Trenwith & Ors v Sutherland Shire Council & Anor

Australian Securities and Investments Commission v Rich (2004) 50 ALJR 500 ; Belongil Progress Association v Byron Shire Council [2000] NSWLEC 118.; Cutcliffe v Lithgow City Council [2006] NSWLEC 463; CASES CITED: Develtor Property Group Pty Ltd v Newcastle City Council [2001] NSWLEC 47 ; Kindimindi Pty Ltd v Lane Cove Council (2006) 143 LGERA 268; Oshlack v Richmond River Council (1998) 193 CLR 72 ; Rushcutters Bay Smash Repairs v H McKenna Netmakers & Ors [2003] NSWSC 670

APPLICANTS Mr A Pickles (Barrister) SOLICITORS Macedone Christie Willis LEGAL REPRESENTATIVES: FIRST RESPONDENT Submitting Appearance

SECOND RESPONDENT In Person

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

40937 of 2004 Trenwith & Ors v Sutherland Shire Council & Anor (No 3)

JUDGMENT ON COSTS 1 Her Honour: I handed down judgment in this matter on 29 August 2005. The Applicants sought declarations of invalidity of a development consent and construction certificate and an order for demolition of the structure in issue. The relevant background to the proceedings is recorded in my judgment at [2] - [10]. I declared the Council's development consent was invalid and void. While I ultimately held that I would consider making an order for demolition, I did not do so in my judgment to enable the parties to agree on whether work could be carried out by the Second Respondent to ameliorate the impact on the Applicants without requiring demolition. I have now made final orders in the matter and also need to determine the question of costs.

2 Section 69 of the Land and Environment Court Act 1979 ("the Court Act") states that: … ( 2) Subject to the rules and subject to any other Act: (a) costs are in the discretion of the Court, (b) the Court may determine by whom and to what extent costs are to be paid, and (c) the Court may order costs to be assessed on the basis set out in Division 6 of Part 11 of the Legal Profession Act 1987 or on an indemnity basis.

3 I have broad discretion to award costs as long as my discretion is exercised judicially. The general rule in Class 4 proceedings is that the successful party ought obtain their legal costs. The Applicants were generally successful in the proceedings and now seek their costs. A successful party is usually entitled to an award of costs unless there is disentitling conduct. There is none in this case. 4 The issue arises as to the basis on which the Respondents should have to pay the Applicants' costs.

5 The Council filed a submitting appearance save as to costs early in the proceedings, but did not file a defence and did not participate in the substantive hearing. A submitting appearance is enabled by Pt 11 r 4(3) of the Supreme Court Rules 1970 (SCR) which are adopted by the Rules of this Court by Pt 6 r 1(1). It argued in the brief costs hearing on 9 February 2006 that as it did not participate in the substantive hearing and did not therefore influence the length of the proceedings or the way the hearing was run, it should not have to bear any costs at all.

6 The Second Respondent filed a defence dated 5 November 2004 which put in issue the matters raised by the Applicant in relation to his conduct and disputed whether the Court should grant the discretionary relief sought. He was the sole contradictor at the substantive hearing. No arguments were made by him in relation to the numerous grounds of invalidity raised by the Applicants but evidence was presented and submissions made on the exercise of the Court's discretion. The Second Respondent, who represented himself at the costs hearing, argued that the situation which gave rise to the declaration of invalidity of the development consent he relied on was the Council's error in granting the development consent. He should not be held responsible by any order that he pay the Applicants' costs. Finding 7 I will consider the Council's position first. The appropriateness of a Council filing a submitting appearance where a development consent is subject to challenge was endorsed in the High Court in Oshlack v Richmond River Council (1998) 193 CLR 72 by Gummow and Gaudron JJ at 77-78, and by Cowdroy J in Kindimindi Pty Ltd v Lane Cove Council (2006) 143 LGERA 268 at 275. Neither of these cases deals with the costs consequences if the Council does file a submitting appearance. There were no submissions from any party including the Council on the effect, if any, of the Council's submitting appearance save as to costs in relation to any costs orders I might make. 8 I have had the benefit of reading the recent decision of Biscoe J in Cutcliffe v Lithgow City Council [2006] NSWLEC 463, where he extensively reviews a number of cases which have considered this issue in this and other Courts. His Honour notes at [14] that a costs order against two or more respondents is joint and several, relying on Rushcutters Bay Smash Repairs v H McKenna Netmakers & Ors [2003] NSWSC 670. The Court is able to determine that the contribution should not be equal as between the respondents, as Biscoe J notes occurred in Belongil Progress Association Inc v Byron Shire Council [2000] NSWLEC 118. 9 As his Honour's review of cases shows, in several jurisdictions the "usual" approach is that the submitting party is immune from costs from the time a submitting appearance is entered in the ordinary course of events. In terms of the costs liability of local councils, in contrast to inferior courts and tribunals, I agree with his Honour's analysis and conclusion at [33] - [36] that there should not be the same inhibitions in ordering costs against a submitting local council whose error has occasioned successful litigation resulting in a development consent being declared invalid. That is the circumstance in this case.

