) Without limiting the power of the Minister to determine the guidelines, the Minister may adopt as guidelines a manual referred to in section 733 (5) (b) of the Local Government Act 1993. (3) The Minister is to ensure that notification of any guidelines is published in the Gazette. (4) A copy of the Minister's guidelines must be available for public inspection on the Internet website of the Department. 37Sections 55E-55H describe the steps that take a "draft" CZMP towards "final" status, as in gazettal and commencement: 55E Public consultation After preparing a draft coastal zone management plan, the council is: (a) to give public notice in a newspaper circulating in the locality of the place at which, the dates on which (comprising a period of not less than 21 days), and the times during which, the draft coastal zone management plan may be inspected by the public, and (b) to publicly exhibit the draft plan at the place, on the dates and during the times set out in the notice. 55F Submissions (1) During the period of public exhibition of a draft coastal zone management plan, any person may make a submission in writing to the council with respect to its provisions. (2) The council must consider all submissions so made. (3) The council may amend the draft coastal zone management plan as a result of the submissions. 55G Certification by Minister (1) After considering any submissions, the council is to submit the draft coastal zone management plan to the Minister for certification under this section. (2) Before submitting the draft coastal zone management plan to the Minister under subsection (1), the council must consult with other public authorities in the manner specified in the Minister's guidelines. (3) Before certifying the draft coastal zone management plan submitted to the Minister under subsection (1), the Minister may refer the plan to the Coastal Panel for advice. (4) The Minister may: (a) certify, or refuse to certify, that a draft coastal zone management plan submitted to the Minister has been prepared in accordance with the requirements of this Act, or (b) if the Minister has referred the plan to the Coastal Panel for advice under subsection (3) and the Coastal Panel has recommended changes to the plan-return the plan to the council and direct the council to amend and resubmit the plan with the recommended changes. (5) A council required to amend and resubmit a plan with recommended changes must do so: (a) within 90 days after being directed to do so by the Minister, or (b) within such longer period as may be agreed to by the Minister. (6) If a council fails to amend and resubmit a plan as required by this section, the Minister may: (a) make the plan with the recommended changes instead of the council, and (b) recover the cost of making the plan from the council, and (c) certify that the draft coastal zone management plan has been prepared in accordance with the requirements of this Act and publish it in the Gazette. Such a plan is taken to have been made by the council in accordance with this Part. 55H Gazettal and commencement of coastal zone management plans (1) If the Minister certifies that a draft coastal zone management plan has been prepared in accordance with the requirements of this Act, the council is to make the plan and publish it in the Gazette. (2) A coastal zone management plan takes effect on the date on which it is published in the Gazette or, if a later date is specified in the plan for its commencement, on the later date so specified. 38Section 55I provides for amendment and repeal of CZMPs in the following terms: (1) A coastal zone management plan may be amended (in whole or in part) or repealed by a coastal zone management plan. (2) A coastal zone management plan can be repealed only by a coastal zone management plan that replaces it. 39Section 55J provides that a copy of the CZMP must be available to the public without charge at Council office during ordinary office hours and must be available on an internet website within 7 days of its publication in the gazette. 40Division 2 of Part 4A provides for the enforcement of the requirements of a CZMP (ss 55K and 55L). 41The Regulation relevantly provides for some transitional arrangements. Regulation 18 provides as follows: (1) Section 55C (1) (d)-(g) of the Act, as inserted by the Coastal Protection and Other Legislation Amendment Act 2010, do not apply in relation to a draft coastal zone management plan submitted to the Minister for approval under section 55G of the Act before 1 January 2011. (2) This clause is taken to have commenced on 1 January 2011. 42Post-January 2011, a Council could proceed with its pre-January draft, as before, or it could withdraw or abandon it, or the Minister could reject it, or refuse to certify it. In any of those latter events, the process to make a plan would recommence under the new regime.

C: Factual Background to the proceedings, their discontinuance, and the primary costs argument

