Sahade v The Owners - Strata Plan No. 62022 & Ors

FIRST RESPONDENT The Owners - Strata Plan No. 62022 PARTIES : SECOND RESPONDENT Chaco Consolidated Pty Limited

THIRD RESPONDENT Noreen Margaret Carpenter

FOURTH RESPONDENT Joyce Schroeder

KEY ISSUES: Costs :- whether respondents satisfied applicants' claim or whether matter resolved by suupervening event - no order as to costs

Environmental Planning and Assessment Act 1979 s 124(3) LEGISLATION CITED: Land and Environment Court Act 1979 s 69 Land and Environment Court Rules 1996 Pt 15 r 7

CASES CITED: Kiama Council v Grant (2006) 143 LGERA 441

APPLICANTS Mr M Sahade SOLICITORS Comino Prassas

LEGAL REPRESENTATIVES: FIRST RESPONDENT No appearance SOLICITORS N/A

SECOND - FOURTH RESPONDENTS Mr J Lazarus SOLICITORS Abbott Tout

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

THE OWNERS - STRATA PLAN NO. 62022 First Respondent

CHACO CONSOLIDATED PTY LIMITED Second Respondent

NOREEN MARGARET CARPENTER Third Respondent

JUDGMENT Jagot J: Introduction 1 This is an application for costs by the applicants in Class 4 proceedings, which have effectively been resolved by the circumstance of the grant of a development consent and, regrettably, the death of the third respondent.

2 In the proceedings the applicants sought declarations and orders with respect to the use of a basement level of premises at 84 Wolseley Road, Point Piper contrary to the Environmental Planning and Assessment Act 1979. In short, that basement area, as disclosed by the various affidavits which have been read into evidence on this costs application, was occupied at the relevant time by the fourth respondent, who was the companion and carer of the third respondent who, at all material times for the purpose of these proceedings, was gravely ill and ultimately passed away.

3 The applicants seek an order for costs having regard to the provisions of s 69 of the Land and Environment Court Act 1979 which provides that, subject to the rules and subject to any other Act, costs are in the discretion of the Court and, in particular, Pt 15 r 7 of the Land and Environment Court Rules 1996 which provides the Court may order a respondent to pay costs of proceedings where a respondent satisfies or causes to be satisfied the claim of the applicant after the proceedings have been commenced.

4 The applicants contend that the second to fourth respondents against whom the orders for costs are sought did satisfy or cause to be satisfied the applicants' claim in that the applicants were concerned about an alleged unlawful use of the basement area as a separate dwelling, absent development consent, in circumstances where development consent was required. The applicants submit that the ultimate obtaining of development consent from the Council on 11 September 2006 satisfied the claim of the applicants for two reasons. First, because it ensured that the use that had been occurring was not a use contrary to the Environmental Planning and Assessment Act 1979. Second, it was a consent granted subject to conditions including in particular condition 6 which limited the use of the basement area to that of a carer's quarters to be used or occupied by a person who was either related to or otherwise living with or who would provide personal care or assistance to the occupier of Lot 1, where the position of the respondents in their points of defence maintained a right generally to occupy the basement area for the purposes of separate occupation.

5 For their part the second to third respondents observe that this cannot be seen to be a case in which the respondents have satisfied or caused to be satisfied the applicants' claim. The applicants' claim in substance was to restrain the use of the basement area. Promptly after the proceedings were commenced, importantly without any formal notice to the respondents of the intention to commence proceedings, the respondents lodged a development application seeking development consent for the very use the subject of complaint. This development application was not lodged by reason of any admission of the correctness in law of the basis of the applicants' claim but, rather, was lodged in order to avoid the dispute about the applicants' claim in circumstances where the third respondent was in very grave ill health and the view was taken by the respondents that, in those circumstances, the most suitable cost efficient and effective way of ensuring that her carer could continue to occupy the basement area was simply to lodge a development application and obtain consent.

6 The respondents thereafter, they submit, appropriately sought to have the proceedings adjourned as expressly contemplated by s 124(3) of the Environmental Planning and Assessment Act 1979 which states that, where a breach of this Act would not have been committed but for the failure to obtain a consent under Pt 4, the Court upon application being made by the defendant may relevantly adjourn the proceedings to enable a development application to be made under Pt 4 to obtain that consent. However, the applicants did not consent to a simple and relatively lengthy adjournment of the proceedings in order to enable the development application to be determined but continued to press for a hearing date. Ultimately, the respondents say a development consent was granted in September 2006 with the condition relied upon by the applicants, namely condition 6 - doing nothing more than merely confirming the existing position, that is that the caretaker's quarters should only be used as caretaker's quarters.

7 In those circumstances, the respondents submit that far from the respondents having satisfied or caused to be satisfied the applicants' claim, the development application has confirmed that the use that was being made of the premises may continue. In particular, the respondents submit that an extraordinary aspect of this case is that, although the applicants were aware of the development application from a very early stage, they chose to continue the proceedings and thereby chose to expend costs at their own risk. Indeed, the development application was lodged only four weeks after the commencement of these proceedings - which, as I have said, were commenced without any formal notice to the respondents.

