Weriton Finance Pty Ltd v Wollongong City Council

Land and Environment Court (NSW)|2011-05-18|Before: Sheahan J, Mr J

Background to the Commissioners' 9 March 2011 decision 24These cases concerned the Headland Hotel site at Austinmer, a parcel of land comprising 6845m2 in nine different allotments, described by the Commissioners as collectively "a tourist use zoned island separated by Yuruga Street from the residentially zoned precinct immediately to its west". Some objectors described the triangular parcel of land as "an iconic headland site", and some significant Norfolk Island pine trees adorning it have been listed as a heritage item under the 1990 LEP. 25The proposal submitted to Council on about 21 October 2009 involved (1) aggregating the nine lots, (2) demolishing the existing hotel buildings, (3) re-subdividing the land into eight lots, (4) developing B&B facilities on proposed Lots 1-7 facing Headland Avenue, and (5) developing the proposed residual Lot 8, covering the southern 40% of the site and fronting Yuruga Street, with a complex comprising serviced apartments (18, with 32 bedrooms), spa treatment rooms (20), associated pool and other facilities, including restaurant and function rooms. Ultimately, Council did not oppose the demolition, but opposed the rest of the proposal, and refused consent(s) on 19 February 2010. 26Appeal Matter 10231 concerned the demolition and the subdivision elements, 10459-10465 concerned the B&B development of Lots 1-7, and 10528 concerned the development of Lot 8. Matter 10231 was commenced on 31 March 2010, the seven B&B cases on 18 June 2010, and 10528 on 2 July 2010. On 5 July 2010, the court made orders that the nine matters run together. Council filed a consolidated Statement of Facts and Contentions ('SFC' - Exhibit W1), dated 20 July 2010, on 3 August 2010. 27The applicant remained keen throughout, to get the case on and over. All nine cases were listed to be heard together over five consecutive days 18-22 October 2010, but the applicant's plans were amended, and, on 20 September 2010, the five dates allocated were changed to 21 and 22 October, and 6, 7 and 10 December 2010. 28After the first two days of hearing, 21-22 October 2010, the Commissioners delivered two judgments on 16-17 November (judgments [2010] NSWLEC 1301, and [2010] NSWLEC 1313).

An order for costs is made 29Judgment No 1301 related to costs issues as a consequence of various amendments proposed to elements of the proposal. Dickson was a prime mover in the applicant's seeking to make those amendments. The Commissioners concluded that the amendments made to the plans for proposed Lots 1-5 were minor, and called for no order as to costs. The amendments made for Lots 6-8 were not minor, and an order for costs was made. (That is the costs order to which reference was made in [8] above).

A preliminary determination is made 30Judgment No 1313 dealt with whether or not elements of the overall proposal required consideration "through the lens of clause 11" of the 1990 LEP, which dealt with the relationship between dwelling-houses and B&B establishments. The parties disagreed on what was required - Council submitted that approval of a B&B required a two-stage approach, and the Commissioners agreed with that submission. 31For a building in the relevant area to be used as B&B accommodation, it must be a dwelling-house. For it to be a dwelling-house, it must satisfy the definition in the LEP namely, "a building or buildings containing one but not more than one dwelling, on one allotment". The word "dwelling" is defined to mean "a room or number of rooms occupied or used or so constructed or adapted as to be capable of being occupied or used as a separate domicile, and includes a granny flat". 32B&B accommodation means "the use of a dwelling-house, part of a dwelling-house, or any ancillary building to a dwelling-house, for the purpose of offering short term (maximum of one month) paid accommodation and home style hospitality to visitors, by the permanent residence of the dwelling-house, where: (a) a maximum of two bedrooms are used for that use and (b) the number of occupants of the establishment, including the permanent occupants, does not exceed seven at any one time, and (c) breakfast is available for visitors". 33Within the relevant Tourism zone (6(c)) at the time, B&B establishments were permissible with consent, but dwelling-houses were permissible only if "advertised development" assessed under cl 11. If a dwelling-house could be approved on the relevant lot it could then be assessed as to its suitability for use as a "B&B".