43The applicants in both these class 4 proceedings own waterfront land in the Belongil Beach area of the Byron Shire, known as the Belongil Spit or Belongil Coast. 44Development of that land, and actions taken by Council and/or residents to protect it from storm and wave damage, have always been controversial, as has Council's long held policy of "planned retreat" (Exhibit A1, pp6-7). 45In 1997 Council established a Coastline Management Committee to assist in developing a CZMP. Applicant John Vaughan was a member of that Committee at some stage (see annexure 'A' to Kelly's affidavit), and the applicants' solicitors made submissions on the development of a CZMP from April 2007 onwards (fols 53-127 of Coleman's July materials). The Committee has had an on-again off-again history over the years since, and there is conflicting evidence as to its role in respect of the CZMP drafted and exhibited in 2009. 46Council and the Department of Planning have disagreed on local planning issues over the years, and both have resisted some developments proposed. The then Department of Natural Resources made a lengthy submission to Council on coastal issues, in criticism of its then draft Local Environmental Plan in April 2006, and the Department of Planning did the same in August 2009. A number of Belongil-related matters have been heard over the years by Judges and Commissioners of this court. 47Council and two of the applicants in each of the present matters, namely John and Anne Vaughan, had class 4 proceedings before this court during 2009 and early 2010 (matters 09/40342 and 09/40344 - "the Vaughan LEC proceedings"). Those matters concerned the alleged failure in May 2009 of beach stabilisation works (including sand nourishment and geobag revetment, carried out as "interim" coastal protection works), for which the Council had granted a consent to itself in 2001. 48At the time of the joint hearing of those Vaughan LEC proceedings on 26-30 October 2009, the court was advised that the Council was working with the State Government on "a draft coastline management plan", based on the "planned retreat" policy, and that, immediately before the 26-30 October 2009 hearing, the NSW government had made some relevant policy announcements. In fact, during October 2009, Council placed on exhibition for two months a draft CZMP, and received 644 submissions. 49While those Vaughan LEC proceedings were adjourned part-heard over the 2009-10 Law Vacation, comprehensive consent orders were agreed upon. Those orders were made by me, by consent, on 1 February 2010, and apparently provoked some local controversy. They provided (in Order 14(a)) for both matters to be discontinued, but the orders and the discontinuances were "without prejudice to any claim for damages or other relief which Vaughans may have against the Council ... arising out of the subject matter" or otherwise. 50After considering all the submissions it had received on the draft plan, Council resolved on 27 May 2010 (Annexures 'B' and 'C' to Kelly's affidavit) to make some amendments to it, and submit that amended draft to the Minister of the day (until the State election in March 2011, Minister Sartor). It was sent to the Minister on 1 September 2010. 51On 2 November 2010, Mr and Mrs Vaughan commenced against the Council Supreme Court proceedings in negligence (2010/363913). Those proceedings are still on foot. (See Vaughan v Byron Shire Council [2011] NSWSC 824, and Vaughan v Byron Shire Council [2012] NSWSC 75). 52Also, Supreme Court proceedings (2010/426979) were commenced by ten of the present applicants on 23 or 24 December 2010, and remain on foot. Those proceedings name as defendants the Council and the Trust of Reserve 82000 (which covers the Jonson Street site - see Statement of Claim at fols 129-176 of Coleman's July materials). Apparently some additional applicants were joined in January 2011. 53In about November 2010, Council received a report from Dean Patterson of BMT WBM Pty Ltd (fols 5-42 of Coleman's July materials) assessing the impacts of the Jonson Street structure, including coastal erosion at Belongil. The involvement of coastal protection works in that erosion appears to be widely accepted (fol 44). The applicants' solicitors relied on that report to urge Council and the Minister to desist from pursuing the draft CZMP (fols 123-127 of Coleman's July materials, and fols 51ff of her August materials), prior to the commencement of the Supreme Court proceedings on 24 December 2010. 54When the coastal legislation was amended, effective 1 January 2011 (Annexure 'D' to Kelly's affidavit), new provisions included the replacement of the 1990 Coastal Manual with a set of Ministerial Guidelines, and the enactment, by the Regulation, of transitional provisions in respect of drafts which were being considered by the government as at 1 January 2011 ([41] above). 55On 18 January 2011, Minister Sartor assured the applicants' solicitors that their submissions would be considered in the review of the draft plan (Verzosa tab 1). 56Class 4 proceedings 40068 were commenced on 28 January 2011, claiming the following relief against Council: 1 A declaration that the draft Byron Shire [CZMP] ... adopted by resolution of the Respondent on 27 May 2010 ... and forwarded by the Respondent to the Minister for Climate Change and the Environment for approval under section 55G of the Coastal Protection Act 1979 is void, invalid, unlawful, and of no effect. 2 An order in the nature of certiorari pursuant of section 69 of the Supreme Court Act 1970 quashing the resolution of the Respondent of 27 May 2010 to adopt the Draft Byron Shire [CZMP]. 3 An order that there be liberty to apply in respect of the implementation or carrying out of any declaration or order that the Court may make. 4 Costs. 5 Such further or other order as to the Court shall seem fit. 57On 9 February 2011, the Minister referred the Council's draft CZMP to the Coastal Panel (fols 198-9 of Coleman's July materials). 58The applicants filed the CZMP in matter 40068, on 11 February 2011. 59On 18 February 2011, the applicants' solicitors asked the Minister to act no further on the draft plan until the Land and Environment Court challenge had been determined. That letter enclosed a summary of the applicants' contentions on the question of invalidity (fols 183-196 of Coleman's July materials). 60However, also on 18 February 2011, the Panel recommended some amendments to the draft plan, and, on 22 February 2011, the Minister directed the Council to make six of them (fols 201-3 of Coleman's July materials, and Verzosa tab 8). 61On 28 February 2011, the applicants' solicitors put Council's solicitors, and on 1 March 2011 the Minister's solicitors, on notice that the applicants reserved their rights to sue Council and individual councillors and officers for misfeasance in public office, defamation, and other breaches (fols 178-181 of Coleman's July materials). 62On 1 March 2011, class 4 proceedings 40167 were commenced against both the Council and the Minister for Climate Change and the Environment, seeking the following relief: 1 A declaration, pursuant to section 20(2)(c) of the Land and Environment Court Act 1979 (NSW) that the Draft Byron Shire Coastal Zone Management Plan as directed by the Second Respondent to be amended by Byron Shire Council in the direction dated 22 February 2011 issued by the Second Respondent to Byron Shire Council under section 55G(4)(b) of the Coastal Protection Act 1979 (NSW) ("Direction") is or would be void, unlawful, invalid and of no effect. 2 A declaration that the Direction is void, unlawful, invalid and of no effect. 3 An order restraining the Respondents and each of them from taking any further step pursuant to or in reliance upon the Direction. 4 An order restraining the Second Respondent from certifying, pursuant to section 55G of the Coastal Protection Act: (a) the present Draft Byron Shire Coastal Zone Management Plan submitted to the Second Respondent by the First Respondent; and/or (b) any further draft or form of the Byron Shire Coastal Zone Management Plan prepared pursuant to or in accordance with the Direction. 5 An order in the nature of certiorari pursuant to section 20(2)(b) of the Land and Environment Court Act 1979 (NSW) quashing the Direction. 6 An order that there be liberty to apply in respect of the implementation or carrying out of any declaration or order that the Court may make. 7 Costs. 8 Such further or other order as to the Court shall seem fit. 63On 2 March 2011, the Minister's solicitors suggested to the applicants' solicitors that proceedings 40167 were "quite misconceived and premature", and would be "vigorously" defended. Indemnity costs would be sought. The threats of action against departmental officers were also rejected (fols 193-4 of Coleman's July materials, and Verzosa tab 9). 64On 3 March 2011, Council resolved in accordance with its officers' recommendation (see Annexure 'E' to Kelly's affidavit 18 July 2011), as follows (Resolution 11-162): 1. That the amendments proposed to the draft CZMP as per Directions numbered 1, 2, 4, 5, and 6 of the Ministerial Direction issued to Council pursuant to s55G of the Coastal Protection Act 1979 on 22 February 2011 could be agreed to and made by Council; 2. To decline to agree to make the requested amendment to draft CZMP as per the Ministerial Directions numbered 3 issued to Council pursuant to s55G of the Coastal Protection Act 1979 on 22 February 2011 and request instead to the Minister to: a) not exercise powers under s55G(6) to make the Plan absent the Council's agreement due to Council's concerns that the amendments required by Direction 3 would have a detrimental impact on the CZMP and the Shire; b) refer Council's draft CZMP back to the Coastal Panel with a request that they reconsider their recommendations numbered 3 and 4 in the light of concern raised by Council in Part D of this Report under the headings 'Ministers Requirement #3 and #4'; c) if the Coastal Panel issues new recommendations, withdraw the existing Ministerial Direction and issue a new Direction under s55G(b); d) otherwise advise Council of the Minister's / Coastal Panel's response as a matter of urgency and preferably within 60 days (so that Council has an opportunity to consider its position prior to the expiry of the 90 day statutory response period). 3. Advise the Minister and the Department of Environment, Climate Change and Water of the outcome of Council's consideration of the Ministerial Direction. 65Notice was immediately given of a rescission motion, the effect of which notice was to stay all action on the Council's 3 March resolution. 66On or about 4 March 2011, three weeks prior to the State election due on 26 March, the government of NSW went into "caretaker mode". 67When 40068 came on for case management for the first time before Biscoe J as List Judge, on 4 March 2011, his Honour noted the other proceedings then on foot (40167), and invited NOMs to be filed returnable seven days later, including any motion that both matters be managed together. 68On 11 March 2011, Biscoe J decided that both cases would be managed together. (Further directions were made by Biscoe J on 8 and 29 April, and by Preston ChJ on 27 May). 69Points of Claim (POC) were filed in 40068 on 22 March 2011 (159 pars over 57 pages), and in 40167 on 4 April 2011 (about 200 pars over 79 pages). The 40167 POC replicate those in 40068, but prefer the same challenges against the Minister (and/or the State of NSW), as were preferred against the Council. Those challenges focus on the "Jonson Street site" and the effects of the "artificial headland" etc erected there, generally south of the Belongil Beach residences. The POC describe various works carried out since the 1960s, and various State and local actions and published reports etc. post 1972, including the publication in about September 1990 of the NSW Coastline Management Manual. The POC refer to the 2009 Vaughan LEC proceedings. 70The challenges articulated in the POC in both matters are based on foreknowledge of expert concerns, breach of the duty to protect property, nuisance, reduction of land support, failure to engage with the local committee, the failure of the majority of submissions on the CZMP to support it or the "planned retreat" policy, failure to observe the statutory requirements, and to (properly) take into account relevant matters, discrimination, incompleteness, appropriation of property without compensation, and Wednesbury unreasonableness. The draft plan, if amended as per the direction of the Minister, is alleged to suffer the same flaws as the Council's original draft. 71On 26 March 2011, the State Election resulted in a change of government, and, on 3 April, the new Minister for the Environment (Minister Parker) was appointed. 72On 8 April 2011, Kelly deposed in matter 40068 that Council management was recommending to Council that in certain circumstances the Council's draft CZMP be withdrawn. If the recommendation were accepted, Kelly suggested, "these proceedings will become otiose" (fols 238-240 of Coleman's July materials). That affidavit was given to the applicants' solicitors at the directions hearing on 8 April 2011, but was not filed in these proceedings until filed in court, with my leave, and without objection, on 31 August 2011. It was not mentioned in Kelly's affidavit of 18 July 2011. 73Kelly's affidavit of 8 April 2011 deposed as follows (in pars 5-7, emphasis mine) in respect of the CZMP amendments directed by the Minister on 22 February and Council's decision of 3 March ([60] and [64] above): 5 At the same Council meeting oral notice was given of a motion to rescind the resolution. In accordance with the Local Government Act 1993 and Council's Code of Meeting Practice, the resolution could not be acted upon until the rescission motion was determined. That rescission motion is intended to go to the 14 April 2011 meeting. 6 In addition to the rescission motion referred to in paragraph 5 above, I am instructed that in response to the rescission motion Council's management's recommendation to the Council at the meeting on 14 April 2011 is, the agenda for which is not yet completely finalised: Management recommend that Council do not rescind Res 11-162 but that Council, additionally, resolves as follows: 1. That in addition to Resolution 11-162 Council resolve that should the Minister: (a) advise Council that they decline Council's request for referral of Council's concerns back to the Coastal Panel; or (b) not otherwise have issued a revised Ministerial Direction pursuant to s55G of the coastal Protection Act 1979 (as amended) by 6 May 2011, then Council will not proceed with the current draft CZMP and the General Manager will be required to write to the Minister advising the Minister that Council: (a) withdraws the draft CZMP from lodgement under s55G(1); (b) will not be proceeding with the current draft CZMP; (c) will have to recommence the process under the new statutory regime and pursuant to the new Minister's Guidelines. 2. That the Minister be notified of this Resolution at the same time they are notified of Resolution 11-162. 7. If Council resolves to act in accordance with the above recommendation, these proceedings will become otiose. 74It is now clear that, between 8 and 14 April 2011, the Council and its officers obtained advice, presumably from its lawyers, DLA Piper/Kelly, and/or from its insurers, which the applicants contend (subs dated 31 October, filed 1 November 2011, par 7) "triggered a change" in Council's position, such that management recommended that Council, and Council resolved to, indeed, withdraw the CZMP. 75On 14 April 2011, Council considered, as part of its business paper (see pp44-50 of Colman's August materials), the Notice of Rescission Motion (p44), a five-page paper entitled "Comments Executive Manager Environment and Planning" (pp45-49), and a one-page "Recommendation" (p50), to which were attached four documents, being a one-page "flowchart overview of process under s 55G" of the Coastal Act, and three "confidential legal advices" (25 pages). 76Having been presented with a range of options, which were narrowed "at the last minute", by the advice it received from lawyers and/or insurers, Council considered, and made, its "final" decision in a confidential session pursuant to s 10A of the Local Government Act 1993 (Exhibit A1, pp3-6). 77A transcript of only the open session of the Council's meeting is before the court (Exhibit A1), but the Council has claimed privilege/confidentiality over the confidential session and associated papers. 78In the event, Council resolved to withdraw its draft CZMP, and to prepare a new one, under the new statutory guidelines and the amended provisions of the coastal legislation. (Resolutions 11-273 to 276, at folios 246-247 of Coleman's July materials). Council stated in the media that the new draft would "recycle" a "considerable amount" of the old (Annexure 'J' to Kelly's 8 April affidavit). 79As I noted in the Introduction to this judgment, after my costs decision was reserved, a controversy arose between the parties regarding oral submissions made on 31 August about that 14 April Council meeting, and the matter has returned to the court three times since. I will return to that controversy once I conclude this recitation of key events leading up to the hearing on 31 August. 80On 27 April 2011, Council's solicitors wrote to the applicants' solicitors suggesting that the applicants discontinue action against the Council in this court, and agree that each party pay its own costs (fols 68-9 of Coleman's August materials). 81On 28 April 2011, Council notified Minister Parker of its 14 April resolution (Annexures 'G' and 'K' to Kelly's affidavit). 82On 26 May 2011, the Minister wrote informing Council that, in the light of the 14 April resolution, she did "not intend" to make the plan. She enclosed, for Council's comment, a draft direction for a new plan, and a formal direction that Council make, in the meantime, an emergency action sub-plan (fols 251-254 of Coleman's July materials). 83On 17 June 2011, Pepper J, as noted above ([7]), granted leave to the applicants in both matters to discontinue, reserved the question of costs, gave directions for a costs hearing, and fixed it for 31 August 2011. 84No Points of Defence had been filed in either matter at the time of their discontinuance. 85On 4 July 2011, the Minister wrote to Council (Exhibit A2), in reply to letters Council sent on 7 and 8 June. As noted above, any new draft plan would need to follow the statutory requirements, as they now stand. The Minister indicated that the new draft plan should be completed by 31 December 2012. (Council's Executive Manager Environment & Planning, Ray Darney, is reputed to have told ABC Radio on 12 January 2012 that Council will be "going back out to the public" about coastal erosion issues, taking advice from experts and government agencies, hoping to "come up with a new plan within 12-18 months" - Michael affidavit, par 9). 86On 10 August 2011, in preparation for the costs hearing on 31 August, the applicants served on Council a Notice to Produce certain documents regarding the 14 April meeting, including any transcript of the confidential session, and including also the legal and insurance advice. The Council claimed privilege, and withheld certain documents on the grounds of their asserted irrelevance. 87On 25 August 2011, Mallesons, solicitors for the applicants, took issue with certain assertions made by the Council, on the grounds that those assertions were "inconsistent with the recording" obtained of the debate in open Council on 14 April. They sought (pp5-6 of Coleman's 31 October materials) five documents said to have been referred to on the tape:

1. "Staff Recommendation/late report 13 April",
2. "Original" Recommendation,
3. "Changed" Recommendation,
4. "Summary of the conflict between old regime and new regime", and
5. "Report" referred to by Councillor Tucker, together with "the whole of the agenda circulated to councillors for the 14 April meeting in the form originally sent to councillors on or before 10 April 2011". 88On 29 August 2011, DLA Piper, solicitors for the Council, responded (pp8-9 ibid - emphasis mine): We address the documents highlighted in your letter as follows: 1 We confirm the document referred to in your letter as Document 1, being the "staff recommendation" and "the late report", is the report and recommendation of the Executive Manager Environment and Planning set out in the Agenda and included in Annexure C to your affidavit of 2 August 2011. 2 The changed recommendation referred to by the General Manager is, as identified in our letter of 25 August 2011, the recommendation which was before the Council meeting. Document 2 referred to in your letter is irrelevant to Council's resolution of 14 April 2011. 3 As the transcript indicates, the recommendation before the Council meeting was circulated on 13 April 2011. Document 3 referred to in your letter is the same as Document 1. 4 The "summary of conflict between old regime and new regime", referred to as Document 4 in your letter, is a document which was before the Council meeting and is the subject of legal professional privilege. 5 The document referred to as Document 5 in your letter is the report of the Executive Manager Environment and Planning set out in the Agenda, which is also referred to in paragraph 1 above. Accordingly, in answer to your request (a) and (b) in your letter, we respond as follows: (a) The five documents have either been produced or are the subject of legal professional privilege. (b) Your request for the Agenda as circulated to Councillors on or before 10 April 2011 is refused on the basis it bears no relevance to the Council meeting of 14 April 2011 and the resolution in respect of the draft CZMP. 89On 30 August 2011, DLA Piper wrote to Mallesons, seeking to debate some issues raised in some correspondence which the court cannot locate among the materials, but the solicitors relevantly said (pp11-12 ibid): ... Our letter of 25 August 2011 denies there was "a new recommendation to Council which withdrew the recommendation in the Agenda" [emphasis added]. We provided this clarification in our letter of 25 August 2011 in response to the suggestion in your letter of 25 August 2011 that the recommendation in the published Agenda was not the recommendation considered by the Council at its meeting. We specifically refer you to the paragraph numbered 3 in your letter of 25 August 2011 where you state we have declined to produce documents which were before the Council at its meeting but not referred to in the Agenda or Minutes. There were no documents before the Council at its meeting on 14 April 2011 which are not referred to in the Agenda or the Minutes. Similarly, there was no other recommendation before the Council at its meeting on 14 April 2011 which is not set out in the Agenda. We have not provided any "old withdrawn Agenda" or withheld any "recommendation that replaced [the old withdrawn Agenda] when it was withdrawn". For the avoidance of doubt, we note the following, all of which is apparent from the audio recording of Council's meeting in non-confidential session, the Agenda and Minutes and our letters of 29 August 2011 and 25 August 2011: 1 Council management drafted a recommendation with respect to the Rescission Motion which was to be considered at the meeting of 14 April 2011. The substance of that draft recommendation was communicated to you in the affidavit of Samantha Kelly sworn 8 April 2011 which is at page 238 of Exhibit KEC-1; 2 Council received legal advice prior to the meeting of 14 April 2011 which caused a new recommendation with respect to the Rescission Motion. This legal advice is the subject of legal professional privilege; 3 The Agenda recorded the recommendation made subsequent to the receipt of the legal advice. This was the recommendation considered by Council at its meeting of 14 April 2011. 90In her affidavit of 12 October 2011, Coleman refers to some of this pre 31 August 2011 correspondence, and deposes (pars 12-14): 12. Having regard to that correspondence and the terms of the transcript of the Council meeting itself, I understood that what was being put to me was that: (a) consideration by the Council about the various Options which the Council staff had identified in the council papers in relation to the directive for Minister Sartor and the plan was wholly irrelevant to the 14 April meeting; and (b) the original recommendation had been overtaken by the new legal advice received from the Insurers on 12 April 2011 and the new recommendation of 13 April 2011, that the Draft Coastal Zone Management Plan be withdrawn. 13. That was consistent with my understanding of the paper that I did have. In particular, I noted that there was not one mention in the copy of the transcript of the Council meeting about the direction from Mr Sartor or the Options to deal with it referred to in the council papers. There is mention of advice from insurers ... 14. I did not press for production of the final form of the first recommendation, accepting it to be irrelevant to the decision of Council on 14 April 2011 as indicated by DLA Piper. 91Consistent with Coleman's conclusion as to the way Council would argue its opposition to the applicant's costs claim, Mr Cotman chose not to press for the production of the documents at the 31 August hearing. 92However, the so-called "original recommendation" of the Council's officers was later produced to the applicants, despite Council's continued insistence on its irrelevance. (See Cotman's subs 31.10.11, par 18). 93I turn now to the events of 31 August 2011.

