South East Forest Rescue Inc v Allied Natural Wood Enterprises Pty Ltd

The challenge to the Council's 14 September 2021 decision

1. On 17 September 2021, the Association commenced fresh Class 4 proceedings, addressed in this decision, seeking a declaration that the development consent purportedly granted by the Council on 14 September 2021 was invalid. The Association also sought orders that would be consequent upon the making of such a declaration.
2. The Association's new Summons had been set down on 3 and 4 November 2021 for hearing of an application for interlocutory relief.
3. On 22 September 2021, the Council and the Company both filed Notices of Appearance. However, later that day, the Council's legal representative advised the Court (and the legal representatives of the other parties) that the Council's appearance was now changed to be a submitting appearance save as to costs.
4. On 6 October 2021, the Company's appearance was amended by the Company filing, on that date, a Notice of Submitting Appearance save as to costs, replacing its Notice of Appearance filed on 22 September 2021.

The competing Notices of Motion

1. On 6 October 2021, a Notice of Motion was filed for the Association seeking an interim injunction restraining the Company from acting upon the development consent purportedly issued by the Council on 14 September 2021 until there had been a substantive determination of the Association's fresh Class 4 proceedings.
2. The following day, a Notice of Motion was filed on behalf of the Company, with the Company seeking that it be listed for hearing at the same time as the Association's Notice of Motion. The substantive order sought in the Company's Notice of Motion, proposed order 2, was in the following terms: That a declaration be made that the development consent purportedly granted to the 1st Respondent by the 2nd Respondent pursuant to section 4.16 of the Environmental Planning and Assessment Act 1979, to development application 2020.81 in relation to land, being lot 16 DP 1066187 at Edrom Road, Edrom is invalid, void and of no force and effect.
3. The Company's Notice of Motion sought, as a consequence, that the proposed hearing dates of 3 and 4 November 2021 be vacated; that costs be reserved and that the proceedings otherwise be dismissed.
4. Given that the Company's Notice of Motion, by virtue of the proposed order set out above, effectively proposing a resolution of the substantive issue in these fresh Class 4 proceedings in favour of the Association, both Notices of Motion were set down before me, as the Duty Judge, on Friday, 15 October 2021, for the purposes of making uncontested final orders.
5. However, as is later explained in more detail, the question of who should pay the costs of these Class 4 proceedings was a matter which remained in dispute and required resolution at a subsequent short costs hearing.
6. For present purposes, it is sufficient to set out Ground 1 in the Association's Summons commencing these Class 4 proceedings. It and its particulars were in the following terms: Decision to grant the Development Consent 1 The decision to grant the Development Consent was invalid because it purports to approve the carrying out of development that had already been carried out at the time of the decision. Particulars a. After 4 September 2020, the First Respondent (or its agents) commenced construction of the buildings the subject of the Development Consent. b. As at 23 August 2021, the construction of buildings the subject of the Development Consent was substantially completed. c. The Development Consent purports to approve the construction of a new log sorter, sawmill, pallet plant and briquette plant, and the repurposing of the existing water treatment thickener tank to store stormwater. d. In the premises, the Development Consent purports to approve the carrying out of development that was already carried out at the time of the decision.

The competing proposed orders

1. At the hearing on 15 October 2021, competing sets of proposed orders were handed up for the Association and for the Company. Each of the competing positions proposed, as order 1, that a declaration be made of the invalidity of the development consent purportedly granted by the Council on 14 September 2021. Although the wording was marginally different, there was no substantive variation to between the two proposed declarations.
2. For the Association, its orders 2 and 3 proposed the setting aside of the Council's purported consent and restraining the Company from undertaking any development in reliance upon it. These orders also proposed the vacating of the 3 and 4 November 2021 hearing dates.
3. No orders equivalent to orders 2 and 3 proposed by the Association were advanced for the Company.

