MATTER : In the matter of an application for a writ of certiorari against the Western Australian Planning Commission

Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : RE WESTERN AUSTRALIAN PLANNING COMMISSION; EX PARTE SOLOMON [No 2] [2010] WASC 328

Practice and procedure - Order nisi - Application for stay of order that applicants give undertaking as to damages

First Respondent : State Solicitor for Western Australia

Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308

1 PULLIN JA: The proceedings before this court have arisen because of an order by Simmonds J in the General Division requiring the first respondent, the Western Australian Planning Commission (WAPC), to show cause why certiorari should not be issued quashing the decision of the WAPC on 3 November 2009 granting approval of an application by a developer, Commercial Properties, to subdivide land at Mundaring.

2 The grounds supporting the order nisi were that the WAPC committed jurisdictional error and failed to have due regard to and apply certain statutory instruments. The order nisi was made by Simmonds J on 11 June 2010. Paragraph 7 of the order nisi provided that the order nisi should operate as a stay of the decision to the extent that the respondent should not indorse its approval on the survey strata plan for the subdivision pursuant to s 145 of the Planning and Development Act 2005 (WA) until determination of the application on return of the order nisi or until further order. By par 8 of the order nisi, Commercial Properties was granted leave on 24 hours' notice to the applicants and to the WAPC to apply to dissolve or vary the stay order.

3 Subsequently, such an application was made by Commercial Properties. Commercial Properties sought an order that the stay be dissolved or, alternatively, that as a condition of the stay continuing, the applicants provide to Commercial Properties an acceptable undertaking as to damages in the sum of $330,000. In support of Commercial Properties' application, an affidavit was filed by C R Hartz dated 27 October 2010 which revealed that the WAPC had advised Commercial Properties that it was satisfied that all conditions of subdivision had been complied with but that it was precluded from indorsing the plan until the Supreme Court proceedings were dissolved or until further order.

4 The affidavit deposed to holding costs accruing on a monthly basis at the rate of just under $15,000 per month and that there were opportunity costs which would also flow from the inability to proceed with the subdivision. There was other evidence that there were persons willing to buy properties in the proposed subdivision. The affidavit also deposed to the fact that the applicants owned unencumbered land valued in excess of $500,000.

5 Commercial Properties therefore submitted that it was unjust for the applicants to be permitted to have the benefit of the stay order without any assurance by an acceptable undertaking as to damages that Commercial Properties would be compensated for losses in the event that the applicants failed in the proceedings in the Court of Appeal. On 8 November 2010, Simmonds J ordered, inter alia:

The continuance of the stay ordered in paragraph 7 of the order nisi issued on 11 June 2010 be subject to the Applicants, within seven days, providing to the Court the usual undertaking as to damages suffered by Commercial Properties after 8 November 2010 and limited to $330,000, such undertaking to endure up to and including the date upon which the Court of Appeal hands down its decision in CACV 74 of 2010 Ex Parte Solomon & Ors.

6 The case reference is a reference to these proceedings.

7 Without commencing an appeal against that interlocutory order, the applicants have now applied for a stay of the above orders of Simmonds J of 8 November 2010. The applicants admit that they would like the benefit of the stay ordered by Simmonds J on 11 June 2010 restraining the WAPC from indorsing the approval to remain in place. However, they seek to be relieved from the effect of the order of 8 November 2010 which requires an undertaking as to damages if the stay in favour of the developer is to continue.

8 Assuming but not deciding that this court may entertain an application for a stay of Simmonds J's orders of 8 November before an interlocutory appeal against that decision has been instituted, the application would have to be dealt with in accordance with established principles which were stated in Eastland Technology Australia Pty Ltd v Whisson [2003] WASCA 307; (2003) 28 WAR 308.

9 The principles in that case have been applied subsequently by the Court of Appeal in relation to applications under s 15 of the Civil Judgments Enforcement Act 2004 (WA) and applications for a stay under the Supreme Court (Court of Appeal) Rules 2005 (WA). They state that the court will usually recognise that the successful litigant is entitled to the benefit of the order pending the determination of the appeal and that a stay order will not be granted unless special circumstances are shown justifying the departure from the ordinary rule.