D: Events at the Costs Hearing on 31 August 2011 94I will return later to deal with the costs arguments themselves (see [195] below), but I turn now to what occurred at the costs hearing, and the controversy that has since arisen regarding (1) the 14 April Council meeting, and (2) the submissions made on 31 August regarding that meeting. 95As the then current draft plan was lodged with the Minister prior to 1 January 2011, it could not be certified if it did not comply with (1) the former, rather than the new, legislation, and (2) the manual that applied then, rather than the guidelines that were subsequently introduced. The Council officer was happy that the document was compliant with the old regime. Should the Council withdraw or reject the current draft, or refuse to certify it, it would have to abandon it, and prepare a new draft in compliance with the new regime. 96Towards the end of his oral submissions on 31 August, Mr Cotman addressed the court on the background to the 14 April 2011 Council deliberations. As he noted, the Minister was, on 22 February 2011 ([60] above), clearly acting to progress the plan towards finalisation, so that it would no longer be considered as a draft, but this litigation had been triggered by the Council resolution to adopt the draft plan, etc, and when the Council rescinded its resolution, and withdrew the draft plan, the applicants' case fell away. 97Mr Cotman submitted that the evidence indicated that the councillors clearly considered they had no real choice, and that the Mayor was clearly of the view that the draft plan should not be withdrawn. Mr Cotman said (T31.8.11, p55, L26) that the Mayor "is deeply frustrated and angered by the fact that it's been done", and then submitted (T p55, LL29-38): Your Honour has evidence that makes it perfectly clear that, against the mere submission that this is simply an adoption of an available course of conduct by a council acting voluntarily to improve its position, as my learned friend puts it, as the council is entitled to do, that the opposite is demonstrably the case on the papers, but even if it was true, then it would not advantage the council's position. Now, there are some submissions that suggest that the Court can't have regard to what the councillors have to say, or what the minutes have to say about what happened in meetings. 98As that hearing on 31 August drew to a close, there was some debate about Marrickville Metro Shopping Centre Pty Limited v Marrickville Council [2009] NSWLEC 109, where Pain J accepted a Council submission that there was a rational basis for the Council's decision-making process, which had been disclosed in the transcript of Council proceedings which was in evidence. Mr Cotman submitted that the court could, therefore, go into the corporate mind of the Council through such minutes, and infer, to the extent that it was not overt on the face of the other materials, what the councillors were dealing with and the reasons for their actions (T p56, LL34-37). 99Mr Cotman also drew attention to both the first instance and appeal decisions in "Kindimindi" - respectively Kindimindi Investments Pty Ltd v Lane Cove Council [2005] NSWLEC 398 (Cowdroy J), and [2006] NSWCA 23, 143 LGERA 277 - another case where a transcript of the Council meeting was available to the court - the court can go to the record of the debate or discussion involving the members of the Council, in order to look directly into the collegiate mind of the decision-making body. 100In Parramatta City Council v Hale (1982) 47 LGRA 319 ("Hale"), a number of councillors gave evidence as to what happened at the meeting. There was no criticism of that course, so in this case the Council could have given evidence if it wished to, to make the case that it had a particular reason for acting, which may sound in whether or not an order for costs should be pursued and/or made. So Mr Cotman submitted (T p57, LL21-26) that, in this case, it was: incumbent on the Council ... to adduce such evidence once such a positive case was propounded, particularly where the objective material to which the Court and the plaintiff could have access was ... directly contrary to the proposition that was being propounded as being the council's position or state of mind. 101In response, Mr Hemmings relied upon the Court of Appeal decision in Kindimindi, and how that case dealt with the Hale approach - the collegiate view must be (T p61, LL24-26) "assessed objectively, not with a descent into the minds of individual decision makers, because there is only one". 102Mr Hemmings then took the point that, in his oral submissions dealing with the transcript of the (open) meeting of 14 April (Exhibit A1), Mr Cotman had omitted to quote a relevant passage of the General Manager's remarks. Mr Hemmings submitted (T p62) that par 6 of Ms Kelly's affidavit of 8 April ([73] above) confirmed that there was, as at 8 April, only a draft or "not finalised" agenda (then detailing, essentially, two alternatives) for the upcoming Council meeting to consider. At the meeting on the 14th, out of some eight possible alternatives, only two of the draft recommendations on that agenda would be considered: one was to decline the requests in the Ministerial direction, and the other to withdraw the CZMP, and not proceed further with the current draft, but instead commence the process under the new statutory regime, pursuant to the Minister's new guidelines. 103It ought also be remembered that Council's insurer had become involved, and had apparently provided confidential advice to Council on 12 April. (Council maintained then, and maintains now, its claim for privilege over the advices it received, and Mr Cotman did not press for access at that hearing). 104The Council agenda "evolved", to use Mr Hemmings's term, from a series of alternatives in a "not finalised agenda" to" an actual report for consideration by the Council". (The report actually presented to Council on 14 April, as downloaded from Council's website, appears at pp 45-50 of Coleman's August materials). 105In the transcript of the open Council meeting (p3 of Exhibit A1), one finds the now controversial comment of the General Manager, which must be assessed against the background of claims of privilege in various pieces of litigation. (The Council continues to maintain its privilege claim). The General Manager said (as quoted, in full, by Mr Hemmings, at T p64, LL17-22): Council, what has happened is that management put a recommendation to you which you have obviously read, as part of it, and since putting that recommendation to you, there has been correspondence received from our insurers. Management, on the basis of that recommendation, has changed its recommendation in order to ensure that we are consistent with the insurer's position. Shannon, if you could just get the summary of the conflict between the old regime and new regime. 106Mr Hemmings submitted (T p64, LL30-32) that that comment was "entirely consistent with the objective facts that your Honour then gets to when your Honour looks at the minute for the decision." 107Mr Cotman responded (T p65, LL9-24 and LL35-40): Now, while the resolution caused the discontinuance, that doesn't make the resolution the discontinuance. And I'll say again, but at the risk of repetition, submissions from the bar table do not prove things. And what your Honour has had, over and over again from my learned friend, is propositions from the bar table, "Well, there's lots of proceedings that the council was involved in, therefore privilege claimed in relation to these doesn't have anything to do with this matter," and so forth. Those are just submissions. There is nothing from the council, not from the people at that meeting, not from the legal advisers, not from the General Manager, none of the documents. Your Honour has been given nothing. And your Honour is then invited to draw an inference that there is a benign explanation for what, on the face of the transcript, is, in our respectful submission, anything other than what has been presented to your Honour by way of submissions. ... And in particular on a matter where it is being said by the council there is a simple and an unambiguous explanation for this whole sorry affair, then it is incumbent on the council to prove it, and let that proposition be tested. And the proof that is eventually put before your Honour is an argumentative proof that says submissions can be made to say there may be an explanation for that which appears on the face of these papers. 108Mr Cotman said that the applicants took the position (T p66, LL1-5) that the evidence contradicted the Council's submissions: If there was a pressing reason before why evidence ought to have been led by the council it becomes a howling need that the council put on evidence when the objective material contradicts the position they take in the submissions. 109In concluding his submissions (T p66, LL18-26), Mr Cotman said: And once they've adopted an affirmative case as to what the council is doing and why, it was incumbent on them to prove it. Now, we have taken the unusual step of seeking to disprove that which was being asserted in the submissions, or at least demonstrate that there is a substantial body of material that contradicts that position. ... 110The costs hearing concluded immediately after those remarks were made, and I reserved my decision. 111However, after an exchange of correspondence between solicitors, commencing on 8 September, the applicants asked me to relist the matter, and I did so on 13 October.