The Planning Regime involved 34The Commissioners concluded in judgment 1313 (at [27]) that, in matters 10459-10465, the assessment of the structures proposed to be approved required "satisfaction of the relevant tests in" cl 11, which relevantly provided: 11 Restrictions on granting certain consents (1) This clause applies to the granting of consent to a development application required to be advertised ... (1A) Any development that is the subject of a development application to which this clause applies is advertised development for the purposes of the Act. (2) The Council shall not grant consent to a development application to which this clause applies unless it is satisfied that: (a) the development is consistent with one or more of the objectives of the zone in which it is proposed that it be carried out, ... (c) no more appropriately zoned site or (if appropriate) accommodation is available in reasonable proximity to the proposed development or the proposed development constitutes a change from an existing use, within the meaning of Division 10 of Part 4 of the Act, ... (g) if the development will provide a service, there is a clear need for the service in the area. 35The zone objectives (for zone 6(c)), for the purposes of cl 11(2)(a) above, were as follows: (a) to identify areas of, and encourage tourist orientated development in, designated tourism precincts, and (b) to allow some diversity of activities that will not prejudice achievement of the objective referred to in paragraph (a) or significantly detract from the character of the locality or the amenity of any existing or proposed development in the locality.

The Hearing continued 36The Commissioners, therefore, gave directions, in that November 2010 judgment (1313 - at [29]), for the filing of any further evidence concerning "matters dealt with in cl 11", and directed also that the town planners have a further joint conference to discuss "any additional matters arising out of cl 11, as applied to the seven bed and breakfast applications." All of those things were to be completed by 3 December. 37Further hearings were duly held on 6, 7, and 10 December 2010, and the matter was stood over, in relevant and controversial circumstances to which I will return, to be completed on a sixth day of hearing, namely 1 February 2011. The Commissioners' lengthy final judgment was handed down on 9 March 2011, dismissing seven appeals and upholding two (see [3] above).

A complaint about the outcome, but no appeal 38Council's case at the final hearing was that the proposal was not permissible because it breached cl 11(2)(a), (c), and (g) ([34] above), any one of which breaches on its own was fatal to the B&B elements of the proposal. The Commissioners decided those seven appeals (10459-65) on the basis that the proposal could not satisfy cl 11(2)(g), and must, therefore, fail. They did not proceed to deal with sub-clauses (a) and (c). 39However, as a precaution, in case of error, they did go on (at [75]-[129]) to assess visual impact, heritage issues, the potential threat to the pines from changes in the wind pattern as a result of the Lot 8 development, and some other merits issues. They concluded ([130]) that the seven B&B applications "require refusal" on the grounds of "unacceptable visual impact". 40Counsel for the applicant at the costs hearing (Mr Johnson) complained that the Council did not put cl 11(2)(g) specifically in issue in the proceedings, as required by par 10 of the court's Class 1 Practice Note to be done in the SFC. 41It is true that the SFC (Exhibit W1) gave no particulars in regard to that sub-clause, and that it did not feature specifically in the discussions in the experts' joint report (see Exhibit W3, pp4-5). However, this is not a s 56A appeal against the Commissioners' decision, but a costs hearing, and I note: (1)that the actual contentions filed (as distinct from the particulars provided in the SFC), were simply to the effect that the dwelling-houses proposed on lots 1-7 did "not satisfy all the requirements of cl 11(2)", such that consent could not be granted (contention 3, but my emphasis), (2)that Council's planner, Lindsay Fletcher (in Exhibit W2, at p5), spoke of the requirement that the applicant satisfy "the tests" in cl 11, and drew attention to the wide terms of contention 3, i.e. "all of the requirements", and (3)that the sub-clause was the topic of some cross-examination of planners by Mr Galasso. 42I conclude that the issue of cl 11(2)(g) was certainly before the court.

