Sader v Elgammal

A History of Litigation Between the Parties

1. The background to the substantive issue the subject of these Class 4 proceedings is set out in Sader (No 2) (at [1]-[24]), and while presently relied upon, is not reproduced here.
2. In addition, facts relevant to the determination of this application were agreed and two bundles of documents were adduced by the parties.
3. The Saders are the registered proprietors of Lot 12 in DP 14844, located in Connells Point. Elgammal is the registered proprietor of Lot 13 in DP 14844, that is, the adjoining property ("the site").
4. It is convenient to note that earlier separate civil enforcement proceeding were commenced by the Saders against Elgammal in respect of development on the site (Sader v Elgammal [2022] NSWLEC 107, "the 2022 Sader decision"). Final orders were made by Duggan J in the 2022 Sader decision on 30 September 2022.
5. To date, works at the site have resulted in six judgments across two sets of proceedings, including one judgment in the Court of Appeal.
6. On 14 December 2020 licence RN 566152 granted under the Crown Land Management Act 2016 ("the CLMA") ("the licence") was transferred to Elgammal in respect of Crown land below the mean high-water mark of the Georges River, permitting the use of various structures, including a boatshed.
7. The boatshed is predominantly located on Crown land, which is zoned W2 Recreational Waterways pursuant to the Georges River Local Environmental Plan 2021 ("the LEP"). Under the W2 zone in the LEP, boatsheds are a nominate permissible use.
8. Condition 3 of Schedule 2 of the licence provided that the licensee had to remove the boatshed from the land when, in the opinion of the relevant Minister, the boatshed was determined to be in poor structural condition, if required by other planning instruments, or by written direction from that Minister.
9. On 14 April 2022 an officer at the Department of Planning and Environment ("the Department") emailed a development compliance officer at Georges River Council ("the Council") stating that the Department considered that the boatshed had "reached its economic life" and ordered the Council to facilitate its removal by issuing a Development Control Order to Elgammal.
10. On 20 May 2022 Harbour Port East Coast Pty Ltd ("Harbour Port"), the planners for Elgammal, lodged the CDC application. On the application the owners were listed only as Elgammal and Harbour Port. However, the application form completed by Harbour Port indicated that the consent of the landowner the subject of the domestic Crown licence covering, among other things, the boatshed had been obtained. It was not in dispute that this asserted consent was never verified by Gearin and was in fact incorrect. It had not been given.
11. The Statement of Environmental Effects ("SEE") accompanying the application for the CDC submitted to the certifier in May 2022, noted that the boatshed was required to be kept in good structural form as a condition of the lease with Crown lands and that works on an unauthorised jetty, ramp and pontoon structure had received landowner's consent.
12. Abigail Bautista from Harbour Port submitted an application to the Department for an Updated Landowner Consent on 27 May 2022.
13. Meanwhile, in the 2022 Sader decision, Elgammal gave an undertaking to the Court on 15 June 2022, that he would not engage in any works or cause any works to be carried out that required development consent, including complying development, on the land below the high-water mark on the site without first obtaining development consent or a CDC.
14. On 28 June 2022 in answer to a query from Harbour Port about works to the boatshed being undertaken pursuant to the CDC, Gearin replied "that's OK, for maintenance."
15. The Department responded to Bautista on 9 August 2022, stating that it considered that the boatshed had reached the end of its structural life and requesting that the landowner's consent application be amended to include its removal.
16. The application for the CDC proposed building works which included the "maintenance and improvement works to boatshed" ("the boatshed works"). The boatshed works were proposed to be carried out predominantly on the Crown land.
17. The System Generated CDC Application Form lodged on the NSW Planning Portal included the following words: Application documents The applicant has included the following documents to support their application. Document type Document file name CDC Improvements to Pool - DWG 3 Pool Sections CDC Improvements to Pool - DWG 1 Site & Roof Plan Architectural Plans CDC - DWG2 PLAN & ELEVATION - 26 Bowden Crescent Connells Point CDC - DWG 1 SITE PLAN- 26 Bowden Crescent Connells Pt Mo CDC Improvements to Pool -DWG 2 Pool Plan Other Documents SEE CDC - 26 Bowden Crescent Connells Point Local Group Certification Contract and Application Form-26 Bowden Crescent Connells Point Owner's consent Domestic Crown License-26 Bowden Crescent Connells Point Homeowner-26 Bowden Crescent Connells Point

1. However, as has been established, the consent of the Crown was not obtained prior to, or as part of, the issuing of the CDC.
2. Between 9 and 22 August 2022, correspondence passed between the Department and Harbour Port. The email communications were in relation to a request from Harbour Port, Elgammal's planners, to obtain landowner's consent for the works below the mean high-water mark on Crown land to undertake the boatshed works. The Department stated that in its opinion the boatshed needed to be removed due to structural damage and that landowner's consent would not be provided.
3. The CDC was issued by Gearin on 5 September 2022. The CDC described the works the subject of the application using language identical to the description given in the application for it, namely, the "maintenance and improved works on a boatshed". The works were to be carried out by plans prepared by Harbour Port ("the approved plans"). The approved plans included drawings depicting the proposed works to the existing boatshed.
4. On 20 September 2022 the Council requested that the Department confirm whether owner's consent had been granted for the CDC.
5. Amy Peet, a Senior Property Management Officer from the Department, contacted the Council on 27 September 2022, noting that the boatshed required removal and that the Department had requested Harbour Port to amend their landowner's consent application to reflect this.
6. As stated above, final orders were made by the Court on 30 September 2022 restraining Elgammal from undertaking certain works on the site.
7. On 8 October 2022 the Council's website advertised that the CDC had been issued.
8. Meanwhile, the Council issued a Stop Work Order in respect of works at the site, which was appealed to this Court. Elgammal relied upon the CDC to argue that the Order be lifted. In a letter between the Council and the Department the issue of the landowner's consent was raised and it was noted that Gearin had relied upon deemed landowner's consent under the CLMA. However, in the opinion of the Council this was an issue between Elgammal and the Department to resolve.
9. The Saders's solicitors wrote to Elgammal's solicitors on 18 October 2022 requesting a copy of the CDC and the landowner's consent, in order to ascertain whether the undertakings given on 15 June 2022 were being complied with and whether landowner's consent had been given. There was no response.
10. On 28 November 2022 Gearin wrote to Harbour Port noting that the Department would not provide owner's consent and that it had requested that "we cancel the CDC".

The Events of December 2022

1. Elgammal undertook works on the boatshed between 3 and 5 December 2022.
2. The solicitors for the Saders wrote to the solicitors for Elgammal on 5 December 2022, referring to alleged breaches of the orders of the Court made on 30 September 2022, and seeking further undertakings from Elgammal regarding the works said to be the subject of those orders.
3. The Saders filed the summons commencing the proceedings the subject of this costs application on 5 December 2022. That is, three months after the grant of the CDC, as required by statute (see r 59.10 of the Uniform Civil Procedure Rules 2005 ("UCPR") and s 4.31 of the Environmental Planning and Assessment Act 1979 ("the EPAA")).
4. It was not in dispute that prior to the filing of the summons no correspondence was sent to Elgammal warning him of the potential litigation unless owner's consent was furnished and the development the subject of the impugned CDC ceased.
5. The solicitors for the Saders sent a copy of the summons to Elgammal on 5 December 2022 at the following email addresses: "yasser.elgammal@dickerdata.com.au" and "yasser.elgammal@gmail.com". The email stated that "a hard copy will be served upon you separately."
6. Elgammal maintains that these email addresses were not in use and that as a consequence he never received the email attaching the summons. It was conceded by the Saders during oral argument that there was no evidence to refute this assertion. I therefore accept that the email and the summons were not received by Elgammal on that day.
7. The next day, on 6 December 2022, a copy of the summons was provided to Elgammal's solicitors by email. Again, the email stated that "a hard copy will be served on Mr Elgammal shortly".
8. At no point, however, was Elgammal either personally served with a copy of the summons or was an order for substituted service obtained from the Court.
9. A letter of demand was also sent by the Saders to Elgammal requesting that he provide an undertaking to cease the works on the boathouse by 5 pm that day.
10. After receipt of the summons, Elgammal's solicitors emailed the Saders's solicitors later that day, noting receipt of the summons filed at 5.33 pm on 5 December 2022, and requesting further details of the boathouse works. Specifically, whether these works were the same works the subject of the CDC. The email went on to state that the solicitors could not obtain instructions regarding the undertaking in the available time.
11. The Saders's solicitors responded to the email on the same day observing that to date it had not received a copy of the CDC or any landowner's consent in respect of it.
12. Later that same day, the Saders's solicitors received an email from Gearin stating that he had requested that Elgammal surrender the CDC "over a week ago". The email was in response to a communication from Elgammal's solicitor notifying him that the Saders were seeking to have the CDC set aside and serving a copy of the summons on him by email.
13. On 7 December 2022 the solicitors for the Saders wrote to the solicitors for Elgammal, referring to the above correspondence with Gearin and making the following proposal to dispose of the proceedings: In those circumstances, our clients now make the following proposal to dispose of the proceedings: (a) You provide the following undertakings by close of business on Friday, 9 December 2022: (i) you will immediately surrender the CDC to the relevant authority; (ii) you will not rely on the CDC in perpetuity; (iii) you will cease the performance of any works described in or carried out in purported reliance on the CDC; and (iv) you will remove, by no later than 31 December 2022, all works which have been carried out by you or on your behalf which are described in the CDC, or were carried out in purported reliance on it; and (b) Upon the receipt of the undertakings and compliance with paragraphs (a)(iii) and (a)(iv) above, the Proceedings be discontinued on the basis that each party bear its own costs. In the event that the above proposal is not accepted by you: (a) our clients will proceed with the Proceedings, including by way of urgent interlocutory injunction precluding any further works pursuant to the CDC, without further notice to you; and (b) this letter will be relied on in seeking orders for costs against you in relation to the Proceedings.
14. An order for demolition or removal was not sought in the summons by way of relief. The offer was not accepted.
15. The Saders issued a notice to produce to Elgammal, Gearin and the Crown on 7 December 2022. The solicitors emailed the notice to produce to Elgammal at "yasser.elgammal@gmail.com" and to the solicitors for Elgammal at "jamieA@onegrouplegal.com.au" on 7 December 2022. Among the documents sought was a copy of the CDC and the "Owners consent received on 20 May 2022".
16. Gearin issued Elgammal a Written Directions Notice ("WDN") on 8 December 2023. The WDN identified the non-compliance an "issue in relation to Owners Consent and the validity of the Complying Development Certificate which has been requested to be withdrawn" by the Department. The steps to be undertaken were to stop all works immediately until the matter was resolved in relation to the owner's consent and the validity of the CDC.
17. Later that day, Gearin emailed Elgammal stating, "sorry Yasser, there has been 'no' inspection as per email dated 8/12/22, we only need clarification in relation to the owners consent and the validity of the CDC, as per Department request, hence the" WDN.
18. It was not a matter of contention that Elgammal had previously represented to the Saders that the works the subject of the CDC were completed prior to the filing of the summons. However, this is not, as Elgammal concedes, correct. For example, the following works described in the plans approved by the CDC had not been commenced or completed: 1. the recladding of various walls to the boatshed; 2. the replacement of pedestrian door to the boatshed; 3. the replacement of windows to the boatshed; and 4. the replacement of the main door to the boatshed with aluminium roller shutters.
19. It was an agreed fact that other works to an existing pool had yet to be completed or commenced, but it is not clear whether these works were the subject of the CDC.
20. On 8 December 2022 the Saders's solicitors wrote to Elgammal's solicitors in the following terms: …We also refer to our letter dated 5 December 2022 in relation to the works carried out at the boat house adjacent to your client's property. Notwithstanding our letter your client commenced further works on the boat house at approximately 7.10 am this morning and as at 4 pm this afternoon substantial further works have been advanced there…Such construction therefore is in clear breach of the 30 September 2022 Orders. … Our clients require your client to provide the following confirmation and undertakings by 5pm on 9 December 2022 that he will: (a) Immediately cease all work pursuant to, in reliance on or described in the Landscape Plans as required by Order 1 of the 30 September 2022 Orders including works related to the boat house referenced and described above and provide confirmation of such cessation to this office; … Unless your client provides the confirmation and undertakings sought by this letter by the time stipulated our clients will, without further notice, proceed to apply to the Land and Environment Court for appropriate orders, including for an urgent interlocutory injunction requiring that your client stop work in relation to the development at the Subject Site which is in breach of the 30 September 2022 Orders.
21. At 12.03 pm on 12 December 2022, the Saders filed a notice of motion seeking an interlocutory injunction which included an order that pending the final determination of the proceedings, Elgammal be restrained from carrying out, or permitting the carrying out, of any works on land owned by the Crown described in the CDC without obtaining prior development consent. The motion was supported by two affidavits sworn by Mark Sader, together with written submissions. It was emailed to "yasser.elgammal@gmail.com" and copied to Elgammal's solicitor at 3.23 pm that same day.
22. The cover letter enclosing the motion stated that it was returnable before Robson J at 10 am on 13 December 2022. The basis of the application claimed to be that works had continued on the boatshed since 5 September 2022, and that neither owner's consent nor consent to carry out the works had been obtained. The letter noted that Gearin had requested that the CDC be surrendered. Accordingly, an undertaking was sought, pending the final determination of the proceedings, not to carry out any works on the land owned by the State as described in the CDC without obtaining prior development consent. If provided, it might make the application for interlocutory relief unnecessary.
23. At 5.24 pm that day, Elgammal's solicitor wrote to the Saders's solicitors proposing an undertaking in these terms: On a without admissions basis, I, Yasser Elgammal, undertake to the Land and Environment Court that pending the final determination of the proceedings, I will not carry out or permit the carrying out of any works on land owned by the State of New South Wales described in the Complying Development Certificate 8058994 dated 5 September 2022 without obtaining prior development consent.
24. An unconditional notice of appearance was filed on behalf of Elgammal on 12 December 2022 at 6.36 pm.
25. On 13 December 2022 the matter came before Robson J who accepted the undertaking proffered by Elgammal which was in relevantly identical terms to that proffered by him to the Saders the previous night: The court notes that without admission the First Respondent undertakes to the Land and Environment Court that pending the final determination of these proceedings, he will not carry out or permit the carrying out of any works on land owned by the State of New South Wales described in Complying Development Certificate 8058994 dated 5 September 2022 without obtaining prior development consent.

The Events Leading up to and the Terms of the 13 February 2023 Offer

1. The Saders's solicitors wrote to Elgammal's solicitors on 10 February 2023, proposing the following ("the 10 February 2023 offer"): …On 9 February 2023 the State of New South Wales responded to our correspondence enclosing documents held by it which fall within the Notice to Produce addressed to the State of New South Wales (which are not objected to in the Notice of Motion). One of those categories was, specifically, "Owner's consent received 20 May 2022", being the only consent referenced in the application by your client for the CDC. None of the documents provided by the State of New South Wales constitute an owner's consent, and in particular no document falling within the description "Owner's consent received 20 May 2022" was provided. Further, we understand that the Second Respondent has requested that the CDC be surrendered by your client. In those circumstances the court is entitled to draw the clear inference that there is no "Owners Consent received 20 May 2022", and that circumstances pertain which caused Gearin certifier of the CDC in question to request that the CDC be surrendered. We also note that the matter was before His Honour Justice Robson on 13 December 2022 at which time your client provided undertakings to the court. Your client has had ample time to produce the applicable landowner's consent, if one exists, and has failed to do so. Further, your client has not produced any other development consent applicable to the Crown's land or otherwise relating to the works described in the CDC. Our clients therefore consider that it is beyond all doubt that your client did not obtain landowner consent for the works the subject of the CDC as he was required to do pursuant to section 4.26(2) of the EPA Act, that the CDC should be set aside, and that the orders sought in the Summons in the Proceedings should be made forthwith. The persistence by your client in any defence of the CDC Proceedings is futile, and is a waste of the court's time and the parties' resources. We enclose our clients' proposed Short Minutes of Order disposing of the CDC Proceedings. Please inform us by return as to whether your client will consent to the proposed orders. In the event that your client fails to do so our clients will rely on this letter as to the question of costs, which they will seek on an indemnity basis.
2. The proposed short minutes of order attached to the 10 February 2023 offer were in these terms: 1 The Court declares, pursuant to section 4.31 of the Environmental Planning and Assessment Act 1979 (EPA Act), that complying development certificate 8058994 issued by the Second Respondent on 5 September 2022 for works described therein as 'maintenance and improvement works to boatshed' (CDC) is invalid and of no effect and is hereby set aside. 2 The First Respondent and his servants and agents be restrained from acting upon, or carrying out any works in purported reliance on the CDC. 3 The First Respondent pay the Applicants' costs of these proceedings. 4 Such other or further orders as the Court sees fit. 5 The directions hearing on 17 March 2023 be vacated. 6 The parties have liberty to apply on 24 hours notice in respect of any breach or threatened breach of order 2 herein.
3. Also on that day, Gearin filed and served a submitting appearance save as to costs.
4. The terms of the 10 February 2023 offer were rejected by Elgammal on 13 February 2023. He did so on the basis that he had lawfully completed all works authorised by the CDC prior to the commencement of the proceedings and that a costs order was not warranted because of the undertaking given by him on 13 December 2022. Moreover, proposed order 6 would result in there being no finality to the proceedings.
5. Instead, the following offer in response was made ("the 13 February 2023 offer"): 1. The Court declares, pursuant to section 4.31 of the Environmental Planning and Assessment Act 1979 (EPA Act), that complying development certificate 8058994 issued by the Second Respondent on 5 September 2022 for works described therein as 'maintenance and improvement works to boatshed' (CDC) is invalid and of no effect and is hereby set aside. 2. The First Respondent and his servants and agents be restrained from acting upon, or carrying out any works in purported reliance on the CDC. 3. Such other or further orders as the Court sees fit. 4. The directions hearing on 17 March 2023 be vacated. Would all parties please advise whether they consent to the above orders. Our client will rely on this correspondence in respect of any application for costs should it come necessary.
6. The 13 February 2023 offer was not accepted. As identified above, a central issue for resolution in these proceedings is the reasonableness of the rejection.
7. In response, the Saders sent a schedule of works purportedly authorised by the CDC, together with photographs of those works, to demonstrate that the statement that Elgammal had "lawfully completed all works authorised by the CDC prior to the commencement of" the proceedings was incorrect.

