Thomas v Randwick City Council

Applicant's submission 7The Applicant relies on three grounds. Firstly in these unusual circumstances whereby the elected councillors could not make a decision as no quorum could be achieved resulting in no decision being made, the Applicant had no choice but to appeal to the Court. That situation alone gives rise to fair and reasonable circumstances simpliciter which justify an order for costs in the Applicant's favour. 8Secondly, relying on r 3.7(c) of the Court Rules the Council acted unreasonably in the circumstances leading up to the commencement of the proceedings 9The unreasonable behaviour is the failure of the Council to pass two procedural motions referring the matter to its General-Manager (the GM) on 26 July 2011 and 20 September 2011 as specifically provided for in cl 8.20 of the Council's Code of Conduct. Given the Council officer's report on file recommending approval of the application subject to conditions it is likely that the GM would have approved the application. It is not appropriate to view the LEC as the default consent authority which is effectively what occurred in this case. 10The Council also acted unreasonably in the conduct of the proceedings, r 3.7(d) of the Court Rules, in that it failed to participate in the conciliation conference contrary to the duty in s 34(1A) of the Court Act that a party has a duty to participate in such a conference. This duty operates regardless of the filing of a submitting appearance under r 6.11 of the Uniform Civil Procedure Rules 2005 (the UCPR). Not having the Council represented at the s 34 conference meant that it could not contribute to the resolution of the proceedings. 11Further the Council required that its file be subpoenaed rather than producing it in accordance with the Class 1 practice note cl 11 which requires production of the Council's file within 14 days. 12The Applicant seeks costs on an indemnity basis because the failure to delegate, the non participation in the conciliation conference, and the requirement to subpoena the Council file individually or together give rise to the relevant special circumstances justifying an order for indemnity costs. Relevant principles are identified in Vis Visitor Investment Services Pty Ltd v Hawkesbury City Council (No 2) [2010] NSWLEC 252 at [14] - [31].

Council's submissions 13None of these grounds are made out. Firstly, the appeal has been brought as provided for in s 97 of the Environmental Planning and Assessment Act 1979 (the EPA Act) as a deemed refusal, which is a commonly exercised appeal mechanism. It is unknown if the GM would have approved the development application if the procedural motions had been passed and it cannot be assumed that no appeal to this Court would have been necessary had the motion to delegate to the GM been passed. 14Secondly the circumstances in r 3.7(c) are not made out. The councillors complied with their obligations under the LG Act and the Council's Code of Conduct in declaring their pecuniary and non-pecuniary interests which resulted in there being no quorum of the Council. There was no unreasonable behaviour in the councillors not voting to delegate the matter to the Council's GM. When the various declared interests are viewed, the context whereby the councillors would not wish to be seen to be endorsing the staff recommendation for approval (which report was on the Council file) or providing tacit support to the application is understandable. It was appropriate that another independent body make the decision, in this case the Court. It is not accepted that the councillors abrogated their civic responsibility to determine such applications by not delegating that decision to a Council officer. 15In relation to r 3.7(d) of the Court Rules, the Council's GM considered it prudent to require a subpoena to produce the Council's file given that it had filed a submitting appearance and there was another active respondent. It did not challenge the subpoena and provided the documents promptly, within two days. That was not unreasonable behaviour. 16The Council filed a submitting appearance early. Under UCPR r 6.11(2) this means that the Council must take no further steps in the proceedings without leave of the Court. It was not required to participate in the conciliation conference and was not asked to do so by the Applicant. There was no breach of the duty in s 34(1A) of the Court Act. Nevertheless when asked by the Applicant the Council gave its consent to the conference being held and gave its consent to the agreement of the Applicant and Second Respondent when asked to do so by the Court. There is no basis for awarding indemnity costs.