The differing costs proposals

1. The Association's proposed orders would have required that the Company and the Council be jointly and severally liable for the Association's costs of these fresh Class 4 proceedings. However, the Company proposed, in the alternative, that the Council should pay the costs of both the Association and the Company of these fresh Class 4 proceedings.

The hearings

1. The substantive hearing on 15 October 2021 and the subsequent short costs hearing on 1 November 2021 were conducted using Microsoft Teams software. There were no personal attendances and no oral evidence was required.

Representation

1. At the substantive hearing on 15 October 2021, Mr Lazarus SC and Ms Sims, barrister, represented the Association. The Company was represented by Dr Berveling, barrister.
2. A costs hearing took place on 1 November 2021. Dr Berveling and Mr McMahon, the Council's solicitor, took part in this costs hearing, the Association having been excused from attendance. Dr Berveling and Mr McMahon had each provided succinct written submissions in support of the position each advanced concerning what was submitted to be the appropriate costs outcome.

Introduction

1. The evidence tendered on 15 October 2021 in support of the Association's Class 4 summons comprised: 1. The Evidence Book (Exhibit A); 2. A Statement of Agreed Facts (Exhibit B); 3. A copy of the orders proposed by the Association for the finalisation of these Class 4 proceedings, which orders were signed by the legal representative of the Council (Exhibit C). The costs' position, as there proposed (and adopted for the Council), was that the Company and the Council be jointly and severally liable for the Association's costs; and 4. A copy of the orders made by Robson J on 24 August 2021(Exhibit D).
2. An affidavit deposed on behalf of the Company by Mr Russell Pretty, the Company's Engineering Manager for the development project, dated 20 August 2021 was behind Tab 7 of Exhibit A. It is to be observed that Mr Pretty's affidavit was served on the Council's legal representative by e‑mail on 25 August 2021 (Exhibit A, Tab 8, folio 275).
3. On behalf of the Company, Dr Berveling tendered an affidavit deposed on behalf of the Association by Mr Kwan, the Association's legal representative, dated 6 October 2021 (Exhibit 1).