Events After the 13 February 2023 Offer

1. A further letter was sent by the Saders's solicitors to Elgammal on 28 February 2023 which proposed ("the 28 February 2023 offer"): Without Prejudice Save as to Costs … Our clients propose that the CDC proceedings be disposed of on the basis that the following orders be made by the court by consent: (a) The Court declares, pursuant to section 4.31 of the Environmental Planning and Assessment Act 1979 (EPA Act), that complying development certificate 8058994 issued by the Second Respondent on 5 September 2022 for works described therein as 'maintenance and improvement works to boatshed' (CDC) is invalid and of no effect and is hereby set aside. (b) The First Respondent and his servants and agents be restrained from acting upon, or carrying out any works in purported reliance on the CDC; and (c) The First Respondent pay 50% of the Applicants' costs of these proceedings, such costs to be agreed or taxed and paid within 28 days of the date of these orders …
2. Elgammal's solicitors wrote to the solicitors for the Saders on 6 March 2023, attaching proposed final consent orders and relevantly advising that ("the 6 March 2023 offer") (emphasis added): Dear Colleagues, We refer to the Settlement Offer contained in the letter received from the Applicant's solicitor of 28 February 2023. We are instructed to accept the Settlement Offer on a without admissions basis.
3. Draft short minutes of order were attached in these terms (emphasis added): 1 On a without admissions basis, the Court declares, pursuant to section 4.31 of Environmental Planning and Assessment Act 1979 (EPA Act), that complying development certificate 8058994 issued by the Second Respondent on 5 September 2022 for works described therein as 'maintenance and improvement works to [the] boatshed (CDC) is invalid and of no effect and is hereby set aside. 2 On a without admissions basis, the First Respondent and his servants and agents be restrained from acting upon, or carrying out any works in purported reliance on the CDC. 3 The First Respondent pay 50% of the Applicants' costs of these proceedings, such costs to be agreed or taxed and paid within 28 days of the date of these Orders.
4. Gearin's solicitors also wrote to the parties on 6 March 2023, proposing an additional order to those proffered by Elgammal, namely, no further order as to costs.
5. The Saders's solicitors replied that same day as follows: Dear Jamie Your email appears to assume that your client's counterproposal made today in respect of the disposal of the proceedings is acceptable to our clients. It is not, and to the extent that a formal rejection of that counterproposal is required, it is rejected. …
6. Elgammal served his response to the summons on 10 May 2023 in the following terms: Ground 1: Failure to obtain landowner's consent 1. Paragraph 1 is not a pleading. 2. Admitted. 3. Admitted. 4. Admitted. 5. Admitted. Discretion 6. The first respondent contends there is no utility in the making of the declaration or the order 2 sought by the applicants on the grounds that: a. The CDC is valid until declared invalid. b. At all material times the works the subject of the CDC were carried out in accordance with the CDC. c. The works the subject of the CDC were completed prior to the filing of the Summons. d. If the works subject of the CDC were authorised by a development consent rather than a complying development certificate, owners consent would be assumed pursuant to s 2.23 of the Crown Lands Management Act 2016. 7. The first respondent opposes order 3 [costs] in the circumstances of the case.
7. The response was the first time that Elgammal had admitted the failure to obtain landowner's consent for the works the subject of the CDC.
8. Between 23 May and 8 June 2023, correspondence passed between the parties with various offers and counteroffers made in an attempt to dispose of the proceedings.
9. On 23 June 2023 the matter came before the Court for directions. Robson J made the following orders: This matter is listed for Class 4 Directions Hearing on 21 July 2023 9.15 am before the Land and Environment Court, Sydney. Estimated duration 10 minutes. The Court notes that the only outstanding issue between the parties is as to costs. The Court orders that the matter is stood over by consent to 21 July 2023.
10. The Saders sent a letter to Elgammal on 26 June 2023, stating the following ("the 26 June 2023 offer"): … We note that on 23 June 2023 the CDC Proceedings were stood over in order for the parties to seek to agree the basis upon which the CDC Proceedings should be disposed of. On that day your client agreed that the major outstanding issue separating the parties was one of costs. On this basis we assume that your client does not intend to rely on the CDC into the future. In those circumstances, the provision of an undertaking by your client not to rely on the CDC should be uncontroversial. Further, we note that on 13 February 2023 your client stated that he had performed all works the subject of the CDC. Whilst our clients do not agree that this is the case, our clients can see no reason why the CDC Proceedings ought not be disposed of on the basis of the provision of an undertaking as sought by our clients as follows: The First Respondent undertakes to the court that he will not carry out any further works in reliance on or described in the complying development certificate 8058994 issued by the Second Respondent on 5 September 2022 (CDC) and will obtain development consent or a separate complying development certificate for any future works on the land the subject of the CDC including in relation to the boatshed, swimming pool and pool deck. We enclose Short Minutes of Order proposed by our clients.
11. The short minutes of order were in the following terms: 1. The Court notes the undertaking given by the First Respondent to the court that he will not carry out any further works in reliance on or described in complying development certificate 8058994 issued by the Second Respondent on 5 September 2022 (CDC) and will obtain development consent or a separate complying development certificate for any future works on the land the subject of the CDC including in relation to the boatshed, swimming pool and pool deck. 2. The Court orders that: 1) The orders of the court made on 17 March 2023 be vacated; 2) The proceedings be dismissed; 3) The costs of the proceedings are reserved; and 4) The Parties have liberty to restore on 3 days notice.
12. Elgammal did not reply to the letter.
13. On 28 July 2023 the matter came before Duggan J for directions. On that day, Elgammal stated that the only substantive issue between the parties was the form of final relief sought by the Saders. Her Honour set the matter down for hearing in relation to the remaining issues of discretion.
14. The Saders filed and served the affidavit of Mark Sader, affirmed 11 August 2023, in compliance with the orders made by the Court on 28 July 2023. Elgammal did not serve his evidence by 25 August 2023 as required by those orders.
15. The Saders's solicitors emailed Elgammal's solicitors on 11 September 2023, noting that he had not served his evidence. Elgammal's solicitors replied that day stating that he would do so by 12 September 2023. This did not occur.
16. On 28 September, and again on 11 December 2023, the solicitors for the Saders sent emails to the solicitors for Elgammal following up on the absence of Elgammal's evidence.
17. Elgammal served the affidavit of Jacqueline Vandebeek on 14 December 2023. This evidence did not, however, go to the issue of discretion but instead went to the question of costs.
18. On 15 December 2023 the Saders's solicitors again emailed Elgammal's solicitors indicating that, "we note that your client has not filed any evidence relating to discretion. Could you please confirm that your client now does not press his pleadings in relation to discretion."
19. Later that day Elgammal's solicitors responded saying, "we have previously made offers to settle the proceedings which were rejected. We are instructed to press the pleadings and maintain the request that you identify what works your client says are not completed."
20. The solicitors for the Saders sent an email to the solicitors for Elgammal that same day, which said: Could you please identify those paragraphs of the "pleading" referred to in your email below which your client intends to press. The works the subject of the CDC which were not completed at the date of issuing the proceedings are described in paragraph 8 of our clients' Notice to Admit Facts dated 18 May 2023 (Notice to Admit).
21. A letter was sent by Elgammal's solicitors to the Saders's solicitors on 18 December 2023, discussing, among other things, the response to the summons, the lack of utility of the proceedings, and settlement prospects. An offer was put in these terms: Offer to Resolve Having regard to the particular facts of this case and Mr Elgammal's attempts at early resolution, we are instructed to make one further offer to avoid wasting valuable Court resources at the scheduled hearing on 1 February 2024: a. The proceedings are discontinued by no later than 20 December 2023; and b. Each party pay their own costs of the proceedings. If the above offer is not accepted, we are instructed to seek costs on an indemnity basis at the hearing on 1 February 2024.
22. Three days later, on 21 December 2023, the solicitors for the Saders responded: Our client notes the following: 1. these are judicial review proceedings based on a single ground: a failure to obtain landowner's consent. The appellate courts have consistently found that in judicial review proceedings, landowners consent is a fundamental jurisdictional pre-requisite to the exercise of a power to issue a development consent: Al Maha Pty Ltd v Huajun Investments Pty Ltd [2018] NSWCA 245, per Basten JA at [9] and Preston CJ at [85] - [97] and [173] - [175]. 2. Your client admitted, belatedly, that landowners consent had not been granted for the CDC. This admission was made on 10 May 2023 as part of his Response to the Summons filed and served on that date (Response to Summons). The CDC Proceedings had been on foot for 6 months by this date and included various interlocutory applications including an application for an injunction that was answered on the doorstep of the Court by an interim undertaking by your client. Your client also resisted, unsuccessfully, a notice to produce in Sader v Elgammal [2023] NSWLEC 21. The documents produced by that notice were put into our clients' evidence in accordance with the directions of the Court, directions that our client has complied with, but in respect of which your client has failed to comply. Under no circumstances should the costs of these aspects of the CDC Proceedings be at the feet of our client. 3. Returning to your client's Response to Summons, your client's pleading as to discretion cannot be maintained: a. the result of a failure to obtain landowner's consent is invalidity: Al Maha Pty ltd v Huajun Investments Pty Ltd [2018] NSWCA 245, per Basten JA at [9]. Discretion has no role to play in these circumstances, particularly when there has been no indication by the Third Respondent that it consented to the works being carried out; b. even if discretion was somehow relevant to the determination of the matters raised in the Summons, your client has put on no evidence relating to discretion; c. your client has purported to answer a Notice to Admit Facts by providing details that undermine the particulars of discretion in the Response to the Summons (dealt with in further detail below); and d. despite the matters raised above, and belated attempts to settle the matter, your client in correspondence dated 15 December 2023 still maintains the pleading of discretion. 4. Most concerningly, your client was on notice of the issue of landowner's consent in December 2022 and that landowner's consent had not been issued for the CDC. Over one year has now passed with the CDC Proceedings still on foot. Your client has never offered to surrender the CDC (despite the certifier requesting it be surrendered), has never offered a permanent undertaking to the Court not to rely on the CDC, nor has he communicated that he would not press the issue of discretion despite the matters raised above. In these circumstances, it is solely your client's conduct that has significantly prolonged and extended the time and costs of these proceedings. Our client is entitled to the relief sought in the Summons and its costs of the proceedings. The failure of your client to recognise the matters raised above and its failure to offer to pay a substantial proportion of our client's costs in these proceedings is unreasonable. For reasons that are self evident, your client has no grounds on which to seek indemnity costs from our client (or indeed costs on any basis).
23. The letter contained the following counteroffer: (a) The First Respondent and his servants and agents be restrained from acting upon, or carrying out any works in purported reliance on or described in the complying development certificate 8058994 issued by the Second Respondent on 5 September 2022; (CDC); (b) The First Respondent provides an undertaking to the court in the terms proposed by the Applicants on 8 June 2023 (which is included at pages 56-57 of Exhibit JV-1 to the affidavit of Ms Vandebeek dated 14 December 2023); and (c) The First Respondent pay the amount of $145,000 to the Applicants in respect of their costs of the proceedings to be paid within 28 days of the date of these orders. Your client should note that the amount referred to in (c) reflects approximately 70% of the costs incurred by the Saders to date in respect of the CDC Proceedings. In the event that this offer is not accepted our clients will rely on this letter, together with our letter dated 28 February 2023 in seeking an order that your client pay their costs of the CDC Proceedings on an indemnity basis. This offer remains open for acceptance until 12 January 2023 at which time it will lapse due to the requirement to engage in detailed preparation for the hearing of the matter on 1 February 2023 and the incurring of further substantial costs in doing so.

Pre-Trial Events in 2024

1. Elgammal served a further affidavit of Vandebeek in respect of costs on 17 January 2024.
2. At a directions hearing before the Court on 17 January 2024: 1. counsel for Elgammal stated that Elgammal did not agree to the orders sought in the summons; and 2. the matter was referred to mediation before Peatman AC on 25 January 2024.
3. The Saders filed and served another affidavit of Mark Sader on 22 January 2024.
4. The mediation concluded on 25 January 2024 without success.
5. On 25 January 2024 at 4.27 pm, Elgammal issued the following notices to produce and subpoena: 1. a notice to produce issued to the Saders; 2. a notice to produce issued to Gearin; 3. a notice to produce issued to the Crown; and 4. a subpoena issued to the Council.
6. At 7.14 pm that evening, the Saders filed and served a notice of motion to set aside the notices to produce and the subpoena.
7. On 29 January 2024 at 5.23 pm, Elgammal served his submissions in the proceedings.
8. On 30 January 2024 the following occurred: 1. the solicitors for the Saders wrote to the Crown confirming an earlier telephone conversation that "it remains the department's position that it intends to issue a demolition order for the boadshed located on the Elgammal licenced land after the CDC has been set aside by the court"; 2. Elgammal served his list of objections to evidence and another affidavit of Vandebeek on 30 January 2024; 3. the Saders filed and served their list of objections to evidence; and 4. the Court ordered the parties to file and serve a statement of agreed facts and brief submissions in respect of the notice of motion dated 25 January 2024 to set aside the notices to produce and the subpoena ("the motion to set aside").
9. Then on 31 January 2024: 1. at 4.16 pm the Saders filed and served their submissions in relation to the motion to set aside; 2. at 4.26 pm the solicitors for the Saders sent Elgammal's solicitors a draft statement of agreed facts; 3. the solicitors for Elgammal sent a reply email to the Saders's solicitors which said: Dear Amanda, We overlooked the correspondence from the court regarding the requirement for submissions and agreed facts. We have received instructions to withdraw the subpoena and notices to produce. We will write to the associate now to advise the position. 1. at 4.59 pm Elgammal informed the Court that he would not press the notices to produce and subpoena; and 2. at approximately 10 pm the Saders filed and served their submissions in reply to the substantive proceedings.
10. On 1 February 2024 at 8.24 am, the solicitors for the Crown wrote to the Saders indicating that, "as per Condition 3 … the boatshed structure should be removed voluntarily as it is structurally unsound and that Crown Lands will be pursuing its removal after the CDC has been set aside".
11. The hearing of the proceedings commenced at 10 am on 1 February 2024. At approximately 10.05 am counsel for Elgammal said (T1:18-26): There has been a development in the last half hour, and the parties have received some correspondence from the State of New South Wales as to its position from [sic] the boatshed. I have since received instruction from my client that on the basis of that correspondence, and it's in the context that Crown Lands have never had any correspondence with him in the whole period of the complying development certificate, that he would now submit to a declaration if the Court was minded to make a declaration in these matters, and also submit to the restraining order sought by the applicants. He would like to be heard on costs.
12. As a consequence, the matter proceeded to a brief hearing in respect of the exercise of the Court's discretion to grant declaratory relief, with the question of costs reserved to a later date (Sader (No 2)).