The prospects of success argument - NOM 2 43The Council's argument on NOM2 is that the applicant pursued the seven B&B appeals when they clearly had no reasonable prospect of success. 44Following judgment 1313 on 16 November 2010, Cottom wrote to Briggs inviting the applicant to discontinue all its proceedings, firstly, on the basis that cl 11(2) could not be satisfied by the DAs in matters 10459-10465 (fols 17-18 of Exhibit C1), and so they were "doomed to fail", and secondly, on the basis that that situation called into doubt also the "efficacy of the other two appeals". His letter outlined the basis for his opinion. 45The applicant's planner, Dan Brindle, contended in an addendum to his Statement of Evidence ('SOE'), dated 23 November 2010 (see fol 25 of Exhibit C1 table 4, item (c)), that the zoning was appropriate for the proposed use, and that there were no other tourist zoned sites found within close proximity. "It is considered unlikely that tourist zoned land of the same quality and suitability for tourist development would be available within immediate proximity". Brindle also noted (at fol 26, item (g)) that Council had not contended that 11(2)(g) was not met. 46On 24 November 2010, Briggs replied to the letter of 16 November 2010 contending that the Council's solicitors had "misread cl 11(2)". The applicant proposed to continue with its appeals, and drew the Council's attention to supplementary town planning evidence prepared by Mr Brindle "in support of cl 11". Briggs's letter said that that statement would be filed "soon", but Cottom deposes that he has no record of that occurring. 47Later on 24 November, Cottom responded to Briggs's letter, joining issue with it, and contending that there was "an abundance of sites" relevantly available within reasonable proximity to the subject site. 48At the time of Council's assessment of the proposal, a new LEP was "imminent and certain". The 2009 LEP came into effect on 26 February 2010. Under it, the subject site would be zoned "SP3", and the project would be characterised as "Tourist and Visitor Accommodation", defined as: ...a building or place that provides temporary or short-term accommodation on a commercial basis, and includes hotel or motel accommodation, serviced apartments, bed and breakfast accommodation and backpackers' accommodation. 49The 2009 LEP contained no provision to the same effect as cl 11. The Commissioners held ([67]-[74]) that the new LEP was not determinative of the applications, but that, on a proper merits assessment under s 79C of the Environmental Planning and Assessment Act 1979, the "absolute failure to satisfy a mandatory prerequisite" of the 1990 LEP was fatal to the B&B elements.

Conclusion on NOM 2 50Differing views of the prospects of success in a litigation matter are not uncommon. 51The applicant in the B&B appeals, although faced with judgment 1313, had competent legal representation and updated advice from Mr Brindle, and I take the view that it was not unreasonable for it to pursue its appeals. 52NOM 2, therefore, fails. 53As the principles upon which that conclusion is based are well established, and quite clear, Council should pay the applicant's costs on that motion.

Mr Dickson 54The role played, or not played, by the applicant's expert Nigel Dickson is at the centre of the debate about NOM 1. 55Dickson is known to the court, and, in other cases in which he has been a witness, he has been identified as both an architect and a planner, and as an expert of lengthy experience. 56It will be seen from what follows that Dickson has been severely criticised by both the applicant and its solicitor in the affidavits and submissions now before the court. The experts with whom he was to confer during the substantive case were also critical of him, and it could be said that the Council's representatives, and the Commissioners hearing the case, made negative comments about him as well. He has not had the opportunity to defend himself in the costs proceedings, having missed the opportunity to do so at the hearing of the appeals. In fairness to him, I intend to set out in great detail the communications involving him or concerning him.

Engagement by Applicant 57Dickson was also known to Briggs, they having worked together in the past on cases and other projects. It would appear from Dimitrovski's affidavit (par 10) that Tomasetti may have recommended Dickson to him for this case, but, in any event, Dimitrovski instructed Briggs to engage him. Briggs contacted him on 9 August 2010, as one of seven experts to be retained by the applicant, following the filing of Council's SFC. 58A fee proposal was put to Weriton, on 20 August 2010, based on an estimated fee of $8000 (plus GST, and disbursements), to provide a SOE. It provided for hourly rates for associated work, terms of payment, interest on outstanding fees, and termination arrangements. Based on the fee proposal, Dimitrovski budgeted $20,000 to cover Dickson's fees, but, on 18 September 2010, Dickson provided a revised fee proposal of $37,000 being $17,000 for the SOE, plus $20,000 additional costs (query comprising/including work on revision of the applicant's architectural drawings). 59Both fee agreements (fols 13 and 22) gave Dickson the right to terminate work without notice, and to exact payment for the work completed. If the client wished to terminate, 48 hours notice was required, plus payment, and, until both of those things were done, Dickson would retain all documentation and reports.