The Statement of Agreed Facts

1. The Court Book contained, behind Tab 6, a Statement of Agreed Facts which had been prepared for the Company. At the hearing on 15 October 2021, it was separately tendered on behalf of the Association - becoming Exhibit B. It is to be noted that, at paragraph 14, the Statement of Agreed Facts sets out the terms of the resolution of the Council of 14 September 2021, the resolution which purported to grant consent to the Company's development application. The terms of the Statement of Agreed Facts (footnotes omitted) are set out below: The Parties 1 The Applicant is a corporate body incorporated under the Associations Incorporation Act 2009 (NSW). 2 The First Respondent (ANWE): a. changed its name on 13 May 2021 from Allied Natural Wood Exports Pty Ltd; and b. is the applicant in the Development Consent. 3 The Second Respondent (the Council) is the consent authority in relation to the Development Consent. Assessment and Approval of the Development Application The Development Application 4 On or about 12 March 2020, the First Respondent submitted a development application for "additions/alterations" to the Eden Chip Mill located at Lot 16 DP 1066187, Edrom Road, Edrom, to the Council (Development Application). The Development Application form described the development as: Erection of steel framed, colourbond sheds to house sawmill, pallet plant and briquette plant (refer to SEE for further information). The Statement of Environmental Effects 5 The Statement of Environmental Effects that was provided to the Council with the Development Application (NGH Statement of Environmental Effects Project No. 19‑571 dated March 2020 - the SEE) set out further details about the proposed development. 6 The SEE states that the Development Application sought approval to "develop a high-tech timber optimisation hub" which would include "a log sorter, sawmill, pallet mill and briquette plant (the proposed additions and alterations). These items would be housed in three new machinery sheds". The DPIE Assessment Report 7 The NSW Department of Planning, Industry and Environment (Department) assessed the Development Application on behalf of BVSC and prepared an assessment report in relation to it (the Assessment Report). First Purported Development Consent 8 On 4 September 2020, the Council made a decision to grant development consent to the First Respondent for the Development (First Purported Development Consent). 9 The decision to grant the First Purported Development Consent was made by the Council's Manager, Planning and Sustainability who did not hold a valid delegation to determine the Development Application. 10 On 24 August 2021, in proceedings 2020/00346528, Robson J made orders including, relevantly, a declaration that the First Purported Development Consent is invalid, void, and of no effect. Development that has been carried out 11 Before 24 August 2021, the First Respondent carried out development in reliance upon the First Purported Development Consent. As at 23 August 2021, there remained "a small proportion of the works to complete construction of the works". The development that had been carried out as at 23 August 2021 included the erection of three sheds (save for downpipes and connection to the stormwater system). The 14 September 2021 Decision 12 At its meeting on 14 September 2021, the Council had before it a report (Report to Council) concerning the Development Application which included a recommendation for its determination, and had the following attachments: 1 Assessment Report prepared by DPIE; 2 Development Plans; 3 Statement of Environmental Effects (SEE); 4 Biodiversity Assessment Attachment (Appendices F & G of SEE); 5 Aboriginal Due Diligence Assessment; 6 Noise Assessment Report; 7 Supplementary Noise Assessment Report; 8 Air Assessment Report; 9 Supplementary Air Assessment Report; 10 Water Cycle Assessment and Management Report; 11 Applicant's Response to Request for Information dated 29 May 2020; 12 Applicant's response to public submissions received during exhibition period; 13 Pre-construction Air Assessment; 14 Proposed Conditions of Consent; and 15 General Terms of Approval from NSW EPA. 13 The Report to Council described the proposed development as: Construction and operation of a log sorter, sawmill, pallet plant, briquette plant and repurposing of the existing water treatment thickener tank. 14 The Council's decision made 14 September 2021 was as follows: 1 That Council determines that the proposed development does not constitute designated development, having consideration to Part 2, Schedule 3 of the Environmental Planning and Assessment Regulation 2000 as the proposed alteration to the approved development will not significantly increase the environmental impacts of the total development. 2 That Council approve Development Application 2020.81 for construction and operation of a log sorter, sawmill, pallet plant, briquette plant and the purchasing of the existing water treatment thickener tank at Lot 16 DP 1066187, Edrom Road, Edrom, subject to the conditions provided in Attachment 14. 3 That those parties who made a submission be noted at of Council's decision. 4 That in the event that additional building approval services by Council officers are required to rectify the extent of works approved that are directly related to Development Application 2020.81, the services are provided pro bono. 5 Point 2 of the Officer's Recommendation in relation to Item 3.1 of today's business paper to recognise that the consent, should Council resolve to approve the development, would be issued under the new name: and noting that Allied Natural Wood Exports has recently changed its name to Allied Natural Wood Enterprises. 15 The Council is a party to proceedings 2020/346528 in relation to the First Development Consent. 16 On 25 August 2021, the Council was served with a copy of the affidavit of Russell Pretty sworn 23 August 2021.

The costs hearing evidence

1. At the subsequent costs hearing on 1 November 2021, an affidavit from Mr Coppock, the Company's legal representative, was read. Mr Coppock deposed to contact which had been made with the Council's legal representatives concerning the application made by the Company that the appropriate costs order in the proceedings was that the Council should pay the costs of these Class 4 proceedings of both the Association and of the Company. He also deposed to having given the Council's legal representative notice of the proposed short costs hearing.