The Court's Power to Award Costs

1. The Court's power to award costs in civil matters is conferred by s 98 of the Civil Procedure Act 2005 ("CPA"), which relevantly provides that: (1) Subject to rules of court and to this or any other Act - (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. (2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court. (3) An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings. (4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to - (a) costs up to, or from, a specified stage of the proceedings, or (b) a specified proportion of the assessed costs, or (c) a specified gross sum instead of assessed costs, or (d) such proportion of the assessed costs as does not exceed a specified amount.
2. The power to award costs in s 98 of the CPA has been modified by r 42.1 of the UCPR: 42.1 General rule that costs follow the event Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.
3. As stated above, Elgammal submitted that the Court should make "some other order" in respect of the costs of the proceedings, notwithstanding that the Saders obtained the relief that they sought in the summons - that is, the event - and that each party ought to bear their own costs.
4. The power to order costs is discretionary (Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534). The presumptive rule is that costs follow the event, subject to any disentitling conduct. This is consistent with the principle articulated by the High Court in Latoudis v Casey (at 566-567) and Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 (at [67]) that costs, being compensatory and not punitive in nature, should be awarded to the successful party. However, the usual order for costs is not a rigid rule (Oshlack at [86] and Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513 at 537).
5. The presumptive rule is more difficult to apply when there has been no hearing on the merits but the proceedings have been resolved. For example, in Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622, the applicant applied for the costs of a proceeding that she had instituted in the High Court appealing the Refugee Review Tribunal's decision to affirm the relevant Minister's refusal of her protection visa application. One week after she commenced proceedings, the Minister granted her a protection visa. Having obtained the relief that she sought, she abandoned her action. McHugh J held that there should be no order for costs observing that (at 624-625, footnotes omitted): In most jurisdictions today, 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 [Latoudis v Casey (1990) 170 CLR 534]. Success in the action or on 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) 170 CLR 534 at 543 and 566-568]. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order. In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties [Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201]. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action [Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194 at 201]. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd [1971] QWN 13],the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent Council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans. Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in South East Queensland Electricity Board v Australian Telecommunications Commission [Unreported; Federal Court of Australia; 10 February 1989] where his Honour ordered the respondent to pay 80 per cent of the applicant's taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare. If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases.
6. These principles were reaffirmed by his Honour in Oshlack, where he opined that (at [67]-[69], footnotes omitted): 67 The expression the "usual order as to costs" embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation. 68 As a matter of policy, one beneficial by-product of this compensatory purpose may well be to instil in a party contemplating commencing, or defending, litigation a sober realisation of the potential financial expense involved. Large scale disregard of the principle of the usual order as to costs would inevitably lead to an increase in litigation with an increased, and often unnecessary, burden on the scarce resources of the publicly funded system of justice. 69 The traditional exceptions to the usual order as to costs focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion. In Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd, Devlin J formulated the relevant principle as follows: "No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct." "Misconduct" in this context means misconduct relating to the litigation, or the circumstances leading up to the litigation. Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute.
7. In Class 4 proceedings where an unsuccessful party consents to the Court making orders or gives an undertaking to the Court in substantially the same terms or effect as those sought by the other party, the Court has determined that the usual order as to costs should be made absent disentitling conduct.
8. In some cases, however, a court may conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action (Oshlack at [69] and Lai Qin at 624).
9. In Kiama Council v Grant [2006] NSWLEC 96; (2006) 143 LGERA 441 the Court ordered costs against the respondent in circumstances where the applicant, Kiama Council, commenced proceedings because of the respondent's failure to comply with orders of the council to carry out remedial work (at [86]). In making the costs order, the Court rejected the respondent's submission that the council had engaged in disentitling conduct (at [93]-[96]): 93 The first disentitling conduct relied upon by the respondent is said to be the conduct of the Council in the circumstances leading up to the litigation. However, as the above chronology shows, there was no disentitling conduct on the part of the Council in the period leading up to the litigation. The Council gave ample notice to the respondent and acted entirely reasonably. The situation is similar to that in Wollondilly Shire Council v Anh Nhu Le (2004) 137 LGERA 416. The Council acted reasonably in commencing the proceedings and the respondent acted unreasonably before commencement of the proceedings. See also Brown v Mornington Peninsula Shire Council (2004) 140 LGERA 11 at 15 [20]. There was also no conduct of the Council in continuing the litigation which could be said to amount to misconduct. The Council acted reasonably. 94 The second asserted misconduct of the Council is that the orders made on 16 December 2005 in the proceedings had already been offered by the respondent. The recitation earlier in the judgment of the facts leading up to the litigation shows clearly that this is not correct. At no time did the respondent ever offer to do remedial work of the nature and extent of that ultimately ordered by the Court. Indeed, all of the responses by the respondent steadfastly avoided offering to do any remedial work at all. 95 The third alleged misconduct of the Council is that the bringing of the proceedings was unnecessary because the breach was merely a technical breach with no imminent environmental harm. Again, that is shown by the above facts not to be correct. The Council from the outset had given the respondent notice that work needed to be carried out to remedy the earthworks that had allegedly been carried out illegally. The Council engaged the services of the Department of Sustainable Natural Resources who identified that remedial works needed to be carried out and specified what those works were. If the breach had been merely technical and there was no imminent environmental harm, it is inconceivable that the Department of Sustainable Natural Resources would have required detailed remedial works to be carried out. Furthermore, after the respondent was provided with the remedial works specified by the Department, the respondent never disputed the necessity to do those works. Indeed, the orders ultimately made by the Court require the respondent to carry out remedial works as specified by the Department. 96 Finally, the fact that there had been some communication between the applicant and respondent in the month preceding the commencement of the proceedings does not constitute any disentitling conduct on the part of the Council. As can be seen from the above summary of the respondent's correspondence, the respondent never undertook to do the works itself or to engage its civil engineer to prepare a detailed plan and undertake the remedial works specified by the Department.
10. The Chief Judge reviewed a number of decisions and summarised the legal principles as follows (at [80]): 80 The principles that emerge from these cases are that in a civil enforcement or judicial review case where there has been no hearing on the merits: "(a) where one party effectively surrenders to the other party by: (i) discontinuing without the consent of the other party; or (ii) giving undertakings to the Court or submitting to the Court making orders against the party substantially in the terms or to the effect claimed by the other party; the proper exercise of the costs discretion will ordinarily be to make the usual order as to costs, unless there is disentitling conduct on the part of the other party; and (b) where some supervening event or settlement so removes or modifies the subject of the dispute that no issue remains except that of costs, the proper exercise of the costs discretion will ordinarily be to make no order as to costs unless: (i) one of the parties has acted so unreasonably that the other party should obtain the costs of the action; or (ii) even if both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried so that the party should obtain the costs of the action."
11. As to what constitutes unreasonable conduct resulting in a costs order other than the usual costs order, in Ralph Lauren 57 Pty Ltd v Byron Shire Council [2014] NSWCA 107; (2014) 199 LGERA 424 Preston J stated (at [26]-[31]): 26 Unreasonableness of conduct can also be found in a defendant continuing to defend litigation until it then surrenders to the plaintiff by consenting to the court making orders, or giving an undertaking to the court, in substantially the same terms and effect as sought by the plaintiff in the proceedings: see Edwards Madigan Torhillo Briggs Pty Ltd v Gloria Stack [2003] NSWCA 302 at [5]; Kiama Council v Grant [2006] NSWLEC 96; (2006) 143 LGERA 441 at [56], [60]-[71], [80]; Ku-ring-gai Council v Minister for Planning (No 2) [2008] NSWLEC 276 at [25], [26]; and Hall v Ku-ring-gai Council [2009] NSWSC 370 at [39]-[48]. This is not a settlement of the litigation in the ordinary sense, but rather a surrender to the plaintiff. In this circumstance, although there has not been a trial on the merits, the court may feel confident that the discontinuing party would have almost certainly have succeeded if the matter had been fully tried: Lai Qin at 625. The defendant's unreasonableness in defending litigation that it would almost inevitably have lost up to the point of surrender, causing the plaintiff unnecessarily and unreasonably to have incurred costs to that point, may provide the justification for a costs order in favour of the discontinuing plaintiff. 27 This was the circumstance justifying the costs order in favour of the applicants in One.Tel. The applicants, by their proceeding, sought to challenge the validity of certain statutory notices directed to the applicants in order to have them set aside. The respondent, after initially defending the notices, encountered an evidentiary difficulty and consented to court orders setting aside the notices. Burchett J held that this meant that the applicant succeeded in the litigation. The result the applicant sought was achieved without a hearing and not by a settlement in the ordinary sense or by extra curial means. A costs order was made in the applicants' favour: at [7]. 28 Circumstances where there may be no unreasonable conduct of the parties include where the plaintiff discontinues because it has achieved the relief sought in the proceedings by means of settlement of the litigation with the mutual consent of the parties or by extra curial means, or because of the happening of a supervening event which so removes or modifies the subject of the dispute that no issue remains between the parties except that of costs: Lai Qin at 624; and One.Tel at [6]. 29 In the case of a settlement, the court ordinarily will not look behind the settlement to the reasons or motivation of the parties to settle, and hence will not evaluate the reasonableness of the parties in settling: see Bitannia Pty Ltd v Parkline Constructions at [81]. 30 An extra curial or supervening event may or may not be related to any conduct or action of the defendant. If the extra curial or supervening event is unrelated to the defendant's conduct, no question regarding the reasonableness of the defendant's conduct can arise and the appropriate order may be that each party bear its own costs. The passage of legislation rendering the plaintiff's proceeding futile or wholly removing the plaintiff's cause of action is an example of a supervening event unrelated to any conduct of the defendant: see Newcastle Wallsend Co Pty Ltd v Industrial Relations Commission of NSW [2006] NSWCA 129; 153 IR 386 (where Tobias JA considered that discontinuance flowed from the supervening event of amending legislation and each party should bear its own costs whereas Basten JA and Mason P were of the view that discontinuance flowed from a different event of an earlier Court of Appeal decision which indicated that the applicant would be unsuccessful if it pursued its claim) and True Conservation Association Inc v Minister Administering the Threatened Species Conservation Act 1995 [2008] NSWLEC 221 at [17]. 31 If, however, the defendant's action constituted or caused the supervening event, the reasonableness or unreasonableness of the defendant's actions may need to be assessed. It is not sufficient by itself that the defendant's action is or brought about the supervening event; there ordinarily needs to be something unreasonable in the defendant taking that action. In an administrative law proceeding, for example, a defendant public authority might re-exercise a statutory power, such as to grant a fresh approval to a fresh application, rendering futile the challenge in the proceedings to the validity of an earlier approval. Notwithstanding that the defendant's action caused the proceeding to become futile, unless there was some unreasonableness in the defendant so acting, the proper exercise of the costs discretion may still be to make no order as to the costs of the proceeding. Examples of this type of case are given in Kiama Council v Grant at [72]-[77]. The decisions in Ku-ring-gai Council v Minister for Planning (No 2) and Hall v Ku-ring-gai Council are, however, different in that the courts did not find any unreasonableness in the conduct of the local council in repealing the order or rescinding the resolution that were the subject of challenge, yet still made a costs order against the defendant.
12. In that case, the passing by the council of the resolution that resulted in the applicants' discontinuing the proceedings did not deliver the very relief which the applicants had sought in the proceedings. Accordingly, the appropriate order was that each party pay their own costs. Even if the applicants had achieved the relief sought, this did not by itself and without more justify an award of costs in favour of the discontinuing party. According to Preston J there needed to be additional unreasonableness in the conduct of the respondent (at [108]), and the applicants had failed to prove that the council had acted unreasonably.
13. Nadilo v Eagleton [2021] NSWCA 232; (2021) 250 LGERA 89 concerned the installation and operation of two air conditioning units, a heat pump and a water heater on the outside of the respondents' house facing the applicant's house. The applicant complained that excessive noise was emitted by their operation. Proceedings were commenced in the Court alleging breaches of various environmental planning instruments, the EPAA, and noise regulations made under that Act. Shortly before the final hearing the parties agreed to settle the matter on terms that the proceedings be dismissed. The substantive dispute had been resolved by the respondents agreeing to replace, remove and enclose the offending units. The applicant sought an order that the respondents pay her costs. The primary judge rejected the application and ordered that each party bear their own costs.
14. The decision was reversed on appeal. Because the applicant had achieved the outcomes that she sought in bringing the proceedings, it was unjust for the primary judge not to have awarded her costs when exercising his discretion under r 42.20(1) of the UCPR. The applicant's success was to be evaluated by looking to the substance of the outcomes sought and obtained by her. The applicant, while not likely to be successful on all claims, would have secured the outcomes she sought by bringing the proceedings (at [10] and [86]-[90]): 10 In the present case also, there was a "clear winner". The practical result of the case is that the machinery is now noise compliant, and the respondents are bound by order of the Court to keep it compliant in the future. There was no question of compromise; the respondents simply ultimately surrendered: they undertook the works required to render the offending machinery compliant, and had it certified as compliant. Once they did so, the applicant had achieved what she had always sought in the proceedings, rendering further prosecution of the proceedings pointless. … 86 The applicant's case was simple. The respondents' use of the two air conditioners and the hot water heater emitted excessive noise, disturbing the applicant's quiet enjoyment and amenity of her house, and she wanted that use to cease until the noise levels of the equipment were reduced so as no longer to interfere with her enjoyment and amenity of her house. The applicant claimed that the respondents' use of the equipment breached the noise performance criteria in both the Exempt Development SEPP and the Noise Control Regulation. There was a degree of overlap in the noise performance criteria, particularly those applicable during the off-peak time. The applicant sought orders restraining the respondents' use of the equipment unless and until the equipment complied with the noise performance criteria. 87 These outcomes were achieved. The respondents replaced the noisy hot water heater with a silent electric water heater. The respondents moved one air conditioning unit into an alcove near the other air conditioning unit, and enclosed both in an acoustic enclosure. The taking of these actions brought both the hot water heater and the air conditioning units into compliance with the noise performance criteria in the Exempt Development SEPP and the respondents arranged for certification of this result. Each of these outcomes was recorded in the notation section of the consent orders. 88 The applicant and respondents also agreed that the respondents should ensure that their use of the air conditioning units will meet, on an ongoing basis, the noise performance criteria in the Exempt Development SEPP and that the Court should order the respondents to ensure this outcome. The primary judge made that order. 89 In these circumstances, the applicant achieved the outcomes she had sought in bringing the proceedings. The fact that the consent orders did not require the respondents to ensure and to arrange certification that the use of the air conditioning units meets the noise performance criteria in the Noise Control Regulation does not detract from this fact that the applicant achieved the outcomes she had sought in bringing the proceedings. There was no added utility in so ensuring or certifying compliance with the noise performance criteria in the Noise Control Regulation. The actions that had already been taken to reduce the noise of the air conditioning units and the hot water heater and to certify and ensure on an ongoing basis compliance with the noise performance criteria in the Exempt Development SEPP were sufficient to achieve the desired outcome of ensuring the quiet use of that equipment. Requiring compliance with the noise performance criteria in the Noise Control Regulation would have yielded little if any additional benefit for the applicant. 90 Thus, it mattered not whether the applicant would or would not have succeeded, let alone almost certainly succeeded, in the claim of breach of the Noise Control Regulation, had the matter been fully tried. It was sufficient that the applicant would have almost certainly succeeded in the claim of breach of the Exempt Development SEPP and that the applicant secured the outcomes she had sought by bringing the proceedings.
15. The proper inquiry was "to look to the substance not the form of the relief sought in the summons". Viewed this way, there was a "clear winner" (at [93]).
16. However, in Nadilo Meagher and Brereton JJA held that it was not necessary to establish unreasonableness on the part of the defendant to obtain an "otherwise" order under r 42.20(1) of the UCPR in circumstances where that party has effectively capitulated without any element of compromise, making further prosecution of the litigation unnecessary. In this regard their Honours appear to have diverged from the reasoning of Preston J (see at [1] per Meagher JA and at [12] per Brereton JA), the latter of whom stated that establishing that the applicant would have inevitably succeeded was necessary but insufficient. According to his Honour there also was a need for the extra circumstance that the respondents' conduct in defending the proceedings up to the time that they agreed to the primary judge making consent orders was unreasonable (citing the unanimous Court of Appeal decision in Ralph Lauren 57).
17. In this context, Preston J further opined that (at [97]-[98], a passage upon which the Saders particularly relied): 97 It may also be accepted that, over a couple of years, there had been to-ings and fro-ings, offers and counter-offers, and other interactions between the applicant and the respondents about the air conditioning units and hot water heater. But behind this surfeit of activity can be seen to be a simple cause and effect relationship: the applicant sought for the respondents to make the noisy air conditioning units and hot water heater quiet and the respondents did so. The respondents' delay in doing so, however, is what is unreasonable. The respondents, in delaying taking action and in defending the proceedings up to the time they consented to the Court making orders noting and requiring the respondents' actions, caused the applicant unnecessarily and unreasonably to have incurred costs up to that point in time. This provides the justification for a costs order in favour of the applicant. 98 The applicant's letter of 28 August 2020 offering to settle the proceedings and the respondents' non-response to this offer are but part of this conduct. The applicant's letter in substance offered no more than what had already been sought in the summons and the respondents' non-response to the letter was no different to their non-response to the summons. The respondents' delay in taking the actions to make the air conditioning units and hot water heater quiet and agreeing to the consent orders was general and not particular to the letter of 28 August 2021.
18. In any event, Meagher and Brereton JJA stated that even if there was a requirement of unreasonableness, the respondents' persistence in the defence of proceedings while at the same time progressively remedying the subject‑matter of the applicant's complaint, and not availing themselves of the opportunity to avoid the applicant incurring costs, would satisfy it.
19. Of course, a court may depart from the usual costs order when a successful party prosecutes the matter solely for the purpose of increasing the costs recoverable or obtains relief which an unsuccessful party had already offered in settlement of the dispute (Oshlack at [69]).

Elgammal Seeks an "Otherwise" Costs Order

1. Notwithstanding that the Saders obtained, both in substance and in form, the relief that they sought in the summons and that, therefore, the event suggests a cost order in their favour, Elgammal seeks an order that each party pays its own costs of the proceedings on the basis of the triumvirate of unreasonable behaviour by the Saders identified by him (see above at [6]). In the alternative, he seeks an order that any costs payable to the Saders be limited to costs incurred before their rejection of the 13 February 2023 offer, and that these costs should be awarded on a joint and several basis between himself and Gearin up until the date that the submitting appearance was filed by him.
2. Each of the asserted iterations of unreasonable conduct said to warrant departure from the usual costs order are discussed below.

Whether the Failure to Give Prior Notice of the Commencement of Proceedings Was Unreasonable

1. It has previously been held that the failure to give prior notice of commencement of action may constitute unreasonable conduct resulting in an order otherwise than in the usual form. The Court has ordered costs against a successful party where it failed to give the respondent such notice thereby denying the respondent a reasonable opportunity to take action that would avoid the litigation and associated costs (Kiama Council v Grant at [47], Lai Qin at 624 and Homemakers Supacenta Belrose Pty Ltd v Warringah Council (No 2) [2008] NSWLEC 126; (2008) 158 LGERA 90 at [15]).
2. Elgammal submitted that the Saders gave him no prior notice of their intention to commence the proceedings, which denied him the opportunity of taking steps to avoid the litigation.
3. Elgammal submitted that the omission was particularly relevant in circumstances where: 1. the proceedings did not come to his attention until 12 December 2022; 2. due to the holiday period, he was not able to obtain legal advice as to the requirement for landowner's consent until early February 2023; and 3. that he acted quickly in making the 13 February 2023 offer to the Saders, which was rejected.
4. By contrast, the Saders argued that even if prior notice had been given, this would not have made any difference, as evidenced by the subsequent conduct of Elgammal by continuing to defend the proceedings, notwithstanding that there was no evidence of owner's consent having been given by the Crown for the works on the boatshed the subject of the CDC.
5. I agree. I do not accept that the omission of notice deprived Elgammal of an opportunity to seek legal advice which might have avoided litigation having regard to the fact that: 1. the CDC was applied for and relied upon by Elgammal in the face of communication between the Department and Harbour Port in August 2022, noting that the boatshed had reached the end of its structural life and pursuant to the licence had to be removed. Further, that landowner's consent would not be provided by the Crown; 2. Elgammal was represented at all relevant times by solicitors; 3. the correspondence between the parties' legal representatives on 18 October 2022, where the Saders requested a copy of the CDC and the landowner's consent. No response was provided by Elgammal's solicitor and Elgammal continued to carry out works on the boatshed; 4. the correspondence and WDN alerting Elgammal to the potential problem with the validity of the CDC and the lack of owner's consent; 5. for 15 months Elgammal resisted the relief sought in the summons; and 6. the Saders were faced with a statutory time period within which to challenge the validity of the CDC.
6. Regarding the October 2022 letter Elgammal submitted in response that: 1. it merely sought information from him to verify whether the previous undertaking provided by him was being complied with, which it was; 2. in circumstances where Elgammal was lawfully undertaking works to the boatshed pursuant to the CDC, there was no obligation to respond to the request for further information; 3. the request for information had nothing to do with these proceedings and could not be relied upon as notice of them; 4. to the extent that a copy of the landowner's consent was sought in the letter, there was no allegation that consent had not been obtained or had been improperly obtained, thereby rendering the CDC invalid; and 5. given the 2022 Sader litigation, in the absence of any specific allegation and in light of the attendant cost of responding to such inquiries, it was reasonable for Elgammal not to engage in further correspondence with the Saders through his solicitors at that time.
7. The failure to give notice of proceedings has been identified by the Court in Homemakers Supacenta as "not a practice to be encouraged" (at [15]). This is because parties should be given the opportunity of resolving disputes absent curial intervention, with all of its concomitant delay and cost.
8. Nevertheless, it is not clear to me on the authorities provided to the Court that the failure to give such notice amounts to either unreasonable conduct, or unreasonable conduct that would disentitle an otherwise successful litigant of their costs in the exercise of the Court's discretion to award them. As noted by Jagot J (as her Honour then was) in Council of the City of Sydney v Chapman [2007] NSWLEC 146, "there may be cases of true urgency that make it unnecessary or inappropriate for a notice before action to be given" (at [13]). Each case falls to be determined on its own facts and circumstances.
9. In the present case, in circumstances where: 1. there was a statutory time limit within which to challenge the validity of the CDC which was nearing expiry; 2. the Saders had made efforts to obtain a copy of the CDC and to ascertain whether landowner's consent had been given in respect of the boatshed works in October 2022, but received no response from Elgammal; 3. Elgammal's planner had been put on notice as late as 28 November 2022, that there was an issue with the validity of the CDC and that the Crown would not provide owner's consent; 4. Elgammal was put on notice on 8 December 2022 when the WDN was issued that the CDC may be invalid due to a problem with the owner's consent; and 5. Elgammal did not finally capitulate until the first day of the final hearing on 1 February 2024, to the granting of the relief sought in the summons and from May 2023 onwards with a defence that put the Saders to proof on discretion, not only do I not think that it was unreasonable for the Saders to commence proceedings on 5 December 2022 without notice to Elgammal, I find that even if notice had been given, it is all but inconceivable, especially given the litigious history between the parties concerning development on the site and the conduct of the parties thereafter, that notice would have avoided the need for litigation.
10. The Saders further contended that it was only by commencing proceedings that the setting aside of the CDC could be achieved. They submitted that the CDC could not be surrendered by Elgammal.
11. The matter is somewhat moot given that at no point did Elgammal volunteer to surrender the CDC, notwithstanding correspondence from Gearin dated 6 December 2022 to the solicitors for the Saders stating that that he had requested the surrender of the CDC "over a week ago". To whom the request was made is not known. The question does not, in my view, need to be determined. The only observation to be made is that the EPAA provides for the voluntary surrender of a "development consent" in s 4.63 of that Act (see also cl 68 of the Environmental Planning and Assessment Regulation 2021 ("EPA Regulations")). The term "development consent" is defined in s 1.4 of the EPAA to mean "consent under Part 4 to carry out development and includes, unless expressly excluded, a complying development certificate". The Saders did not point to anything in the EPPA or the EPA Regulations that expressly excludes a CDC from the statutory regime governing surrender.
12. In any event, failure to provide notice is generally not unreasonable where the other party nonetheless had the opportunity to take steps to avoid the claim (Wollondilly Shire Council at [16]-[18]). Elgammal had the opportunity to avoid the claim by responding to the letter from the Saders dated 18 October 2022. Instead, it was ignored. While Elgammal's decision not to respond was not in and of itself unreasonable, it strongly suggests, and it may be reasonably inferred, that further correspondence, including correspondence foreshadowing legal action, would not have resulted in a more conciliatory outcome.

