Tradelink Constructions Pty Ltd v Holroyd City Council

Land and Environment Court (NSW)|2005-10-26|Before: Ms J, Bignold J, Talbot J

Background 1 This matter concerns a Notice of Motion by the respondent council for costs associated with a Class 1 appeal. The appeal was in respect of a mixed commercial and residential development situated at 33 Sherwood Road, Merrylands, which was ultimately granted approval by consent orders on 4 August 2004.

2 Subsequent to this consent, the respondent was granted leave to make a costs application pursuant to His Honour Justice Bignold's decision of 3 June 2005.

3 The council's cost application is based on two main grounds comprising: + Additional costs incurred during the processing of the development application over the period it was before the Court; + The overall conduct of the applicant in commencing Class 1 proceedings and thereby causing the council to incur costs for the development application, which was considered deficient in basic detailing so as to prevent its legal and practical assessment. 4 The respondent seeks the following relief: 1. The applicant pay the respondent council's costs incurred in the proceedings as follows: (a) 40-50% of the costs incurred from filing of the proceedings on 24 October 2003 to 22 April 2004: (i.e. $18,760.57); (b) 20% of the costs incurred from the joint conference on 22 April 2004 for up to and including the hearing on 17 June 2004; (i.e. $5,321), and (c) The costs incurred following adjournment of the hearing on 17 June 2004 to 22 July 2004; (i.e. $1,725.90) 2. The applicant pay the respondent council's costs in this Notice of Motion; (i.e. $16,000). 5 In support of this application, the council has provided a detailed chronology of events listing the various meetings of experts and advisers associated with the appeal. Together with this are detailed unit costs, amounting to the claimed $25,807.47, which cover Items 1(a) - (c) above.

6 Both parties acknowledge that the Rules of the Court allow for the awarding of costs in Class 1 appeals whereby the Land and Environment Court Rules 1996 Pt 16, r 4(2) provides: 2 . No order for the payment of costs will be made in proceedings to which this Rule applies unless the Court considers that the making of a costs order is, in the circumstances of the particular case, fair and reasonable. 7 According to Mr McKee's submissions, where the Court processes incur additional costs for a party, in order to achieve an acceptable "community outcome", then it is fair and reasonable for that party to recoup those additional costs.

8 In particular, he refers to the matter of Aldi v Holroyd City Council [2005] NSWLEC 338, where His Honour Justice Talbot said that the discretion to award any (fair and reasonable) costs would be on the basis that parties are to remain confident they may commence or defend proceedings without the threat of incurring liability for costs (other than their own costs) even if they are not the successful party. He also noted that experts can differ in respect of subjective as well as objective views on the impact of development and it is appropriate for those views to be fully articulated, tested and reconciled in the appeal process. Furthermore, he considered whether there were legitimate arguments raised by the applicant in terms of the merits of the appeal, or if they could be classified as amounting to an irrational or ambit claim.

9 From this, Mr McKee's submission is that the conduct of the applicant in these proceedings amounted to an ambit claim or was irrational in that it was a decision "not governed by fair consideration of facts or evidence". The reasons for the submission include the applicant's persistence with a zero building line setback to Patton Street against council's preferred 5 m setback and the failure to lodge appropriate supporting documentation for SEPP 55 validation, SEPP 65 statement addressing design quality principles, adequate drawings and traffic report.

10 Against this Notice of Motion, Ms Wauchope submits that where the appeal proceedings are confined to consideration of the merits of a particular application, about which minds may reasonably differ, there are good reasons to suggest that the conventional approach to order costs (i.e. costs follow the event) should not be followed and no costs order should be made. The essence of the proceedings is a merit review of a decision of council (Rio Pioneer General [2003]; Raiti).

11 In addition to this, Ms. Wauchope submits that the respondent did not raise in these proceedings any preliminary jurisdictional point (such as regarding capacity for approval) which would have the character of usual litigation, determining the legal position between the parties, and which would attract a costs order as contemplated in Gee (Gee v Port Stephens Council [2003] 131 LGERA25 McClellan C J.

12 In that case, at par 56 the Chief Judge stated: 56. I have already indicated there will be many cases in classes 1 and 2 where it is appropriate there be no order as to costs. In my opinion this is likely to be the case where the issues in dispute are confined to merit considerations. However, a different approach may be required where a preliminary question is raised. If it happens that determination of the preliminary question will assist the Commissioner of his merits of the matter by defining the contents or limits on his or her discretion it is likely that no order for costs should be made. There will be others. However where the preliminary point raised is said to preclude consent at all, the proceedings cease to have the character of merit review and different considerations arise. 13 The applicant also lodged a detailed chronology of events dealing with the processing of this development application. I note that there are some minor discrepancies between them.