10 The central issue is always whether the stay is necessary to preserve the subject matter and integrity of the litigation; but even if that can be demonstrated, the stay will usually be refused if it cannot be established that the appeal, whether upon a grant of leave or not, has ultimately reasonable prospects of success. If that hurdle can be overcome, the stay may still be refused where it appears that the balance of convenience does not lie in favour of the applicant.

11 Because the order of Simmonds J of 8 November 2010 is an interlocutory order, it would be necessary for the applicants to obtain leave to appeal against it and, in doing so, to demonstrate not only that the decision under review was wrong or attended with sufficient doubt to justify granting leave to review the order, but also to show that substantial injustice would be done by leaving the decision unreversed.

12 The applicants have submitted that Simmonds J erred in making the order of 8 November 2010. The primary submission is that once Simmonds J had referred the hearing or the return of the order nisi to the Court of Appeal under s 43(2) of the Supreme Court Act 1935 (WA), he had no jurisdiction then to make the order that was made on 8 November 2010.

13 I will assume but not decide that this submission has reasonable prospects of success. The applicants submit that a refusal of a stay will make any subsequent order made by the Court of Appeal on the return of the order nisi nugatory but, of course, it will only be rendered nugatory if the undertaking as to damages is not given.

14 In considering the balance of convenience, it is clear that the applicants have the assets to support or back an undertaking as to damages but they prefer not to give that undertaking because they do not wish to expose assets to a risk that they might be sold for the purpose of recovering damages.

15 If the applicants fail in the proceedings, they will have prejudiced the developer and caused it to incur substantial extra expenses and to lose opportunities. Those expenses would not have been incurred and the opportunities would not have been lost had the proceedings not been on foot and the stay had not been ordered by Simmonds J. The undertaking which Simmonds J required on 8 November protects the developer against that loss. The applicants, if they succeed, will not suffer any loss by providing the undertaking. The balance of convenience therefore strongly favours Commercial Properties.

16 Finally, no substantial injustice will be done by leaving the 8 November decision unreversed. If the decision is unreversed, the applicants will expose themselves to a liability that they should properly have to meet for having delayed the development. If the applicants succeed, then the undertaking will fall away and not cause any detriment to the applicants. So, viewed from that point of view, there is no substantial injustice by leaving the 8 November decision unreversed. For

all those reasons, the application for a stay should be refused and that is the order I would make.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : RE WESTERN AUSTRALIAN PLANNING COMMISSION; EX PARTE SOLOMON [2010] WASCA 236 (S)

MATTER : In the matter of an application for a writ of certiorari against the Western Australian Planning Commission

Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA

Citation : RE WESTERN AUSTRALIAN PLANNING COMMISSION; EX PARTE SOLOMON [No 2] [2010] WASC 328

Costs - Order nisi discharged - Appropriate costs order

First Respondent : State Solicitor for Western Australia

Australian Securities Commission v Aust-Home Investments Ltd [1993] FCA 585; (1993) 44 FCR 194

Edwards Madigan Torzillo Briggs Pty Ltd v Stack [2003] NSWCA 302.

Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534

One.Tel Ltd v Commissioner of Taxation [2000] FCA 270; (2000) 101 FCR 548

Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622

1 PULLIN JA: The issue between the parties concerns the appropriate costs order following the applicants' abandonment of the proceedings by moving for and obtaining a discharge of the order nisi which had been made in its favour. The applicants have asked that there be no order as to costs and the respondents have sought an order for costs against the applicants.

2 The background is that the second respondent proposed a subdivision of land near land occupied by the applicants. The applicants are trustees of a charitable trust.

3 The applicants sought an order nisi to review the decision of the first respondent which had granted subdivisional approval. The application for the order nisi was opposed but granted by Simmonds J and the order nisi was made returnable in the Court of Appeal. The applicant sought a stay order which was opposed but granted. The effect of the stay was to restrain the Western Australian Planning Commission (WAPC) from indorsing its approval on the survey strata plan. Liberty was granted to the second respondent to apply to set aside or vary the stay order.