Whether the Failure to Personally Serve the Originating Process was Unreasonable

1. Personal service of an originating process in Class 4 of this Court's jurisdiction is required by rr 10.20(1) and (2) of the UCPR: 10.20 Personal service required only in certain circumstances (1) Any document required or permitted to be served on a person in any proceedings may be personally served, but need not be personally served unless these rules so require or the court so orders. (2) Except as otherwise provided by these rules - (a) any originating process, and any order for examination or garnishee order, in proceedings in the Supreme Court, the Industrial Relations Commission (including the Commission when constituted as the Industrial Court), the Land and Environment Court, the District Court or the Dust Diseases Tribunal must be personally served, and (b) any originating process in the Local Court must be served in one of the following ways - (i) it may be personally served on the defendant, (ii) it may be left, addressed to the defendant, at the defendant's business or residential address, with a person who is apparently of or above the age of 16 years and apparently employed or residing at that address, (iii) if served by the Local Court, it may be sent by post, addressed to the defendant, to the defendant's business or residential address in an envelope marked with a return address (being the address of the Local Court but not so identified)…
2. The Saders accept, as they must, that the summons was not personally served upon Elgammal as mandated. They neither sought an order for substituted service, nor did they request that the solicitors who had previously acted for Elgammal accept service on his behalf.
3. To the extent that the 6 December 2022 email from the solicitors for the Saders to Elgammal's solicitors enclosed an electronic copy of the summons and asked, "please inform us if you are instructed in this matter", no explicit or implied confirmation of instructions was provided to the Saders's solicitors.
4. To reiterate, that the proceedings did not come to Elgammal's attention until 12 December 2022 is not challenged by the Saders.
5. Elgammal submitted that the failure was material because had service been properly effected, the Saders could have been informed that Gearin had issued the WDN on 8 December 2022, which required Elgammal to cease works on the boatshed and that it had been complied with, thereby avoiding the filing of the application for urgent interim relief on 12 December 2022.
6. Elgammal contended that the notice of motion for the interlocutory injunction was unreasonably filed. Within two hours of its receipt, he had offered an undertaking to the Court that works would not continue until the proceedings were resolved. The Court accepted the undertaking, and the motion was not pressed. Further, senior counsel for the Saders appeared on the return of the motion, notwithstanding the agreement by Elgammal to give the undertaking.
7. Elgammal also submitted that had he been personally served, the proceedings would have come to his attention earlier augmenting the potential for an early resolution.
8. In response, the Saders submitted that: 1. Elgammal could not have been personally served immediately after the summons was filed because he was away from Sydney between 6 and 9 December 2022; 2. two attempts were made to serve Elgammal personally, both at his business address and at the site, however, neither were successful; 3. the summons was served electronically on Elgammal using the same gmail address that was used by Elgammal's solicitors on 7 February 2022; 4. on 6 December 2022 the summons was served electronically on the solicitors for Elgammal; 5. Elgammal's solicitors filed a notice of appearance on 12 December 2022, thereby waiving any objection to the absence of personal service on Elgammal; and 6. the application for interim relief was necessary because by at least 8 December 2022, Elgammal was aware of the issue with the CDC and had not ceased works on the boatshed. In addition, the WDN was not an instrument that compelled Elgammal to cease works being undertaken pursuant to the CDC.
9. Personal service of an originating process is necessary as a matter of procedural fairness to ensure that proceedings come to the attention of a respondent and to permit that party to obtain advice and take a position on the continuation of the litigation.
10. However, as r 10.19 of the UCPR provides: 10.19 Waiver of objection to service A party who files a document in reply to a document alleged to have been served on that party is taken to have waived any objection to the fact or manner of service unless he or she files and serves notice of the objection together with the document so filed.
11. Elgammal's solicitors filed a notice of appearance on 12 December 2022. Therefore, the failure to personally serve Elgammal can only be relevant to the events transpiring between the date when the summons was filed (5 December 2022) and the date that the notice of appearance was filed (12 December 2022).
12. In my view, the failure of the Saders's solicitors to personally serve Elgammal during this period is not sufficiently unreasonable that it disentitles them to costs. At its highest, it may have resulted in the successful negotiation of an undertaking to avoid the need for the application for interim relief to be filed, however: 1. it is likely that any attendant costs are in this regard insubstantial given that the notice of motion did not progress to a contested hearing and that Elgammal filed no evidence in response to it; 2. the Saders received no response whatsoever to their communications dated 7 and 8 December 2022, that is prior to the filing of the notice of motion, requesting that an undertaking be provided by Elgammal; 3. it may be readily inferred from the emails to Elgammal from Gearin, including the issuing of the WDN on 8 December 2022, that Elgammal knew that there was an issue in relation to owner's consent and that the validity of the CDC was in question. Works were to cease immediately pursuant to the WDN. There is evidence, however, that works were being carried out on the boatshed until 4 pm on 8 December 2022, in contravention of that instrument. This strongly suggests that the issuing of the WDN (and the Saders's knowledge of it) was, at the very least, immaterial because works continued to be carried out on the boatshed in any event. If anything, the non-compliance with the WDN strengthened the need to seek interim injunctive relief; and 4. by parity of reasoning to the asserted failure to give notice to Elgammal of the commencement of the proceedings, I likewise do not accept that personal service of the summons would have resulted in the proceedings being resolved earlier than they were.

Whether the Rejection of the 13 February 2023 Offer Was Unreasonable

1. Elgammal submitted that the Saders's rejection of the 13 February 2023 offer was so unreasonable that even ignoring the other misconduct of the Saders, this was sufficient to deny the Saders a costs order in their favour. This is because as at 13 February 2023, Elgammal was surrendering and but for any disentitling conduct the ordinary costs rule would have applied. That is, costs would have followed the event of the surrender and the Saders would have obtained the very relief that they sought and ultimately obtained. That the offer was not accepted was evidence of the maintenance by the Saders of the proceedings in order to preserve for themselves a position to argue an entitlement to costs.
2. The 13 February 2023 offer was neither expressed as an offer of compromise, nor an offer made pursuant to the principles in Calderbank v Calderbank [1975] All ER 333; [1975] 3 WLR 586. Nonetheless, Elgammal submitted that the offer is highly relevant to the exercise of the Court's discretion to award the Saders their costs insofar as it was a genuine attempt to avoid the expense of litigation (Whitney v Dream Developments Pty Ltd [2013] NSWCA 188; (2013) 84 NSWLR 311 at [76]). The 13 February 2023 offer was in the same terms as the 10 February 2023 offer, except that there was no liberty to apply, and significantly, it was silent as to costs.
3. Elgammal contends that as at the date of the rejection of the 13 February 2023 offer, the conduct of the parties "becomes irrelevant" because all future steps were "tainted" by the Saders's unreasonable refusal of it.

The Rejection of the 13 February 2023 Offer Was Reasonable in the Circumstances

1. It is important to understand the factual context within which the 13 February 2023 offer was made. At the risk of repetition, it was in fact a counteroffer to the offer rejected by Elgammal on 10 February 2023. It should be recalled that Elgammal rejected the 10 February 2023 offer for three reasons: 1. first, on the basis that he had lawfully completed all works authorised by the CDC prior to the commencement of the proceedings; 2. second, because a costs order was not warranted because of the undertaking given by Elgammal on 13 December 2023 to cease works; and 3. third, that the liberty to apply forming part of the proposed orders would result in no finality to the proceedings.
2. On 28 February 2023 the Saders made a counteroffer in the same terms as the 13 February 2023 offer, but with an order that Elgammal pay 50% of the Saders's costs to date. The offer was purportedly accepted by Elgammal on a "without admissions basis" on 6 March 2023.
3. Understandably, the 6 March 2023 offer was not accepted by the Saders. While no reasons were given for the rejection, Elgammal acknowleges that a declaration would not be made by the Court on a "without admissions basis". According to Elgammal, the declaration was proposed in these terms because he was being subjected to the threat of contempt proceedings from the Saders in the 2022 Sader decision as a result of further works carried out by him on the site.
4. Nothing further occurred in the matter until the response to the summons was filed by Elgammal on 10 May 2023. In that defence, Elgammal admitted that owner's consent had not been obtained and that the CDC was invalid, but he pleaded that, as a matter of discretion, the declaratory relief ought not be made, and moreover, that the costs order sought by the Saders was opposed.
5. I am of the opinion that the rejection of the 13 February 2023 offer by the Saders was entirely reasonable based on the following factors. First, on 10 February 2023 the Saders wrote to Elgammal maintaining that his defence of the CDC was a waste of the Court's and the parties' resources. The 10 February 2023 offer proposed short minutes of order consistent with the relief in the summons, and included an order for costs in the Saders's favour. The offer was not accepted. If any conduct is unreasonable, it is this conduct by Elgammal. Had the 10 February 2023 offer been accepted by Elgammal, the litigation would have ended almost a year earlier.
6. Second, instead of accepting the 10 February 2023 offer, on 13 February 2023 Elgammal replied saying that in respect of the proposed costs order, "in circumstances where Elgammal had lawfully completed all works authorised by the CDC prior to the commencement of the proceedings, a costs order was not warranted nor agreed". This statement was erroneous. Further works permitted by the CDC were yet to be carried out. Given this was a, if not the, stated factual basis for making an offer to resolve the proceedings without the payment of the Saders's costs, it was not unreasonable for the Saders to reject an offer that would deprive them of their costs of the proceedings.
7. Third, I do not accept that the events subsequent to the making of the 13 February 2023 offer are irrelevant to the exercise of the Court's discretion to award costs. On the contrary, I find the subsequent conduct of Elgammal to be unreasonable insofar as he: 1. rejected the 28 February 2023 offer, which represented a significant discount on the costs sought by the Saders; 2. sought to settle the matter "on a without admissions basis" on 6 March 2023, knowing that it was unlikely that the Court would grant the relief sought by the Saders in this form; 3. filed a response on 10 May 2023, admitting that owner's consent had not been obtained, but pleading discretionary grounds that were either wrong (the works pursuant to the CDC had not been completed prior to the filing of the summons), nonsensical (a pleading that the "the CDC is valid until declared invalid" when the making of declaratory relief in respect of the validity of that instrument was being resisted), and would not, in any event, have resulted in the efficient disposition of the proceedings insofar as a hearing was required on the discretionary grounds (including whether or not the works the subject of the CDC were authorised by a development consent and that owner's consent could therefore be assumed) and on the question of costs; 4. maintained this defence until the first day of the hearing notwithstanding the terms of the 26 June 2023 offer, and thereby requiring the Saders to file and serve evidence in anticipation of a hearing on discretion. If any party is to be accused of unreasonably maintaining the proceedings, it is Elgammal; and 5. suggested to the Court on 1 February 2024 that, with the exception of costs, he was surrendering to the relief sought by the Saders in the summons because of the receipt of late correspondence received from the Crown, which, I readily infer, concerned the issue of landowner's consent for the works on the boatshed, notwithstanding that he was informed by the certifier by at least 8 December 2022, that there was a question over the validity of the CDC due to the lack of owner's consent by the Crown (see above at [53] and [54]).
8. Just to be clear, however, even if the post 13 February 2023 offer conduct of the parties is disregarded, I would nevertheless find that it was reasonable for the Saders to reject the offer if for no other reason than the offer did not include payment of any part of their costs.

The Submitting Appearance Filed by the Certifier

1. In relation to the appropriate costs order to be made, if any, against Gearin, the Saders do not seek a costs order against him.
2. Elgammal, however, seeks a costs order against Gearin in the event that he is ordered to pay the Saders's costs. Specifically, he seeks an order that costs be awarded against Gearin on a joint and several basis up until the date that the submitting appearance was filed by Gearin.
3. Gearin submitted that if the Court orders the payment of Saders's costs, liability for these costs ought to be visited wholly upon Elgammal, on the basis that he had filed an early submitting appearance and has never played an active role in the proceedings. Alternatively, if he is liable for the Saders's costs, then it should be on the basis proffered by Elgammal.
4. Gearin submitted that there should be no order for costs against him because, notwithstanding his conceded fault in not checking whether landowner's consent had been given by the Crown prior to issuing the CDC: 1. his submitting appearance was filed early, particularly considering that the summons was filed in December 2023 and the submitting appearance was filed approximately two months later in February 2024. Minimal activity incurring costs occurred over the Christmas period and during January 2024; 2. by filing a timely submitting appearance, Gearin did not cause significant costs to be incurred following the commencement of proceedings, which is consistent with facilitating the just, quick and cheap resolution of the real issues in the dispute pursuant to s 56 of the CPA. Further, the costs reasonably incurred by the Saders prior to 10 February 2023 (when the submitting appearance was filed by him), form only a relatively small proportion of the overall costs of the proceedings; 3. Gearin had no ability to remedy the situation other than to submit to the proceedings. There is no power under the EPAA for a CDC to be revoked or annulled by a certifier; 4. the proceedings could have been resolved by consent at an early stage had Elgammal chosen not to actively defend them. Elgammal could have, for example, surrendered the CDC; and 5. the application for the CDC was accompanied by documents prepared by Harbour Port, including the SEE. This information failed to identify that the Crown's consent as landowner was outstanding. He was entitled, at least in part, to rely on the supporting information provided to him by Elgammal's planners.
5. The relevant principles regarding awards of costs where a submitting appearance is filed were recently summarised by Pain J in Inglis v Buckley (No 2) [2023] NSWLEC 113, which I respectfully repeat and adopt (at [47]): 47 …Established principles that would assist the Court in the exercise of the costs discretion in the circumstances of this proceeding are: (1) the rationale for the usual rule that costs follow the event is that the successful party to proceedings should be compensated and that an award of costs is not to be punitive: Latoudis; (2) ordinarily, an order for costs will not be made against a submitting party: Develtor Property Group Pty Ltd v Newcastle City Council [2001] NSWLEC 47 at [42]; Highland v Labraga (No 3) [2006] NSWSC 871 at [20]-[23]; Midson v Workers Compensation Commission (No 2) [2017] NSWSC 147 at [28]-[31]; (3) there is no prima facie rule that a submitting party will never be ordered to pay costs, contextual circumstances will be taken into consideration: Seller v Jones [2014] NSWCA 19 at [55], [59] cited with approval in Lou v IAG Ltd t/as NRMA Insurance (2019) 101 NSWLR 606; [2019] NSWCA 319 (Lou) at 614; (4) abiding by the limits of the Hardiman principle does not immunise a government authority from an adverse costs order: Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No 3) (1987) 77 ALR 609 at 612; (5) Material considerations (House v King (1936) 55 CLR 499; [1936] HCA 40) to the exercise of discretion relevantly include: (a) whether the filing of a submitting appearance and the 'role' taken by the Council were consistent with the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in dispute contained in s 56(3) of the Civil Procedure Act: Lou at [47]; (b) whether the error the subject of the proceeding was caused by a party: Lou at [44], Cutcliffe at [50], noting that it is a material consideration rather than a rule per Basten JA in Rossi v Living Choice Australia Ltd [2015] NSWCA 244 at [73]; and (c) whether the proceeding could have been resolved by consent: Lou at [44] (i.e. the conduct of the parties in the litigation).
6. As her Honour observed in that case, in Rossi v Living Choice Australia Ltd [2015] NSWCA 244 Basten JA emphasised that the mere fact that a decision‑maker has erred is not in and of itself sufficient to warrant making a costs order against it (at [73]): 73 The circumstance engaging par (b) in Cutcliffe was that the beneficiary of the decision does not defend the proceedings; it was then said that the reason why the consent authority could not "immunise itself from costs consequences of its own error by entering a submitting appearance [was] because then a successful applicant cannot be properly compensated in costs." But that cannot be true in the case of proceedings which are actively defended by another party. The mere fact that the decision-maker is ultimately found to have erred in its approach is not, of itself, a sufficient reason to order costs against it, being costs incurred after the entry of a submitting appearance. So far as the guidelines in Cutcliffe suggest otherwise, they should not be applied.
7. In the present case, Gearin's submissions may be accepted. Although he did not immediately file a submitting appearance upon receipt of the summons, given the chronology described above, he did so in a sufficiently timely manner, and moreover, there was nothing in his conduct either before or after the filing of that appearance that in any way caused additional expense to be incurred by the other parties or that in any way protracted the duration of the proceedings.
8. On the contrary, the evidence before the Court discloses that the legal costs incurred by the Saders from the date of the filing of the summons to the date of the filing of the submitting appearance was not the result of any conduct by Gearin. Given that an award of costs is compensatory, there appears to be no loss to the Saders occasioned by Gearin's conduct during this intervening period that attracts compensation by way of costs. In the exercise of my discretion to award costs, I find that it is appropriate that there be no order as to costs with respect to Gearin.

Costs of the Motion

1. Elgammal has not been successful in his application for an "otherwise" costs order. Applying the costs principles articulated above, he is therefore liable for the Saders's costs of resisting his demand for an order that each party pay their own costs of the proceedings.
2. Elgammal should also pay the costs of Gearin. Gearin was compelled to take an active role in the costs hearing because of the costs order sought against him by Elgammal in the event that Elgammal was ordered to pay the Saders's costs. Elgammal has failed to secure this alternative costs order. Costs therefore follow the event in respect of the application by Elgammal against Gearin.

Orders

1. The Court therefore orders that: 1. the first respondent is to pay the applicants' costs of the proceedings; 2. the first respondent is to pay the applicants' and the second respondent's costs of this application; and 3. the exhibits are to be 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: 12 April 2024

New South Wales Department of Planning and Environment (Third Respondent)

The Applicants in Settled Class 4 Proceedings Seek Their Costs

1. The substantive subject matter of these Class 4 proceedings was determined on 2 February 2024, in Sader v Elgammal (No 2) [2024] NSWLEC 4.
2. At issue was whether complying development certificate 8058994 ("the CDC") issued by the certifier, Paul Gearin, the second respondent, was invalid on the basis that landowner's consent from the State of New South Wales, the third respondent ("the Crown"), was required as a statutory precondition to its issue but had not been obtained. The CDC was in respect of works carried out on land subject to a Crown licence.
3. Ultimately it was accepted by the first respondent, Yasser Elgammal, that owner's consent was required for the CDC to have been validly issued and, by consent, the parties requested that the Court grant the relief in prayers 1 and 2 of the summons, which comprised a declaration of invalidity and final injunctive relief:

1 A declaration pursuant to section 4.31 of the Environmental Planning and Assessment Act 1979 (EPA Act) that complying development certificate 8058994 issued by the Second Respondent on 5 September 2022 for works described therein as 'maintenance and improvement works to boatshed' (CDC) is invalid and of no effect and is set aside.

2 An order restraining the First Respondent by itself, its servants or agents from acting upon, or carrying out any works in purported reliance on the CDC.

3 An order that the Respondents pay the Applicants' costs of these proceedings.

1. After a brief hearing, the Court determined that it was appropriate to grant the relief sought, however, it reserved the question of costs to allow the parties to file and serve submissions and evidence on the matter (Sader (No 2) at [32]). This judgment determines the outstanding costs issue.
2. In short, the applicants, Mark and Sandra Sader ("the Saders"), seek their costs of the proceedings from the respondents, and Elgammal in particular, on the basis that costs follow the event. In this case, the event was the making of the declaration and the granting of the final injunction. In respect of Gearin, these costs are only sought up to the date that he filed a submitting appearance on 10 February 2023.
3. It was agreed by all parties that no order as to costs should be made against the Crown.
4. Elgammal resists such an order on three bases:

(a) first, because of the Saders's failure to provide him with notice of their intention to commence proceedings;

(b) second, because of the Saders's failure to personally serve the originating process on him; and

(c) third, because the Saders's rejection of the offer made by him on 13 February 2023 ("the 13 February offer") was unreasonable.