Assessment of Project 60Dickson identified serious shortcomings in the applicant's architectural plans, and, on 8 September 2010, he swore an affidavit (fols 13-15 of Exhibit C1), in which he indicated having "explored opportunities to improve the development design to provide a better architectural and planning outcome". He included in his draft SOE "a series of alternative design solutions which address particular contentions" in respect of the various elements of the proposal. He went on to say that he had "formed the view that there are a number of matters which require additional information clarification of the detail and to a certain extent amendment to the scheme to provide an appropriate development outcome", which he described in broad terms (in par 7). Unfortunately, he left for China for a one-week visit on that day, hoping to be able to file his SOE no later than Friday 17 September, with a view to the applicant's maintaining the then proposed hearing dates of 18-22 October. 61Dickson's affidavit of 8 September concluded with the following paragraph (Exhibit C1, fol 15) Pursuant to the expert witness practise (sic) direction, I am compelled to inform the Court of my opinion and provide the parties with the opportunity to consider those opinions at the earliest opportunity. Having undertaken a detailed assessment of the proposed development, I am satisfied that and believe that the Court will be assisted by the additional information requested by me to be included upon the plans and further, the modifications I have recommended be made to the development will provide for a better outcome in both architectural and town planning terms.

Fees escalate during dialogue with the respondent's experts 62The amended plans ensued, and Dickson's SOE was circulated to two of the respondent's experts, Dr Richard Lamb (visual impact) and Gabrielle Morrish (urban design), for review. Case management continued in the court, and, on 20 September 2010, the dates for the expected five-day hearing were revised as noted above ([27]). 63In the period 22-30 September 2010, Dickson submitted invoices for $42,770, $1,374 (printing costs), and $37,163, and the applicant made payments of $7,000 and $35,770. An amount of $38,538 remained outstanding (out of $81,308). Briggs deposes (par 16) that, at no time during September, did he understand there was any dispute between Dickson and Weriton/Thirroul in relation to fees. However, Dickson's SOE had not been completed at that stage. 64Dimitrovski deposes (par 17) to being aware, during September 2010, that there was, however, some "dispute" between Dickson and the applicant's project designer, Stephen Bowers. He opined that they "did not proceed in respect to one another in a professional manner to properly serve the needs of Thirroul". 65As at 29 September, Bowers had also invoiced the applicant $22,682 for amending his drawings, and Bowers was seeking $15,000 from the applicant for handing over his files to Dickson, at Dimitrovski's request. Dimitrovski deposes (par 38) to his belief that Dickson's work on amending the drawings "duplicated" the work done by Bowers. 66As already noted, the October hearing resulted in judgments 1301 and 1313, and the payment of some costs by the applicant to the Council in respect of the amended plans. 67There are some differences in detail between the evidence given by Cottom and Briggs, but the preparation of the case progressed through November, with apparently full involvement by Dickson, despite any friction between himself and Bowers, and/or any escalating concern about Dickson's fees. 68The real and relevant problem with Dickson arose as the resumption of the hearing on 6 December 2010 approached. 69The court has had to establish an accurate chain of email and other communications, by drawing together, and cross-referencing, the annexures to, and some comments in, the various affidavits. 70Cottom deposes (par 28) that he rang Briggs, on 29 November 2010, to report that he had been advised by Lamb and Morrish that, as Dickson had "not been paid by the applicant", he was "refusing to arrange a joint conference" (Exhibit C1, fol 34). On the same day, Dimitrovski explained to Briggs his concern about the escalation of Dickson's fees, and the terms now being imposed by Dickson on continuation of his work on the matter. Adverse comparisons were drawn with the fees charged by Bowers. Dickson quite properly wanted Morrish's and Lamb's reports before any joint conference of experts, and he denied withholding services from the applicant. Briggs rang Cottom back later the same day indicating that Dickson had been waiting for instructions from him. "Our wires got crossed" (par 29, and Exhibit C1, fol 35). Lamb told Cottom he would contact Dickson next morning. Morrish and Lamb proceeded to finalise their individual reports (see emails at fols 36 and 37). 