E: Summary of events post the 31 August 2011 hearing 112Having not pressed the Notice to Produce during the hearing on costs on 31 August, Mr Cotman later came to the view that Council had shifted its ground during that hearing in a way which, in the absence of those documents, he could not meet. 113In correspondence following the hearing on 31 August, Council maintained its view that the documents, production of which was in dispute before and at the hearing, were irrelevant to the costs debate, and the applicants expressed the view that the way in which Mr Hemmings had made Council's submissions at the hearing on 31 August was "inaccurate", even "misleading", and, might lead the court into error "in relation to the agreed position between the parties" (T13.0.11, p3, LL27-29 - my emphasis). 114As the dispute progressed, Mr Cotman proposed, on 5 October 2011, that counsel agree upon a "note" to be sent to me "clarifying" the matter. The "note" Mr Cotman suggested was in the following terms (applicants' subs filed 1.11.11, par 29): With the consent of counsel for Byron Shire Council, I write to advise the Court that both parties are in agreement that the draft recommendation and its final form referred to in the address in reply of the Counsel for Byron Shire Council (see attached transcript at page 62) and the consideration of the various identified options to deal with the Minister's direction were irrelevant to Council's decision of 14 April 2011, these matters having been overtaken by the new advice from insurers on 12 April 2011 and the new recommendation on 13 April 2011. 115Mr Hemmings was especially concerned at the suggestion that he had "misled" the court, or been guilty of any "professional impropriety" at all. He did not agree to send/join in a "note" to the court, and asserted that Mr Cotman's draft note requested the court to consider some documents out of context. He did, however, concede (T13.10.11, p2, LL17-18) that: "if there is a misleading statement that has been made it should be corrected". 116When agreement could not be reached on sending me a note, the applicants asked me to relist the matter, and that occurred on 13 October 2011. 117In her third affidavit (on 12 October), Coleman deposed (pars 15-17) to the Council's failure, accepted by Cotman on 31 August, to provide documents regarding the 14 April meeting: 15 I was therefore confused to hear Counsel for Byron Shire Council in his last address made submission to the Court on 31 August 2011 in reply to Mr Cotran (sic) which commenced by referring to the draft of the recommendation set out in the affidavit of Samantha Kelly sworn on 8 April 2011. I recall Counsel noted that the final version (ie the version which DLA Piper had declined to produce on the grounds of relevance) was not before the Court and its terms not known. Counsel made submissions which seemed to suggest that the decision to withdraw the Coastal Zone Management Plan on 14 April could be seen as part of a process that involved the council making choices related to the recommendation referred to in the affidavit of Samantha Kelly on 8 April 2011 (or the final form of that) or consideration of the various Options that related to that recommendation. 16 After the hearing, I wrote to DLA Piper again to seek a copy of the final version of the first recommendation to Council the draft of which was in the affidavit of Samantha Kelly sworn on 8 April 2011. 17 After several requests that document was produced by DLA Piper. However at the time of production, DLA Piper confirmed that: We remain of the opinion that this document is irrelevant to the issues. 118The document referred to in par 17 of Coleman's 12 October affidavit, and annexed to it, was page "(45)" of the Council's papers for its ordinary meeting on 14 April, which recorded the following: RECOMMENDATION Management recommend that Council do not rescind Res 11-162 but that Council, additionally, resolves as follows: 1. That in addition to Resolution 11-162 Council resolve that should the Minister: (a) advise Council that they decline Council's request for referral of Council's concerns back to the Coastal Panel; or (b) not otherwise have issued a revised Ministerial Direction pursuant to s55G of the Coastal Protection Act 1979 (as amended) by 6 May 2011, then Council will not proceed with the current draft CZMP and the General Manger will be required to write to the Minister advising the Minister that Council: (i) withdraws the draft CZMP from lodgement under s55G(1); (ii) will not be proceeding with the current draft CZMP; (iii) will have to recommence the process under the new statutory regime and pursuant to the new Minister's Guidelines. 2. That the Minister be notified of this Resolution at the same time they are notified of Resolution 11-162. 119The Council's page "(45)" document notes the attachment to it, for councillors' use, of two confidential legal advices (Annexures 36(b) and (c) to the Council papers). The affidavit itself also attaches, along with page "(45)", a copy of Resolution 11-162 of 3 March 2011 ([64] above). 120Coleman's 12 October affidavit concluded: 19. I remain concerned that the Court may have been left with an impression that material that the parties agree was irrelevant to the consideration of the 14 April resolution was somehow relevant to the decision as made. 121Mr Cotman assured the court on 13 October (T p3, LL17-18) that he was not alleging that "anyone has misled the court", nor (T p4, LL33-34) that anyone had "engaged in any form of professional impropriety", merely that Mr Hemmings may have inadvertently misconstrued a change made in the recommendations going before Council (T p4, L18). His written submissions of 31 October 2011 (pars 19-26) say that Mr Hemmings's oral submissions on 31 August were "inaccurate". 122For his part, Mr Hemmings steadfastly claims that in the later stages of the hearing on 31 August 2011, indeed at my invitation (T31.8.11, p60, L36), he merely replied to something which Mr Cotman had raised, late and orally, in arguing the applicants' claim for costs. 123The impasse between the parties, about the exchange which occurred at the end of the 31 August hearing, was not resolved at the mention on 13 October. 124Mr Cotman handed up on that day a one-page "Summary of the Plaintiff's [sic] Position". It expressed his continuing concerns (1) that the applicants had thought it was common ground between themselves and Council that the original multi-choice recommendation became irrelevant, and was not considered by Council on 14 April, and (2) that the court could fall into error by accepting Mr Hemmings' submissions (at T pp62-4) as asserting that that recommendation "was still alive and considered at the meeting" (Summary par 7). He noted (at T13.10.11 p5, LL43-47) that: the only recommendation before the meeting on that day was to withdraw the plan. And that's of course the resolution which was then passed and withdraw the plan was there because the insurer's (sic) had made a recommendation to the Council. 125The lingering dispute between counsel became clearer in the following important exchange (T13.10.11, p9, LL10-41): COTMAN: ...my learned friend has just repeated the very problem that we have insofar as my learned friend adheres to the proposition that the document at 39A is a record of the meeting, a report of the meeting. It's not, it's the Council papers, the agenda papers for the meeting of 14 April. And so what my learned friend is yet again asserting is the very thing that his solicitor has disavowed and the disavowal of which we accept which is that the material which is there on those pages was a matter for consideration on 14 April as matters eventually transpired, not as matters were anticipated they would when the papers were first prepared. ... HEMMINGS: That's not an agreed position. COTMAN: Thank you. Now we're getting clear. My learned friend says that is not an agreed position. In other words, as I understand it, my learned friend is asserting that at the meeting of 14 April there was consideration of the matters dealt with in the draft resolution. That is precisely contrary to what we have been told time and time again in the correspondence. HEMMINGS: Your Honour, with the greatest respect, my friend misunderstands the difference between the report that was before the Council at which it ultimately made its decision by reference to a resolution a draft resolution. They are two different things. COTMAN: A withdrawn resolution. That's the point. HEMMINGS: ... There were two resolutions, one which was ultimately made. The resolution ultimately made was based upon the report. The report was the one that was in Ms Coleman's affidavit until which after Mr Cotman referring to it I made submissions. 126As the matter required calm consideration on both sides, the transcript of the hearing on 31 August having only just become available as at 13 October, I put to both counsel that, without any formal application being required, both parties should have a chance to make some further submissions after they had reviewed that transcript. 1272 November 2011 was later appointed for that purpose. 128The applicants had promised on 13 October (T p10, LL9-11) to provide precise particulars of their allegation, but Mr Cotman's submissions on reopening, his intended NOM, and a further Coleman affidavit became available to Mr Hemmings and the court only late on 1 November, and Council needed time to consider those materials. 129Regrettably, therefore, not much progress was made on 2 November 2011. Mr Cotman agreed that Council should be given further time, but took the opportunity to explain (T2.11.11, p4, LL35-36) that the applicants remained concerned by the "late" suggestion by Mr Hemmings on 31 August "that there was something other than the insurers (sic) advice or the legal advice that motivated the Council on the day" (i.e. 14 April), which Mr Cotman said was a different case from that which the applicants had come to court to meet on 31 August. 130In answer to a specific question from me (see T2.11.11, p5, LL6-20), Mr Cotman explained what the applicants sought from a reopening (LL11-20): If all there is in the material that we expect that that's in the confidential session is a discussion of the insurers' advice and indeed if the insurers' advice or the legal advice, however it is described, is of the robustness that it is apparently from what was said in the open session is as robust as it apparently is from what was said in the open session, we expect to be able to say to your Honour two things: (a) the submissions I made on the last occasion as to the likely motivation of the council ought to be accepted and (b) to the extent that my learned friend was suggesting that one could infer that there was some other reason for the council acting as it did ought be rejected. 131He further explained: (1) that the transcript of the "open" Council meeting "doesn't bear out the inference" that Council considered additional matters (LL22-35), (2)that the applicants would also argue that any privilege attaching to the documents had been waived - one cannot argue, fairly, on a hypothetical basis about inferences as to what occurred in confidential session, without the actual material (LL37-42), (3) that Mr Hemmings had argued orally on 31 August a position contrary to that put in the pre-hearing correspondence, expanding, in the hearing, the range of matters that informed Council's change of direction. 132Subsequently, the hearing of the NOM to reopen was fixed for 3 February 2012. I will return later to the events of that day. (See [218]ff below).

F: The controversial correspondence 31 August-13 October, 2011 133The mention on 13 October was instigated by the solicitors for the applicant, and, in anticipation of it, Kelly filed on 12 October a folder of correspondence passing between Mallesons and DLA Piper following the hearing on 31 August (verified by her affidavit dated 11 October). Other items of correspondence were included in Coleman's (fourth) affidavit, sworn 31 October 2011. 134That correspondence, the parties contend, was undertaken to try and elucidate what issues remained worrying for the applicants (see T2.11.11, p9, LL1-5). 135It was only after concluding the hearing on 3 February 2012 that I had, and took, the opportunity to examine all this voluminous correspondence in any detail. 136As it has assumed substantial significance on the question of costs, especially those incurred post-31 August against a background of assertions that the court had been misled. As Mr Hemmings argues (T2.11.11, p9, LL32-34) that the allegation of misleading the court changed in substance over that time (to 13 October 2011), the exchanged correspondence should be set out in regrettable detail.

8 September 2011 137On 8 September 2011, Mallesons wrote to Kelly referring to the correspondence of 25-30 August 2011, and said (Kelly, 11 October, pp7-8): You will recall that by our Notice to Produce and, in particular, by our letter 25 August 2011, we asked you to provide us with a copy of the original recommendation to Council for its meeting on 14 April 2011 before it was replaced by the recommendation apparently issued on 13 April 2011. You addressed our request for that document particularly by your letters of 29 August 2011, 30 August 2011 and a further letter of 30 August 2011. In summary, what you told us in that correspondence was: 1. The initial recommendation "is irrelevant to Council's resolution of 14 April 2011". 2. You refused to provide us with a copy of the final version of the original recommendation for the meeting of 14 April 2011. 3. The refusal to produce was on the basis that documents created before the Council meeting are not relevant to "any fact in issue" unless before the Council at its meeting of 14 April 2011 which this recommendation was not. 4. The form of the original resolution was as per the affidavit of Samantha Kelly sworn 8 April 2011. As you know, your Counsel in his closing address did refer to the first draft recommendation as set out in the affidavit of Kelly sworn 8 April 2011, telling the Court that 'we' did not know what was the exact form of the final version of the draft recommendation. Your Counsel sought to link that document to two other documents including Option 1 on page 39(a) of the paper for the Council meeting as being relevant to the true reasons for the withdrawal of the Coastal Zone Management Plan. In these circumstances, we call upon you to provide us with the final form of that recommendation and otherwise reserve our client's position. Please let us have the final form of the original recommendation tomorrow.

12 September 2011 138Kelly replied on 12 September (at 9.02am) saying simply (p10): "As previously advised the form of the draft recommendation was as deposed to in the affidavit of Samantha Kelly" (presumably the affidavit of 8 April, rather than that of 18 July). 139Later on 12 September (12.15pm), Michael emailed in reply (p12): Thank you for that confirmation. As you will have seen from our letter, in light of what your Counsel represented to the Court, we are calling for the document itself. As you know, it was always our position that you should have produced this document under the Notice to Produce. The need to produce the document has been compounded by the submissions of your Counsel in his closing address in which he told the Court that no-one knew what the final form of that first recommendation was. Please do not continue to withhold this document. Please produce the document to us immediately. 140Later again (2.21pm), Kelly responded (p15): We confirm: The original recommendation that was provided to Councillors was set out in the affidavit of Samantha Kelly. The wording of the original recommendation was amended and a final version provided to Councillors for the meeting on 14 April 2011. A copy of that document has been provided to you in answer to the Notice to Produce. You have requested in the attached correspondence the 'final form of that recommendation'. The final form of the recommendation has been in your possession for some time and was also provided in answer to the Notice to Produce. 141Michael responded (at 2.39pm - p20): In our letter of 8 September 2011, which you enclosed with your email below, we asked for the final form of the original recommendation for the Council meeting on 14 April 2011. That letter referred to the fact that your affidavit of 8 April 2011 set out the draft of that recommendation and you had failed to produce the original. This morning, we made it clear that we were looking for the "final form of that first recommendation". This is the document you have consistently refused to provide to us. By your email at 9.02am this morning, you appeared to clearly understand which document we were referring to, as you referred to "the form of the draft recommendation" referred to in your affidavit of 8 April 2011 and assured us that the final form was the same. In your latest email, you seem to have reverted to discussing the second recommendation, being the one which was before the Council at its meeting of 14 April 2011 (according to your assurances in correspondence). Plainly, we are not asking for a coy of that second recommendation. We agree we have that document. We are asking you, again, for the final form of the draft recommendation referred to in your affidavit of 8 April 2011. This is the document you referred to in your email to us at 9.02am this morning. You have assured us that the final form of that draft recommendation is the same as described in your affidavit. We are calling for that final form of the draft recommendation. 142Before Kelly responded, Mallesons wrote a letter (emailed by Michael at 5.40pm), in which they said, in part (p25): We have now requested four times since last Thursday evening that you let us have a copy of a document which your Counsel told the Court was relevant to the decision to withdraw the Draft CZMP and which your Counsel was using in attempting to resist the costs order sought by our clients. Please produce the document without further delay. No excuse at all has even been suggested by you to justify withholding production of this document now that your Counsel has told the Court that this document is relevant. Nor could there be any such excuse or justification. Your professional responsibilities require you to produce the document without any further delay and we call upon you again to do so. 143Late on 12 September (5.51pm), Kelly replied to Michael's email (rather than the more formal later letter, p26): We remain of the opinion this document is irrelevant to the issues. In maintaining that objection, we provide a copy of the document required by your clients being the form of the recommendation provided to Councillors prior to the meeting on 14 April 2011 (and uploaded onto Council's webpage at 10.54am on 11 April 2011). We again confirm the recommendation was set out in paragraph 6 of the affidavit of Samantha Kelly sworn 8 April 2011 and has been known to your clients since that time. We remain of the opinion this document is completely irrelevant to any issue your clients are seeking to advance in support of their application for costs. 144Kelly transmitted, with that email, page "(45)" of the Council papers for 14 April (see p31). 145Michael replied to Kelly (at 5.54pm - p32): Thank you for providing the document. We note that you say that this document is "completely irrelevant". Your Counsel told the Court that this was a relevant document. Could you please explain to us the basis on which you are saying this document is not relevant, having regard to your Counsel's submissions to the Court? (emphasis added by me) 146Kelly responded (at 5.56pm - p37): "We do not propose debating your clients' interpretation of submissions made to the Court".