1. According to Elgammal, by reason of the disentitling conduct of the Saders, the appropriate order is that each party should bear their own costs of the proceedings.
2. I have determined that the Saders, having been wholly successful in obtaining the relief that they sought in the summons, ought to be awarded their costs. They have engaged in no conduct that would warrant a departure from the general rule that costs follow the event.
3. Given the timely filing by Gearin of a submitting appearance, there should be no order for costs against him.

1. The background to the substantive issue the subject of these Class 4 proceedings is set out in Sader (No 2) (at [1]-[24]), and while presently relied upon, is not reproduced here.
2. In addition, facts relevant to the determination of this application were agreed and two bundles of documents were adduced by the parties.
3. The Saders are the registered proprietors of Lot 12 in DP 14844, located in Connells Point. Elgammal is the registered proprietor of Lot 13 in DP 14844, that is, the adjoining property ("the site").
4. It is convenient to note that earlier separate civil enforcement proceeding were commenced by the Saders against Elgammal in respect of development on the site (Sader v Elgammal [2022] NSWLEC 107, "the 2022 Sader decision"). Final orders were made by Duggan J in the 2022 Sader decision on 30 September 2022.
5. To date, works at the site have resulted in six judgments across two sets of proceedings, including one judgment in the Court of Appeal.
6. On 14 December 2020 licence RN 566152 granted under the Crown Land Management Act 2016 ("the CLMA") ("the licence") was transferred to Elgammal in respect of Crown land below the mean high-water mark of the Georges River, permitting the use of various structures, including a boatshed.
7. The boatshed is predominantly located on Crown land, which is zoned W2 Recreational Waterways pursuant to the Georges River Local Environmental Plan 2021 ("the LEP"). Under the W2 zone in the LEP, boatsheds are a nominate permissible use.
8. Condition 3 of Schedule 2 of the licence provided that the licensee had to remove the boatshed from the land when, in the opinion of the relevant Minister, the boatshed was determined to be in poor structural condition, if required by other planning instruments, or by written direction from that Minister.
9. On 14 April 2022 an officer at the Department of Planning and Environment ("the Department") emailed a development compliance officer at Georges River Council ("the Council") stating that the Department considered that the boatshed had "reached its economic life" and ordered the Council to facilitate its removal by issuing a Development Control Order to Elgammal.
10. On 20 May 2022 Harbour Port East Coast Pty Ltd ("Harbour Port"), the planners for Elgammal, lodged the CDC application. On the application the owners were listed only as Elgammal and Harbour Port. However, the application form completed by Harbour Port indicated that the consent of the landowner the subject of the domestic Crown licence covering, among other things, the boatshed had been obtained. It was not in dispute that this asserted consent was never verified by Gearin and was in fact incorrect. It had not been given.
11. The Statement of Environmental Effects ("SEE") accompanying the application for the CDC submitted to the certifier in May 2022, noted that the boatshed was required to be kept in good structural form as a condition of the lease with Crown lands and that works on an unauthorised jetty, ramp and pontoon structure had received landowner's consent.
12. Abigail Bautista from Harbour Port submitted an application to the Department for an Updated Landowner Consent on 27 May 2022.
13. Meanwhile, in the 2022 Sader decision, Elgammal gave an undertaking to the Court on 15 June 2022, that he would not engage in any works or cause any works to be carried out that required development consent, including complying development, on the land below the high-water mark on the site without first obtaining development consent or a CDC.
14. On 28 June 2022 in answer to a query from Harbour Port about works to the boatshed being undertaken pursuant to the CDC, Gearin replied "that's OK, for maintenance."
15. The Department responded to Bautista on 9 August 2022, stating that it considered that the boatshed had reached the end of its structural life and requesting that the landowner's consent application be amended to include its removal.
16. The application for the CDC proposed building works which included the "maintenance and improvement works to boatshed" ("the boatshed works"). The boatshed works were proposed to be carried out predominantly on the Crown land.
17. The System Generated CDC Application Form lodged on the NSW Planning Portal included the following words:

Application documents

The applicant has included the following documents to support their application.

CDC - DWG2 PLAN & ELEVATION - 26 Bowden Crescent Connells Point

CDC - DWG 1 SITE PLAN- 26 Bowden Crescent Connells Pt Mo

Local Group Certification Contract and Application Form-26 Bowden Crescent Connells Point

Domestic Crown License-26 Bowden Crescent Connells Point

1. However, as has been established, the consent of the Crown was not obtained prior to, or as part of, the issuing of the CDC.
2. Between 9 and 22 August 2022, correspondence passed between the Department and Harbour Port. The email communications were in relation to a request from Harbour Port, Elgammal's planners, to obtain landowner's consent for the works below the mean high-water mark on Crown land to undertake the boatshed works. The Department stated that in its opinion the boatshed needed to be removed due to structural damage and that landowner's consent would not be provided.
3. The CDC was issued by Gearin on 5 September 2022. The CDC described the works the subject of the application using language identical to the description given in the application for it, namely, the "maintenance and improved works on a boatshed". The works were to be carried out by plans prepared by Harbour Port ("the approved plans"). The approved plans included drawings depicting the proposed works to the existing boatshed.
4. On 20 September 2022 the Council requested that the Department confirm whether owner's consent had been granted for the CDC.
5. Amy Peet, a Senior Property Management Officer from the Department, contacted the Council on 27 September 2022, noting that the boatshed required removal and that the Department had requested Harbour Port to amend their landowner's consent application to reflect this.
6. As stated above, final orders were made by the Court on 30 September 2022 restraining Elgammal from undertaking certain works on the site.
7. On 8 October 2022 the Council's website advertised that the CDC had been issued.
8. Meanwhile, the Council issued a Stop Work Order in respect of works at the site, which was appealed to this Court. Elgammal relied upon the CDC to argue that the Order be lifted. In a letter between the Council and the Department the issue of the landowner's consent was raised and it was noted that Gearin had relied upon deemed landowner's consent under the CLMA. However, in the opinion of the Council this was an issue between Elgammal and the Department to resolve.
9. The Saders's solicitors wrote to Elgammal's solicitors on 18 October 2022 requesting a copy of the CDC and the landowner's consent, in order to ascertain whether the undertakings given on 15 June 2022 were being complied with and whether landowner's consent had been given. There was no response.
10. On 28 November 2022 Gearin wrote to Harbour Port noting that the Department would not provide owner's consent and that it had requested that "we cancel the CDC".

1. Elgammal undertook works on the boatshed between 3 and 5 December 2022.
2. The solicitors for the Saders wrote to the solicitors for Elgammal on 5 December 2022, referring to alleged breaches of the orders of the Court made on 30 September 2022, and seeking further undertakings from Elgammal regarding the works said to be the subject of those orders.
3. The Saders filed the summons commencing the proceedings the subject of this costs application on 5 December 2022. That is, three months after the grant of the CDC, as required by statute (see r 59.10 of the Uniform Civil Procedure Rules 2005 ("UCPR") and s 4.31 of the Environmental Planning and Assessment Act 1979 ("the EPAA")).
4. It was not in dispute that prior to the filing of the summons no correspondence was sent to Elgammal warning him of the potential litigation unless owner's consent was furnished and the development the subject of the impugned CDC ceased.
5. The solicitors for the Saders sent a copy of the summons to Elgammal on 5 December 2022 at the following email addresses: "yasser.elgammal@dickerdata.com.au" and "yasser.elgammal@gmail.com". The email stated that "a hard copy will be served upon you separately."
6. Elgammal maintains that these email addresses were not in use and that as a consequence he never received the email attaching the summons. It was conceded by the Saders during oral argument that there was no evidence to refute this assertion. I therefore accept that the email and the summons were not received by Elgammal on that day.
7. The next day, on 6 December 2022, a copy of the summons was provided to Elgammal's solicitors by email. Again, the email stated that "a hard copy will be served on Mr Elgammal shortly".
8. At no point, however, was Elgammal either personally served with a copy of the summons or was an order for substituted service obtained from the Court.
9. A letter of demand was also sent by the Saders to Elgammal requesting that he provide an undertaking to cease the works on the boathouse by 5 pm that day.
10. After receipt of the summons, Elgammal's solicitors emailed the Saders's solicitors later that day, noting receipt of the summons filed at 5.33 pm on 5 December 2022, and requesting further details of the boathouse works. Specifically, whether these works were the same works the subject of the CDC. The email went on to state that the solicitors could not obtain instructions regarding the undertaking in the available time.
11. The Saders's solicitors responded to the email on the same day observing that to date it had not received a copy of the CDC or any landowner's consent in respect of it.
12. Later that same day, the Saders's solicitors received an email from Gearin stating that he had requested that Elgammal surrender the CDC "over a week ago". The email was in response to a communication from Elgammal's solicitor notifying him that the Saders were seeking to have the CDC set aside and serving a copy of the summons on him by email.
13. On 7 December 2022 the solicitors for the Saders wrote to the solicitors for Elgammal, referring to the above correspondence with Gearin and making the following proposal to dispose of the proceedings:

In those circumstances, our clients now make the following proposal to dispose of the proceedings:

(a) You provide the following undertakings by close of business on Friday, 9 December 2022:

(i) you will immediately surrender the CDC to the relevant authority;

(ii) you will not rely on the CDC in perpetuity;

(iii) you will cease the performance of any works described in or carried out in purported reliance on the CDC; and

(iv) you will remove, by no later than 31 December 2022, all works which have been carried out by you or on your behalf which are described in the CDC, or were carried out in purported reliance on it; and

(b) Upon the receipt of the undertakings and compliance with paragraphs (a)(iii) and (a)(iv) above, the Proceedings be discontinued on the basis that each party bear its own costs.

In the event that the above proposal is not accepted by you:

(a) our clients will proceed with the Proceedings, including by way of urgent interlocutory injunction precluding any further works pursuant to the CDC, without further notice to you; and

(b) this letter will be relied on in seeking orders for costs against you in relation to the Proceedings.

1. An order for demolition or removal was not sought in the summons by way of relief. The offer was not accepted.
2. The Saders issued a notice to produce to Elgammal, Gearin and the Crown on 7 December 2022. The solicitors emailed the notice to produce to Elgammal at "yasser.elgammal@gmail.com" and to the solicitors for Elgammal at "jamieA@onegrouplegal.com.au" on 7 December 2022. Among the documents sought was a copy of the CDC and the "Owners consent received on 20 May 2022".
3. Gearin issued Elgammal a Written Directions Notice ("WDN") on 8 December 2023. The WDN identified the non-compliance an "issue in relation to Owners Consent and the validity of the Complying Development Certificate which has been requested to be withdrawn" by the Department. The steps to be undertaken were to stop all works immediately until the matter was resolved in relation to the owner's consent and the validity of the CDC.
4. Later that day, Gearin emailed Elgammal stating, "sorry Yasser, there has been 'no' inspection as per email dated 8/12/22, we only need clarification in relation to the owners consent and the validity of the CDC, as per Department request, hence the" WDN.
5. It was not a matter of contention that Elgammal had previously represented to the Saders that the works the subject of the CDC were completed prior to the filing of the summons. However, this is not, as Elgammal concedes, correct. For example, the following works described in the plans approved by the CDC had not been commenced or completed:

(a) the recladding of various walls to the boatshed;

(b) the replacement of pedestrian door to the boatshed;

(c) the replacement of windows to the boatshed; and

(d) the replacement of the main door to the boatshed with aluminium roller shutters.

1. It was an agreed fact that other works to an existing pool had yet to be completed or commenced, but it is not clear whether these works were the subject of the CDC.
2. On 8 December 2022 the Saders's solicitors wrote to Elgammal's solicitors in the following terms:

...We also refer to our letter dated 5 December 2022 in relation to the works carried out at the boat house adjacent to your client's property. Notwithstanding our letter your client commenced further works on the boat house at approximately 7.10 am this morning and as at 4 pm this afternoon substantial further works have been advanced there...Such construction therefore is in clear breach of the 30 September 2022 Orders.

...

Our clients require your client to provide the following confirmation and undertakings by 5pm on 9 December 2022 that he will:

(a) Immediately cease all work pursuant to, in reliance on or described in the Landscape Plans as required by Order 1 of the 30 September 2022 Orders including works related to the boat house referenced and described above and provide confirmation of such cessation to this office;

...

Unless your client provides the confirmation and undertakings sought by this letter by the time stipulated our clients will, without further notice, proceed to apply to the Land and Environment Court for appropriate orders, including for an urgent interlocutory injunction requiring that your client stop work in relation to the development at the Subject Site which is in breach of the 30 September 2022 Orders.

1. At 12.03 pm on 12 December 2022, the Saders filed a notice of motion seeking an interlocutory injunction which included an order that pending the final determination of the proceedings, Elgammal be restrained from carrying out, or permitting the carrying out, of any works on land owned by the Crown described in the CDC without obtaining prior development consent. The motion was supported by two affidavits sworn by Mark Sader, together with written submissions. It was emailed to "yasser.elgammal@gmail.com" and copied to Elgammal's solicitor at 3.23 pm that same day.
2. The cover letter enclosing the motion stated that it was returnable before Robson J at 10 am on 13 December 2022. The basis of the application claimed to be that works had continued on the boatshed since 5 September 2022, and that neither owner's consent nor consent to carry out the works had been obtained. The letter noted that Gearin had requested that the CDC be surrendered. Accordingly, an undertaking was sought, pending the final determination of the proceedings, not to carry out any works on the land owned by the State as described in the CDC without obtaining prior development consent. If provided, it might make the application for interlocutory relief unnecessary.
3. At 5.24 pm that day, Elgammal's solicitor wrote to the Saders's solicitors proposing an undertaking in these terms:

On a without admissions basis, I, Yasser Elgammal, undertake to the Land and Environment Court that pending the final determination of the proceedings, I will not carry out or permit the carrying out of any works on land owned by the State of New South Wales described in the Complying Development Certificate 8058994 dated 5 September 2022 without obtaining prior development consent.

1. An unconditional notice of appearance was filed on behalf of Elgammal on 12 December 2022 at 6.36 pm.
2. On 13 December 2022 the matter came before Robson J who accepted the undertaking proffered by Elgammal which was in relevantly identical terms to that proffered by him to the Saders the previous night:

The court notes that without admission the First Respondent undertakes to the Land and Environment Court that pending the final determination of these proceedings, he will not carry out or permit the carrying out of any works on land owned by the State of New South Wales described in Complying Development Certificate 8058994 dated 5 September 2022 without obtaining prior development consent.

The Events Leading up to and the Terms of the 13 February 2023 Offer

1. The Saders's solicitors wrote to Elgammal's solicitors on 10 February 2023, proposing the following ("the 10 February 2023 offer"):

...On 9 February 2023 the State of New South Wales responded to our correspondence enclosing documents held by it which fall within the Notice to Produce addressed to the State of New South Wales (which are not objected to in the Notice of Motion). One of those categories was, specifically, "Owner's consent received 20 May 2022", being the only consent referenced in the application by your client for the CDC. None of the documents provided by the State of New South Wales constitute an owner's consent, and in particular no document falling within the description "Owner's consent received 20 May 2022" was provided.

Further, we understand that the Second Respondent has requested that the CDC be surrendered by your client.

In those circumstances the court is entitled to draw the clear inference that there is no "Owners Consent received 20 May 2022", and that circumstances pertain which caused Gearin certifier of the CDC in question to request that the CDC be surrendered.

We also note that the matter was before His Honour Justice Robson on 13 December 2022 at which time your client provided undertakings to the court. Your client has had ample time to produce the applicable landowner's consent, if one exists, and has failed to do so. Further, your client has not produced any other development consent applicable to the Crown's land or otherwise relating to the works described in the CDC.

Our clients therefore consider that it is beyond all doubt that your client did not obtain landowner consent for the works the subject of the CDC as he was required to do pursuant to section 4.26(2) of the EPA Act, that the CDC should be set aside, and that the orders sought in the Summons in the Proceedings should be made forthwith.

The persistence by your client in any defence of the CDC Proceedings is futile, and is a waste of the court's time and the parties' resources.

We enclose our clients' proposed Short Minutes of Order disposing of the CDC Proceedings.

Please inform us by return as to whether your client will consent to the proposed orders. In the event that your client fails to do so our clients will rely on this letter as to the question of costs, which they will seek on an indemnity basis.

1. The proposed short minutes of order attached to the 10 February 2023 offer were in these terms:

1 The Court declares, pursuant to section 4.31 of the Environmental Planning and Assessment Act 1979 (EPA Act), that complying development certificate 8058994 issued by the Second Respondent on 5 September 2022 for works described therein as 'maintenance and improvement works to boatshed' (CDC) is invalid and of no effect and is hereby set aside.

2 The First Respondent and his servants and agents be restrained from acting upon, or carrying out any works in purported reliance on the CDC.

3 The First Respondent pay the Applicants' costs of these proceedings.

4 Such other or further orders as the Court sees fit.

5 The directions hearing on 17 March 2023 be vacated.

6 The parties have liberty to apply on 24 hours notice in respect of any breach or threatened breach of order 2 herein.

1. Also on that day, Gearin filed and served a submitting appearance save as to costs.
2. The terms of the 10 February 2023 offer were rejected by Elgammal on 13 February 2023. He did so on the basis that he had lawfully completed all works authorised by the CDC prior to the commencement of the proceedings and that a costs order was not warranted because of the undertaking given by him on 13 December 2022. Moreover, proposed order 6 would result in there being no finality to the proceedings.
3. Instead, the following offer in response was made ("the 13 February 2023 offer"):

1. The Court declares, pursuant to section 4.31 of the Environmental Planning and Assessment Act 1979 (EPA Act), that complying development certificate 8058994 issued by the Second Respondent on 5 September 2022 for works described therein as 'maintenance and improvement works to boatshed' (CDC) is invalid and of no effect and is hereby set aside.

2. The First Respondent and his servants and agents be restrained from acting upon, or carrying out any works in purported reliance on the CDC.

3. Such other or further orders as the Court sees fit.

4. The directions hearing on 17 March 2023 be vacated.

Would all parties please advise whether they consent to the above orders.

Our client will rely on this correspondence in respect of any application for costs should it come necessary.

1. The 13 February 2023 offer was not accepted. As identified above, a central issue for resolution in these proceedings is the reasonableness of the rejection.
2. In response, the Saders sent a schedule of works purportedly authorised by the CDC, together with photographs of those works, to demonstrate that the statement that Elgammal had "lawfully completed all works authorised by the CDC prior to the commencement of" the proceedings was incorrect.

1. A further letter was sent by the Saders's solicitors to Elgammal on 28 February 2023 which proposed ("the 28 February 2023 offer"):

Without Prejudice Save as to Costs

...

Our clients propose that the CDC proceedings be disposed of on the basis that the following orders be made by the court by consent:

(a) The Court declares, pursuant to section 4.31 of the Environmental Planning and Assessment Act 1979 (EPA Act), that complying development certificate 8058994 issued by the Second Respondent on 5 September 2022 for works described therein as 'maintenance and improvement works to boatshed' (CDC) is invalid and of no effect and is hereby set aside.