The submissions on invalidity for the Association

1. The submissions on behalf of the Association to demonstrate that it was appropriate that I make the declaration of invalidity concerning the development consent purportedly granted by resolution of the Council on 14 September 2021, and the order restraining the Company from acting upon that purported consent, can be addressed in comparatively brief compass.
2. In this context, it is to be noted that, at the hearing on 15 October 2021, Dr Berveling did not wish to be heard to oppose the making of the declaration or of the restraining order.
3. Mr Lazarus took me through the history of the earlier Class 4 proceedings and the making of the orders on 24 August 2021 by Robson J declaring, relevantly, that the first purported development consent was invalid. He took me to the Company's development application and the supporting Statement of Environmental Effects (Tabs 1 and 2 of Exhibit A) to explain the nature of the extensive additions and alterations which the Company proposed to undertake at its Edrom plant.
4. He then took me to the affidavit of Mr Pretty where, at paragraphs 8 to 11, Mr Pretty deposed that, as at the date of the affidavit (23 August 2021, being some three weeks before the meeting of the Council which granted the second purported development consent), the works the subject of the Company's development application were substantially completed. The relevant portion of the affidavit was in the following terms: 8 The building works commenced after the consent approval was granted 4 September 2020. Work has been progressing since then save interruptions caused by COVID restrictions and significant weather events. 9 The value of the works is about $17m. There remains a small proportion of the works to complete construction of the works. 10 The works that remain to be done include: ● installing the briquette plant, ● completing the electrical installation works for sawmill and briquette equipment, ● making safe the planned installation, ● completing the services installation works, ● completing the stormwater works to control the water run-off from the sheds, site rectification works, and ● the commissioning of the plant and equipment. At the current rate of construction the commissioning will commence on the saw line in three weeks and the briquette plant in seven weeks. 11 There are three sheds (as part of the works), which now have roofs and guttering but no downpipes or connection to the stormwater system. The roofs were completed in the last 2-3 weeks. A 4.5ML concrete tank is being refurbished to receive this stormwater from the buildings. At the last rainfall when the roofs were on but there was no guttering, significant erosion occurred around the perimeter of buildings and on adjacent areas of the site which is now just been made good.
5. This passage from the affidavit of Mr Pretty, demonstrated, Mr Lazarus submitted, that, prior to the Council purporting to grant development consent on 14 September 2021 to the Company's development application, the works which were the subject of that development application had substantially (if not virtually entirely) been completed. Mr Lazarus submitted that it was long‑settled that it was not possible to grant development consent retrospectively for works which had already been carried out (citing the Court of Appeal's approval, in Dincel Construction System Pty Ltd v Penrith City Council [2021] NSWCA 133, of Talbot J's observation to this effect, at [20], in Signorelli Investments Pty Ltd v Sutherland Shire Council (2001) 114 LGERA 27; [2001] NSWLEC 78 to that effect; and the Court of Appeal's statement confirming this in Ku‑ring‑gai Council v Buyozo Pty Ltd [2021] NSWCA 177 at [39]).
6. As a consequence, he submitted that the Association had established the factual and legal basis upon which I should be satisfied that it was appropriate to make the declaration sought in the proposed orders contained in Exhibit C and to make the restraining order sought as order 3 in that exhibit.
7. Mr Lazarus indicated that, although the Association proposed that the appropriate costs order, as shown in Exhibit C, was that the Company and the Council should be liable, jointly and severally, for the Association's costs, how the burden of the costs order was to be framed was not a matter of material concerning to the Association, provided that a costs order in its favour was made.

Consideration of invalidity of the 14 September 2021 grant of development consent

1. Although there was no active contradictor on the question of whether the declaration and the restraining order should be made, nonetheless, I must be satisfied, independently, that it is appropriate to make the declaration and that restraining order.
2. I am satisfied that it is appropriate to do so on the basis of the factual evidence before me. This is because the uncontradicted evidence of Mr Pretty is that, by, at the latest, some three weeks before the Council purportedly granted the second development consent (here being sought to be declared invalid), the Company had substantially carried out the significant additions and alterations to its plant at Edrom for which the Company's development application had sought consent.
3. In circumstances where I am satisfied, on the basis of long‑settled authority (as cited by Mr Lazarus), there was no power vested in the Council to grant retrospective development consent for the works which had already been effected, the Council's purporting to grant such consent was invalid.
4. As a consequence, I was satisfied that it was appropriate to make the declaration and the restraining order sought by the Association.