10 Councils have a significant statutory role in the granting of development consents under the Environmental Planning and Assessment Act 1979 ("EP&A Act"). Once issued such consents confer legal entitlements on their holder until declared invalid by a Court. Cases before this Court are unlike those where a submitting appearance can bring an end to proceedings without the need for a hearing on substantive issues. As Biscoe J states at [18] in Cutcliffe, it is still necessary for the applicant to satisfy the Court that the declaratory relief sought ought be granted. His Honour usefully outlines at [18] a number of decisions where different courts have determined this, see particularly Australian Securities and Investments Commission v Rich (2004) 50 ALJR 500 at [10]. 11 His Honour refers to cases in this Court which have considered this issue particularly that of Develtor Property Group Pty Ltd v Newcastle City Council [2001] NSWLEC 47 where Bignold J considered that the filing of a submitting appearance meant that generally the submitting party was immune from any liability for costs. In that case there was only one respondent, the council, which filed a submitting appearance. I agree with Biscoe J's statement at [31] that: … a successful applicant in declaratory proceedings should have all its costs reasonably incurred in obtaining declaratory relief, which include the costs of a hearing. That is because the applicant is not entitled to such relief merely because the respondents have submitted but must satisfy the court, by evidence and argument, that a declaration should be made. 12 In Cutcliffe his Honour proposes general guidelines at [50] for the exercise of the Court's discretion where a consent authority files a submitting appearance, as follows: The following general guidelines may be formulated, based on the cases and principles reviewed in this judgment, for the exercise of the Court's discretion to order costs where

· an applicant successfully brings proceedings that are necessary to have declared invalid or set aside a development consent or decision of a consent authority; · the consent authority and the beneficiary of the development consent or decision are necessary or proper parties; and

· the cause of the invalidity is an error of or attributable to the consent authority and not to the beneficiary: (a) the applicant will ordinarily be entitled to be compensated by an award in its favour of the costs of the proceedings unless it has engaged in disentitling conduct.

… ( c) where the beneficiary does defend the proceedings, albeit unsuccessfully, the applicant's costs will ordinarily be awarded against both the beneficiary and the consent authority, whether or not the latter enters a submitting appearance. The award of costs against the consent authority is because its error is the cause of the litigation. It cannot immunise itself from costs by entering a submitting appearance for the reason given in (b) above. The award of costs against the beneficiary is because it chose to defend the proceedings. A qualification is that the beneficiary alone may be required to bear the applicant's costs to the extent that they exceed the costs that the applicant would have incurred if both respondents had submitted, being costs attributable to defences that the beneficiary has unsuccessfully raised and the consent authority has not raised. An example may be a defence by the beneficiary that, notwithstanding an invalidating error by the consent authority, the court, for discretionary reasons, ought not to grant any relief.

13 Here the Applicants have successfully brought proceedings to have declared invalid a development consent issued by the Council. The Applicants filed evidence and argued their case in the Council's absence as they were obliged to do if they were to obtain the declaratory orders and consequential relief sought. It was clearly necessary for them to convince the Court that the declaratory orders ought be made given that in the absence of those orders the development consent they sought to impugn continued on foot. Further it is clear that the Council and the beneficiary of the development, the Second Respondent, were necessary and proper parties.

14 In relation to whether the cause of the invalidity is an error attributable to the consent authority, the Applicants argued in the substantive hearing the development consent was invalid on four bases:

(i) the inadequate notice given by the Council due to the inadequacy of the plan of the proposed development sent to neighbours. (ii) whether the development application lodged complied with s 78A of the EP&A Act and cl 50 of the Environmental Planning and Assessment Regulation 2000. I held it did not comply, a failure of the Second Respondent. (iii) whether the Council erred in failing to consider relevant matters in relation to the development application. I held that it did, a significant error on the Council's part in the circumstances of the case. (iv) whether works were carried out which did not have development consent, which was clearly the case for parts of the structure given that a s 96 modification application for these was lodged by the Second Respondent after the structure was completed. 15 It is clear that there was a strong likelihood that I would declare the development consent invalid based on any one of the first three grounds argued. In the course of my judgment I made adverse findings about the Council officers' assessment of the development consent in considering issue (iii) above. I also made adverse comments about the plans supplied by the Second Respondent in relation to the development application. I determined all the grounds in issue as I considered I needed to do so in order to inform the exercise of my discretion in this matter. Given that demolition orders were sought this was a difficult matter requiring careful consideration of all the relevant circumstances. The cause of the invalidity of the development consent was an error or errors attributable to the Council, given its primary role in assessment of development applications under the EP&A Act.

16 The hearing, which took several days, was otherwise devoted to arguments about the exercise of the Court's discretion as the Second Respondent did not wish the Court to make the demolition order sought as consequential relief by the Applicants.

17 Weighing up the conduct of the respective parties in the proceedings and the nature of the issues, I consider the First and Second Respondents should be jointly and severally liable for the Applicants' costs of these proceedings as provided for by the principle in [50], third bullet point (c) in Cutcliffe set out above. 18 I consider both Respondents should share liability for costs. The Second Respondent was the only contradictor and challenged the consequential relief sought by the Applicants resulting in a substantial hearing. He was found to have filed an incomplete development application in ground (ii). The Council is liable for costs for the reasons already canvassed. 19 While the principle in [50], third bullet point (c) in Cutcliffe sets out a qualification whereby the beneficiary of the consent may be required to bear a greater share of an applicant's costs because of defences raised unsuccessfully, I do not consider I should apply such a qualification here to require the Second Respondent to pay more costs than the Council. The Second Respondent had relied on the development consent granted by the Council and constructed a structure. He had little option but to oppose the demolition orders sought by the Applicants is such circumstances.

Orders 20 The Court orders that:

1. The First and Second Respondents must pay the Applicants' costs of these proceedings.
2. The exhibits may be returned.

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