(b) The First Respondent and his servants and agents be restrained from acting upon, or carrying out any works in purported reliance on the CDC; and

(c) The First Respondent pay 50% of the Applicants' costs of these proceedings, such costs to be agreed or taxed and paid within 28 days of the date of these orders ...

1. Elgammal's solicitors wrote to the solicitors for the Saders on 6 March 2023, attaching proposed final consent orders and relevantly advising that ("the 6 March 2023 offer") (emphasis added):

Dear Colleagues,

We refer to the Settlement Offer contained in the letter received from the Applicant's solicitor of 28 February 2023.

We are instructed to accept the Settlement Offer on a without admissions basis.

1. Draft short minutes of order were attached in these terms (emphasis added):

1 On a without admissions basis, the Court declares, pursuant to section 4.31 of Environmental Planning and Assessment Act 1979 (EPA Act), that complying development certificate 8058994 issued by the Second Respondent on 5 September 2022 for works described therein as 'maintenance and improvement works to [the] boatshed (CDC) is invalid and of no effect and is hereby set aside.

2 On a without admissions basis, the First Respondent and his servants and agents be restrained from acting upon, or carrying out any works in purported reliance on the CDC.

3 The First Respondent pay 50% of the Applicants' costs of these proceedings, such costs to be agreed or taxed and paid within 28 days of the date of these Orders.

1. Gearin's solicitors also wrote to the parties on 6 March 2023, proposing an additional order to those proffered by Elgammal, namely, no further order as to costs.
2. The Saders's solicitors replied that same day as follows:

Dear Jamie

Your email appears to assume that your client's counterproposal made today in respect of the disposal of the proceedings is acceptable to our clients. It is not, and to the extent that a formal rejection of that counterproposal is required, it is rejected. ...

1. Elgammal served his response to the summons on 10 May 2023 in the following terms:

Ground 1: Failure to obtain landowner's consent

1. Paragraph 1 is not a pleading.

2. Admitted.

3. Admitted.

4. Admitted.

5. Admitted.

Discretion

6. The first respondent contends there is no utility in the making of the declaration or the order 2 sought by the applicants on the grounds that:

a. The CDC is valid until declared invalid.

b. At all material times the works the subject of the CDC were carried out in accordance with the CDC.

c. The works the subject of the CDC were completed prior to the filing of the Summons.

d. If the works subject of the CDC were authorised by a development consent rather than a complying development certificate, owners consent would be assumed pursuant to s 2.23 of the Crown Lands Management Act 2016.

7. The first respondent opposes order 3 [costs] in the circumstances of the case.

1. The response was the first time that Elgammal had admitted the failure to obtain landowner's consent for the works the subject of the CDC.
2. Between 23 May and 8 June 2023, correspondence passed between the parties with various offers and counteroffers made in an attempt to dispose of the proceedings.
3. On 23 June 2023 the matter came before the Court for directions. Robson J made the following orders:

This matter is listed for Class 4 Directions Hearing on 21 July 2023 9.15 am before the Land and Environment Court, Sydney. Estimated duration 10 minutes.

The Court notes that the only outstanding issue between the parties is as to costs.

The Court orders that the matter is stood over by consent to 21 July 2023.

1. The Saders sent a letter to Elgammal on 26 June 2023, stating the following ("the 26 June 2023 offer"):

... We note that on 23 June 2023 the CDC Proceedings were stood over in order for the parties to seek to agree the basis upon which the CDC Proceedings should be disposed of. On that day your client agreed that the major outstanding issue separating the parties was one of costs. On this basis we assume that your client does not intend to rely on the CDC into the future. In those circumstances, the provision of an undertaking by your client not to rely on the CDC should be uncontroversial.

Further, we note that on 13 February 2023 your client stated that he had performed all works the subject of the CDC.

Whilst our clients do not agree that this is the case, our clients can see no reason why the CDC Proceedings ought not be disposed of on the basis of the provision of an undertaking as sought by our clients as follows:

The First Respondent undertakes to the court that he will not carry out any further works in reliance on or described in the complying development certificate 8058994 issued by the Second Respondent on 5 September 2022 (CDC) and will obtain development consent or a separate complying development certificate for any future works on the land the subject of the CDC including in relation to the boatshed, swimming pool and pool deck.

We enclose Short Minutes of Order proposed by our clients.

1. The short minutes of order were in the following terms:

1. The Court notes the undertaking given by the First Respondent to the court that he will not carry out any further works in reliance on or described in complying development certificate 8058994 issued by the Second Respondent on 5 September 2022 (CDC) and will obtain development consent or a separate complying development certificate for any future works on the land the subject of the CDC including in relation to the boatshed, swimming pool and pool deck.

2. The Court orders that:

1. The orders of the court made on 17 March 2023 be vacated;

2. The proceedings be dismissed;

3. The costs of the proceedings are reserved; and

4. The Parties have liberty to restore on 3 days notice.

1. Elgammal did not reply to the letter.
2. On 28 July 2023 the matter came before Duggan J for directions. On that day, Elgammal stated that the only substantive issue between the parties was the form of final relief sought by the Saders. Her Honour set the matter down for hearing in relation to the remaining issues of discretion.
3. The Saders filed and served the affidavit of Mark Sader, affirmed 11 August 2023, in compliance with the orders made by the Court on 28 July 2023. Elgammal did not serve his evidence by 25 August 2023 as required by those orders.
4. The Saders's solicitors emailed Elgammal's solicitors on 11 September 2023, noting that he had not served his evidence. Elgammal's solicitors replied that day stating that he would do so by 12 September 2023. This did not occur.
5. On 28 September, and again on 11 December 2023, the solicitors for the Saders sent emails to the solicitors for Elgammal following up on the absence of Elgammal's evidence.
6. Elgammal served the affidavit of Jacqueline Vandebeek on 14 December 2023. This evidence did not, however, go to the issue of discretion but instead went to the question of costs.
7. On 15 December 2023 the Saders's solicitors again emailed Elgammal's solicitors indicating that, "we note that your client has not filed any evidence relating to discretion. Could you please confirm that your client now does not press his pleadings in relation to discretion."
8. Later that day Elgammal's solicitors responded saying, "we have previously made offers to settle the proceedings which were rejected. We are instructed to press the pleadings and maintain the request that you identify what works your client says are not completed."
9. The solicitors for the Saders sent an email to the solicitors for Elgammal that same day, which said:

Could you please identify those paragraphs of the "pleading" referred to in your email below which your client intends to press.

The works the subject of the CDC which were not completed at the date of issuing the proceedings are described in paragraph 8 of our clients' Notice to Admit Facts dated 18 May 2023 (Notice to Admit).

1. A letter was sent by Elgammal's solicitors to the Saders's solicitors on 18 December 2023, discussing, among other things, the response to the summons, the lack of utility of the proceedings, and settlement prospects. An offer was put in these terms:

Offer to Resolve

Having regard to the particular facts of this case and Mr Elgammal's attempts at early resolution, we are instructed to make one further offer to avoid wasting valuable Court resources at the scheduled hearing on 1 February 2024:

a. The proceedings are discontinued by no later than 20 December 2023; and

b. Each party pay their own costs of the proceedings.

If the above offer is not accepted, we are instructed to seek costs on an indemnity basis at the hearing on 1 February 2024.

1. Three days later, on 21 December 2023, the solicitors for the Saders responded:

Our client notes the following:

1. these are judicial review proceedings based on a single ground: a failure to obtain landowner's consent. The appellate courts have consistently found that in judicial review proceedings, landowners consent is a fundamental jurisdictional pre-requisite to the exercise of a power to issue a development consent: Al Maha Pty Ltd v Huajun Investments Pty Ltd [2018] NSWCA 245, per Basten JA at [9] and Preston CJ at [85] - [97] and [173] - [175].

2. Your client admitted, belatedly, that landowners consent had not been granted for the CDC. This admission was made on 10 May 2023 as part of his Response to the Summons filed and served on that date (Response to Summons). The CDC Proceedings had been on foot for 6 months by this date and included various interlocutory applications including an application for an injunction that was answered on the doorstep of the Court by an interim undertaking by your client. Your client also resisted, unsuccessfully, a notice to produce in Sader v Elgammal [2023] NSWLEC 21. The documents produced by that notice were put into our clients' evidence in accordance with the directions of the Court, directions that our client has complied with, but in respect of which your client has failed to comply. Under no circumstances should the costs of these aspects of the CDC Proceedings be at the feet of our client.

3. Returning to your client's Response to Summons, your client's pleading as to discretion cannot be maintained:

a. the result of a failure to obtain landowner's consent is invalidity: Al Maha Pty ltd v Huajun Investments Pty Ltd [2018] NSWCA 245, per Basten JA at [9]. Discretion has no role to play in these circumstances, particularly when there has been no indication by the Third Respondent that it consented to the works being carried out;

b. even if discretion was somehow relevant to the determination of the matters raised in the Summons, your client has put on no evidence relating to discretion;

c. your client has purported to answer a Notice to Admit Facts by providing details that undermine the particulars of discretion in the Response to the Summons (dealt with in further detail below); and

d. despite the matters raised above, and belated attempts to settle the matter, your client in correspondence dated 15 December 2023 still maintains the pleading of discretion.

4. Most concerningly, your client was on notice of the issue of landowner's consent in December 2022 and that landowner's consent had not been issued for the CDC. Over one year has now passed with the CDC Proceedings still on foot. Your client has never offered to surrender the CDC (despite the certifier requesting it be surrendered), has never offered a permanent undertaking to the Court not to rely on the CDC, nor has he communicated that he would not press the issue of discretion despite the matters raised above.

In these circumstances, it is solely your client's conduct that has significantly prolonged and extended the time and costs of these proceedings.

Our client is entitled to the relief sought in the Summons and its costs of the proceedings.

The failure of your client to recognise the matters raised above and its failure to offer to pay a substantial proportion of our client's costs in these proceedings is unreasonable.

For reasons that are self evident, your client has no grounds on which to seek indemnity costs from our client (or indeed costs on any basis).

1. The letter contained the following counteroffer:

(a) The First Respondent and his servants and agents be restrained from acting upon, or carrying out any works in purported reliance on or described in the complying development certificate 8058994 issued by the Second Respondent on 5 September 2022; (CDC);

(b) The First Respondent provides an undertaking to the court in the terms proposed by the Applicants on 8 June 2023 (which is included at pages 56-57 of Exhibit JV-1 to the affidavit of Ms Vandebeek dated 14 December 2023); and

(c) The First Respondent pay the amount of $145,000 to the Applicants in respect of their costs of the proceedings to be paid within 28 days of the date of these orders.

Your client should note that the amount referred to in (c) reflects approximately 70% of the costs incurred by the Saders to date in respect of the CDC Proceedings.

In the event that this offer is not accepted our clients will rely on this letter, together with our letter dated 28 February 2023 in seeking an order that your client pay their costs of the CDC Proceedings on an indemnity basis.

This offer remains open for acceptance until 12 January 2023 at which time it will lapse due to the requirement to engage in detailed preparation for the hearing of the matter on 1 February 2023 and the incurring of further substantial costs in doing so.

1. Elgammal served a further affidavit of Vandebeek in respect of costs on 17 January 2024.
2. At a directions hearing before the Court on 17 January 2024:

(a) counsel for Elgammal stated that Elgammal did not agree to the orders sought in the summons; and

(b) the matter was referred to mediation before Peatman AC on 25 January 2024.

1. The Saders filed and served another affidavit of Mark Sader on 22 January 2024.
2. The mediation concluded on 25 January 2024 without success.
3. On 25 January 2024 at 4.27 pm, Elgammal issued the following notices to produce and subpoena:

(a) a notice to produce issued to the Saders;

(b) a notice to produce issued to Gearin;

(c) a notice to produce issued to the Crown; and

(d) a subpoena issued to the Council.

1. At 7.14 pm that evening, the Saders filed and served a notice of motion to set aside the notices to produce and the subpoena.
2. On 29 January 2024 at 5.23 pm, Elgammal served his submissions in the proceedings.
3. On 30 January 2024 the following occurred:

(a) the solicitors for the Saders wrote to the Crown confirming an earlier telephone conversation that "it remains the department's position that it intends to issue a demolition order for the boadshed located on the Elgammal licenced land after the CDC has been set aside by the court";

(b) Elgammal served his list of objections to evidence and another affidavit of Vandebeek on 30 January 2024;

(c) the Saders filed and served their list of objections to evidence; and

(d) the Court ordered the parties to file and serve a statement of agreed facts and brief submissions in respect of the notice of motion dated 25 January 2024 to set aside the notices to produce and the subpoena ("the motion to set aside").

(a) at 4.16 pm the Saders filed and served their submissions in relation to the motion to set aside;

(b) at 4.26 pm the solicitors for the Saders sent Elgammal's solicitors a draft statement of agreed facts;

(c) the solicitors for Elgammal sent a reply email to the Saders's solicitors which said:

Dear Amanda,

We overlooked the correspondence from the court regarding the requirement for submissions and agreed facts.

We have received instructions to withdraw the subpoena and notices to produce.

We will write to the associate now to advise the position.

(d) at 4.59 pm Elgammal informed the Court that he would not press the notices to produce and subpoena; and

(e) at approximately 10 pm the Saders filed and served their submissions in reply to the substantive proceedings.

1. On 1 February 2024 at 8.24 am, the solicitors for the Crown wrote to the Saders indicating that, "as per Condition 3 ... the boatshed structure should be removed voluntarily as it is structurally unsound and that Crown Lands will be pursuing its removal after the CDC has been set aside".
2. The hearing of the proceedings commenced at 10 am on 1 February 2024. At approximately 10.05 am counsel for Elgammal said (T1:18-26):

There has been a development in the last half hour, and the parties have received some correspondence from the State of New South Wales as to its position from [sic] the boatshed. I have since received instruction from my client that on the basis of that correspondence, and it's in the context that Crown Lands have never had any correspondence with him in the whole period of the complying development certificate, that he would now submit to a declaration if the Court was minded to make a declaration in these matters, and also submit to the restraining order sought by the applicants. He would like to be heard on costs.

1. As a consequence, the matter proceeded to a brief hearing in respect of the exercise of the Court's discretion to grant declaratory relief, with the question of costs reserved to a later date (Sader (No 2)).

1. The Court's power to award costs in civil matters is conferred by s 98 of the Civil Procedure Act 2005 ("CPA"), which relevantly provides that:

(1) Subject to rules of court and to this or any other Act -

(a) costs are in the discretion of the court, and

(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and

(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis.

(2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court.

(3) An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings.

(4) In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to -

(a) costs up to, or from, a specified stage of the proceedings, or

(b) a specified proportion of the assessed costs, or

(c) a specified gross sum instead of assessed costs, or

(d) such proportion of the assessed costs as does not exceed a specified amount.

1. The power to award costs in s 98 of the CPA has been modified by r 42.1 of the UCPR:

42.1 General rule that costs follow the event

Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.

1. As stated above, Elgammal submitted that the Court should make "some other order" in respect of the costs of the proceedings, notwithstanding that the Saders obtained the relief that they sought in the summons - that is, the event - and that each party ought to bear their own costs.
2. The power to order costs is discretionary (Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534). The presumptive rule is that costs follow the event, subject to any disentitling conduct. This is consistent with the principle articulated by the High Court in Latoudis v Casey (at 566-567) and Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 (at [67]) that costs, being compensatory and not punitive in nature, should be awarded to the successful party. However, the usual order for costs is not a rigid rule (Oshlack at [86] and Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513 at 537).
3. The presumptive rule is more difficult to apply when there has been no hearing on the merits but the proceedings have been resolved. For example, in Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin [1997] HCA 6; (1997) 186 CLR 622, the applicant applied for the costs of a proceeding that she had instituted in the High Court appealing the Refugee Review Tribunal's decision to affirm the relevant Minister's refusal of her protection visa application. One week after she commenced proceedings, the Minister granted her a protection visa. Having obtained the relief that she sought, she abandoned her action. McHugh J held that there should be no order for costs observing that (at 624-625, footnotes omitted):

In most jurisdictions today, 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 [Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534]. Success in the action or on 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 at 543 and 566-568]. When there has been no hearing on the merits, however, a court is necessarily deprived of the factor that usually determines whether or how it will make a costs order.

In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties [Australian Securities Commission v Aust-Home Investments Ltd [1993] FCA 585; (1993) 44 FCR 194 at 201]. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action [Australian Securities Commission v Aust-Home Investments Ltd [1993] FCA 585; (1993) 44 FCR 194 at 201]. In administrative law matters, for example, it may appear that the defendant has acted unreasonably in exercising or refusing to exercise a power and that the plaintiff had no reasonable alternative but to commence a litigation. Thus, for example, in R v Gold Coast City Council; Ex parte Raysun Pty Ltd [1971] QWN 13],the Full Court of the Supreme Court of Queensland gave a prosecutor seeking mandamus the costs of the proceedings up to the date when the respondent Council notified the prosecutor that it would give the prosecutor the relief that it sought. The Full Court said that the prosecutor had reasonable ground for complaint in respect of the attitude taken by the respondent in failing to consider the application by the prosecutor for approval of road and drainage plans.

Moreover, in some cases a judge may feel confident that, although both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried. This is perhaps the best explanation of the unreported decision of Pincus J in South East Queensland Electricity Board v Australian Telecommunications Commission [Unreported; Federal Court of Australia; 10 February 1989] where his Honour ordered the respondent to pay 80 per cent of the applicant's taxed costs even though his Honour found that both parties had acted reasonably in respect of the litigation. But such cases are likely to be rare.

If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases.

1. These principles were reaffirmed by his Honour in Oshlack, where he opined that (at [67]-[69], footnotes omitted):

67 The expression the "usual order as to costs" embodies the important principle that, subject to certain limited exceptions, a successful party in litigation is entitled to an award of costs in its favour. The principle is grounded in reasons of fairness and policy and operates whether the successful party is the plaintiff or the defendant. Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of costs is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the costs of the unsuccessful litigation.

68 As a matter of policy, one beneficial by-product of this compensatory purpose may well be to instil in a party contemplating commencing, or defending, litigation a sober realisation of the potential financial expense involved. Large scale disregard of the principle of the usual order as to costs would inevitably lead to an increase in litigation with an increased, and often unnecessary, burden on the scarce resources of the publicly funded system of justice.

69 The traditional exceptions to the usual order as to costs focus on the conduct of the successful party which disentitles it to the beneficial exercise of the discretion. In Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd, Devlin J formulated the relevant principle as follows:

"No doubt, the ordinary rule is that, where a plaintiff has been successful, he ought not to be deprived of his costs, or, at any rate, made to pay the costs of the other side, unless he has been guilty of some sort of misconduct."

"Misconduct" in this context means misconduct relating to the litigation, or the circumstances leading up to the litigation. Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute.