Orders concerning invalidity of the grant of consent on 24 September 2021

1. At the conclusion of the hearing on 15 October 2021, I indicated that I was satisfied that it was appropriate to make the declaration and restraining order in the terms sought by the Association and that I would do so at that time, providing my reasons for doing so in conjunction with my provision of reasons concerning how the burden of costs in these Class 4 proceedings should fall. This judgment provides my reasons for making the declaration and restraining order in the terms signed and dated by me following the 15 October 2021 hearing.

The Council's 20 October 2021 regularising resolution

1. Although it plays but a minor part in the matters required to be dealt with by me, for completeness I note that the Council adopted a resolution on 20 October 2021 (presently unchallenged) addressing matters concerning the Company's development application (both as to its past construction activities; proposed future construction activities to finalise the project; and the use of those past constructed elements in the future). This resolution was in the following terms: 1 That Council determines that the proposed development does not constitute designated development having consideration to Part 2, Schedule 3 of the Environmental Planning & Assessment Regulation 2000 as the proposed alteration to the approved development will not significantly increase the environmental impacts of the total development. 2 That Council approves Development Application 2020.81 for the installation and commissioning of machinery and equipment in an existing Sawmill Shed and existing Briquette Plant Shed, construction of a Pallet Plant Shed, installation, commissioning and use of machinery and equipment in a Pallet Plant Shed, and use of existing Log Sorter, existing Sawmill, and briquette making in existing Briquette Plant Shed, and use of re-purposed water thickener tank to store stormwater at Lot 16 DP 1066187, Edrom Road, Edrom, subject to the conditions provided in Attachment 14. 3 That those parties who made a submission be notified of Council's decision. 4 That in the event that additional building approval services by Council officers are required to rectify the extent of works approved that are directly related to Development Application 2020.81, these services are provided pro bono.

Introduction

1. At the commencement of the short costs hearing on 1 November 2021, I indicated to Dr Berveling and Mr McMahon that, in addition to the contest as joined in the written submissions, a further potential outcome might be contemplated by me - with this being that the Council pay the Association's costs but that there be no costs order for or against the Company. I asked the advocates to address this possibility during the course of their oral submissions. They subsequently did so.
2. Mr McMahon's written submissions proposed that both Respondents should be jointly and severally liable to pay the Association's costs.
3. Dr Berveling's further written submissions on costs were in addition to the matters which he had advanced in his earlier written submissions provided for the purposes of the hearing on 15 October 2021. It remained the Company's position that the Council should pay its costs as well as those of the Association.