14 However, the respondent's case may conveniently be divided into the following elements: i) Period 1 : 6 March 2003 - 24 October 2003; this period includes pre-lodgement discussions between the parties, until the development application was made on 25 March 2003 and then the Class 1 appeal was lodged on 24 Oct 2003, ii) Period 2 : 24 October 2003 - 22 April 2004; this period involves various discussions/negotiations between the parties, callovers, mentions and case management to deal with amended plans lodged on 5 February, which were notified. Further amended plans were then lodged on 23 March. iii) Period 3: 22 April 2004 - 17 June 2004; this period included review of the proposal and case management to identify and progress the outstanding matters. Revised plans, including separate drainage plans were provided by the applicant to address some of the outstanding issues and to facilitate joint conferencing by the experts. Further amended plans were provided on 10 June 2004, for consideration at the appeal hearing listed for 17 June 2004. iv) Period 4 : Post 17 June 2004. The appeal commenced with a view and a number of residents presented their objections. On-site, the Court took the opportunity of clarifying the unresolved planning issues and allowed discussion between the respective experts. From this the experts agreed there were some 6 "outcome" matters of concern which could likely be remedied by way of further amendments. Consequently the proceedings were adjourned to allow further amended plans to be lodged and considered. This resulted in the presentation of acceptable plans leading to the party's agreement to Consent Orders on 2 July 2004. 15 It is apparent from the chronologies that the processing and assessment of this development application has involved a considerable amount of time and interaction between the relevant parties, to achieve the Consent Orders. This is mainly due to the applicant's persistence with the aforementioned design aspects, which varied from the DCP.

16 Accordingly, Mr McKee's submission is that there were design deficiencies in the application and the unwillingness by the applicant to adopt council's preferred setback indicates the initial development application was made on the basis of an ambit claim, which incurred significant extra costs on council's behalf, which it is fair and reasonable to be recompensed by the applicant.

17 Against this, however, I note Ms Wauchope's submissions regarding the inability to satisfactorily ascertain all of council's requirements and that no response from council was received for some 7 months after lodgement of the development application.

18 In my assessment of this part of the costs claim, I note that this is a medium-sized development comprising 4 storeys containing ground level commercial tenancies and 18 x 2 and 3 x 3 bedroom units over 2 levels of basement carparking. The estimated cost of the development was $3m. Presumably it would be apparent that assessing a development of this scale would necessarily be involved and require the allocation of adequate resources, which the development application fees would substantially cover.

19 But the lack of any council response or decision within a reasonable period, resulted in the applicant lodging the appeal on the basis of a deemed refusal, some 7 months after the application was lodged. At this stage, on the 6 November 2003 council advised the applicant that its assessment of the information submitted revealed a number of deficiencies, which meant that the proposal could not be further considered until certain information was submitted. This advice concluded by inviting the applicant to lodge amended plans, responding to the substantial list of the deficiencies on the basis that: a. "if the amended plans are deemed to require re-notification, an amended plan fee, equal to half the original Development Application fee paid may be required, prior to council considering the application further. This …"

20 It is apparent that the control of this development application was in council's hands for the initial periods, until the appeal was lodged. Accordingly the council could have refused the application, if it considered the application details were so deficient to preclude effective 79C assessment. But the council did not adopt this course, and instead invited the amended plans on the basis that some further fees may be required, and I accept council does not claim any costs for this Period 1.

21 The main claim for costs covers the Periods 2 and 3, which the evidence indicates involved extensive liaisons and negotiation between the parties. This included resolution (somewhat belatedly) of the Statement of Issues for the applicant to respond to. Nevertheless during this period, council took no initiatives to reject the application because of its concern about lack of details, or to detail any claim for costs. Instead it facilitated the ongoing negotiations.

22 In my assessment, negotiations on aspects of a development proposal is normal procedure that would be allowed for in the development application fees, excluding Court costs. But reference to the various chronologies in this case indicates extensive, if not excessive liaison and negotiation by the parties, up until the appeal hearing. This is confirmed in my opinion, by reference to the council's total cost of $64,129.34 for Periods 2 and 3. Also the applicant's reference to its additional costs in the order of $155,000 for amended plans in this case.

23 Insofar as the council only claims a percentage of its total cost, nevertheless these percentages have been arbitrarily determined, resulting in the amount of $24,081.57. Despite having some of the detailed cost items, the Court is not in a position to assess all of the individual cost components and does not consider in this case that arbitrarily selected percentages of costs represents fair and reasonable method to ascertain allowable costs. 24 Insofar as I accept there were some deficiencies in the level of detailing of the applicant's preferred development option, nevertheless the council continued to process the application, during Periods 2 and 3. Consequently the applicant experienced considerable delay in having this preferred option determined. In my assessment, I do not consider this preferred option represented an "ambit claim" and accordingly I do not consider it is fair and reasonable to award council costs, in the absence of any prior conditional agreement.