1. In Class 4 proceedings where an unsuccessful party consents to the Court making orders or gives an undertaking to the Court in substantially the same terms or effect as those sought by the other party, the Court has determined that the usual order as to costs should be made absent disentitling conduct.
2. In some cases, however, a court may conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action (Oshlack at [69] and Lai Qin at 624).
3. In Kiama Council v Grant [2006] NSWLEC 96; (2006) 143 LGERA 441 the Court ordered costs against the respondent in circumstances where the applicant, Kiama Council, commenced proceedings because of the respondent's failure to comply with orders of the council to carry out remedial work (at [86]). In making the costs order, the Court rejected the respondent's submission that the council had engaged in disentitling conduct (at [93]-[96]):

93 The first disentitling conduct relied upon by the respondent is said to be the conduct of the Council in the circumstances leading up to the litigation. However, as the above chronology shows, there was no disentitling conduct on the part of the Council in the period leading up to the litigation. The Council gave ample notice to the respondent and acted entirely reasonably. The situation is similar to that in Wollondilly Shire Council v Anh Nhu Le [2004] NSWLEC 524; (2004) 137 LGERA 416. The Council acted reasonably in commencing the proceedings and the respondent acted unreasonably before commencement of the proceedings. See also Brown v Mornington Peninsula Shire Council [2004] VCAT 1140; (2004) 140 LGERA 11 at 15 [20]. There was also no conduct of the Council in continuing the litigation which could be said to amount to misconduct. The Council acted reasonably.

94 The second asserted misconduct of the Council is that the orders made on 16 December 2005 in the proceedings had already been offered by the respondent. The recitation earlier in the judgment of the facts leading up to the litigation shows clearly that this is not correct. At no time did the respondent ever offer to do remedial work of the nature and extent of that ultimately ordered by the Court. Indeed, all of the responses by the respondent steadfastly avoided offering to do any remedial work at all.

95 The third alleged misconduct of the Council is that the bringing of the proceedings was unnecessary because the breach was merely a technical breach with no imminent environmental harm. Again, that is shown by the above facts not to be correct. The Council from the outset had given the respondent notice that work needed to be carried out to remedy the earthworks that had allegedly been carried out illegally. The Council engaged the services of the Department of Sustainable Natural Resources who identified that remedial works needed to be carried out and specified what those works were. If the breach had been merely technical and there was no imminent environmental harm, it is inconceivable that the Department of Sustainable Natural Resources would have required detailed remedial works to be carried out. Furthermore, after the respondent was provided with the remedial works specified by the Department, the respondent never disputed the necessity to do those works. Indeed, the orders ultimately made by the Court require the respondent to carry out remedial works as specified by the Department.

96 Finally, the fact that there had been some communication between the applicant and respondent in the month preceding the commencement of the proceedings does not constitute any disentitling conduct on the part of the Council. As can be seen from the above summary of the respondent's correspondence, the respondent never undertook to do the works itself or to engage its civil engineer to prepare a detailed plan and undertake the remedial works specified by the Department.

1. The Chief Judge reviewed a number of decisions and summarised the legal principles as follows (at [80]):

80 The principles that emerge from these cases are that in a civil enforcement or judicial review case where there has been no hearing on the merits:

"(a) where one party effectively surrenders to the other party by:

(i) discontinuing without the consent of the other party; or

(ii) giving undertakings to the Court or submitting to the Court making orders against the party substantially in the terms or to the effect claimed by the other party;

the proper exercise of the costs discretion will ordinarily be to make the usual order as to costs, unless there is disentitling conduct on the part of the other party; and

(b) where some supervening event or settlement so removes or modifies the subject of the dispute that no issue remains except that of costs, the proper exercise of the costs discretion will ordinarily be to make no order as to costs unless:

(i) one of the parties has acted so unreasonably that the other party should obtain the costs of the action; or

(ii) even if both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried so that the party should obtain the costs of the action."

1. As to what constitutes unreasonable conduct resulting in a costs order other than the usual costs order, in Ralph Lauren 57 Pty Ltd v Byron Shire Council [2014] NSWCA 107; (2014) 199 LGERA 424 Preston J stated (at [26]-[31]):

26 Unreasonableness of conduct can also be found in a defendant continuing to defend litigation until it then surrenders to the plaintiff by consenting to the court making orders, or giving an undertaking to the court, in substantially the same terms and effect as sought by the plaintiff in the proceedings: see Edwards Madigan Torhillo Briggs Pty Ltd v Gloria Stack [2003] NSWCA 302 at [5]; Kiama Council v Grant [2006] NSWLEC 96; (2006) 143 LGERA 441 at [56], [60]-[71], [80]; Ku-ring-gai Council v Minister for Planning (No 2) [2008] NSWLEC 276 at [25], [26]; and Hall v Ku-ring-gai Council [2009] NSWSC 370 at [39]- [48]. This is not a settlement of the litigation in the ordinary sense, but rather a surrender to the plaintiff. In this circumstance, although there has not been a trial on the merits, the court may feel confident that the discontinuing party would have almost certainly have succeeded if the matter had been fully tried: Lai Qin at 625. The defendant's unreasonableness in defending litigation that it would almost inevitably have lost up to the point of surrender, causing the plaintiff unnecessarily and unreasonably to have incurred costs to that point, may provide the justification for a costs order in favour of the discontinuing plaintiff.

27 This was the circumstance justifying the costs order in favour of the applicants in One.Tel. The applicants, by their proceeding, sought to challenge the validity of certain statutory notices directed to the applicants in order to have them set aside. The respondent, after initially defending the notices, encountered an evidentiary difficulty and consented to court orders setting aside the notices. Burchett J held that this meant that the applicant succeeded in the litigation. The result the applicant sought was achieved without a hearing and not by a settlement in the ordinary sense or by extra curial means. A costs order was made in the applicants' favour: at [7].

28 Circumstances where there may be no unreasonable conduct of the parties include where the plaintiff discontinues because it has achieved the relief sought in the proceedings by means of settlement of the litigation with the mutual consent of the parties or by extra curial means, or because of the happening of a supervening event which so removes or modifies the subject of the dispute that no issue remains between the parties except that of costs: Lai Qin at 624; and One.Tel at [6].

29 In the case of a settlement, the court ordinarily will not look behind the settlement to the reasons or motivation of the parties to settle, and hence will not evaluate the reasonableness of the parties in settling: see Bitannia Pty Ltd v Parkline Constructions at [81].

30 An extra curial or supervening event may or may not be related to any conduct or action of the defendant. If the extra curial or supervening event is unrelated to the defendant's conduct, no question regarding the reasonableness of the defendant's conduct can arise and the appropriate order may be that each party bear its own costs. The passage of legislation rendering the plaintiff's proceeding futile or wholly removing the plaintiff's cause of action is an example of a supervening event unrelated to any conduct of the defendant: see Newcastle Wallsend Co Pty Ltd v Industrial Relations Commission of NSW [2006] NSWCA 129; 153 IR 386 (where Tobias JA considered that discontinuance flowed from the supervening event of amending legislation and each party should bear its own costs whereas Basten JA and Mason P were of the view that discontinuance flowed from a different event of an earlier Court of Appeal decision which indicated that the applicant would be unsuccessful if it pursued its claim) and True Conservation Association Inc v Minister Administering the Threatened Species Conservation Act 1995 [2008] NSWLEC 221 at [17].

31 If, however, the defendant's action constituted or caused the supervening event, the reasonableness or unreasonableness of the defendant's actions may need to be assessed. It is not sufficient by itself that the defendant's action is or brought about the supervening event; there ordinarily needs to be something unreasonable in the defendant taking that action. In an administrative law proceeding, for example, a defendant public authority might re-exercise a statutory power, such as to grant a fresh approval to a fresh application, rendering futile the challenge in the proceedings to the validity of an earlier approval. Notwithstanding that the defendant's action caused the proceeding to become futile, unless there was some unreasonableness in the defendant so acting, the proper exercise of the costs discretion may still be to make no order as to the costs of the proceeding. Examples of this type of case are given in Kiama Council v Grant at [72]-[77]. The decisions in Ku-ring-gai Council v Minister for Planning (No 2) and Hall v Ku-ring-gai Council are, however, different in that the courts did not find any unreasonableness in the conduct of the local council in repealing the order or rescinding the resolution that were the subject of challenge, yet still made a costs order against the defendant.

1. In that case, the passing by the council of the resolution that resulted in the applicants' discontinuing the proceedings did not deliver the very relief which the applicants had sought in the proceedings. Accordingly, the appropriate order was that each party pay their own costs. Even if the applicants had achieved the relief sought, this did not by itself and without more justify an award of costs in favour of the discontinuing party. According to Preston J there needed to be additional unreasonableness in the conduct of the respondent (at [108]), and the applicants had failed to prove that the council had acted unreasonably.
2. Nadilo v Eagleton [2021] NSWCA 232; (2021) 250 LGERA 89 concerned the installation and operation of two air conditioning units, a heat pump and a water heater on the outside of the respondents' house facing the applicant's house. The applicant complained that excessive noise was emitted by their operation. Proceedings were commenced in the Court alleging breaches of various environmental planning instruments, the EPAA, and noise regulations made under that Act. Shortly before the final hearing the parties agreed to settle the matter on terms that the proceedings be dismissed. The substantive dispute had been resolved by the respondents agreeing to replace, remove and enclose the offending units. The applicant sought an order that the respondents pay her costs. The primary judge rejected the application and ordered that each party bear their own costs.
3. The decision was reversed on appeal. Because the applicant had achieved the outcomes that she sought in bringing the proceedings, it was unjust for the primary judge not to have awarded her costs when exercising his discretion under r 42.20(1) of the UCPR. The applicant's success was to be evaluated by looking to the substance of the outcomes sought and obtained by her. The applicant, while not likely to be successful on all claims, would have secured the outcomes she sought by bringing the proceedings (at [10] and [86]-[90]):

10 In the present case also, there was a "clear winner". The practical result of the case is that the machinery is now noise compliant, and the respondents are bound by order of the Court to keep it compliant in the future. There was no question of compromise; the respondents simply ultimately surrendered: they undertook the works required to render the offending machinery compliant, and had it certified as compliant. Once they did so, the applicant had achieved what she had always sought in the proceedings, rendering further prosecution of the proceedings pointless.

...

86 The applicant's case was simple. The respondents' use of the two air conditioners and the hot water heater emitted excessive noise, disturbing the applicant's quiet enjoyment and amenity of her house, and she wanted that use to cease until the noise levels of the equipment were reduced so as no longer to interfere with her enjoyment and amenity of her house. The applicant claimed that the respondents' use of the equipment breached the noise performance criteria in both the Exempt Development SEPP and the Noise Control Regulation. There was a degree of overlap in the noise performance criteria, particularly those applicable during the off-peak time. The applicant sought orders restraining the respondents' use of the equipment unless and until the equipment complied with the noise performance criteria.

87 These outcomes were achieved. The respondents replaced the noisy hot water heater with a silent electric water heater. The respondents moved one air conditioning unit into an alcove near the other air conditioning unit, and enclosed both in an acoustic enclosure. The taking of these actions brought both the hot water heater and the air conditioning units into compliance with the noise performance criteria in the Exempt Development SEPP and the respondents arranged for certification of this result. Each of these outcomes was recorded in the notation section of the consent orders.

88 The applicant and respondents also agreed that the respondents should ensure that their use of the air conditioning units will meet, on an ongoing basis, the noise performance criteria in the Exempt Development SEPP and that the Court should order the respondents to ensure this outcome. The primary judge made that order.

89 In these circumstances, the applicant achieved the outcomes she had sought in bringing the proceedings. The fact that the consent orders did not require the respondents to ensure and to arrange certification that the use of the air conditioning units meets the noise performance criteria in the Noise Control Regulation does not detract from this fact that the applicant achieved the outcomes she had sought in bringing the proceedings. There was no added utility in so ensuring or certifying compliance with the noise performance criteria in the Noise Control Regulation. The actions that had already been taken to reduce the noise of the air conditioning units and the hot water heater and to certify and ensure on an ongoing basis compliance with the noise performance criteria in the Exempt Development SEPP were sufficient to achieve the desired outcome of ensuring the quiet use of that equipment. Requiring compliance with the noise performance criteria in the Noise Control Regulation would have yielded little if any additional benefit for the applicant.

90 Thus, it mattered not whether the applicant would or would not have succeeded, let alone almost certainly succeeded, in the claim of breach of the Noise Control Regulation, had the matter been fully tried. It was sufficient that the applicant would have almost certainly succeeded in the claim of breach of the Exempt Development SEPP and that the applicant secured the outcomes she had sought by bringing the proceedings.

1. The proper inquiry was "to look to the substance not the form of the relief sought in the summons". Viewed this way, there was a "clear winner" (at [93]).
2. However, in Nadilo Meagher and Brereton JJA held that it was not necessary to establish unreasonableness on the part of the defendant to obtain an "otherwise" order under r 42.20(1) of the UCPR in circumstances where that party has effectively capitulated without any element of compromise, making further prosecution of the litigation unnecessary. In this regard their Honours appear to have diverged from the reasoning of Preston J (see at [1] per Meagher JA and at [12] per Brereton JA), the latter of whom stated that establishing that the applicant would have inevitably succeeded was necessary but insufficient. According to his Honour there also was a need for the extra circumstance that the respondents' conduct in defending the proceedings up to the time that they agreed to the primary judge making consent orders was unreasonable (citing the unanimous Court of Appeal decision in Ralph Lauren 57).
3. In this context, Preston J further opined that (at [97]-[98], a passage upon which the Saders particularly relied):

97 It may also be accepted that, over a couple of years, there had been to-ings and fro-ings, offers and counter-offers, and other interactions between the applicant and the respondents about the air conditioning units and hot water heater. But behind this surfeit of activity can be seen to be a simple cause and effect relationship: the applicant sought for the respondents to make the noisy air conditioning units and hot water heater quiet and the respondents did so. The respondents' delay in doing so, however, is what is unreasonable. The respondents, in delaying taking action and in defending the proceedings up to the time they consented to the Court making orders noting and requiring the respondents' actions, caused the applicant unnecessarily and unreasonably to have incurred costs up to that point in time. This provides the justification for a costs order in favour of the applicant.

98 The applicant's letter of 28 August 2020 offering to settle the proceedings and the respondents' non-response to this offer are but part of this conduct. The applicant's letter in substance offered no more than what had already been sought in the summons and the respondents' non-response to the letter was no different to their non-response to the summons. The respondents' delay in taking the actions to make the air conditioning units and hot water heater quiet and agreeing to the consent orders was general and not particular to the letter of 28 August 2021.

1. In any event, Meagher and Brereton JJA stated that even if there was a requirement of unreasonableness, the respondents' persistence in the defence of proceedings while at the same time progressively remedying the subject‑matter of the applicant's complaint, and not availing themselves of the opportunity to avoid the applicant incurring costs, would satisfy it.
2. Of course, a court may depart from the usual costs order when a successful party prosecutes the matter solely for the purpose of increasing the costs recoverable or obtains relief which an unsuccessful party had already offered in settlement of the dispute (Oshlack at [69]).

1. Notwithstanding that the Saders obtained, both in substance and in form, the relief that they sought in the summons and that, therefore, the event suggests a cost order in their favour, Elgammal seeks an order that each party pays its own costs of the proceedings on the basis of the triumvirate of unreasonable behaviour by the Saders identified by him (see above at [6]). In the alternative, he seeks an order that any costs payable to the Saders be limited to costs incurred before their rejection of the 13 February 2023 offer, and that these costs should be awarded on a joint and several basis between himself and Gearin up until the date that the submitting appearance was filed by him.
2. Each of the asserted iterations of unreasonable conduct said to warrant departure from the usual costs order are discussed below.

Whether the Failure to Give Prior Notice of the Commencement of Proceedings Was Unreasonable

1. It has previously been held that the failure to give prior notice of commencement of action may constitute unreasonable conduct resulting in an order otherwise than in the usual form. The Court has ordered costs against a successful party where it failed to give the respondent such notice thereby denying the respondent a reasonable opportunity to take action that would avoid the litigation and associated costs (Kiama Council v Grant at [47], Lai Qin at 624 and Homemakers Supacenta Belrose Pty Ltd v Warringah Council (No 2) [2008] NSWLEC 126; (2008) 158 LGERA 90 at [15]).
2. Elgammal submitted that the Saders gave him no prior notice of their intention to commence the proceedings, which denied him the opportunity of taking steps to avoid the litigation.
3. Elgammal submitted that the omission was particularly relevant in circumstances where:

(a) the proceedings did not come to his attention until 12 December 2022;

(b) due to the holiday period, he was not able to obtain legal advice as to the requirement for landowner's consent until early February 2023; and

(c) that he acted quickly in making the 13 February 2023 offer to the Saders, which was rejected.

1. By contrast, the Saders argued that even if prior notice had been given, this would not have made any difference, as evidenced by the subsequent conduct of Elgammal by continuing to defend the proceedings, notwithstanding that there was no evidence of owner's consent having been given by the Crown for the works on the boatshed the subject of the CDC.
2. I agree. I do not accept that the omission of notice deprived Elgammal of an opportunity to seek legal advice which might have avoided litigation having regard to the fact that:

(a) the CDC was applied for and relied upon by Elgammal in the face of communication between the Department and Harbour Port in August 2022, noting that the boatshed had reached the end of its structural life and pursuant to the licence had to be removed. Further, that landowner's consent would not be provided by the Crown;

(b) Elgammal was represented at all relevant times by solicitors;

(c) the correspondence between the parties' legal representatives on 18 October 2022, where the Saders requested a copy of the CDC and the landowner's consent. No response was provided by Elgammal's solicitor and Elgammal continued to carry out works on the boatshed;

(d) the correspondence and WDN alerting Elgammal to the potential problem with the validity of the CDC and the lack of owner's consent;

(e) for 15 months Elgammal resisted the relief sought in the summons; and

(f) the Saders were faced with a statutory time period within which to challenge the validity of the CDC.

1. Regarding the October 2022 letter Elgammal submitted in response that:

(a) it merely sought information from him to verify whether the previous undertaking provided by him was being complied with, which it was;

(b) in circumstances where Elgammal was lawfully undertaking works to the boatshed pursuant to the CDC, there was no obligation to respond to the request for further information;

(c) the request for information had nothing to do with these proceedings and could not be relied upon as notice of them;

(d) to the extent that a copy of the landowner's consent was sought in the letter, there was no allegation that consent had not been obtained or had been improperly obtained, thereby rendering the CDC invalid; and

(e) given the 2022 Sader litigation, in the absence of any specific allegation and in light of the attendant cost of responding to such inquiries, it was reasonable for Elgammal not to engage in further correspondence with the Saders through his solicitors at that time.

1. The failure to give notice of proceedings has been identified by the Court in Homemakers Supacenta as "not a practice to be encouraged" (at [15]). This is because parties should be given the opportunity of resolving disputes absent curial intervention, with all of its concomitant delay and cost.
2. Nevertheless, it is not clear to me on the authorities provided to the Court that the failure to give such notice amounts to either unreasonable conduct, or unreasonable conduct that would disentitle an otherwise successful litigant of their costs in the exercise of the Court's discretion to award them. As noted by Jagot J (as her Honour then was) in Council of the City of Sydney v Chapman [2007] NSWLEC 146, "there may be cases of true urgency that make it unnecessary or inappropriate for a notice before action to be given" (at [13]). Each case falls to be determined on its own facts and circumstances.
3. In the present case, in circumstances where:

(a) there was a statutory time limit within which to challenge the validity of the CDC which was nearing expiry;

(b) the Saders had made efforts to obtain a copy of the CDC and to ascertain whether landowner's consent had been given in respect of the boatshed works in October 2022, but received no response from Elgammal;

(c) Elgammal's planner had been put on notice as late as 28 November 2022, that there was an issue with the validity of the CDC and that the Crown would not provide owner's consent;

(d) Elgammal was put on notice on 8 December 2022 when the WDN was issued that the CDC may be invalid due to a problem with the owner's consent; and

(e) Elgammal did not finally capitulate until the first day of the final hearing on 1 February 2024, to the granting of the relief sought in the summons and from May 2023 onwards with a defence that put the Saders to proof on discretion,

not only do I not think that it was unreasonable for the Saders to commence proceedings on 5 December 2022 without notice to Elgammal, I find that even if notice had been given, it is all but inconceivable, especially given the litigious history between the parties concerning development on the site and the conduct of the parties thereafter, that notice would have avoided the need for litigation.