The Company's submissions

1. Dr Berveling commenced his oral submissions by referring to the Association's written submissions at paragraph 21 - where Mr Lazarus had outlined why he had submitted that the Company should be liable for the Association's costs. The written submissions said: 21 The First Respondent, having conceded that the Development Consent is invalid on the basis of Ground 1, could have resolved the proceedings by surrendering the Development Consent. The vast majority of the costs of the proceedings would have been avoided had the First Respondent done so. The First Respondent was (and is) competently advised, and ought to have appreciated (as it has belatedly) that the DA could not have been validly approved.
2. The possibility of surrendering the consent purportedly granted by the Council on 14 September 2021 was raised at the Registrar's directions hearing on 23 September 2021, but there was no subsequent request to the Company to surrender its consent, Dr Berveling noted.
3. Dr Berveling noted, in his written submissions on costs, that he had addressed the legitimacy of the Company's decision to file a submitting appearance in these proceedings, rather than surrendering the consent. He had said, at paragraph 11 in those written submissions, that: 11 The First Respondent's decision to file a submitting appearance rather than surrender the Consent was a proper decision which it could make - it made a legitimate forensic choice to do so. The 2 options would result in significant different time frames for the First Respondent: (a) submitting (and a declaration of invalidity at a hearing then scheduled for 3 and 4 November 2021) could lead to timely re-determination of the DA by Council,4 in contrast to - (b) a lengthy timeframe for preparing, lodging, and publicly notifying a fresh DA, and then a Report to Council and finally its determination.
4. He submitted, by implication, that the course subsequently adopted by the Council, through its resolution on 20 October 2021, validated the Company's decision not to surrender the consent.
5. He next submitted that the costs' proposal advanced by the Company was the only reason why the Council was now raising the failure of the Company to surrender the consent as a relevant matter.
6. He then submitted that the necessity for these fresh Class 4 proceedings arose solely as a consequence of the invalidity of the September 2021 resolution of the Council in circumstances where it had been advised that the works proposed by the Company were substantially complete.
7. He relied on guidelines set out by Biscoe J in Cutcliffe v Lithgow City Council (2006) 147 LGERA 330; [2006] NSWLEC 463 (Cutcliffe), at [50], in particular guideline (b), a guideline in the following terms: (b) where the beneficiary does not defend the proceedings, the applicant's costs will ordinarily be awarded against the consent authority, whether or not the latter enters a submitting appearance. This is because the cause of the litigation is the error of the consent authority and not of the applicant or the beneficiary. The consent authority cannot immunise itself from costs consequences of its own error by entering a submitting appearance because then a successful applicant cannot be properly compensated in costs. It is not sufficient that a consent authority should bear the applicant's costs only up to the time of the consent authority's submitting appearance because the applicant must continue to incur costs thereafter in order to establish, by evidence and argument at a hearing, that it is entitled to declaratory and injunctive relief.
8. In response to the submission in Mr McMahon's written submission that there was an ambiguity in the description of the Company's proposed development in its development application, Dr Berveling addressed that in paragraph 15 of his written submissions, proposing that: … there was no error in the description of the development application and the Determination made on 14 September 2021 replicates the Determination made on 4 September 2020 (the basis of the 1st proceedings).
9. Dr Berveling concluded his submissions by saying that the Company found itself in these proceedings through no fault of its own, and simply wished to get out of them. A submitting appearance was, under the circumstances, appropriate and it should not be penalised by an adverse costs order in these second, unnecessary proceedings arising from its development application, as I understood him.

