Steffan v McKnight (No 2)

Representation: Counsel:
P Tomasetti SC and L Nurpuri (Applicants)
J Hutton SC and R Coffey (Respondents)
Solicitors:
Addisons (Applicants)
HWL Ebsworth Lawyers (Respondents)

File Number(s): 2023/00173987

Publication restriction: Nil

JUDGMENT

Nature of proceedings

1. These proceedings concerned whether the Respondents were carrying out development without consent or contrary to a development consent. The substantive proceedings were determined with declarations and orders being made as set out in Steffan v McKnight [2025] NSWLEC 34 (the Substantive Decision). In essence, the Applicants established an entitlement to the relief sought.

2. The Applicants now seek their costs of the proceedings. The Respondents oppose such an order in part.

3. The facts relating to this case are those set out in the Substantive Decision and are not repeated. The defined terms identified in the Substantive Decision are adopted here.

Dispute

4. The Applicants seek an order that the Respondents pay the costs of the proceedings. The Applicants contend that pursuant to the operation of s 98 of the Civil Procedure Act 2005 (NSW) (CP Act) and r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) that, in accordance with the operation of the usual rule, costs should follow the event. The event in this case being the Applicants succeeding in the substantive proceedings.

5. The Respondents accept that the Applicants were successful with respect to the claim relating to the issue of car parking but did not accept that the Applicants were successful with respect to the other issues raised in the substantive proceedings. The Respondents contended that the Applicants had not been wholly successful in the proceedings and had in fact:

6. failed on their claims requiring the Respondents to carry out works to the storage area to rectify water ingress issues;

7. failed on their claim for relief in respect of stormwater;

8. failed on their claim in respect of requiring the Respondents to arrange a final inspection of the storage area; and

9. failed on their claim in relation to the spiral stairs and privacy screen.

10. The Respondents relied upon authority that whilst the UCPR provided for a general rule there remains a discretion as to the exercise of the power to award costs. In the exercise of such discretion, it is necessary to carefully consider what is the relevant “event”. Where a claimant has more than one cause of action or claim, with different relief sought in each (not several claims or causes of action directed to one end), and is only successful in obtaining some of that relief, the “event” cannot be the proceedings as a whole: see Permanent Trustee Aust Ltd v FAI General Insurance Co Ltd (Supreme Court (NSW), 3 June 1998, unrep); Gupta v Fordham Laboratories Pty Ltd (No 2) [2018] NSWSC 694 at [24] (per Ward CJ in Eq); James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 at [34]; F & D Bonaccorso Pty Ltd v City of Canada Bay Council (No 5) [2008] NSWLEC 235 at [7]; and Lismore City Council v Dajoco Investments Pty Ltd [2022] NSWLEC 28 at [50].

11. The Respondents submitted that a comparison between the relief sought, the matters pressed at hearing and the relief granted, demonstrated that the Applicants were not “wholly successful”. The proceedings involved “separate claims for different relief” and the Applicants should not be entitled to the costs relating to the relief upon which they were not successful. In addition, the Respondents identified other matters which were said to have been identified in the summons or developed in the evidence which were not pressed at the hearing.

12. Upon consideration of these factors the Respondents submitted that the appropriate costs order would be:

13. the Applicants and Respondents bear their own costs (this will have the advantage of avoiding a costly assessment process; and reflects the real measure of success enjoyed by each set of parties, once the failed claims and abandoned claims are brought to account);

14. alternatively, the Applicants and Respondents be ordered to pay the costs of the opposing set of parties in respect of the claims on which they were unsuccessful; or

15. alternatively, the Respondents be ordered to pay only part of the Applicants’ costs.

Consideration

9. In dealing with the issues for determination in the Substantive Decision I identified the issues for determination at [38]. Those issues as identified reflected the subject matter of the issues as addressed by the parties.

10. Issues 1 and 2 related to whether the Respondents had an entitlement to park upon a number of slabs. That issue remained in dispute until the final submissions in the proceedings. At the final submissions the Respondents admitted that there was no entitlement derived from the 2004 Consent but pressed that the Applicants should not obtain relief in the exercise of the Court’s discretion. As to the 2001 Consent the Applicants, whilst admitting that work had not been completed in accordance with that consent denied that such would permit the making of the declarations and orders sought at all or in the exercise of the Court’s discretion.