1. The Saders further contended that it was only by commencing proceedings that the setting aside of the CDC could be achieved. They submitted that the CDC could not be surrendered by Elgammal.
2. The matter is somewhat moot given that at no point did Elgammal volunteer to surrender the CDC, notwithstanding correspondence from Gearin dated 6 December 2022 to the solicitors for the Saders stating that that he had requested the surrender of the CDC "over a week ago". To whom the request was made is not known. The question does not, in my view, need to be determined. The only observation to be made is that the EPAA provides for the voluntary surrender of a "development consent" in s 4.63 of that Act (see also cl 68 of the Environmental Planning and Assessment Regulation 2021 ("EPA Regulations")). The term "development consent" is defined in s 1.4 of the EPAA to mean "consent under Part 4 to carry out development and includes, unless expressly excluded, a complying development certificate". The Saders did not point to anything in the EPPA or the EPA Regulations that expressly excludes a CDC from the statutory regime governing surrender.
3. In any event, failure to provide notice is generally not unreasonable where the other party nonetheless had the opportunity to take steps to avoid the claim (Wollondilly Shire Council at [16]-[18]). Elgammal had the opportunity to avoid the claim by responding to the letter from the Saders dated 18 October 2022. Instead, it was ignored. While Elgammal's decision not to respond was not in and of itself unreasonable, it strongly suggests, and it may be reasonably inferred, that further correspondence, including correspondence foreshadowing legal action, would not have resulted in a more conciliatory outcome.

Whether the Failure to Personally Serve the Originating Process was Unreasonable

1. Personal service of an originating process in Class 4 of this Court's jurisdiction is required by rr 10.20(1) and (2) of the UCPR:

10.20 Personal service required only in certain circumstances

(1) Any document required or permitted to be served on a person in any proceedings may be personally served, but need not be personally served unless these rules so require or the court so orders.

(2) Except as otherwise provided by these rules -

(a) any originating process, and any order for examination or garnishee order, in proceedings in the Supreme Court, the Industrial Relations Commission (including the Commission when constituted as the Industrial Court), the Land and Environment Court, the District Court or the Dust Diseases Tribunal must be personally served, and

(b) any originating process in the Local Court must be served in one of the following ways -

(i) it may be personally served on the defendant,

(ii) it may be left, addressed to the defendant, at the defendant's business or residential address, with a person who is apparently of or above the age of 16 years and apparently employed or residing at that address,

(iii) if served by the Local Court, it may be sent by post, addressed to the defendant, to the defendant's business or residential address in an envelope marked with a return address (being the address of the Local Court but not so identified)...

1. The Saders accept, as they must, that the summons was not personally served upon Elgammal as mandated. They neither sought an order for substituted service, nor did they request that the solicitors who had previously acted for Elgammal accept service on his behalf.
2. To the extent that the 6 December 2022 email from the solicitors for the Saders to Elgammal's solicitors enclosed an electronic copy of the summons and asked, "please inform us if you are instructed in this matter", no explicit or implied confirmation of instructions was provided to the Saders's solicitors.
3. To reiterate, that the proceedings did not come to Elgammal's attention until 12 December 2022 is not challenged by the Saders.
4. Elgammal submitted that the failure was material because had service been properly effected, the Saders could have been informed that Gearin had issued the WDN on 8 December 2022, which required Elgammal to cease works on the boatshed and that it had been complied with, thereby avoiding the filing of the application for urgent interim relief on 12 December 2022.
5. Elgammal contended that the notice of motion for the interlocutory injunction was unreasonably filed. Within two hours of its receipt, he had offered an undertaking to the Court that works would not continue until the proceedings were resolved. The Court accepted the undertaking, and the motion was not pressed. Further, senior counsel for the Saders appeared on the return of the motion, notwithstanding the agreement by Elgammal to give the undertaking.
6. Elgammal also submitted that had he been personally served, the proceedings would have come to his attention earlier augmenting the potential for an early resolution.
7. In response, the Saders submitted that:

(a) Elgammal could not have been personally served immediately after the summons was filed because he was away from Sydney between 6 and 9 December 2022;

(b) two attempts were made to serve Elgammal personally, both at his business address and at the site, however, neither were successful;

(c) the summons was served electronically on Elgammal using the same gmail address that was used by Elgammal's solicitors on 7 February 2022;

(d) on 6 December 2022 the summons was served electronically on the solicitors for Elgammal;

(e) Elgammal's solicitors filed a notice of appearance on 12 December 2022, thereby waiving any objection to the absence of personal service on Elgammal; and

(f) the application for interim relief was necessary because by at least 8 December 2022, Elgammal was aware of the issue with the CDC and had not ceased works on the boatshed. In addition, the WDN was not an instrument that compelled Elgammal to cease works being undertaken pursuant to the CDC.

1. Personal service of an originating process is necessary as a matter of procedural fairness to ensure that proceedings come to the attention of a respondent and to permit that party to obtain advice and take a position on the continuation of the litigation.
2. However, as r 10.19 of the UCPR provides:

10.19 Waiver of objection to service

A party who files a document in reply to a document alleged to have been served on that party is taken to have waived any objection to the fact or manner of service unless he or she files and serves notice of the objection together with the document so filed.

1. Elgammal's solicitors filed a notice of appearance on 12 December 2022. Therefore, the failure to personally serve Elgammal can only be relevant to the events transpiring between the date when the summons was filed (5 December 2022) and the date that the notice of appearance was filed (12 December 2022).
2. In my view, the failure of the Saders's solicitors to personally serve Elgammal during this period is not sufficiently unreasonable that it disentitles them to costs. At its highest, it may have resulted in the successful negotiation of an undertaking to avoid the need for the application for interim relief to be filed, however:

(a) it is likely that any attendant costs are in this regard insubstantial given that the notice of motion did not progress to a contested hearing and that Elgammal filed no evidence in response to it;

(b) the Saders received no response whatsoever to their communications dated 7 and 8 December 2022, that is prior to the filing of the notice of motion, requesting that an undertaking be provided by Elgammal;

(c) it may be readily inferred from the emails to Elgammal from Gearin, including the issuing of the WDN on 8 December 2022, that Elgammal knew that there was an issue in relation to owner's consent and that the validity of the CDC was in question. Works were to cease immediately pursuant to the WDN. There is evidence, however, that works were being carried out on the boatshed until 4 pm on 8 December 2022, in contravention of that instrument. This strongly suggests that the issuing of the WDN (and the Saders's knowledge of it) was, at the very least, immaterial because works continued to be carried out on the boatshed in any event. If anything, the non-compliance with the WDN strengthened the need to seek interim injunctive relief; and

(d) by parity of reasoning to the asserted failure to give notice to Elgammal of the commencement of the proceedings, I likewise do not accept that personal service of the summons would have resulted in the proceedings being resolved earlier than they were.

Whether the Rejection of the 13 February 2023 Offer Was Unreasonable

1. Elgammal submitted that the Saders's rejection of the 13 February 2023 offer was so unreasonable that even ignoring the other misconduct of the Saders, this was sufficient to deny the Saders a costs order in their favour. This is because as at 13 February 2023, Elgammal was surrendering and but for any disentitling conduct the ordinary costs rule would have applied. That is, costs would have followed the event of the surrender and the Saders would have obtained the very relief that they sought and ultimately obtained. That the offer was not accepted was evidence of the maintenance by the Saders of the proceedings in order to preserve for themselves a position to argue an entitlement to costs.
2. The 13 February 2023 offer was neither expressed as an offer of compromise, nor an offer made pursuant to the principles in Calderbank v Calderbank [1975] All ER 333; [1975] 3 WLR 586. Nonetheless, Elgammal submitted that the offer is highly relevant to the exercise of the Court's discretion to award the Saders their costs insofar as it was a genuine attempt to avoid the expense of litigation (Whitney v Dream Developments Pty Ltd [2013] NSWCA 188; (2013) 84 NSWLR 311 at [76]). The 13 February 2023 offer was in the same terms as the 10 February 2023 offer, except that there was no liberty to apply, and significantly, it was silent as to costs.
3. Elgammal contends that as at the date of the rejection of the 13 February 2023 offer, the conduct of the parties "becomes irrelevant" because all future steps were "tainted" by the Saders's unreasonable refusal of it.

The Rejection of the 13 February 2023 Offer Was Reasonable in the Circumstances

1. It is important to understand the factual context within which the 13 February 2023 offer was made. At the risk of repetition, it was in fact a counteroffer to the offer rejected by Elgammal on 10 February 2023. It should be recalled that Elgammal rejected the 10 February 2023 offer for three reasons:

(a) first, on the basis that he had lawfully completed all works authorised by the CDC prior to the commencement of the proceedings;

(b) second, because a costs order was not warranted because of the undertaking given by Elgammal on 13 December 2023 to cease works; and

(c) third, that the liberty to apply forming part of the proposed orders would result in no finality to the proceedings.

1. On 28 February 2023 the Saders made a counteroffer in the same terms as the 13 February 2023 offer, but with an order that Elgammal pay 50% of the Saders's costs to date. The offer was purportedly accepted by Elgammal on a "without admissions basis" on 6 March 2023.
2. Understandably, the 6 March 2023 offer was not accepted by the Saders. While no reasons were given for the rejection, Elgammal acknowleges that a declaration would not be made by the Court on a "without admissions basis". According to Elgammal, the declaration was proposed in these terms because he was being subjected to the threat of contempt proceedings from the Saders in the 2022 Sader decision as a result of further works carried out by him on the site.
3. Nothing further occurred in the matter until the response to the summons was filed by Elgammal on 10 May 2023. In that defence, Elgammal admitted that owner's consent had not been obtained and that the CDC was invalid, but he pleaded that, as a matter of discretion, the declaratory relief ought not be made, and moreover, that the costs order sought by the Saders was opposed.
4. I am of the opinion that the rejection of the 13 February 2023 offer by the Saders was entirely reasonable based on the following factors. First, on 10 February 2023 the Saders wrote to Elgammal maintaining that his defence of the CDC was a waste of the Court's and the parties' resources. The 10 February 2023 offer proposed short minutes of order consistent with the relief in the summons, and included an order for costs in the Saders's favour. The offer was not accepted. If any conduct is unreasonable, it is this conduct by Elgammal. Had the 10 February 2023 offer been accepted by Elgammal, the litigation would have ended almost a year earlier.
5. Second, instead of accepting the 10 February 2023 offer, on 13 February 2023 Elgammal replied saying that in respect of the proposed costs order, "in circumstances where Elgammal had lawfully completed all works authorised by the CDC prior to the commencement of the proceedings, a costs order was not warranted nor agreed". This statement was erroneous. Further works permitted by the CDC were yet to be carried out. Given this was a, if not the, stated factual basis for making an offer to resolve the proceedings without the payment of the Saders's costs, it was not unreasonable for the Saders to reject an offer that would deprive them of their costs of the proceedings.
6. Third, I do not accept that the events subsequent to the making of the 13 February 2023 offer are irrelevant to the exercise of the Court's discretion to award costs. On the contrary, I find the subsequent conduct of Elgammal to be unreasonable insofar as he:

(a) rejected the 28 February 2023 offer, which represented a significant discount on the costs sought by the Saders;

(b) sought to settle the matter "on a without admissions basis" on 6 March 2023, knowing that it was unlikely that the Court would grant the relief sought by the Saders in this form;

(c) filed a response on 10 May 2023, admitting that owner's consent had not been obtained, but pleading discretionary grounds that were either wrong (the works pursuant to the CDC had not been completed prior to the filing of the summons), nonsensical (a pleading that the "the CDC is valid until declared invalid" when the making of declaratory relief in respect of the validity of that instrument was being resisted), and would not, in any event, have resulted in the efficient disposition of the proceedings insofar as a hearing was required on the discretionary grounds (including whether or not the works the subject of the CDC were authorised by a development consent and that owner's consent could therefore be assumed) and on the question of costs;

(d) maintained this defence until the first day of the hearing notwithstanding the terms of the 26 June 2023 offer, and thereby requiring the Saders to file and serve evidence in anticipation of a hearing on discretion. If any party is to be accused of unreasonably maintaining the proceedings, it is Elgammal; and

(e) suggested to the Court on 1 February 2024 that, with the exception of costs, he was surrendering to the relief sought by the Saders in the summons because of the receipt of late correspondence received from the Crown, which, I readily infer, concerned the issue of landowner's consent for the works on the boatshed, notwithstanding that he was informed by the certifier by at least 8 December 2022, that there was a question over the validity of the CDC due to the lack of owner's consent by the Crown (see above at [53] and [54]).

1. Just to be clear, however, even if the post 13 February 2023 offer conduct of the parties is disregarded, I would nevertheless find that it was reasonable for the Saders to reject the offer if for no other reason than the offer did not include payment of any part of their costs.

The Submitting Appearance Filed by the Certifier

1. In relation to the appropriate costs order to be made, if any, against Gearin, the Saders do not seek a costs order against him.
2. Elgammal, however, seeks a costs order against Gearin in the event that he is ordered to pay the Saders's costs. Specifically, he seeks an order that costs be awarded against Gearin on a joint and several basis up until the date that the submitting appearance was filed by Gearin.
3. Gearin submitted that if the Court orders the payment of Saders's costs, liability for these costs ought to be visited wholly upon Elgammal, on the basis that he had filed an early submitting appearance and has never played an active role in the proceedings. Alternatively, if he is liable for the Saders's costs, then it should be on the basis proffered by Elgammal.
4. Gearin submitted that there should be no order for costs against him because, notwithstanding his conceded fault in not checking whether landowner's consent had been given by the Crown prior to issuing the CDC:

(a) his submitting appearance was filed early, particularly considering that the summons was filed in December 2023 and the submitting appearance was filed approximately two months later in February 2024. Minimal activity incurring costs occurred over the Christmas period and during January 2024;

(b) by filing a timely submitting appearance, Gearin did not cause significant costs to be incurred following the commencement of proceedings, which is consistent with facilitating the just, quick and cheap resolution of the real issues in the dispute pursuant to s 56 of the CPA_._ Further, the costs reasonably incurred by the Saders prior to 10 February 2023 (when the submitting appearance was filed by him), form only a relatively small proportion of the overall costs of the proceedings;

(c) Gearin had no ability to remedy the situation other than to submit to the proceedings. There is no power under the EPAA for a CDC to be revoked or annulled by a certifier;

(d) the proceedings could have been resolved by consent at an early stage had Elgammal chosen not to actively defend them. Elgammal could have, for example, surrendered the CDC; and

(e) the application for the CDC was accompanied by documents prepared by Harbour Port, including the SEE. This information failed to identify that the Crown's consent as landowner was outstanding. He was entitled, at least in part, to rely on the supporting information provided to him by Elgammal's planners.

1. The relevant principles regarding awards of costs where a submitting appearance is filed were recently summarised by Pain J in Inglis v Buckley (No 2) [2023] NSWLEC 113, which I respectfully repeat and adopt (at [47]):

47 ...Established principles that would assist the Court in the exercise of the costs discretion in the circumstances of this proceeding are:

(1) the rationale for the usual rule that costs follow the event is that the successful party to proceedings should be compensated and that an award of costs is not to be punitive: Latoudis;

(2) ordinarily, an order for costs will not be made against a submitting party: Develtor Property Group Pty Ltd v Newcastle City Council [2001] NSWLEC 47 at [42]; Highland v Labraga (No 3) [2006] NSWSC 871 at [20]- [23]; Midson v Workers Compensation Commission (No 2) [2017] NSWSC 147 at [28]- [31];

(3) there is no prima facie rule that a submitting party will never be ordered to pay costs, contextual circumstances will be taken into consideration: Seller v Jones [2014] NSWCA 19 at [55], [59] cited with approval in Lou v IAG Ltd t/as NRMA Insurance (2019) 101 NSWLR 606; [2019] NSWCA 319 (Lou) at 614;

(4) abiding by the limits of the Hardiman principle does not immunise a government authority from an adverse costs order: Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No 3) [1987] FCA 393; (1987) 77 ALR 609 at 612;

(5) Material considerations (House v King (1936) 55 CLR 499; [1936] HCA 40) to the exercise of discretion relevantly include:

(a) whether the filing of a submitting appearance and the 'role' taken by the Council were consistent with the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in dispute contained in s 56(3) of the Civil Procedure Act: Lou at [47];

(b) whether the error the subject of the proceeding was caused by a party: Lou at [44], Cutcliffe at [50], noting that it is a material consideration rather than a rule per Basten JA in Rossi v Living Choice Australia Ltd [2015] NSWCA 244 at [73]; and

(c) whether the proceeding could have been resolved by consent: Lou at [44] (i.e. the conduct of the parties in the litigation).

1. As her Honour observed in that case, in Rossi v Living Choice Australia Ltd [2015] NSWCA 244 Basten JA emphasised that the mere fact that a decision‑maker has erred is not in and of itself sufficient to warrant making a costs order against it (at [73]):

73 The circumstance engaging par (b) in Cutcliffe was that the beneficiary of the decision does not defend the proceedings; it was then said that the reason why the consent authority could not "immunise itself from costs consequences of its own error by entering a submitting appearance [was] because then a successful applicant cannot be properly compensated in costs." But that cannot be true in the case of proceedings which are actively defended by another party. The mere fact that the decision-maker is ultimately found to have erred in its approach is not, of itself, a sufficient reason to order costs against it, being costs incurred after the entry of a submitting appearance. So far as the guidelines in Cutcliffe suggest otherwise, they should not be applied.

1. In the present case, Gearin's submissions may be accepted. Although he did not immediately file a submitting appearance upon receipt of the summons, given the chronology described above, he did so in a sufficiently timely manner, and moreover, there was nothing in his conduct either before or after the filing of that appearance that in any way caused additional expense to be incurred by the other parties or that in any way protracted the duration of the proceedings.
2. On the contrary, the evidence before the Court discloses that the legal costs incurred by the Saders from the date of the filing of the summons to the date of the filing of the submitting appearance was not the result of any conduct by Gearin. Given that an award of costs is compensatory, there appears to be no loss to the Saders occasioned by Gearin's conduct during this intervening period that attracts compensation by way of costs. In the exercise of my discretion to award costs, I find that it is appropriate that there be no order as to costs with respect to Gearin.

1. Elgammal has not been successful in his application for an "otherwise" costs order. Applying the costs principles articulated above, he is therefore liable for the Saders's costs of resisting his demand for an order that each party pay their own costs of the proceedings.
2. Elgammal should also pay the costs of Gearin. Gearin was compelled to take an active role in the costs hearing because of the costs order sought against him by Elgammal in the event that Elgammal was ordered to pay the Saders's costs. Elgammal has failed to secure this alternative costs order. Costs therefore follow the event in respect of the application by Elgammal against Gearin.

(1) the first respondent is to pay the applicants' costs of the proceedings;

(2) the first respondent is to pay the applicants' and the second respondent's costs of this application; and

(3) the exhibits are to be returned.