The Council's submissions

1. After outlining the basis why the Council accepted that its resolution of 14 September 2021 was invalid (citing Ku-ring-gai Council v Buyozo Pty Ltd [2021] NSWCA 177), Mr McMahon's written submissions proposed that, had that resolution been in different terms (by dividing the operative sentence into two separate sentences - one to deal with future development and the second to permit use of the already carried out development), then the resolution would have been appropriate. The failure of the resolution to be so structured, he submitted, arose from ambiguity in the description of the Company's proposed development in the development application which had been lodged on behalf of the Company.
2. He then submitted that the proceedings would have been resolved if the Company had surrendered its development consent. In these circumstances, he submitted (written submissions at paragraph 9) that: 9 The First Respondent, having conceded that the Development Consent is invalid on the basis of Ground 1, could have resolved the proceedings by surrendering the Development Consent. The vast majority of the costs of the proceedings would have been avoided had the First Respondent done so. The First Respondent was (and is) competently advised, and ought to have appreciated (as it has belatedly) that the DA could not have been validly approved, if the words in the Development Application were used in the subsequent development consent. It had the ability to use words in the application which did not contain the ambiguity.
3. He noted that the ability to surrender the development consent was a course available to the Company, but not to the Council.
4. Mr McMahon commenced his oral submissions by referring to the written submissions on behalf of the Association, at paragraphs 21 and 23, concerning the positions of the Company and the Council, respectively. These paragraphs were in the following terms: 21 The First Respondent, having conceded that the Development Consent is invalid on the basis of Ground 1, could have resolved the proceedings by surrendering the Development Consent. The vast majority of the costs of the proceedings would have been avoided had the First Respondent done so. The First Respondent was (and is) competently advised, and ought to have appreciated (as it has belatedly) that the DA could not have been validly approved. 22 … 23 The Council should be ordered to pay the Applicant's costs notwithstanding its submitting appearance because its error was the cause of the invalidity of the Development Consent. The Council decided to approve development that it was aware had already been carried out, in circumstances where it too was competently advised and ought to have appreciated that what it was proposing to do would result in an invalid consent.
5. Mr McMahon adopted those paragraphs as being here relevant on the question of costs.
6. In his written and oral submissions, Mr McMahon referred me to what had been said by Preston CJ in Platford v van Veenendaal and Shoalhaven City Council (No 2) [2018] NSWLEC 86 (Platford), at [21], that: … the ordinary rule that no order for costs should be made against a submitting party has less applicability in judicial review proceedings where both respondents, the consent authority which granted the development consent and the beneficiary of the development consent, make submitting appearances. Application of the ordinary rule would result in the successful applicant not being compensated for the costs of the proceedings.
7. In his written submissions, he cited (at paragraph 11) the observation by Duggan J in Reulie Land Co Pty Limited v Lee Environmental Planning Pty Limited and Ors (No 2) [2020] NSWLEC 49, at [33], where her Honour had identified two relevant factors to be taken into account: … the extent to which the submitting party contributed to the error; and the reasonableness in not resolving the proceedings but submitting to them; have been identified as relevant considerations.
8. He submitted that these were factors here engaged in circumstances where the Company's conduct should be regarded as unreasonable, but that the Council's resolution had contributed to the error giving rise to the proceedings. Under those circumstances, he proposed that the Council and the Company should be jointly and severally liable for the Association's costs.

The Company's reply submissions

1. Dr Berveling was concise in his reply to Mr McMahon's submissions (having addressed Mr McMahon's written submissions in the Company's written submissions). Dr Berveling noted that surrender would not constitute a comment on the validity of the consent or on the correctness of the granting of that consent. The Company's decision not to surrender the consent was entirely appropriate in the circumstances.