71On 30 November 2010, Dickson had still not seen Lamb's report, but told Lamb he was "available to conference". 72Both of the respondent's relevant expert reports were filed with the court on 1 December 2010, and Cottom also advised Briggs by email on 1 December that Dickson (and the applicant's other experts) would be required for cross-examination (fol 38). 73By 2 December 2010, Dickson's fees had escalated from the original estimate of $8,000 to billings of over $100,000. Dimitrovski advised Briggs that he had paid $44,000, and was being chased for further payments of $65,000. Dimitrovski was alarmed because there had been only two days of a scheduled five-day hearing, and joint conferencing of the relevant experts had not yet occurred. He deposes (pars 40-45) that, throughout the period leading up to the hearing dates 6, 7 and 10 December, and, during that hearing week, he "understood" that Dickson was "continuing to work on the matter despite his various demands for payment of fees", except when in Adelaide attending his sick father, but that, after 6 December, he could not reach Dickson by telephone, other than by voicemail messages, which Dickson did not return. Dimitrovski continually assured Dickson (1) that it was not a case of not paying his fees, but a case of having "inadequate cash funds available to pay the invoices immediately", and (2) that he was taking steps to obtain the funds. 74On the morning of 2 December, Jane Murray (from Dickson's office) sought assistance from Briggs regarding the payment of the then outstanding invoices. Briggs understood from those discussions that Dickson would "continue working on the matter notwithstanding the request for payment of fees". Later that day, Briggs received from Murray an email enclosing a letter from Dickson, allegedly emailed late on the 1st, requiring Briggs's firm, by close of business on the 4th, to pay outstanding fees and give irrevocable undertakings in respect of funds held in trust. 75Overnight on 2 December 2010, Briggs emailed Cottom complaining that Council was late in serving its evidence, thereby delaying the joint conferencing process. Briggs reserved his rights. 76On Friday 3 December 2010, Morrish called Cottom, saying that Dickson had left the joint conference he was hosting that morning, without completing the joint report. "We've been left to draft the report and email it to Nigel. We are working on it now at Richard's office ...". Morrish commented to Cottom "Nigel has caused all of the delays with our joint report, in conjunction with the applicant not having instructed him until this week" (Cottom, par 34). Cottom then replied at length to Briggs (fol 42). Inter alia, he complained about the aborting of the conference by Dickson, when none of the Council's experts had limited their availability for joint conferencing. 77Undercover of an email sent at 4.15pm on 3 December, Dickson sent Briggs a letter of demand seeking payment of fees under threat of suspending work. At the time, Briggs was trying to work out with Murray a resolution of the fee issue, so work could continue on the case. 78At 3.30pm on Saturday 4 December 2010, Dickson emailed the applicant and Briggs, saying (Briggs fol 48): For the record the experts met at my office at about 9.00am Friday 3rd December. I only had an a (sic) short period to meet available on Friday, and the meeting was scheduled for 8.30am, since I had a appointment with a Barrister at University Chambers on another matter at 10.00am, and meetings for the remainder of the day. As you are aware I only received the experts reports on Tuesday afternoon, and I was in Melbourne on Thursday. At the meeting I was given a prepared typed template of the conference with the expert agreements and disagreements already set out in the document, prepared by Richard Lamb's office. This was a surprise since the report contained agreements which could be purported to be my own, prepared by his office. As I am going through these so called 'agreements' that were shown in the draft document and checking and editing since I am worried that this would mis-represent my opinions entirely and slants my opinions quite noticeably away from my evidence. During the course of the meeting there was discussion about the various elements of the applications that the experts were in agreement on and those where we differed. Because of my time commitment I had to leave to get a taxi to Martin Place at 9.45am. By the time I left I was certainly aware the position of the other experts was to remove the buildings on lots 6 and 7, and effect a larger setback