Thomson Landscape & Garden Supplies Pty Ltd v Hornsby Shire Council

Land and Environment Court (NSW)|1998-04-23|Before: Sheahan J, Council Sheahan J

The applicant (" Thomson ") has now sought an order that the respondent (" the Council ") pay its costs of these proceedings, including the costs of this Notice of Motion.

Comprehensive affidavits have been filed in regard to this Notice of Motion. The applicant's position can be gleaned from the affidavit of one of its Directors, Douglas Kenneth Thomson, dated 25 October 1999 and two affidavits by its solicitor, Denis Paul Williams, dated 16 September and 28 October 1999. The respondent's position may be gleaned from the affidavit of its solicitor, Michael John Connell, dated 11 September 1999.

The contents of those affidavits need not be set out in detail in this judgment, but the court has also had the benefit of comprehensive submissions, made both orally and, subsequently, in writing.

One of the appeals (Matter 10293) concerned Council's refusal of an application made by Thomson on 8 September 1998 to modify consent 31/80 granted to it by the Council under delegated authority on 28 February 1980 for the stated use of " supplying of wholesale landscape and garden materials to the trade ". The modification was sought in order to allow outside storage of materials and goods.

The other appeal (Matter 10294) concerns the Council's refusal of a development application made on 9 September 1998 (Council reference 840/98) for a retail shop on the same property, to be used only in a way " ancillary " to the " main purpose or use of the property as a wholesale landscape supplier ".

During the pre-trial period there was some dispute, debate and correspondence between the parties regarding the issue of permissibility, but at the hearing the major issues argued were the conditions which should apply to any approval of shop and any approval of the modification of the consent.

All the conditions sought by the Council were opposed by Thomson.

The two Thomson brothers have been in the wholesale landscape supply business since 1978 and relocated the company's operations to the subject land (lot 124 DP 609395, 44 Beaumont Road, Mount Kuringai) in about 1978.

Thomson's use of the subject land following the granting of two consents in 1980 (the second not directly relevant to these appeals) was the subject of considerable disputation between the company and the Council until approximately 1984, and the company acknowledged in this case that it had some trouble complying with the conditions of consent in those early days.

Relations were then relatively quiet until the Council apparently sent a letter predicating some legal action during 1994, but, more especially, in March 1998, when it received a complaint alleging that Thomson was acting in breach of its consent.

Thereafter, there appears (see Annexure 'F' to Connell's affidavit) to have been a series of inspections followed by on-site meetings and various correspondence, after which Thomson sought the advice of consultant town planner, Mr K L Willis, a former long-time employee of Council.

The development and modification applications, which are the subject of these proceedings, were then lodged with Council in September 1998.

The appeals to this court were filed on 28 April 1999, and, on 5 May 1999, the Council resolved to refuse both applications.

It is perhaps also relevant that there had been some class 4 proceedings commenced by Thomson against the Council and three other respondents, including two companies, at least one of which has been described as a nearby competitor. Thomson's solicitor, in argument, also places some significance on the fact that a local competitor was effectively the only objector to the relevant applications the subject of this appeal. Those class 4 proceedings were commenced in February/March 1998 and concluded in August 1998 on a basis which apparently included an order that the competitor pay Thomson's costs.

In its written submissions, Thomson refers to the Council's " threatened Class 4 proceedings against the Applicant and …the Respondent's orchestrated surveillance, criticisms and threats of legal action against the Applicant which commenced in mid 1998, at the initiation of those associated with Hornsby Sand & Cement ".

If that is the competitor about whom Thomson complains, I note that no company of that name is named as a respondent in the proceedings 40048 of 1998 (so far as documents from that matter are included in the evidence in this).

Thomson had also objected to a development approval granted apparently in July 1998 to that competitor and there was an allegation that Thomson's relationship with Council deteriorated as a consequence of having taken that position.

There is some evidence that Thomson complained to the Department of Local Government about the actions of one sometime Councillor of the Hornsby Shire, and of the compliance officer, Mr Greg Taylor, and that the Department declined to take any action, once the named Councillor ceased to hold office.

In the Council's Planning Division's report to the meeting of 5 May 1999, the Council officers suggested that the Council had two options from which to choose. It could either approve the two applications by Thomson, or it could decide to refuse them, proceed to change the description of " ancillary use " in the Hornsby LEP, and commence legal action (presumably class 4 proceedings) against Thomson to ensure compliance with the conditions of Development Consent 31/80.

The officers recommended the first of those options, and a draft of a comprehensive set of conditions was submitted. They included provisions for a deferred commencement consent which would require the regularisation of anything in Thomson's operation that did not strictly comply with the conditions of consent 31/80.