Consideration

1. I have earlier noted that Mr McMahon cited [21], of Preston CJ's decision in Platford (see [57] above). It is appropriate to note, also, that the quotation to which Mr McMahon took me was but the first of two relevant comments made by his Honour in Platford. The second of them, in the following paragraph, was: 22 Secondly, I do not consider it is appropriate in the circumstances of this case to apply the general guideline suggested in para (b) of Cutcliffe. That guideline is based on the assumption that "the cause of the invalidity is an error or attributable to the consent authority and not to the beneficiary." This assumption needs to be understood in the context in which the general guideline was suggested, being judicial review of the exercise of the power of a consent authority under the EPA Act (such as the determination of a development application by the grant of development consent). Necessarily, the judicial review proceedings will only be successful if the applicant establishes that there was invalidating error in the exercise of the power by the consent authority. Hence, the mere fact that the cause of the invalidity is an error of the consent authority is not, of itself, a sufficient reason to order costs against the consent authority. This is the point made by Basten JA in Rossi v Living Choice Australia Ltd at [73].
2. As can be seen, Preston CJ referred to [73] of the judgment by Basten JA in Rossi v Living Choice Australia Ltd [2015] NSWCA 244. It is appropriate to set out the observations therein: 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.
3. However, what has here arisen is quite unusual because not only was the first attempt by the Council to issue a development consent to the Company set aside by Robson J as earlier described, but, after that had occurred, the Council was expressly put on notice, by virtue of the service of Mr Pretty's affidavit, that the works for which the Company had applied for development consent a considerable period earlier had, in fact, been substantially completed.
4. In these circumstances, where there is no active contradiction of the Association's case by either the Company or the Council, the fact that the Company had put the Council on notice of circumstances that would automatically render any further resolution (in similar terms to the resolution that had been set aside by Robson J) by the Council purporting to grant the Company's development application would be doomed placed the responsibility solely on the Council for the further resolution necessitating these proceedings.
5. The present, unusual circumstances cannot immunise the Council from the potential for a costs order against it in favour of the Association. The question next, however, is whether the Council should also pay the Company's costs. In these unusual circumstances, I am satisfied that it should for the following reasons.
6. These second Class 4 proceedings have arisen solely as a consequence of the Council resolving, on 14 September 2021, to purport to grant development consent to the Company in circumstances where an earlier attempt by a council officer acting without delegation had purported to grant an earlier consent to the Company in circumstances where, as earlier outlined, the council officer purporting to grant that consent did not have delegation to do so.
7. This resolution of the Council occurred some three weeks after the Council had been advised, by the service on its legal representative of Mr Pretty's affidavit, that the works were substantially complete.
8. Properly advised, the Council should have been aware that it was not legally able to grant retrospective development consent to works which had already been carried out. In such circumstances, the Council's resolution of 14 September 2021 was the sole cause for the necessity for the Association to commence these fresh Class 4 proceedings to prevent the loss of the public benefit of the orders made by Robson J on 24 August 2021.
9. Under the circumstances, the valid paths open to the Council, in light of it having been advised, by virtue of the service of Mr Pretty's affidavit, that the works were substantially complete, were: 1. Either to resolve to refuse the Company's development application; or 2. To pass a resolution structured in the fashion of that adopted by the Council on 20 October 2021 - one granting consent for necessary future works to complete the Company's proposed development and also granting consent for the use of those works which had already been carried out without development consent.
10. There is no evidence in these proceedings that the purported resolution of the Council on 14 September 2021 arose as a consequence of any activity on behalf of the Company seeking to re-enliven Council's consideration of the Company's development application in the fashion which took place on 14 September 2021. On the evidence before me, the necessity for these fresh Class 4 proceedings arose solely from the actions of the Council on 14 September 2021.
11. The Council has, by its resolution on 20 October 2021, now adopted an approach which addresses the defects inherent in the 14 September 2021 resolution which has been set aside, reflecting an approach which, had the Council resolved in that fashion in September 2021, would have avoided the necessity for these fresh Class 4 proceedings.
12. Although there is a superficial attraction to adopting the third potential course I earlier outlined and was addressed by the parties to the costs hearing, I am satisfied that it would be inappropriate to leave the Company without the benefit of a costs order against the Council because to do so would, effectively, punish the Company for being an innocent victim of the flawed approach taken by the Council embodied in its September 2021 resolution.
13. Under these circumstances, I am satisfied that it is appropriate to require the Council to bear the costs of both the Association and the Company for these Class 4 proceedings.

Orders

1. The declaration and orders of the Court made on 15 October 2021, addressing the substantive matters in these Class 4 proceedings, were in the following terms: The Court makes the following orders and declarations: (1) Declare that the development consent purportedly granted to the First Respondent by the Second Respondent pursuant to section 4.16 of the Environmental Planning and Assessment Act 1979 (EP&A Act) on 14 September 2021 for development application 2020.81 in relation to land at Lot 16 DP 1066187 at Edrom Road, Edrom (Purported Development Consent) is invalid, void and of no force and effect. (2) Sets aside the Purported Development Consent. (3) The First Respondent is restrained from undertaking any development in reliance on the Purported Development Consent. (4) The hearing on 3 and 4 November 2021 be vacated.
2. The orders now made, following the short costs hearing on 1 November 2021, are in the following terms: 1. The Second Respondent is to pay the costs of the Applicant of the proceedings as agreed or assessed; 2. The Second Respondent is to pay the costs of the First Respondent of the proceedings (including of the costs hearing) as agreed or assessed; and 3. The exhibits are returned.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 11 November 2021