8 In those circumstances, the respondents submit that the only possible basis upon which the applicants could succeed in an application for costs would be to demonstrate either that the respondents acted so unreasonably that the applicants should obtain a costs order or that the applicants were almost certain to succeed if the matter had been fully tried. The respondents say that nothing in the facts or circumstances supports either suggestion and that, accordingly, the appropriate exercise of discretion in this matter is that there should be no order as to costs, particularly where the failure of the applicants to give notice to the respondents of the commencement of the proceedings was unreasonable conduct on the applicants' part because it deprived the respondents of the opportunity to address the applicants' concerns prior to commencement of the proceedings, namely by lodgement of the development application which could potentially have avoided the need for the proceedings altogether.

9 As is apparent, the effect of the respondents' submissions is that this is not a case where one party has effectively surrendered to the other party. It is a case where a supervening event, namely the grant of the development consent, has removed or modified the subject of the dispute so that no issue remains between the parties. Presumably also, the passing away of the third respondent also rendered these proceedings redundant.

10 In my view, s 124(3) of the Environmental Planning and Assessment Act 1979 is an important provision disclosing part of the legislative scheme that underlies the statute. That is, there is a clear intention disclosed by s 124(3) that, where the relevant breach of this Act is the carrying out of development without development consent, in circumstances where development consent can be obtained for the development, there should be an opportunity for prospective respondents to proceedings or actual respondents to proceedings to make application to adjourn proceedings to enable a development application to be made and determined under Pt 4. I consider that s 124(3) has an important role to play in achieving the objects of the Act, as set out in s 5, because it is through a process of assessment and determination of a development application that all relevant matters under s 79C of the Act can be weighed, assessed and determined.

11 Part of the problem with the applicants' claim for costs in this matter is that the applicants commenced these proceedings absent any formal notice to the respondents. I consider that Mr Lazarus' submission - that the respondents were effectively deprived of the opportunity to address the applicants' concern prior to the commencement of the proceedings - has substance. This is particularly so when it is considered that, despite the fact that the proceedings were commenced absent any formal notice to the respondents and despite the grave illness of the third respondent, the respondents took steps to have prepared and lodged a development application apparently within approximately four weeks of commencement of the proceedings - so that on the very first return date of the Class 4 application, the respondents were in a position to inform the Court that a development application for the very use complained about was lodged and, accordingly, they were able to apply to adjourn the proceedings as contemplated by s 124(3). Indeed, as it turned out, the Council granted development consent for precisely the use that was being carried out by the respondents.

12 In these circumstances, I consider Mr Lazarus' submissions as set out in his outline filed before me today persuasive. That is, this is not a case where it could be said that the respondents satisfied or caused to be satisfied the applicants' claim. Certainly, it was part of the applicants' claim that a use was being carried out absent development consent where development consent was required. But, in substance, the applicants sought an injunction restraining the use of the premises. The respondents acted appropriately on receipt of the Class 4 application in a manner designed to avoid the unnecessary incurring of costs with respect to this litigation, notwithstanding the substantial issues upon which they might well have relied at a final hearing and as set out in the affidavit of Mr Cole of 23 November 2006. That is, the respondents put those substantial arguments both of law and discretion to one side, promptly lodged a development application and appropriately sought an adjournment of proceedings commenced without notice to them, which application for adjournment according to the record appears to have been consistently opposed by the applicants.

13 In those circumstances, I accept Mr Lazarus' submissions and am of the view that this is a case which clearly points to the appropriate exercise of discretion on costs for the substantive proceedings being that there should be no order as to costs because supervening events have occurred and indeed commenced to occur as early as February 2006 and which so modified the subject of the dispute that no issue remains except for costs.

14 Accordingly, I propose to order that each party is to pay its own costs of the Class 4 proceedings. [Counsel then addressed on costs of the hearing today] 15 The respondents now seek an order for the costs of today which the applicants oppose, effectively on the grounds that the application for costs was worthy of judicial consideration and that there was no case precisely on point. The purpose of a costs order, as is well known, is compensatory. I do not consider that the fact that application was worthy of judicial consideration is a matter entitled to material weight. It seems to me that I have determined the costs application by reference to well-known principles, which were conveniently summarised by Preston J in Kiama Council v Grant (2006) NSWLEC 96. 16 Given the compensatory purpose of the costs order, and as Mr Lazarus has said, defending the costs application required the preparation of evidence, namely the affidavit of Mr Cole of 23 November 2006, the preparation of submissions by counsel and the attendance of Mr Cole and Mr Lazarus before the Court today, I consider that it is an appropriate exercise of discretion that the respondents should have their costs of today as agreed or as assessed and I propose so to order. Order 2 will be that the applicant is to pay the costs of the second to fourth respondents as agreed or as assessed of and incidental to the costs application.

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