13 September 2011 147Michael responded the next day (13 September, at 2.16pm - p43): We refer to your email below and the letters which you have sent us advising that the original recommendation was irrelevant and only the material before the Council meeting of 14 April 2011 was relevant. We understand from your email that you are saying that there is an interpretation of Counsel's submissions that is consistent with that position and with the oral and written advice before the Council on 14 April 2011, including the advice referred to by the Mayor in open session after the confidential session that there was a point where 'we are in breach' of legislation. Is our understanding of your position correct? 148Kelly replied (at 2.22pm - p49): We make no such statement. We remain of the opinion the document is not relevant to the issues that were before the Court for the costs issue. 149Michael then emailed (at 4.04pm - p56): We are not sure what you intend to convey by the statement that you "make no such statement". You have said to us repeatedly in writing that it is only the material before the Council on 14 April 2011 which is relevant to Council's decision. The transcript indicates that there was an oral briefing at that meeting which you have told us is privileged, as well as a fresh piece of legal advice apparently received on 12 April 2011. The Mayor appears to have been referring to some of that advice in the latter part of the meeting when she referred to a breach of legislation. Further, even without your statements to us in correspondence, you surely accept that your professional responsibilities as an instructing solicitor would require you to have been satisfied of the matters set out in our email below of 2.16pm? (The email asking "is our understanding of your position correct?). 150Later on 13 September (at 4.10pm), Kelly responded (p63): We have produced the document you have requested. We also confirm the contents of the document have been known to your clients since 8 April 2011. As to the other matters you have raised, we do not propose corresponding any further on the issue. We do not understand the issue you are now seeking to advance, we do not propose debating with you the impact of submissions made in Court and we do not see the relevance of any of the matters you are raising to a decision that is reserved before the Court.

14 September 2011 151The next day, 14 September 2011 (at 11.24am), Michael emailed Kelly (p71) referring to the last email of 13 September, and saying, in part: ...We have been writing to you since last Thursday evening, firstly to obtain a copy of the final version of the original submission given that your Counsel made reference to this document (and its absence) in his final submissions and then, having obtained that document, to obtain some assurances from you that you are satisfied as the solicitor on the record that the submissions made by your Counsel are accurate having regard to the matter to which we have pointed. We also wish to correct your assertion that we have known the contents of the final form of the original recommendation since 8 April 2011. You did not produce that document until 12 September 2011. You told us about its content in a letter of 30 August 2011. We did not know that your Counsel would continue to make submissions about the draft and final form of this original recommendation for the meeting of 14 April it notwithstanding you said that it was irrelevant until we heard those submissions on the afternoon of 31 August 2011. We do not raise these issues lightly. It is of concern to us that yesterday in two emails you would not give us the assurances that we have sought from you as to the accuracy of those submissions. By an email of 4.10 pm you advised that you do not propose corresponding with us any further. In the circumstances, we suggest that this is not an appropriate response. You are the solicitor on the record and owe duties to the Court. We are raising matters for your attention in that context. In your email you say that you "do not see the relevance of any of these matters [we] are raising to a decision that is reserved before the Court". It is clear that the duty of a solicitor to the Court continues up to the time of judgment. We refer you, by way of example, to Riley's Solicitors' Manual, at paragraph 22,055.5 for authority on that point. We note also that you say you do not understand the issues we are raising. We will restate them in a separate email. 152Kelly responded (at 11.56am - p80): We note you propose forwarding a further email on the issues you are raising. Please also include the transcript of the LEC hearing so the matters you are seeking to address can be considered in context.

15 September 2011 153The next day (15 September 2011), Mallesons wrote a lengthy letter to DLA (pp90-93 - sent by email at 2.23pm from Michael to Kelly), which endeavoured to summarise what DLA was putting to them, namely, that the only relevant recommendation was "the new recommendation of 13 April 2011", and that "the final form of the original recommendation is 'completely irrelevant'". The letter noted (par 6 on p91) that the transcript of the 14 April meeting indicates that "Council was evidently told in the confidential session that the Council was in 'breach' of legislation". 154In par 8 of the lengthy letter, the applicants' solicitors purported to summarise Mr Hemmings's submissions of 31 August. Included in that summary (in par 8(e)) is the statement "your Counsel told the court the final form of the original draft recommendation set out in the affidavit of Samantha Kelly of 8 April 2011 was not known, and relied upon the original recommendation as a relevant document without producing that document". The letter goes on (in 8(f)) to say that the submission was made that "the Council was not motivated by any of the legal proceedings between our clients and the references to the insurer's views in the minutes need not refer to those proceedings but may refer to other proceedings". 155The letter continued (in par 9) to argue that "Council was putting to the court two positive propositions, which could not be tested on the day", because of the position taken by the Council and its lawyers on the production of documents. 156The first of those two propositions (set out in par 10) is that the "affidavit resolution was merely a draft, which may not have been carried forward in final form", whereas the evidence shows it was "carried forward until withdrawn, apparently on 13 April 2011". Council is then said to have continued to assert that the original recommendation is irrelevant, because it was overtaken by insurer advice on 12 April, and the "replacement recommendation on 13 April 2011". 157The second proposition "which could not be tested on the day", "because of the privilege claim" was (par 11) "the implicit assertion that the confidential session did not deal with Council's position under the law relative to the Land and Environment Court or Supreme Court proceedings". 158The letter goes on to say (in pars 13-15), regarding the first proposition: 13 Plainly, your Counsel's reliance in submissions on the document you had refused to produce on the grounds of irrelevance was directly contrary to your position in the correspondence. 14 In these circumstances, we have asked you for some assurances or explanation as to how Counsel's submissions at the 31 August 2011 hearing are consistent with your position both before and after the hearing that the final form of the original recommendation is 'completely irrelevant'. 15 If you are unsure of what occurred during the hearing of 31 August 2011, we suggest you may wish to communicate with your Counsel about what he said. As we said on 14 September 2011, your professional responsibilities require you to address this issue. 159The letter then went on to deal with the second proposition (in par 16): ... you and your client know what happened in confidential session. We do not. The Mayor evidently came out of that session believing there was a breach of 'the Act' and she was not contradicted when she stated that position. We are concerned that Counsel's submissions apparently deny that there was discussion at the meeting of the Council's legal position about or in relation to the legality of the existing Draft CZMP. To the contrary, your Counsel suggested that there was a mere voluntary election to proceed to the new regime and supported this by reference to the document which you say is irrelevant. 160The letter concluded (p93): 18 It is obvious that the fact that relevant evidence is withheld from the Court on the basis of privilege does not permit statements to be made to the Court in disregard of that material. It is not open to make submission just using the material that is available to the Court if it is in fact contradicted by the balance of material known to the legal practitioners (particularly if this is privileged material). 19 It is for these reasons we were asking you in our emails on 13 September 2011 whether you are satisfied that Counsel's submissions, particularly those involving reference to the original recommendation, are consistent with: (a) your letters indicating the original recommendation is "completely irrelevant"; and (b) the Mayor's reference to the advice about a breach of "the Act" and whether that could be rectified by an amendment to "the Act", and your knowledge of the totality of the advice before Council on 14 April 2011. 20 We repeat that question and ask for your urgent reply. You will be aware of recent authorities that endorse that communications between the solicitors in relation to these types of issues is desirable. If you are not satisfied with the references of your Counsel, then the appropriate course is to withdraw those submissions.

16 September 2011 161The next morning, Friday 16 September, Kelly again asked Michael (at 8.29am - p94) to provide the transcript of the submissions so that the matters Mallesons were raising "can be considered in context". 162Michael replied (at 11.16am - p95) that the transcript was not yet available, but would be forwarded as soon as it was. However, the matters Mallesons had been putting were urgent, and needed to be dealt with on the basis of what DLA and Hemmings knew was submitted to the court. Michael offered that Cotman was prepared to speak to Hemmings about these concerns. 163In Michael's email the following paragraph also appeared (p95): We do not know whether your Counsel was aware, before he made the submissions, that you had refused to produce the final form of the draft original recommendation on the basis that both the draft and final form of the recommendation were irrelevant. We also do not know whether your Counsel is aware that since he made those submissions to the Court, you have told us that the document that he relied on is "completely irrelevant" to Council's decision to withdraw the Coastal Zone Management Plan. We believe that you ought to inform your Counsel of this correspondence if he is not aware of it.

18 September 2011 164On Sunday 18 September, Kelly asked Michael (by email at 8.04pm - p98): ... is it contended by your clients that the draft recommendation as set out in the affidavit of Samantha Kelly (and known to your clients well prior to the submissions on costs) is any different to the document provided last week? If so, please identify the differences. Further, is it contended by your clients that they did not know what the draft recommendation was, despite it being set out in the affidavit of Samantha Kelly (which was not object (sic) to or challenged by your clients)? If so, please specify the basis of that contention.

19 September 2011 165On the following Monday, 19 September (at 1.46pm), Michael emailed Kelly (p101): We write to put on the record our response to the two questions you have set out below. Your first question was whether our clients contend that the draft recommendation set out in the affidavit of Samantha Kelly is any different to the document provided last week. Now that we can see the draft and the final recommendation (which you provided to us only after the hearing), of course we do not make that contention. We note however, that your Counsel told the Court that the final might well be different - this is one of the points we are raising with you. Your second question was whether our clients contend that they did not know what the draft recommendation was. Prior to our arrival at the hearing, we understood from you that the final recommendation was in the same format as the affidavit of Samantha Kelly. We had no means of testing that suggestion as we did not have the final, since you refused to give it to us. However, we were not agitating that position because you had told us on a number of occasions that both the draft and the final were irrelevant. On that basis, we were assuming that there would be no reference at the hearing to the draft or final form of the original recommendation for the meeting of 14 April 2011. We were taken by surprise when your Counsel made submissions referring to the draft and the absence of the original and suggesting it was relevant. This is one of the reasons which has prompted us to write to you asking you to answer the questions most recently set out in our letter to you of 15 September 2011. 166On the same day, Mallesons wrote formally (p106) to follow up their letter of 15 September. The follow-up letter was sent by email (at 2.05pm on 19 September), and included the following extract from Riley's Solicitors Manual (22,050.5)): Being a party to the presentation of evidence, or the making of statements, to the court that is partly true, but by omitting the whole truth creates a misleading impression to the court, represents a breach of the lawyer's duty to the court. The warning of the Chief Justice in Re Thom should be at the forefront of the lawyers' minds in this context: It is perhaps easy by casuistical reasoning to reconcile one's mind to a statement that is in fact misleading by considering that the deponent is not under any obligation to make a complete disclosure. By this means a practitioner may be led into presenting a statement of fact which, although it may not be capable of being pronounced directly untrue in one particular or another, still presents a body of information that is misleading, and conceals from the mind of the tribunal the true state of facts which the deponent is professing to place before it. For that reason it is proper on such an occasion as this to express condemnation of any such casuistical paltering with the exact truth of the case.

20 September 2011 167Michael continued to pursue Kelly for a response to the letter of 15 September. He sent her emails at 10.01am, and 11.30am on 20 May (pp107-110), pointing out that Mallesons had raised their issues on 12 September, and required an urgent response "before taking our own course".

