Sylvester & Ors v Cessnock City Council & Ors

APPLICANT Ms H Irish (Barrister)

SOLICITORS Whitehead Cooper Williams

SECOND AND THIRD RESPONDENT Mr P Larkin (Barrister)

SOLICITORS Messrs Oliver Campbell

IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 40011 of 2002

3 February 2003 MICHAEL JOSEPH SYLVESTER LYN FAY SYLVESTER KEVIN JOHN GOODWIN JEAN ANNE GOODWIN JODIE ROBB JEFFREY PAUL BURKE ANTHEA THERESE BURKE Applicants v CESSNOCK CITY COUNCIL First Respondent ACM LANDMARK PTY LIMITED Second Respondent

ST PATRICKS OF NULKABA PTY LIMITED Third Respondent

1 By notice of motion filed on 25 October 2002 the applicants seek an order that the second and third respondents ("the respondents") pay the applicants' costs in respect of prayers 2 and 3 of the amended application. In summary the amended application sought a declaration that development consent 8/2000/433 only related to the construction and operation of a cremation facility (prayer 1); a declaration that the use of the respondents' land for the purpose of conducting weddings and funerals and associated purposes was unlawful unless a development consent was in force (prayer 2); and an order restraining the respondents from using the premises for various purposes without consent (prayer 3).

History of Litigation 2 These proceedings concern the alleged unlawful use of a church building formerly known as St Patricks Church, Nulkaba ("the church"). The church was constructed in 1893, replacing an original timber slab building which had been constructed in 1872. The church was used by the Catholic Church until its sale in 1991. Thereafter pursuant to development consent No. 118/692/10 granted by the first respondent ("the council") the church was used for a reception centre, café and chapel. Such consent lapsed but the building was nevertheless used thereafter for weddings and funerals. 3 On 21 March 2001 development consent 8/2000/433 ("the consent") was issued by the council to the second respondent in respect of the property known as Lot 235 DP 755252 and Lot 1 DP 128674. Such consent granted approval for the establishment of a crematorium facility upon such land. 4 These proceedings were commenced on 23 January 2002. The applicants initially sought a declaration of invalidity of a grant of the consent. Declarations were also sought that the use of the subject land for the purpose of conducting weddings, funerals and associated purposes was unlawful. The applicants sought an order restraining the respondents from using the subject site as a crematorium or crematorium facility, for weddings, funerals, the viewing of deceased persons, or for hire for any purpose, a wedding centre or a mortuary chapel. 5 By application for development consent No. 8/2002/108/1 dated 31 January 2002 the second respondent sought council's consent for the use of the church for wedding and funeral services. 6 Prior to any determination of the council in respect of development application No. 8/2002/108/1 the applicants amended their class 4 application to seek the relief set out in paragraph 1 of this judgment. 7 These proceedings were fixed for hearing on 18 July 2002. However, on 17 July 2002 the applicants discontinued their claims for relief against the council and discontinued prayers 1 and 3(a) against the respondents. The applicants agreed to pay the reasonable costs of the council and of the respondents by reason of such discontinuance. Accordingly the only remaining issue was the applicants' claims for declaration that the use of the church was unlawful for the purpose of conducting weddings and funerals and associated activities and for an order restraining such use. 8 On the evening of 17 July 2002 the council granted consent to the development application No 8/2002/108/1 made by the second respondent for the use of the church for wedding and funeral services. 9 On 18 July 2002 the hearing was adjourned to enable the applicants to consider their position as a result of the grant of council consent on the previous evening. From that time the parties agree that no costs have been incurred, other than the costs relating to this hearing.

The Applicants' Submissions 10 The applicants submit that they should be entitled to an order for their costs of the proceedings since the alleged unlawful use of the church was only regularised by the grant of consent No. 8/2002/108/1 by the council on the 17 July 2002. They submit that their actions in instituting the proceedings have been vindicated in consequence of the consent. 11 The applicants further submit that pursuant to Pt 15 r 7 of the Land and Environment Court Rules 1996 ("the Court Rules") they should be entitled to an order for costs. Part 15 r 7 provides:-

Order for costs alone 7. The Court may order the respondent to pay the costs of the proceedings where a respondent satisfies or causes to be satisfied the claim of the applicant after the proceedings have been commenced.