However, the Council resolved simply to refuse both applications. It is also clear from the evidence that the motion to refuse the applications was successfully moved by the Councillor about whom Thomson complained.

There is no evidence of any action being taken against Thomson as canvassed in the second option put in the officer's report, but there is some evidence that the Council, in the light of the Thomson applications, proceeded to explore the prospect of amending the LEP provisions relating to shops within industrial zones (see Exhibit 1, Executive Manager's Report PLN 252 of 1999, dated 1 September 1999). This report regarding possible amendment of the LEP was not tendered in evidence before Commissioner Murrell.

On behalf of the Council, Mr Parry submitted that the Council was properly concerned, at the hearing, about the extent of retailing in the industrial zone. He says that he was unable to concede on Council's behalf that the proposed use was in fact " ancillary " and, therefore, lawful, until certain evidence (Mrs Thomson's statement) was presented to him on the first day of the hearing (2 September). He then conceded that the " ancillary " use was permissible.

Until that point, no direct evidence had been provided in support of Thomson's contention and the respondent had accepted that there were no clearly severable financial records of the company available. Indeed, the applicant had failed to produce any document in answer to a Notice to Produce which sought documents as to the extent of retailing from the site.

It is now common ground that the appropriate test to be applied to the question of " ancillary " use in the context of the Hornsby LEP, was/is that set out by Pearlman J in her judgment in Loccisano v Hornsby Council [1996] NSWLEC 122, and that Thomson complied with it. That case is referred to in the report of 1 September regarding possible amendment of the LEP ( Exhibit 1 ).

At the hearing of the appeal leave was obtained to amend the s 96 application to accord with the landscape plan which was forwarded to the Council's solicitors two weeks before the hearing. That plan was admitted into evidence and became the amended site plan. It remains with the court file as it is referred to in the conditions, and a further copy was tendered at the costs hearing ( Exhibit 2 ).

Mr Parry states that the plan represented significant alterations making the proposal " materially different ". Thomson denies that contention and asserts that, for convenience, it adapted the plan for another purpose, to define what in fact was already in place. Nonetheless, the plan satisfied several of the Council's concerns and several of its draft conditions.

A reading of Commissioner Murrell's judgment indicates that the court was persuaded by Thomson not to impose upon it several of the major conditions advocated by the Council, but it is clear that some which were imposed, were strenuously opposed by Thomson.

The court's function in this hearing is to determine whether the evidence about the class 1 appeals discloses circumstances which are truly " exceptional ", so as to warrant the making of an order for costs, or for some apportionment of Thomson's costs between the parties.

Judges of this court are frequently called upon to adjudicate upon whether the circumstances of particular class 1 cases are " exceptional ", and, in doing so, to review earlier cases on the question. I made a comprehensive review in Foboco Pty Ltd v Kiama Municipal Council , (Sheahan J, NSWLEC, 23 April 1998, unreported) and to my knowledge no issue has ever been taken in this court with my analysis of the correct principles to apply.

Orders for costs are compensatory and not punitive in nature, and the court must review, when exercising the costs discretion, the conduct of both parties in order to decide how to apportion the costs burden. Latoudis v Casey (1991) 170 CLR 534.

In Oshlack v Richmond River Council (1998) 193 CLR 72 the High Court recognised (at 88) that there is:

no absolute rule … that, in the absence of disentitling conduct, a successful party is to be compensated by the unsuccessful party. Nor is there any rule that there is no jurisdiction to order a successful party to bear the cost of the unsuccessful party.

Some pattern of disputation between the parties to class 1 litigation, and/or among commercial competitors interested in the outcome of that litigation, is not unusual in cases before this court, and it is a difficult task to define what level of disputation, or what type of background to it, is sufficient to ground an order for costs. Each case turns on its own facts.

The Council here was vested with several discretions. It had no duty either to grant its approval or to waive its rights to impose conditions. See Anibal 21 Pty Ltd v Waverley Council (1998) 98 LGERA 296.

Thomson has freely admitted to some failure to observe the conditions of its 1980 consent and it made no secret of having made some retail sales over the years, without a consent strictly directed to that activity.

The cases establish that it is not necessary for a disgruntled applicant to go so far as establishing bad faith on the part of the Council. There are some allegations, but no hard evidence of bad faith in this case. See discussion in Kremer & Associates v North Sydney Municipal Council (1982) 47 LGERA 209 at 220.

Likewise, there is in this case no evidence that the Council was " acting recklessly and irresponsibly, in blatant disregard of its public duty ", as was alleged in Lavender View Regency Pty Ltd v North Sydney Council (Sheahan J, NSWLEC, 18 June 1997, unreported).

