Turnbull v Director-General of the Department of Premier and Cabinet

Consideration 5Costs in Class 1 proceedings are considered under r 3.7 of the Court Rules. They are payable only if the Court considers it is fair and reasonable to do so. I do not consider that the circumstances giving rise to the finding in Gracewood in relation to absence of jurisdiction arise here and this matter falls to be determined under r 3.7 on the basis the Court has jurisdiction in the matter. Essentially the issue is whether the revocation of the SWO at this stage of the proceedings is unreasonable behaviour which should result in a costs order in the Applicant's favour despite there being no resolution of the merits of the SWO or whether it is invalid as raised in the Applicant's Notice of Motion filed on 22 May 2012. In other words, there is no relevant event to inform the Court whether it is fair and reasonable that costs be awarded where the usual costs order is that each party pay its own costs. 6In Lai Qin McHugh J discussed the principles which apply in an application for costs when a party elects not to pursue an action because he or she has achieved the relief sought by settlement or extra-curial means. Lai Qin was an application to the High Court seeking writs for prohibition, certiorari and mandamus against the Minister for Immigration and Ethnic Affairs, inter alia. Kiama v Grant was considering the award of costs in civil enforcement proceedings in Class 4 where the usual approach to costs is that these follow the event. The summary of costs principles in civil enforcement and judicial review proceedings identified in Kiama v Grant at [80] includes: (a)where one party effectively surrenders to the other party by: (i)discontinuing without the consent of the other party; or (ii)giving undertakings to the Court or submitting to the Court making orders against the party substantially in the terms or to the effect claimed by the other party; the proper exercise of the costs discretion will ordinarily be to make the usual order as to costs, unless there is disentitling conduct on the part of the other party; and (b)where some supervening event or settlement so removes or modifies the subject of the dispute that no issue remains except that of costs, the proper exercise of the costs discretion will ordinarily be to make no order as to costs unless: (i)one of the parties has acted so unreasonably that the other party should obtain the costs of the action; or (ii)even if both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried so that the party should obtain the costs of the action. 7These principles must be considered in the context of r 3.7 which applies to costs in Class 1 proceedings. The usual approach is that costs in Class 1 proceedings are not payable by an unsuccessful party, generally to be determined when the outcome of the proceedings is known. Subsection (3)(d) of r 3.7 identifies circumstances where the Court in the exercise of its discretion may award costs and includes unreasonable behaviour in the conduct of the proceedings by one of the parties. There is no express reference in the subsection to the effect of a supervening event at the hand of one of the parties. The award of costs by the Court is a discretionary decision and the factors in subsection (3) are not exhaustive or determinative of whether costs ought be awarded. Whether costs ought be awarded depends very much on the facts of each case. 8Here the Department issued a stop work order which has been revoked without effective notice to the Applicant at the outset of the hearing of a Notice of Motion challenging its validity. The effect of the revocation of the order was that the proceedings were rendered otiose and an order for dismissal followed automatically. These circumstances are akin to that identified in [80(a)] of Kiama v Grant in civil enforcement cases where there is no hearing on the merits as the effect is as if one party surrenders to the other party by discontinuing without the consent of the other. Alternatively a supervening event at the hand of the Respondent has removed the subject matter of the dispute and the issue arises of whether one of the parties has acted unreasonably (Kiama v Grant at [80b(i)]). 9Given the history of the matter outlined above in par 2 it appears the Applicant on his own and through his solicitors has taken steps to resolve whether the stop work order was warranted. The Applicant incurred costs in filing an appeal against the order when it continues in force, as an appeal does not give rise to a stay of such an order. I do not consider that it is an answer to these costs being incurred that the Respondent states that there has been no determination of either the Notice of Motion filed 22 May 2012 arguing the order was invalid or on the merits of the order. I agree with the Applicant's submission that an explanation for why this course was pursued to save further costs given that the order expires in the near future has to be supported by more than statements from the bar table by the Respondent's legal representative if reliance is placed on that explanation to respond to an allegation of unreasonable behaviour. The Applicant exercised his appeal rights under the NV Act, incurred legal costs in doing so, and through no fault on his part and the unilateral action of the Respondent the subject matter of the proceedings has been removed without a substantiated explanation. The circumstances suggest unreasonable behaviour sufficient to justify an order for costs in the Applicant's favour on the basis that it is just and reasonable in the circumstances of this case. 10Each matter must be determined on its facts so that other cases tend to be of limited assistance. The Applicant provided the ex tempore judgments of J A Westaway and Son Pty Ltd v Manly Council [2005] NSWLEC 565 and Scheele v Cooma Monaro Shire Council [2004] NSWLEC 768. In Westaway, a draft and a final order under s 121B of the Environmental Planning and Assessment Act 1979 were given to the applicant who appealed the final order in Class 1 proceedings. After the applicant filed a Statement of Issues alleging that the final s 121B order was invalid, relying on inconsistency in text between the draft and final forms of the order, the parties sought consent orders that the appeal be allowed and the statutory order be withdrawn. The applicant sought his costs. Given the history of the matter, the Court considered that it was fair and reasonable to order costs in the applicant's favour. In Scheele, the respondent issued a number of notices under s 18 of the Noxious Weeds Act 1993 to the applicant, who appealed in Class 2 proceedings. Before the proceedings were heard the respondent decided to withdraw the notices and no evidence was provided as to why they were withdrawn. Consequently, the applicant discontinued the appeals and sought his costs. The Court considered it was fair and reasonable to award the applicant's costs. These cases suggests the approach I am taking is appropriate. 11The Respondent provided the ex tempore cases of Council of the City of Sydney v Palladium Management Pty Limited (No 2) [2007] NSWLEC 129 and Euro Sweets (NSW) Pty Ltd v Pittwater Council [2011] NSWLEC 92. In Palladium Management the applicant brought Class 4 proceedings in relation to the use of parts of a residential flat building and subsequently discontinued them before the matter had gone to trial. The Court stated at [13] that the general rule where there was no hearing on the merits but the proceedings were brought to an end by a supervening event or settlement is that there is no order as to costs, relying on Lai Quin. However, if one of the parties would almost certainly have succeeded, it would be unfair not to award costs in that party's favour. In Palladium Management the Court did not award costs. I consider the result in the matter before me should be different for the reasons I have stated. 12In Euro Sweets the applicant commenced a Class 1 appeal against a s 121B order issued by the respondent requiring it to cease using its premises for the retail sale of food and beverages. On the day before the application was returnable before the Court the respondent notified the applicant that it had revoked the order. The applicant sought its costs. The Court refused the costs application, stating that the general rule was no costs order and that in many respects the applicant caused its own misfortune as it would not have had to address a s 121B order if it had ceased the activities subject of that order. The facts of that case are different to those before me. 13I consider the Respondent should pay the Applicant's costs of the proceedings not covered by the costs order made in Turnbull (No 1) and will so order.

Order 14The Court orders the Respondent to pay the Applicant's costs of the proceedings not covered by the costs order made in Turnbull v Director-General of the Department of Premier and Cabinet [2012] NSWLEC 121. 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: 06 June 2012