to the SE boundary of the spa building. It was agreed with the experts that Richard Lamb would work up a detailed text of the items that he wished to comment on and then that would be passed onto Gabrielle Morrish. Richard Lamb distributed his text at 1.44pm Friday and Gabrielle Morrish at 5.48pm on Friday evening. I am now at my office this afternoon going over the detail of the document. As noted above I am now working through the pre-prepared text as well as the new material added on Friday afternoon and checking and editing it to make sure it accords exactly with my opinions and also that it is cross checked against the Statements of Evidence of the other experts and with my own. The pre-prepared text is troublesome, but nonetheless I will seek to expedite my comments then email it back to the other experts later this evening Saturday or possibly Sunday for their detailed review and finalisation. I will keep you both informed due to the lateness of the matter over the next few hours. I was to have gone to Adelaide over this weekend to see my father who is in a nursing home, but put the trip off to get this done adequately and reasonably. 79At 7.29pm on Sunday 5 December 2010, with the hearing due to resume the next morning, and Dickson having not provided his comments to Morrish, she noted in an email to him that Lamb's and her comments had been sent on Friday about lunchtime. She said (Exhibit C1, fol 47): Where are your comments Nigel? You have had all weekend. I trust you will explain to the commissioners in the morning why there is no joint report from us given Richard and I sent our comments to you on Friday by around lunchtime? 80Apparently Dickson responded to Morrish at about 8pm on the 5th, and Morrish emailed Cottom at 9.57pm (fol 48): As I predicted his email was not sent till 8pm tonight. I have only just seen it and he has written an extensive amount that we cannot possibly deal with at this time of night I will try to look at it in the morning but suspect it will take some time to work through as he appears to have gone through evidence page by page in some instances. I have to say I consider the delay he has caused and the time he has taken, the time this has finally come through and the time we have left to review and add to our own bit is completely unacceptable. I think Richard and I are likely to need some time to go through this and add what we need to so it will not be ready by court tomorrow. How do you want us to play this? 81At 10.01pm on the 5th, Dickson emailed the applicant (Briggs fol 50 - emphasis mine): I issued the joint report with my comments completed at 8.00pm this evening. It took me the best part of both Saturday and Sunday going through it carefully and reading the statements provided this week, and going back to the documents issued over the last few months. Let me know what instructions I have for tomorrow morning at Court. I will still need to finalise the Joint Report document with a review and signature in the morning, depending on the checks of the other experts. At this stage I have done all I can. ... Please call me anytime to discuss. 82Lamb sent Dickson the following strongly worded email at 11.43pm on the evening of Sunday 5th (Briggs fols 51-2): I wish to strongly object to what you or have done (sic) to this joint report, given the agreement among you, Gabrielle and myself on Friday morning. We agreed on a number of matters and to provide a summary of our reasons for disagreement on a limited number of issues. Gabrielle and I did this in good faith. What you have done is to make it into a statement of evidence in reply, repeat slabs of your own evidence (which we specifically said we would not do) and to take issue among other things with matters that we had already agreed on, or had agreed were not the most important matters to address. A great deal of it is simply description of what is either in the drawings or in you (sic) own statement of evidence, or opinions that differe (sic) from ours on matters we have already agreed we differ on. I also strongly object to your claim that the document was sent to you on Friday evening and that somehow you were disadvantaged. That may be when someone at your office looked at the email for it, but I can assure you that it was sent to you hours before that. I sat around in my office until after 8pm on Friday waiting for a response and did not even get an acknowledgment that you had received it. Now I have to deal with it on a Sunday night and I find it to be unrecognisable in the terms of our agreement. I note also that the version you have been working on is not even the latest one that I sent you (it does not have Gabrielle's signature and it does not have a number of amendment (sic) that I made around mid-day on Friday). I will not agree with this so called Joint Report which is 90% Dickson and 10% Lamb and Morrish and I will be removing my electronic signature from it. Maybe you can explain to the court how there is no agreed statement, tomorrow morning. 