Thomson relies particularly on three decisions of the court, namely Raiti v Leichhardt Municipal Council (1991) 72 LGRA 333, Berk v Woollahra Municipal Council [No.2] (1992) 78 LGERA 180, and Anibal 21 .

I examined all three of these cases in Foboco , and need not repeat my analysis here.

In Raiti , the Council played effectively a " dead bat " in the appeal. The test applied by Hemmings J (at 336) was whether there had been a " failure of Council to properly discharge or even attempt to discharge its duties …" , such that the applicant was compelled to come to court to obtain a consent it would have obtained had Council performed those duties. His Honour found that the obligation to come to court " should never have arisen " and made an order for costs.

In Minas v Botany Municipal Council (1988) 65 LGRA 129, Bignold J found that exceptional circumstances were made out when the Council had made " a very material mistake " which " so influenced " the Council's dealing with the matter that the litigation became necessary.

In Ray Group Pty Ltd v Byron Shire Council (1998) 98 LGERA 378, Talbot J was " not satisfied that the council dealt fairly and reasonably with the application for approval " (at 381) and he, therefore, awarded costs to the applicant.

With respect to Thomson's submissions, this is not a Raiti situation. Each side asserted a case to argue in the appeal and did so. The court had to weigh up the arguments for and against particular contested conditions; it inspected the site; and it came to a conclusion. In that conclusion, both parties had some successes and some losses. Accordingly, I do not find the logic of Hemmings J, albeit I would agree with his decision in Raiti , to be compelling in this case.

In Anibal 21 Talbot J made the following comments (at 297-8) which I think are applicable to the present case, and I adopt them: The applicant might feel justified in complaining that it suffered unfair treatment at the hands of the council having regard to the whole of the circumstances. However, that, in itself, does not amount to exceptional circumstances within the meaning of the Practice Direction. The council did not act capriciously or in a way that lacked any plausible foundation. It was clearly open for the council to assess the application having regard to the nature of the objections raised by residents and from its own observations and assessment of the site. If the court was to hold that a council was not entitled to refuse a development application whenever the expert material before it supported the granting of consent or otherwise face a costs order, that, in most cases, would impose an unreasonable fetter on the exercise of the council's discretion which the historical approach to costs in planning and building matters, now reflected in the Practice Direction, seeks to address.

There is an unusual history to this proposal and there are some unusual features to the way in which it was carried through to trial, but a finding merely that there has been an " unusual " history of dealings, including litigation, between the parties is of itself not sufficient to ground an order for costs. See Lavender View and Foboco.

Hotly contested issues between the parties, strongly worded exchanges of correspondence between the parties, and even some evidence of inconsistent approaches by the Council to various applications, are, likewise, not sufficient. See Foboco .

I conclude that the circumstances of this case are not so exceptional as to warrant the court's exercise of its discretion to make an order for costs in favour of the applicant.

I will, therefore, dismiss the Notice of Motion.

However, I acknowledge that Thomson had a genuine case to argue for an order for costs, and, I will, therefore, make no order as to the parties' costs of the Notice of Motion.

Accordingly, the formal order of the court will be that in both cases each party will pay all of its own costs.

The three exhibits tendered in the costs hearing may be returned to the respondent, but the other exhibits in the court file should remain there.

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.

CITATION : Thomson Landscape & Garden Supplies Pty Ltd v Hornsby Shire Council [2000] NSWLEC 59 APPLICANT PARTIES : Thomson Landscape & Garden Supplies Pty Ltd RESPONDENT Hornsby Shire Council FILE NUMBER(S) : 10293 and 10294 of 1999 CORAM: Sheahan J KEY ISSUES: Costs :- in class 1 - whether exceptional circumstances LEGISLATION CITED: Anibal 21 Pty Ltd v Waverley Council (1998) 98 LGERA 296; Berk v Woollahra Municipal Council [No.2] (1992) 78 LGERA 180; Foboco Pty Ltd v Kiama Municipal Council Sheahan J, NSWLEC, 23 April 1998, unreported; Kremer & Associates v North Sydney Municipal Council (1982) 47 LGERA 209; Latoudis v Casey (1991) 170 CLR 534; CASES CITED: Lavender View Regency Pty Ltd v North Sydney Council (Sheahan J, NSWLEC, 18 June 1997, unreported; Loccisano v Hornsby Council [1996] NSWLEC 122; Minas v Botany Municipal Council (1988) 65 LGRA 129; Oshlack v Richmond River Council (1998) 193 CLR 72; Raiti v Leichhardt Municipal Council (1991) 72 LGRA 333; Ray Group Pty Ltd v Byron Shire Council (1998) 98 LGERA 378 DATES OF HEARING: 17/11/99, written submissions 3/12/99 DATE OF JUDGMENT: 03/31/2000

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