21 September 2011 168Kelly provided this response early on 21 September (7.57am - p112): We have reviewed your correspondence in this matter and spoken with Counsel. We respond as follows: We confirm the draft recommendation was known to your clients having been deposed to in the affidavit of Samantha Kelly. In response to your comment that you had 'no means of testing' whether the maters as deposed to in that affidavit was an accurate transcription of the draft recommendation, we remind you that you required Samantha Kelly for cross examination on the contents of the affidavits deposed to and then, on the morning of the LEC costs argument said you did no longer required (sic) anyone cross examination. We note that the differences between the 'draft' and 'final' recommendation are minor in nature and there is no change in the context of the recommendation between the two versions. You have stated that 'you assumed there would be no reference at the hearing to the draft or final form of that original recommendation for the meeting of 14 April 2011'. We do not know the basis of that assumption, particularly as the matter was before the Court was on your clients' own application. You had stated our Counsel 'made submissions referring to the draft and the absence of the original'. We do not understand the matters you are raising, particularly as the draft and original were before the Court. We can only assume you have misunderstood or misinterpreted submissions made. We remain of the opinion the contents of the draft recommendation is irrelevant to the matters LEC costs argument. The draft recommendation was not in the final version of the agenda before Council on the day of the meeting. The relevant document, being the final agenda papers, was what was considered on the day of the meeting. Those documents were provided to you in answer to the Notice to Produce. Further, what was relevant was the resolution reached by Council as opposed to any recommendations made in agenda papers. You have made reference to a comment made by the Mayor during the meeting. Again, we can only assume you have you have (sic) misunderstood or misinterpreted submissions made during the hearing. The selective manner in which you have sought to interpret comments made during the meeting does not make sense when viewed in context. In response to the specific matters your (sic) have requested us to respond to in paragraph 19 of your raised (sic) your letter of 15 September: We are satisfied that Counsel's submissions are consistent with our letters stating that the 'original' (as referred to by us as the 'draft') recommendation is 'completely irrelevant'. For the avoidance of doubt, we remain of the opinion the draft recommendation is not relevant as it was not the document that formed part of the final business papers being considered on the day of the meeting. We are satisfied that Counsel's submissions are consistent with any comments made by the Mayor, or anyone else, during the meeting on 14 April 2011. We do not see any need to, or propose to, withdraw any submissions made on behalf of our client. 169Mallesons sought clarification of some aspects of Kelly's response, in a formal letter later on 21 September (emailed by Michael at 12.31pm -pp116-117). They drew a distinction among three things: a "draft recommendation" (described in Kelly's affidavit 8 April), "the original recommendation" (being the final form of that draft recommendation ultimately provided with the email of 12 September, but not prior to the hearing, which DLA said had been uploaded to Council's webpage on 11 April), and "the second recommendation" (the one circulated to Council on 13 April). 170Mallesons accused DLA of refusing to provide "the original recommendation" for the purposes of the hearing. But had its counsel refer to it at the hearing, and said (at p117): Given that the original recommendation was not before the Court, your email this morning does not explain how there could be any submissions made by your Counsel to the Court based on the original recommendation (or its draft), in light of the fact that you said prior to the hearing and now continue to say that the draft and the original recommendation were irrelevant. ... We assumed that your Counsel would not be making submissions to the Court based on documents you told us were irrelevant. 171Mallesons complained of DLA's continued refusal to explain.

22 September 2011 172Michael sent a chase-up email the next morning, 22 September (p118), and Kelly responded at length (pp120-121). Council contended that the draft recommendation and the original recommendation are the same document, of which there were two versions - the first appeared in the Kelly affidavit of 8 April, and was only slightly amended for the final agenda papers. That slightly amended second version was produced to the applicants in response to the Notice to Produce. DLA had frequently stated that both versions of the recommendation were known to the applicants. Clearly, therefore, the original recommendation was before the court. 173Kelly continued (p120): In any event, having spoken to Counsel, and notwithstanding your numerous emails and letters, we remain unsure about the concern that you raise. To the best of Counsel's recollection, submissions were based upon the (final) resolution that was before the Council when it made its decision. Submissions may have been made upon the earlier version but Counsel does not have any specific recollection. As previously advised, if you have a continuing concern, it may be necessary to see the transcript and for you to specifically identify your concern. Nevertheless, Counsel does recall making submissions in reply (to Mr Cottman's (sic) submissions in reply). That was necessary due to your Counsel raising several matters, for the first time, in his 'reply' submissions. If it is those submissions that your alleged concerns arise from, Counsel's reply submissions were simply based upon, and by reference to, materials that were before the Court and that had been referred to by Mr Cottman (sic) in his 'reply'. 174Kelly continued (p121), contending that Mallesons must have understood or misinterpreted the submissions made during the hearing. "The selective manner in which you have sought to interpret comments made during the meeting does not make sense when viewed in context". DLA confirmed that it was satisfied with their counsel's submissions. The applicants' lawyers should, therefore, identify "the purported inaccurate and misleading submissions" it contends were made. 175The email continued (p121): We are also instructed to advise that we consider the correspondence on this issue has been unnecessary and appears to our client to be aimed either at: (a) advancing issues you did not raise in support of your application, or (b) to undermine the claim for privilege over Council's legal advice that was considered at the meeting on 14 April 2011. It must now be apparent to you that either no issue properly arises, or that there is a fundamental disagreement between us. Clearly in our view, no issue arises. However, if you are of the contrary view, the appropriate course is that identified by us above, and previously. It is for your clients to precisely identify, by reference to the transcript, the concerns that you have. The correspondence on this issue must be brought to an end. The costs being incurred appear to us to be clearly inconsistent with the guiding principles' that should apply to all Civil litigation.

28 September 2011 176On 28 September, Mallesons forwarded the transcript of the hearing on 31 August, under cover of a lengthy letter (emailed by Michael at 6.27pm - pp124-126), containing what could be described as a "lecture" about the duty not to mislead, and the duty to avoid creating a misleading impression, for example, by making a statement which is partly true, but omits the whole truth. Council contends (par 2, p124) that, once the insurers provided advice on 12 April, the original recommendation was withdrawn, and the "various options" fell away, yet Mr Hemmings's submissions did not indicate that the draft in the 8 April affidavit was "a completely irrelevant document". 177Mallesons summarised (in par 3, pp124-5) what they said was Mr Hemmings's chain of reasoning, and (in par 4, p125) they put that "these submissions have or are at substantial risk of having misled the Court". They allege that Mr Hemmings did not tell the court the whole story, and, in taking that course, created a "misleading impression". The material before the court was misleading, and it was improper for him to make submissions about material not before the court, or what might be inferred from the confidential advices (pars 5-7, pp125-126): 5 It is not an answer for you to suggest that Mr Cotman had a right of reply or that we had known about the terms of the original form of the recommendation for some time. As it happens, our Counsel did protest about the accuracy of these submissions at the time they were being made by your Counsel and your Counsel continued undeterred. 6 Furthermore, it is no answer to say that your Counsel was making submissions based on materials that were before the Court. Your Counsel cannot make submissions based on material before the Court that are misleading. What is more concerning is that, in effect, he was making submissions about material not before the court and what might be inferred to be its content, being the confidential advices. 7 If the submissions are contrary to the true state of affairs they cannot properly be made or allowed to stand once it is apparent they are or have the capacity to mislead. It is misleading to make submissions to the Court about a document or material to assert it as being relevant (suggesting one process of reasoning of the Council) if it is "completely irrelevant" and not before the relevant meeting or part of the decision making process. 178The transcript of the hearing on 31 August, enclosed with that letter, appears in the Kelly materials at pp127-192.

30 September 2011 179On 30 September, Kelly replied, by email (p193), that she had reviewed the letter of 28 September: We have already addressed the matters raised in our previous correspondence. We also note you have not identified any purported misleading submission made by our Counsel. We do not accept there is any misleading submissions (sic) that have been made in this matter. (emphasis mine)

5 October 2011 180Mallesons wrote again on 5 October (pp194-195) complaining that Kelly's "blanket denial" does not allay their concerns. Mallesons again contended that there was "a real risk that the Judge does not appreciate that you say that these documents which were referred to by your counsel are completely irrelevant". As DLA is satisfied there has been no misleading submission, and Mallesons hold the concern that there has been, "we assume that you could have no objection" to the proposed note, which Mallesons said (p195) would address "our concerns that the Court may have been led to think these documents were or are relevant, rather than completely irrelevant to the resolution as passed". An application to relist was foreshadowed.

6-7 October 2011 181On 6 October, Kelly emailed Michael in response (p196): On a number occasions (sic), we have invited you to specifically identify, by reference to the Transcript, what is said by you to be misleading submissions. You have repeatedly refused to do so. However, we note that by your proposed letter to Sheahan J, you refer to page 62 of the Transcript. It causes us great concern if this is the part of the transcript that has given rise to the voluminous correspondence following the submissions. As stated in our email of 22 September, to the best of our counsel's recollection, at that stage without the benefit of transcript, he had sought leave, and did obtain leave, to reply to Mr Cotman's reply submissions. That leave had been necessary because Mr Cotman raised matters in his 'reply' for the first time. It is obvious from the page of the transcript to which you now refer, that our counsel's submissions are purely responsive to the matters raised by Mr Cotman (and to which Mr Cotman then took the opportunity to again reply). We remain of the opinion that there have not been any misleading submissions by our counsel. We do not consent to the proposed note being forwarded to the Court. It suffers from a number of vices, not least of which is to request the judge to consider one portion of the transcript out of context. 182The application to relist was then made to my associate (p200), on 7 October.

10-12 October 2011 183On 10 October, Kelly wrote to Coleman (p202), apparently claiming the "high ground" in the discussion: We refer to your letters of 15 September 2011 and 5 October 2011. Your letter of 15 September 2011 asked us to respond to suggestions our Counsel made submissions to the Court on 31 August 2011 which were unavailable to the Council and should be withdrawn. We have repeatedly refuted your allegations of any 'unavailable' or 'misleading' submissions having been made. We have also asked you to fully particularise the substance of this allegation and identify by reference to the transcript the alleged misleading submissions made in Court. You have not done so. Our firm, our Counsel and our client takes very seriously your allegations of misleading the Court. We invite you to either withdraw the allegations or particularise the purported misleading submissions by reference to the transcript, particularly in light of your communication to the Court seeking the relisting of the proceedings before Justice Sheahan. We will be seeking orders for payment of our client's costs in relation to the relisting and the associated correspondence. 184In her affidavit of 11 October, Kelly made the point (in par 3) that: "As at the time of swearing this affidavit, I have not been provided with the particulars of the purportedly misleading submissions by reference to the transcript". 185Coleman's third affidavit was sworn on 12 October 2011 ([15], [90], [117], [118], and [120] above) and filed in court the next day.

13 October 2011 186I have already referred briefly above ([121]-[126]) to the mention of the matter on 13 October 2011, where counsel for both Council and the applicants put their arguments in at least a preliminary way. 187The matter was stood over part-heard to a date to be fixed, and the Registrar appointed 2 November 2011.