The Respondents' Submissions 12 The respondents submit that the alleged unlawful use of the church had not been established. The respondents proposed to rely upon the doctrine of existing use to show that the use of the premises was never unlawful. The respondents alternatively submit that even if their use of the premises had been proven to be unlawful, the Court in its discretion would have refused to have granted relief in view of the history of the use of the church.

Findings 13 Pursuant to s 69 of the Land and Environment Court Act 1979 the Court has a wide discretion in respect of costs. Such discretion must be exercised judicially. 14 When parties to proceedings have resolved their differences except as to costs the Court must be guided by the principles enunciated by the High Court of Australia in Re The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622. In that decision McHugh J at p 624 said:- 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 (3). 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 (4).

15 His Honour continued (at p 625):- 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. 16 Applying such tests, the Court must enquire whether either of the parties has acted so unreasonably as to warrant an order for costs being made against them. 17 The Court is not to attempt to try the hypothetical action. Instead it must pay regard only to the conduct of the parties. Prima facie the applicants acted reasonably in believing that the use of the premises was being conducted unlawfully. The respondents rely upon their defences from which they submit their use was lawful, and that even if unlawful, the Court would not have granted relief. If such a result were achieved, the respondents submit that they would have been entitled to an order for costs as the successful party. 18 The Court is satisfied that it could not be said that the conduct of either party was unreasonable. It has weighed up the competing arguments and concludes that it should not attempt to reach a conclusion upon the result of the proceedings. To do so would be tantamount to determining the merits of the claim and of the defences. 19 In Craig Murray v Trevor Valaire [2001] NSWLEC 57, Lloyd J considered the operation of Pt 15 r 7 of the Court Rules. Having reviewed various authorities His Honour concluded that in respect of the matter before him the principles of Lai Qin prevailed. Similarly in this instance the Court applies the principles of Lai Qin to the determination of costs. Accordingly no order for costs will be made.

Costs of this application 20 The costs of the present application are sought by the respondents. They had repeatedly offered to settle this application on the basis that no order for costs was to be made. The respondents had advised the applicants that if not accepted, the Court would be requested to make an order in the respondents' favour upon an indemnity basis, presumably in accordance with the principle in Calderbank v Calderbank [1975] 2 All ER 333. 21 There are certain factors which mitigate against the making of such an award. The settlement for these proceedings has not resulted merely from a change of resolve by the applicants. The discontinuance has resulted solely from the circumstance that the council granted consent for the very use which the applicants claimed was unlawful on 17 July 2002. The application for such consent was made only after these proceedings were instituted.

22 The Court accepts the submission of Ms Irish (counsel for the applicants) that the applicants believed that the circumstances would warrant the Court the making of an order pursuant to Pt 15 r 7 of the Court Rules. Such belief was based on the fact that the claim for relief was satisfied after the proceedings commenced. 23 The Court accepts that the institution of these proceedings motivated the respondents to make their development application. Whether the application was in fact necessary remains an unresolved question in view of the possibility of operation of existing use rights. The circumstances nevertheless lead to the conclusion that the application for costs, although unsuccessful, was not baseless.

Summary of Findings 24 The Court concludes that the applicants did not act unreasonably in the institution of these proceedings, nor did the respondents act unreasonably in conducting their defence. Accordingly, applying the principle explained by McHugh J in Lai Qin, no order for costs should be made. 25 The Court declines to exercise its discretion to make an order that the applicants pay the costs of this application on an indemnity basis upon the ground that the applicants were justified in believing that they would be successful in obtaining an order for costs in view of the provisions of Pt 15 r 7 of the Court Rules. 26 The applicants have also filed a notice of motion seeking to exclude certain evidence at this hearing. The Court will dismiss the motion in view of the fact that the respondents did not seek to rely upon the challenged affidavits.

Orders 27 The Court orders:

1. The applicant's Notice of Motion seeking an order that the second and third respondents pay the applicants' costs in respect of prayers 2 and 3 of the Amended Application be dismissed.
2. That the Notice of Motion relating to the exclusion of evidence be dismissed.
3. That there be no order as costs of these proceedings.
4. The exhibits be returned.

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