(emphasis added)
12 Rule 3.7(3) provides that "circumstances in which the Court might consider the making of a costs order to be fair and reasonable include (without limitation) the following". The list that follows is similar to the indicative guidelines formulated under the old rule (Part 16 r 4 of the Land and Environment Court Rules 1996) in Grant v Kiama Municipal Council [2006] NSWLEC 70 at [15] by Preston CJ, and approved by the Court of Appeal in Port Stephens Council v Sansom [2007] NSWCA 299, 156 LGERA 125 at [56]. The circumstances of the present case do not correspond with the circumstances in the list but that is not an end to the matter because the list is not exhaustive.
13 Rule 3.7 was discussed by myself in Arden Anglican School v Hornsby Shire Council [2008] NSWLEC 103, 158 LGERA 224 at [8] - [10]:
"[8] The new rule 3.7 replaces the former Part 16 r 4 of the Land and Environment Court Rules 1996 (NSW), which provided that in proceedings such as these 'No order for the payment of costs will be made ... unless the Court considers that the making of a costs order is, in the circumstances of the particular case, fair and reasonable'. The words 'of the particular case' do not appear in the new rule.
[9] In the context of the presumptive rule that there will be no order as to costs in planning appeals, the power to make a costs order is in the broadest of terms, that is, what is 'fair and reasonable in the circumstances'. All rational considerations are relevant to the formulation of that judgment. In the end, the question is whether, in the opinion of the Court, they are of sufficient weight to overcome the presumptive rule. Indicative guidelines for the exercise of the discretion are useful in promoting consistent decisions, but are not entitled to presumptive, let alone determinative, weight. These principles were identified in the context of the former Part 16 r 4 by the Court of Appeal in Port Stephens Council v Sansom at [48], [53] and [54] and Thaina Town (On Goulburn) Pty Ltd v Sydney City Cou ncil (2007) 156 LGERA 150 at [33] and [35]. Those judgments were delivered on the same day by an identically constituted Bench of five judges. Spigelman CJ delivered the leading judgment in each case. The presence of the words 'in the particular circumstances of the case' in the old rule influenced his Honour to hold that a general characterisation of proceedings such as 'merits review' or 'capacity', cannot be determinative or, indeed, entitled to presumptive weight: Sansom at [60]. In the present case, there was no suggestion that the absence of these words from the new rule bears on the outcome.
[10] One of the purposes of the costs follow the event rule in ordinary civil litigation is to encourage the parties to settle their disputes: Sansom at [26]; Thaina at [65]. In contrast, a no discouragement principle underlies the no costs rule in planning appeals, that is, that persons generally should not be discouraged from exercising their rights of appeal via the prospect of an adverse costs order: Sansom at [22]-[23]. This may be rationalised on the bases that a significant purpose of planning appeals is to improve the decision-making process and that those involved are not adversaries in the same sense as adversaries in conventional civil litigation. Spigelman CJ explained this in Sansom at [71]-[74]:
71 …An appeal from a consent authority is similarly an element of the management of the scheme of the EPA Act by that authority. To treat such a review as equivalent to a lis between adversarial parties is, in most cases, a considerable oversimplification. In particular, it does not give weight to the public interest regulatory responsibilities of the consent authority, which should itself be anxious to ensure that it has made the correct decision. In such a context, characterisation of the proceedings either as merits review or as equivalent to adversarial litigation does not appear to me to be a particularly useful approach to the formulation of the judgment for which r 4(2) provides.
72 In my opinion, a significant purpose served by planning appeals is to improve the quality of the decision-making process. This is a purpose which any statutory consent authority should be presumed to be anxious to achieve as an incident of its exercise of the statutory powers which Parliament has reposed in it. Individuals and corporations who challenge such decisions do not have the same obligations. They do, however, have a legitimate expectation that the decision-making process will result in the correct or preferable decision.
73 One of the critical differences between ordinary civil litigation and planning appeals is the absence of a reciprocal relationship between the interests of the parties. They are not, or should not be, adversaries in the sense that can be said of the usual kind of civil litigation in courts.
74 Underlying Justice McClellan's approach [in Gee v Port Stephens Council (2003) 131 LGERA 325] is an assumption that each side in a planning appeal should be treated the same as a matter of fairness: whether the proceedings are classified as merits review or as raising an issue of capacity. In my opinion, a comparison of the interests to which I have referred at [71]-[73] of these reasons, suggest that an unsuccessful consent authority should be more likely to suffer an adverse costs order than an unsuccessful applicant."
14 In Marinkovic v Rockdale City Council [2006] NSWLEC 601 there had been multiple amendments to development application plans prior to 19 September 2006. Preston CJ granted leave to rely on amended plans served on 18 September 2006 after the applicant assured the Court that they reflected the development proposed, and directed that no further amendments would be allowed without leave of a judge of the Court. His Honour determined that the applicant's conduct had been unreasonable and had caused the council to incur a wholly unreasonable degree of costs and, accordingly, that the applicant should pay the council's costs up to and including 19 September 2006.