Post 13 October 2011 188Coleman annexed to her affidavit of 31 October 2011 (as Annexure 'D') a letter written to her by Kelly, emailed to Michael on 18 October 2011 (pp 26-28), which, in fairness to both sides, should be reproduced in full, despite its length. (I have highlighted the paragraphs on which Mr Cotman placed particular reliance in his submissions of 31 October 2011): We refer to your email of 17 October 2011 received at 5.04PM and your further email this morning. It is our understanding that before this matter was to be re-listed, your clients were to identify with some specificity the issue they were seeking to advance so the parties could attempt to reach agreement. If agreement could not be reached, then the parties were to approach the Court for a date. Accordingly, we look forward to receipt of the submission you are now seeking to advance. We also refer to the Court appearance before Justice Sheahan on 13 October 2011. Despite alleging numerous times in correspondence that misleading submissions have been made on behalf of our client to the Court, we understand from the submissions of Mr Cotman SC that is no longer the position and it is not contended by your clients that any misleading submissions have been made to the Court. If our understanding from Mr Cotman's submissions is incorrect and your clients' maintain their allegations that misleading submissions have been made to the Court, we again request you provide particulars of the misleading submissions that are said to have been made by reference to the transcript. Several references have been made in your recent correspondence as to the professional obligations to respond to issues raised in your correspondence. Given the extremely serious nature of the allegations you are raising against our counsel and our firm, we would expect the same professional obligations to apply to yourselves. We assume such serious allegations would not be repeatedly made without basis and, accordingly, we again request you specify that basis or withdraw the allegations. Nevertheless, if our understanding of your senior counsel's submission to the Court is correct and you no longer make such allegations, then the issue is considered closed. As to another matter raised by Mr Cotman SC, he stated to the Court that it was agreed between the parties that Council management's recommendation to Council in the form attested to in the affidavit of Samantha Kelly of 8 April 2011 and provided to you on 12 September 2011, is irrelevant to your client's Notice of Motion seeking costs. We agree that this recommendation is irrelevant. However, Mr Cotman then proceeded to state it was agreed that 'the documents underpinning that recommendation' were also irrelevant. That position is not agreed and has never been conveyed by our clients, either in writing or in submissions. The only document our client has ever contended was completely irrelevant was the draft (also referred to by you as the 'original') recommendation. That is a one page document and to avoid any confusion, we have attached the document we contend was irrelevant. Further, as repeatedly stated on behalf of our client, the reason we say the document is irrelevant is because it was not the form of recommendation included in the business papers that were before Council on the day of the meeting. We do not submit that any other documents are irrelevant. In particular, we have not and do not submit that the report to Council that was included in the business papers (and appearing at page 45 to page 49 of the second affidavit of Karen Elizabeth Coleman of 2 August 2011) is also irrelevant. That report was before the Council meeting of 14 April 2011 and so is quite clearly relevant to Council's decision, a position we have always maintained. Our Counsel's submissions in reply in respect of this report appear at TS 63. The questions our Counsel posed at TS 63.10-14 and the options referred to at TS 63.18-32 were each raised in the report and were considered by Council at the meeting of 14 April 2011 with the benefit of that same report. As we have said on many occasions, the documents which are relevant to Council's resolution of 14 April 2011 are those which were before the Council at its meeting. No contrary position has ever been submitted by our client. We look forward to your identification of the issue to be raised before the Land and Environment Court. 189A further copy of Council's page "(45)" was attached to that letter, and appears in the annexure (at p29), but the Coleman (or Michael) emails of 17 and 18 October, referred to in the first paragraph of the letter, do not appear to be before the court. 190Mr Cotman relies on the paragraph which I have highlighted (towards the end of the letter I have just quoted in full) to make the submission (31.10.11, par 34 - emphasis in original) that "Council has now clearly affirmed that its case is that Council in fact considered the 'options' associated with the irrelevant first recommendation and the Sartor Direction contained in the Agenda Options Paper at the meeting at which the resolution was passed". 191Annexure 'E' to Coleman's 31 October affidavit is an email from Kelly to Michael dated 21 October 2011 (p30), referring to a letter she received from Michael on the 20th, which again Coleman has not annexed to her affidavit. Kelly said, in part (with my emphasis again on a comment relied upon by Mr Cotman): We note you seek leave to reopen your clients' case, not just your submissions. Accordingly, it would seem necessary for your client to make a formal application to reopen its case. Without knowing on what basis your client now seeks to reopen its case and also advance further submissions, we do not know whether the half day hearing you now propose is appropriate (noting that your Senior Counsel advised on the last occasion only 2 hours was required). Accordingly, we look forward to your evidence in support of the application to reopen the case and the further submissions you now wish to make. As to the other matters raised in your letter, we have repeatedly stated the records that were relevant to Council's decision were those before Council on the day of the subject meeting, being 14 April 2011. The report to which you refer was included in the agenda for the meeting (being the business papers) and therefore, can be assumed to have been considered by the Council. Whether it is mentioned in any recording of the meeting bears no meaning as to whether it was a consideration of Council. Please confirm the matter is listed on 2 November 2011. If that is the case, we will require the matters upon which you seek to rely on that date (being the evidence and submissions) by 5.00pm on Friday 28 October 2011 so that we can provide any response prior to the hearing and avoid further wasting of the Court's time. We again put you on notice that we are seeking orders for all costs associated with this issue since judgment was reserved by Sheahan J. 192Mr Cotman submits (31.10.11, par 37) that the highlighted passage above "flatly contradicts" what DLA Piper's letters of 29 and 30 August 2011 ([88] - [89] above) had said, denying that the "original agenda" was relevant. Mr Cotman submits (31.10.11, par 41) that the revised position taken by the applicants is: (a) completely unsupported by any contemporaneous note or any witness; (b) contrary to the transcript of the open session of the Council meeting on 14 April 2011 which does not refer to any consideration of the original recommendation or the agenda options paper at any point at all in the meeting but to advice from the insurer; (c) contrary in some respects to the face of the documents relied on ... 193The Coleman affidavit of 31 October was filed on 1 November 2011, but not formally read until 3 February 2012. 194As I have recounted earlier (see [127]ff), not much was achieved in court on 2 November 2011.

H: The primary arguments on costs 195The applicants' primary submission at the costs hearing on 31 August was that Byron Shire Council should pay all applicants costs in both proceedings, on the basis that, once POC were filed, Council effectively capitulated, rendering the applicants successful in each proceeding, with costs to follow the event. 196As Mr Cotman said on their behalf (T31.8.11, p14, LL43-46, and p47, LL7-21), "...it can't sensibly be said that we didn't get the effective relief that we were seeking and we got it because of the conduct of the defendants rendering the sub-stage of the case otiose. Therefore, we would prima face (sic) get our costs unless there is some pressing reason why not ... Here we have a unilateral act by a defendant that takes the substrata out of the proceedings ...", giving the plaintiffs "practical success". 197If that submission is not successful, the applicants' alternative submission is that the Council should pay all of the applicants' costs in 40068, and each respondent half of the applicants' costs in 40167. 198The applicants' submissions-in-chief point out that the primary relief they sought in the second proceedings, as in the first, despite the involvement also of the Minister as a respondent in the second, was the invalidation of the draft CZMP. 199Mr Cotman argues that the Council was pressing on with the challenged draft for three months after the new regime came into force, until the late intervention of its insurers, which came as a surprise to at least some elected councillors (T pp49-54). Council's reluctance to disclose the documents and/or debate in the confidential session of the 14 April meeting should lead to an adverse inference being drawn by the court, pursuant to Jones v Dunkel (1959) 101 CLR 298. 200The applicants' written submissions assert (pars 16-30) that it was the unilateral conduct of the Council which intervened and effectively granted the applicants all the relief they sought - the Council's decision to withdraw the draft, and begin the process afresh under the amended statutory regime was an effective capitulation or "surrender" on Council's part, and that decision was taken by Council to give it an advantage in the proceedings. 201A distinction is drawn in the authorities between such "surrenders", and cases where a "supervening event" removes the issue between the combatants: One.Tel Ltd v Commissioner of Taxation [2000] FCA 270; 101 FCR 548 ("One.Tel"), at 553 per Burchett J; Kiama Council v Grant [2006] NSWLEC 96; 143 LGERA 441, at [49]-[50], and [72]-[80]. 202Mr Cotman relied, in particular, on Bitannia Pty Ltd v Parkline Constructions Pty Ltd [2009] NSWCA 32 ('Bitannia'), Hall v Ku-Ring-Gai Council [2009] NSWSC 370 ("Hall"), Champagne View Pty Ltd v Shearwater Resort Management Pty Ltd [2000] VSC 214, and Garwolin Nominees Pty Ltd v Statewide Building Society [1984] VR 469 to support his submission that, having effectively obtained the primary relief they sought, in both matters, "by the very action of the principal respondent", the applicants are entitled to an order against Council for their costs in both proceedings, and should not have to bear those costs themselves. 203In terms of their alternative submission that the two respondents jointly share the costs burden in 40167, the applicants' primary point is that the Council should not have sent the draft plan to the Minister, and that Council's subsequent conduct has recognised that fact. The applicants point out that, had Council not passed the resolution of May 2010 adopting the draft plan and sending it to the Minister, the Minister would not have been involved at all. 204The applicants had corresponded with the former Minister pointing out the flaws they perceived in the proposed draft plan, but had received no response. 205That Minister sent the draft plan to the NSW Coastal Panel for advice and, on receipt of that advice, communicated his direction to the Council. As he went ahead without responding to the applicants or otherwise addressing their concerns, it is relevant that the Minister in the incoming government decided not to proceed with the plan. The Council was warned of that possibility on 29 April 2011, and the Minister so advised the Council on 26 May 2011, effectively surrendering the position taken by the former Minister, and creating a basis upon which the court could order that the two respondents to the later proceedings share responsibility for the costs of the applicants. 206The Minister (involved as a respondent only in 40167) submits that each party should pay its own costs of the second proceedings, "in the particular circumstances of this case", despite "the presumptive rule" that would give the Minister his costs (T31.8.11, p33, LL12-15). 207The Minister argues that the commencement of the second proceedings was not reasonable, that the pleadings were unclear and failed to disclose any cause of action against him/her, and that they disclose no recognised basis for judicial review. The relief sought was irrelevant to any final plan, and/or not related to the Minister's own conduct. At a very early stage in the passage of the proceedings, the plan was withdrawn, but it is by no means clear to the court that the applicants were "almost certain" to succeed in their claims. 208The Minister intended to argue discretion, in any event (T31.8.11, pp43ff), and did not "surrender". The conduct of Council in withdrawing the draft plan was "the relevant supervening event" (T p44). There was no justification for the second proceedings - the Minister could have been joined in the first matter. 209The Council (a respondent in both matters) does not seek any order for its own costs in either of the discontinued proceedings, but believes each party should pay its own in both of them, as there has been no unreasonableness on its part, but unsatisfactory and disentitling conduct on the part of the applicants. 210The Council's draft CZMP was prepared, "cognisant of the then current legislation and Coastal Manual", and, by the time it was considered by the Minister and the Coastal Panel, the governing statutory regime had been amended. On receipt of the Minister's direction, it became necessary for Council to reconsider its policy position, and formulate an attitude to what should be done about the draft. 211After considering, at meetings held on 24 February, 3 March, and 14 April, whether to persist with that draft or start the process again, it resolved on 14 April to withdraw the challenged draft. Mr Hemmings says (par 12) that that decision was totally independent of the applicants' then current proceedings. 212Council characterises the situation as a case of "supervening event", given that the statutory regime was altered by the State: Bitannia at [80]. Therefore, the appropriate order is that each party pay its own costs. The applicants sought to impugn the validity of the draft CZMP, and that issue was never finalised, nor was it conceded by either respondent. 213Council was directed to draft a new CZMP, accommodating some suggested amendments, and that draft will be assessed in accordance with the new regime. Council in no way capitulated to the applicants' claims in the proceedings, so the situation is not comparable with, for example, One Tel or Hall. 214Mr Hemmings also indicated in his written submissions (par 38) that Council would most likely have challenged the applicants' proceedings on jurisdictional grounds. 215The disentitling conduct alleged against the applicants involves their commencing these proceedings, without notice, while very similarly pleaded Supreme Court proceedings were already on foot. No attempt was made to bring the two sets of proceedings together, nor to transfer the Supreme Court proceedings to this court, nor to amend 40068 to add the Minister as a respondent. 216As matter 40167 was directed primarily at the Minister's actions, if the Council's primary costs position is rejected, any order for the applicants' costs should be made against only the Minister. 217Council having put to the applicants, on 27 April 2011, its primary costs proposition (i.e. that all three parties should be ordered to pay their own respective costs), and the applicants having declined to agree to it, Council now seeks also an order for them to pay its costs of the hearing on costs.