83At 12.46am on Monday 6 December 2010, Dickson emailed Briggs in the following terms (Briggs fol 51): I advised on Saturday that I felt 'ambushed' at the conference on Friday morning since the time was limited and the pre-agreements in the conference presented by Richard Lamb's office were something I had to have time to review and consider my position on since time was very limited. Refer to my previous email to you on this on Saturday. I have done my best to review the report over the weekend so that my opinions and work are properly respected. I am most upset by the thought that I should be railroaded on this matter without appropriate conferencing and consideration of both the experts reports and my own work to date. 84Also at 12.46am on 6th, Dickson emailed Lamb (copy to Morrish - Briggs fol 53): I am very upset and disturbed by your email. Both you and Gabrielle attended my office late on Friday morning for a meeting which was to have taken place at 8.30am. You presented me with text which had been pre-assembled by your office which showed our agreed positions. You had even put your signature to the document as though to expedite its delivery to the Court. In the meeting we only had about half an hour to discuss our respective positions to the facts. I told you that I had no other time available to consider the matter that day. I returned to my office on Saturday and simply cannot agree to the matters expressed in the document sent to me on Friday either at midday or at 5.48pm. I cannot be rushed into completing it. I spent time over the weekend reviewing your SOE and GM's SOE to make sure I understood your respective positions as well (sic) the material you have brought forward. In the conference on Friday I was not fully aware of all of GM's view on the applicability of SEPP 71 and the NSW Coastal policy, it was barely discussed, particularly in relation to her view about the requirement for a 50m setback. We did not discuss also your photo montages, nor the concerns GM had about the amenity of the BandB units. Having now read her text and your (sic) I now have a better view on how to respond on these matters, which I have now done.

The hearing resumes 6-7 December 2010, but Dickson does not appear 85Cottom says (par 39) that he was not notified that Dickson would not appear on the 6th, and he had Morrish and Lamb at court for most of the day, until all were, eventually, informed that Dickson "would not be attending". 86At some stage Briggs made contact with Murray, and she advised him (Briggs par 46) that Dickson's father - a nursing home patient ([78] above) - had taken ill, and been hospitalised, and Dickson was flying to Adelaide to visit him. Dickson later told Briggs he was not sure when he would return. 87At 12.37pm on the 6th (Exhibit C1, fol 49), Morrish sent the following email to Dickson: Richard and I are working through a new version of the report here on level 3 if you wish to join us. We are taking the deleted points that you decided to no longer agree with and are fleshing out our concerns. It would be best if we all worked this through together to keep the report to the point as required for these things. Please let us know when u (sic) arrive. 88He responded at 1.16pm (fol 49): Can you email it to me. My father has been hospitalised and I am ready to go Adelaide. 89Morrish copied that email exchange to Cottom. 90At 3.42pm on the 6th, Cottom's assistant forwarded a draft joint report to Dickson by email (Exhibit C1, fol 50). 91The hearing continued on Tuesday 7 December 2010, without the parties' respective experts on visual impact and urban design, due to the expected continued absence of Mr Dickson. 92At 10.04am on the 7th, Morrish emailed Dickson in the following terms (Briggs fol 56): Sorry to hear about your father - did you get the email report - the solicitors office sent it for me so it could get to you before you flew out? 93At 4.38pm she emailed him again (Exhibit C1, fol 52): Hope your Dad is better. Can you let Richard and I know as soon as you return when you will have to edits to (sic) the report done - we have assumed that you will have cut and paste in your words to the locations that suit the new version of the report and if you are able to send them through as soon as possible as the next draft of the joint report then Richard and I can take a final look and hopefully we can all agree to sign it and get it to the lawyers. 