25 With respect to Period 4, which covers the time following commencement of proceedings with the view, I acknowledge that the applicant elected to undertake further amendments in response to objectors' concerns and matters arising. Whilst some mention of costs was made, no conditional arrangement was agreed. Nevertheless, I consider it fair and reasonable to allow the costs claimed by council for this period, in the amount of $1725.90, based on the extent of the re-assessment of the amendments, the scope of which the Court was made aware of. Conclusions 26 Having considered the extensive evidence presented and the respective submissions it is apparent that this development application was for a medium-sized development, with an estimated cost of $3m that generated a number of merit issues to be addressed. Some of the merit issues concern the applicant's reluctance to adopt council's prescribed development controls, including street setbacks in Paton Street. But that option was available for the applicant to test at appeal, considering the discretion allowed in council's prevailing development controls. Therefore I do not consider it reasonable to award significant costs against the applicant because the initial development application may have been classified as an " ambit claim", according to Mr McKee's submissions. I do not accept this submission.

27 Insofar as the assessment of the application was somewhat slow because of poor communications between the parties, nevertheless the parties agreed to pursue this course of negotiations to progress the application by way of a series of amendments. It seems to me that this is part and parcel of the litigation process, which allows parties to take whatever action it considers necessary and reasonable to achieve a negotiated settlement or, best present its case at the appeal hearing. Accordingly, some costs must inevitably be accepted by both parties, unless conditional costs arrangements are made.

28 With regard to cost claims, the basis for costs awards was confirmed in the matter of Cachia v Hanes HC of A (1993 - 1994 179 CLR), wherein reference is made to the use of the Rules for compensation and reimbursement to litigants as follows: "To use the Rules to compensate a litigant in person for time lost or would cut across their clear intent. Costs, within the meaning of the Rules, are reimbursement for work done or expenses incurred by a practitioner or practitioner's employee. Compensation for loss of time of a litigant in person cannot be said to constitute costs within the meaning of the Rules.

This is hardly surprising. It has not been doubted since 1278 when the Statute of Gloucester (30) introduced the notion of costs to the common law, that costs are awarded by way of indemnity (or, more accurately, partial indemnity) for professional legal cost actually occurred in conduct the litigation. They were never intended to be comprehensive compensation for any loss suffered by a litigant… 29 Application of this principle to Class 1 matters can appropriately be used as a basis to award fair and reasonable costs. However because of the nature of these proceedings, which sometimes involves applications for adjournments so that matters can be addressed to achieve a worthwhile community outcome, this most likely incurs additional costs, which are allowable. Accordingly, the appropriate procedure should be for leave to be sought on a conditional basis, which is specified at the time of hearing the leave application.

30 In the current case, while leave was granted to allow the amended plans after the view, it was not on the specified conditional basis. Nevertheless in the circumstances in this case, where the matter of costs was raised, in respect of the amended plans, I consider it fair and reasonable that appropriate costs should be awarded to the council. Such costs could cover the legal costs associated with dealing with the amended plans, including the relevant expert fees. Accordingly I consider that the council's claim for Period 4 of $1725.90 should be allowed, subject to the concurrence of the Chief Judge.

31 Insofar as, the respondent seeks further costs of $16,000 for the cost hearing, and it has been partially successful with the aforementioned costs award for Period 4, nevertheless I do not consider this cost should be awarded against the applicant, taking into account the relatively inefficient procedure adopted in assessing this development application by both parties. Therefore each party should bear its own costs in respect of this hearing.

Provisional Orders 32 The provisional order of the Court (subject to the concurrence of the Chief Judge) are:

The appeal is allowed. 2. The applicant is required to pay the respondent's costs in processing the amended application, for the amount of $ 1725.90. 3. Each party to bear its own costs for the costs hearing. 4. The exhibits may be returned. 33 In accordance with cl 10 of the Land and Environment Court Practice Direction 1993 (Directions 1 to 15), the parties are to advise the Registrar within fourteen (14) days whether they wish to make further submissions to the Chief Judge in relation to this matter.

                      R Hussey
                      Commissioner of the Court
                      rjs/ljr

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 : Tradelink Constructions Pty Ltd v Holroyd City Council [2005] NSWLEC 392

Gee v Port Styephens Council [2003] 131 LGERA 25 ; CASES CITED: Aldi Foods Pty Ltd v Holroyd City Council [2005] NSWLEC 338

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Cases Cited (2)