Finding 17The parties have agreed that these circumstances are unusual and that is important background given the Applicant's submission that the Court should not be seen to encourage poor public administration in local government by not awarding costs to the Applicant in this matter. This submission was directed to the circumstance that the motions to delegate the matter to the GM were not passed leaving this Applicant with no option but to commence an appeal under s 97 of the EPA Act in this Court. 18It is important to recognise the presumptive rule in Class 1 appeals that each party pays its own costs, identified in numerous authorities referred to in the parties' submissions. A useful summary of costs principles can be found in Monaghan v Holroyd City Council (2009) 167 LGERA 321 at [83] and authorities concerning the operation of r 3.7 in St Mary's Land Limited v Valuer-General of NSW [2011] NSWLEC 2 at [54] - [57] referring to Agonic Holdings Pty Ltd v Lithgow City Council [2009] NSWLEC 34 at [4] - [5]. 19I largely agree with the Council's submissions on why none of the arguments of the Applicant should succeed. 20In relation to the simpliciter fair and reasonable argument, these unusual circumstances do not alone suggest that it is fair and reasonable to order the Council to pay the Applicant's costs. I agree with the Council's solicitor's submission that the councillors found themselves in the position of having no quorum because of their necessary and important compliance with the legislated rules regulating conflict of interests in local councils. The Applicant did not rely on the motion to delegate to the GM not being passed on this ground. 21In relation to r 3.7(c) of the Court Rules, the main criticism is that the motion to delegate to the GM was not passed on two occasions. The councillors were not compelled to delegate the matter to the GM and had a discretion whether to do so. Viewed in the context identified by the Council's solicitor their choice not to do so does not appear unreasonable. While the Applicant complains that the only avenue open to it was to appeal to this Court, in these unusual circumstances that does not appear an unfair or unreasonable outcome. There was a statutory mechanism provided through a deemed refusal appeal for the Applicant to proceed. It is not appropriate in assessing reasonableness to make any assumptions as to whether the application, if sent to the GM, would have been approved and the need for an appeal to the Court avoided. 22In relation to whether there was unreasonable conduct of the proceedings it is also necessary to look at the circumstances overall. In relation to the s 34 conference, the Council did not frustrate the conduct of the conference, co-operated in agreeing to the holding of the s 34 conference and later consenting to the agreement reached between the Applicant and the Second Respondent. It is debateable any agreement was necessary in light of the Council's early submitting appearance filed and the operation of r 6.11(1) UCPR to the effect that the Council then submitted to any orders of the Court but for any reservation as to costs. Given the circumstances, it is not necessary that I resolve finally the nature of the interaction, if any, between the filing of a submitting appearance under r 6.11 of the UCPR preventing the taking of further steps in a proceeding without leave of the Court (r 6.11(2)), and the duty to participate in a s 34 conference in s 34(1A) of the Court Act and whether these are steps in a proceeding to which r 6.11(1) applies. The Applicant says no, the Council yes. The Council's behaviour did not result in the Applicant incurring any additional or unreasonable costs in relation to the conduct of the s 34 conference. The same observation can be made in relation to the requirement for a subpoena which was apparently issued for understandable reasons of prudence by the GM and resulted in the prompt delivery of relevant documents in any event. 23The principles concerning the award of indemnity costs were identified inter alia in F & D Bonnacorso Pty Ltd v City of Canada Bay Council (No 3) [2007] NSWLEC 569 as requiring special or unusual circumstances. In Rosniak v Government Insurance Office (1997) 41 NSWLR 608 Mason P (Clarke AJA agreeing) referred to a court requiring evidence of moral delinquency. While these are unusual circumstances I do not consider there has been any conduct of the Council suggesting any shortcomings in its behaviour and certainly none justifying an award of costs on this basis. 24In light of these findings the Applicant's Notice of Motion dated 29 November 2011 is dismissed. It is unnecessary to further consider the additional affidavit of Mr Fahey dated 20 January 2012 which the Applicant's counsel sought to tender and in relation to which I postponed my decision.

Orders 25The Court makes the following orders:

1. Applicant's Notice of Motion dated 29 November 2011 is dismissed.
2. No order as to costs. 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: 16 April 2012