I: The Question of Reopening 218On 3 February 2012 the parties argued the applicants' NOM of 2 November 2011, primarily seeking the following: 1 Order that the Applicants have leave to re-open their evidence on costs of the proceedings and to make further submissions if leave for further submissions has not already been granted. 2 Orders that the Applicants have leave to: (a) call on the Notice to produce served on the Respondent Council on 27 October 2011; (b) lead in evidence any tape and other documents produced by the Respondent Council in answer to the Notice to Produce, and a transcript of such tape verified as accurate; (c) in the event that the tape and transcript, the final form of recommendation or any other material that was provided to Byron Shire Council for purposes of the meting of 14 April 2011 are led in evidence, make submissions to be heard on the relevance of any and all such documents on the issue of cost in these proceedings, with the Respondent Council and the Respondent Minister also having leave to make submissions and be heard on those matters. 219In these two proceedings, commenced respectively on 28 January and 1 March 2011, the applicants have always had the difficulty that they were attempting to attack the validity of a draft policy document. 220Council has never reversed its decision of 27 May 2010, to place a draft CZMP before the Minister, and no finding of invalidity of any draft has ever been made or conceded. 221The pleadings in these matters were not completed - indeed, Council had not yet requested particulars of the POC - when, on 14 April 2011, Council resolved to withdraw its original draft and prepare a new one, in accordance with the revised statutory scheme. Such a course was entirely open to the Council, but that decision removed from the scene the very document upon which these proceedings rested. 222The costs argument, which was conducted and, I thought, concluded, on 31 August in the context of the proceedings, was based on (1) the applicants' claims that the respondents "surrendered", (2) Council's characterisation of the change in regime as a "supervening event", and (3) the Minister's characterisation of the Council's decision of 14 April as a "supervening event". There was no effective surrender or capitulation by the Council or the Minister, nor any "practical success" for the applicants. The draft document they opposed was withdrawn, but any new draft may well give rise to similar allegations of invalidity. 223The attempt by Mr Cotman and the applicants to reopen that costs argument seeks to have the court enquire into the Council's recommendation and reasoning processes which brought about the 14 April decision. Mr Hemmings and the respondent Council characterise those processes as "antecedent events", as distinct from "supervening events", and submit that they are, therefore, irrelevant to the question of costs. 224Mr Cotman alleges that the Council shifted its position on the costs argument, after its primary submissions were made on 31 August, to create/raise an issue which (subs 31.10.11, par 43) "manifestly" requires "determination by a properly conducted hearing with the relevant evidence in the hands of both parties in accordance with the proper administration of justice". He says (pars 45-6) that the authorities require the court to allow a reopening where it will ensure that "the interests of justice are better served" (Urban Transport Authority of NSW v Nweiser (1992) 28 NSWLR 471, at 478). 225Mr Cotman also noted (par 44): By way of further complication, the Council asserts that the Applicants, who do not have access to the confidential and privileged material, carry a burden of proof in relation to this issue: [T31.08.11, p64, L11 - p64, L12]. Asserting such an onus makes it impossible for Council to withhold any part of the deliberative material once it asserts a positive case based on what must have occurred in confidential session if at all. 226Mr Cotman says that Mr Hemmings invited the court to "infer" what Council actually considered, but refuses to provide the materials. Mr Cotman softened the demand for documents, before the hearing on 3 February 2012, but Mr Hemmings affirmed the Council's objections, apparently because all the subject documents comprise a confidential package of advices. 227If the costs argument is reopened, the applicants seek (pars 47ff) access to the tape of the confidential session of the crucial Council meeting, on the basis that privilege has been waived or applies to only part of it, as Council's conduct is inconsistent with the maintenance of the confidentiality: Mann v Carnell [1999] HCA 66; 201 CLR 1, at [29]. See also Evidence Act 1995 s 122, and Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [2008] NSWLEC 247; 161 LGERA 86. 228The applicants rely for waiver on the following actions of the Council (pars 59-68): (a)making submissions on 31 August 2011 about an inference to be drawn about the content of the confidential session while claiming privilege and so not placing before the court evidence of that content; (b)the submission made on 13 October 2011 (T13.10.11, p9, LL38-40) that "there were two resolutions, one which was ultimately made ... based upon the [agenda option paper]", and the confirmation of that position on 18 October 2011; (c)withholding the tape from the applicants amounts to a breach of procedural fairness by Council. 229Mr Hemmings submits, in response, that a relatively simple fact situation has been complicated by the voluminous correspondence I have described (in Section F above). The court must concern itself with the objective circumstance(s) which led to the loss of utility in the proceedings, and the decision to discontinue. 230What went to Council as part of the agenda for its meeting of 14 April, in light of the pending rescission motion, included management's "comments paper", which contained options, formulated in an evolutionary way over time, as Council assessed the impacts of the statutory changes, and took professional and insurance advice. 231One of the options (to withdraw the CZMP and redraft it under the new regime) was recommended by management, and adopted by Council. 232Also included in the agenda papers were three other documents, over which legal professional privilege has been claimed (see [75] above). 233Mr Hemmings submits that, as it is a matter of objective and proven fact that those documents were before the Council, the court does not need any evidence of the actual deliberations, and should accept that Council made a decision consistent with material before it. When the evidence shows that a document was before the Council, the court should accept that it was taken into consideration: Schroders Australia Property Management Ltd v Shoalhaven City Council [2001] NSWCA 74, at [72]: Alexander v Yass Valley Council [2011] NSWLEC 148; 184 LGERA 123, at [113]. 234Council did not adopt a "new course" in this argument over costs - Mr Hemmings points out that he opened up the relevant controversy towards the end of the 31 August hearing, because of submissions made, in reply, by Mr Cotman about inferences sought to be made by the applicants. Mr Hemmings premised his response on the basis that he "didn't need to go there" (as Mr Cotman had earlier conceded) - he responded to an "erroneous submission ... that the report was not a consideration of the Council because it was superseded by a new recommendation", and simply rejected the applicant's argument that some inference should be drawn about the legal advice. The inference Mr Cotman wants the court to draw is that Council withdrew the draft plan because it was advised that that course would give it a strategic advantage in resolving the litigation. 235As Mr Hemmings noted (T3.2.12, p24, LL21-4): So, we are here because I answered something which I said was irrelevant to something that Mr Cotman accepted he didn't need to demonstrate, reopening because of concerns about inferences that should not be drawn. and later (at T p26, LL15-21): So, there was raised in Mr Cotman's submissions the text of the report contained in the agenda. To the extent irrelevant inferences were being asked to be drawn, I addressed your Honour upon the balance of that document, that it was purely in-reply and I accept that it's entirely irrelevant except for the fact that my friend tried to draw an inference which he now appears to suggest is an irrelevant matter because it goes to subjective rather than objective. So, it's a storm in the proverbial teacup. He added (at Tp27, LL17-24): As a consequence, whether my friend withdraws the request for inference or not, that is the inference that he invited your Honour to draw on the last occasion that it's because of the advice received from the insurer, whether it's withdrawn or not, that can only be consideration of subjective matters in the workings of the minds of the councillors and so is irrelevant and so that which my friend asks the court to do is to reopen on his own case so as to permit consideration of irrelevant matters that go to the subjective matters being considered by the councillors before they made their decision. 236Mr Hemmings relies on the following statement by Basten JA in Bitannia (at [81]): As has been noted on more than one occasion, the variety of relevant factors renders it difficult to reduce the exercise of discretion by characterisation of the reason for discontinuance ... There is also a risk that the subjective motivations of the plaintiff in discontinuing may be put forward as a basis for some other order. Except to the extent that such views may have been put before the defendant, for example as a basis for settlement, and be established as such on the evidence, subjective considerations of one party will generally be immaterial, so that the discretion will be exercised on the basis of the objective circumstances established on the evidence. 237There is no evidence before the court that in withdrawing the CZMP Council was motivated by the need to close down the proceedings. 238There are no grounds for any reopening, and, because it will lead to further hearings regarding the notice to produce, and privilege, it would not be the "just, quick and cheap" way to resolve the costs dispute. The applicants are bound by their counsel's forensic decision not to press, at the hearing, the Notice to Produce, and they cannot overcome the privilege claim. It is not fair for the court to let them "have another go" (T3.2.12, p23, LL18-20). 239The interests of justice are best served by objective assessment of the supervening event, not what led up to it, and that leads to a conclusion that each party should pay its own cost of the discontinued proceedings. 240He also submits that the applicants should bear the respondent's costs on the reopening application. 241In reply, Mr Cotman contested Mr Hemmings's contention that it was he (Cotman) who opened up the controversy. He says (at T3.2.12, p29, LL3-13) that the applicants were compelled to respond to Mr Hemmings's "evolution of the document" case (outlined at T31.8.11, pp21-4). 242He also contested the submission that the Council's decision is a "supervening event" (T3.2.12, p32, LL43-7): ... when one looks at what is meant by a supervening event, it can't itself mean the decision that founds the application, it must mean something like some outside force that has effectively compelled each party to deal with things they way they are, or compelled the defendant to deal with things they way they did. 243He went on to assert (Tp33, LL29-47) that Council must prove that the alleged "supervening event" is "some matter unrelated to these proceedings". It cannot, "as a matter of procedural fairness ... have it both ways" (Tp34, LL5-6).

J: Consideration 244The principles governing reopening of matters are fairly well settled: the interests of justice are paramount. I discussed the relevant authorities and principles in Teoh v Hunters Hill Council (No 3) [2009] NSWLEC 121; 167 LGERA 432 (especially at [43]-[61]), and they have not been criticised in subsequent litigation. 245The principles to be applied in allocating the costs burden in class 4 proceedings are, likewise, well settled; it is their just and reasonable application to particular fact situations which complicates the court's task, case-by-case: see my discussion in Monaghan v Holroyd City Council; Holroyd City Council v Monaghan [2009] NSWLEC 112; 167 LGERA 321. For examples where a matter is discontinued, see Great Lakes Council v Wilkes [2010] NSWLEC 117, and Gillespie v Wolseley Investments Pty Ltd [2011] NSWLEC 24. 246The Minister took an active part in the argument on costs, but not in that on reopening. The prime mover on reopening, Mr Cotman, agreed (T3.2.12, p35, LL7-17) that, if I rejected his reopening application, I should decide immediately, the question of costs, which involves all parties. 247He also appeared to concede that he should have pressed his notice to produce before all three parties began their submissions on costs, rather than wait till judgment on those submissions had been reserved. 248He accused Mr Hemmings of trying to "have it both ways", but it appears to me that he himself was trying to do so. He specifically agreed (T3.2.12, p31, LL29-34) that the subjective intention of Council is irrelevant to the costs question, but the applicants sent off an inordinate amount of rather intemperate correspondence trying to convince the Council, and then Mr Cotman spent an inordinate amount of hearing time trying to convince the court, to allow him to interrogate that very question. 249The respective positions of the parties have been set out in great detail in this judgment, and I do not need or intend to repeat or summarize them here. Suffice to say that I prefer the submissions made by Mr Hemmings, and am of the opinion that the evidence, which is clear and not much disputed, supports the Council's case, and that part of it in which the Minister joined. 250The court does not accept that Mr Hemmings misled it in any way at any stage of the matter. It seems to me that at least part of the problem which arose between counsel for the applicants and for the Council resulted from loose use of terminology on the applicants' side, in respect of Council practices, procedures and documents, e.g. they do not distinguish reports to Council meetings from reports of Council meetings. Nor do they distinguish among the agenda for, a transcript of, and the minutes of Council meetings. (See, for example, Cotman's submissions of 31 October 2011, par 10). 251The court finds absolutely no basis upon which it should exercise its discretion to reopen the costs matter, and the interests of justice are best served by refusing to reopen the matter. The applicants' NOM has no merit, and should be dismissed with costs. The court was not asked to consider ordering such costs on an indemnity basis, so they will be ordered on a party-party basis. 252I turn now to the costs of the discontinued proceedings. 253I am satisfied that the applicants have certainly overcome the presumptive rule requiring them to pay the costs of the respondents. The respondents chose not to call on that rule, but there is some evidence upon which they could easily have relied to argue for some of their costs, given that the applicants commenced three separate proceedings in the same premises. 254However, applying the established principles, I find that the applicants have made no real case for them to recover any of their costs from the respondents. 255In all those circumstances, there should, and will, be no orders for costs in respect of the two proceedings in this court and their discontinuance.

K: Conclusion/Orders 256The court makes the following orders: (1) The parties to proceedings 40068 and 40167 of 2011 are ordered to each pay their own costs of those proceedings, and of the hearing on costs on 31 August 2011. (2) The Notice of Motion filed on 2 November 2011 is dismissed, and those applicants who brought it are ordered to pay the costs incurred by both respondents in relation to costs, since 31 August 2011, on a party-party basis, as agreed or assessed. (3) The exhibits are returned.

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: 21 December 2012