11. In addition, a number of matters were raised relating to whether the construction of the slab upon which the parking was occurring had been constructed in accordance with the relevant development consents. Such works were described as the storage area below the slab as provided for in the 2001 Consent. In addition, there was an issue as to whether a circular staircase from the level of the slab to the ground below had been constructed in accordance with the consent.

12. The issue relating to the ability to park vehicles turned upon whether the 2004 Consent authorised such use and whether work had been carried out in accordance with the 2001 Consent. As to these issues both the fact of the use and the nature of the construction of the structures as permitted by the consent was at the heart of the issue in dispute. Contrary to the Respondents’ submissions, whilst the breaches as to use, manner of construction of the storage area and the circular staircase were separately identified and to some extent identified by separate claims for relief, the issues were all bound up in the determination of whether the 2001 Consent had been lawfully constructed and used.

13. I found the breaches as identified by the Applicants had been established on the evidence. As to discretion I did provide some amelioration of the effect of the orders proposed by permitting the Respondents a period of time in which to regularise the use of the slabs to which the issues related and declined to require rectification of the storage area and the circular staircase. The exercise of the discretion was not an indication of a failure of the Applicants in connection with their claims, rather an indulgence granted to the Respondents in light of the factors identified in the Substantive Decision. The exercise of the discretion in the circumstances of this case does not operate to displace the usual order, particularly where, as in this case, the issue of discretion became prominent after a late concession as to the breach.

14. In each of the issues identified as Issues 1, 2 and 3(b) I consider that the Applicants have been wholly successful and is entitled to the costs of those issues.

15. A remaining question relates to the stormwater issue identified as Issue 3(a). This particular matter is of a different type to those identified above as I did find that the Applicants’ construction of the stormwater condition imposed upon the 2001 Consent was not to be accepted, and therefore, I found that the Applicants had not established that there was a breach of condition 43. However, such a failure does not, of itself, preclude the making of a costs order in accordance with the usual order where the issue was merely a part of the larger primary issue upon which the Applicants were successful. The question, therefore, that arises in determining the question of costs is whether, as the Respondent contends, the stormwater issue was a separate cause of action with different relief sought.

16. It is true that the Applicants sought relief for “rectification works” in connection with the stormwater system in the event it had been constructed otherwise than in accordance with the condition of the 2001 Consent. However, I do not consider the particularisation of the rectification sought as identification of a separate cause of action or relief. In the context of the substantive proceedings the Applicants contended that the 2001 Consent had been carried out contrary to its terms in breach of the Environmental Planning and Assessment Act 1979 (NSW). That unlawfulness being the cause of action was then particularised by reference to certain operative provisions of the 2001 Consent, including the stormwater condition.

17. The relief granted in the Substantive Decision, in particular the declaration at [87(1)(b)], found that the 2001 Consent was carried out otherwise than in accordance with the terms of the approval. Whilst the stormwater condition ultimately did not form part of that finding it was a relevant part of the claim upon which the Applicant was ultimately successful.

18. Finally, as to the issues that were identified as not being pressed at hearing, I accept the submissions of the Applicants that at least to some degree the crystallisation of the claims did not occur until after the Respondents had filed their defence and made relevant admissions, at which time the real dispute was identified. To the extent that some evidence was not read, such issues are in my view a matter for determination at the assessment phase of a costs order rather than a matter that disentitles a claimant to a costs order.

19. Accordingly, for the reasons outlined above and for the same reasons identified at [12] above, I accept the Applicants’ submissions that the dispute with respect to the compliance with the condition of the 2001 Consent relating to the stormwater was part of the larger whole of the primary dispute relating to the development carried out pursuant to the 2001 Consent and the consequences of any identified breach. Accordingly, I do not consider that the issue of stormwater, although unsuccessful, was a separate independent issue such that the usual order as to costs should not be made.

Conclusion

20. For the reasons identified above, I find that the Applicants have been wholly successful in the proceedings such that the usual order as to costs should be made and that there are no circumstances that arise in this case that warrant a departure from the usual order.

Orders

21. The Court orders that the Respondents pay the Applicants’ costs of the proceedings, including the application for costs.

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