4 It may be inferred that the second respondent proceeded to do work necessary to ensure that all conditions attached to the WAPC approval were satisfied. In the following few months, the second respondent took no steps to take advantage of the liberty to apply to vary or set aside the stay order and did not seek an urgent appeal order.

5 The applicants took prompt steps to ensure an early hearing of the return of the order nisi. By November, the applicants had filed all necessary documents and were awaiting a hearing.

6 The next relevant event was that the second respondent satisfied all of the conditions imposed on the subdivisional approval and then applied to vary or set aside the stay order. An affidavit in support deposed that there were persons willing to purchase some of the new lots.

7 On 8 November 2010, an order was made by Simmonds J in effect requiring the applicants to give an undertaking as to damages if the stay preventing the WAPC from indorsing its approval on the strata plan was to continue. The applicants were given seven days to provide the undertaking. The applicants, as trustees, decided that they were not prepared to risk the assets of the trust and therefore decided to challenge the decision of Simmonds J by way of interlocutory appeal. They sought a stay of Simmonds J's order of 8 November 2010 pending the determination of the proceedings in this court and in the proposed interlocutory appeal.

8 At the hearing of the applicants' stay application, the first applicant said that if the applicants did not succeed in obtaining the stay, then they would abandon the primary proceedings in this court. In reasons which have been published, the application for a stay was dismissed and the applicants thereupon moved for and obtained an order discharging the order nisi. The proceedings were in effect, discontinued. The respondents then applied for the order for costs and the applicants, as indicated above, submitted that there should be no order as to costs.

9 The power to order costs is a discretionary power. Ordinarily, the power is exercised after a hearing on the merits and, as a general rule, the successful party is entitled to his or her costs. Success in the action or on the particular issues is the fact that usually controls the exercise of the discretion. A successful party is prima facie entitled to a costs order: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534, 566 - 568 (McHugh J). However, when there has been no hearing on the merits, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order: Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622, 624 (McHugh J). The issue about costs cannot be resolved by the court trying a hypothetical action between the parties because this would burden the parties with the cost of a litigated action which, by the abandonment of the action, they have avoided: Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (624). If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled, or its further prosecution became futile, the proper exercise of the costs discretion will usually mean the court will make no order as to costs of the proceedings: Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (625). However, if after litigating for some time, one party effectively surrenders to the other, then the court may make a costs order against that party: One.Tel Ltd v Commissioner of Taxation [2000] FCA 270; (2000) 101 FCR 548, 552 - 553 (Burchett J); Edwards Madigan Torzillo Briggs Pty Ltd v Stack [2003] NSWCA 302. This might be justified where it was clear that the strength of the other side's case led to the surrender thereby allowing the inference to be drawn that the abandoning party had acted unreasonably in suing or defending in the first place.

10 The applicants acted reasonably in commencing proceedings. Their application was sufficiently well founded to justify a grant of an order nisi. The result on that interlocutory step is a relevant factor in determining the reasonableness of the conduct of the parties: Australian Securities Commission v Aust-Home Investments Ltd [1993] FCA 585; (1993) 44 FCR 194, 201 (Hill J).

11 They acted reasonably in taking prompt steps to try and bring the proceedings in the Court of Appeal to an early hearing. The applicants acted reasonably by promptly discontinuing the proceedings once they knew that they were exposed to a potential liability for damages if they wanted to keep in place the stay ordered by Simmonds J in June 2010. They correctly understood that if they did not give the undertaking as to damages, the stay preventing the indorsement of the strata plan would come to an end, that the second respondent could then sell land and that the interests of third parties would be a potential discretionary reason for refusing to make the order nisi absolute. The second respondent acted reasonably in defending the proceedings and seeking an undertaking as to damages to protect itself from losses which might be suffered.

12 The first respondent had no basis for claiming a costs order in its favour. No order for costs is sought against it by the applicants.

13 In those circumstances, the appropriate order is that there should be no order as to the costs of the proceedings.