94The hearing was adjourned, to resume on Friday 10th. No hearing was ever scheduled for this matter for the 8th or 9th. 95At 11.37pm on the 7th, Dickson had not long landed back in Sydney, and he responded to Morrish (Exhibit C1, fol 51), saying: At this point I have not seen the joint report. Could you email it to me, thanks... 96At 12.01am on Wednesday 8 December 2010, Dickson emailed Morrish, Lamb and Briggs (Briggs fol 56): Just confirming that I have not as yet seen the latest on the joint report. 97At 12.25am Lamb, and at 12.31am Morrish, emailed Dickson the joint report, and Dickson replied at 12.46am that he would look at it "in the morning" (see Briggs fol 58). 98At 7.30am on the 8th, Morrish responded (Exhibit C1, fol 51) to the email sent to her at 11.37pm on the 7th ([95] above): ... Now you definitely have the draft when can Richard and I expect you (sic) bits added in and the final version back for our final check so we can all sign it? 99At 6.16pm in the evening of the 8th, Murray "re-emailed" to Briggs and Dimitrovski the letter (of demand) Dickson said he had already emailed to them dated 6 December, (Briggs, fol 61 - emphasis mine) which said: I have written to, and spoken repeatedly with you both regarding payment of the debt owed to D R Design (NSW) Pty Ltd. The fact that the hearing is imminent and there is a substantial debt that remains outstanding clearly falls at your at your (sic) feet, and has left me no option but to make it clear that I won't be completing the Joint Conference Report and I won't be attending Court, while this debt remains unpaid. The last invoice issued to you George was on 23 September 2010, and since that date I have continued to work on your matter and expended enormous resources as a measure of good faith. However given the resistance I've experienced in terms of being paid for past work undertaken, and a request to undertake further work which will involve further time and further costs which are not secured, I am not prepared to proceed until outstanding monies are in hand. I now urge you to advise details of payment before 12.00pm Thursday, 9 December 2010, so that we may proceed. This is clearly within your hands to resolve and any loss caused by your delay is solely attributable to your actions. I'm sure you understand that it is ridiculous to contemplate that any person would expect either a professional or tradesman to undertake work where they are not paid. 100Briggs deposes (par 52) that he did not receive any earlier email alleged in that email to have been sent to him. 101On Thursday 9 December 2010 at 1.07pm, Morrish emailed Dickson again (Exhibit C1, fol 54): When can we expect the joint report please. There is no sign of it despite it having been emailed to you on Monday afternoon (which I am assured by our solicitor did occur) and emailed again late on the evening of the 7th. It is not reasonable to leave Richard and myself no time to deal with it. You have already had it for a day and half and this is leaving us less than an afternoon to consider any changes you are adding to it. Given last time you did not return the report until very late on Sunday night with the hearing on the Monday morning with extensive changes neither Richard of I will be tolerant of that happening again. Please send it through urgently so we can do our final review in a reasonable and timely manner and so that it can be lodged with the court this afternoon before close of business. 102At 1.30pm on the 9th, Murray again emailed Briggs and Dimitrovski (Briggs, fol 62 - emphasis mine): As we have not received a response to the letter emailed to you both on 8 December 2010, we will proceed in accordance with the terms reflected in said letter. 103At 4.52pm on the 9th, Cottom emailed to Briggs the following letter (fol 56): Wollongong City Council and Weriton Finance Pty Ltd Land and Environment Court proceedings 10231, 10459-10465 and 10528 of 2010 Proposed development at 1 Yuruga Street, Austinmer If you are not already aware, we have been informed by our client's urban design expert that Mr Dickson has still not responded to the revised draft of the joint report submitted to him by way of email from our Sydney office on 6 December 2010. Quite frankly, absent any extenuating circumstances that we and the relevant experts for the Council are not aware of, this is completely unacceptable and will result in further time being wasted in Court tomorrow. The only available option that now seems to remain is for the experts to confer at Court while the planners' evidence is continued and concluded. We imagine that this will give rise to further wasted time at the hearing tomorrow. This is in addition to that suffered on Monday without any prior notice to us whatsoever. Please impose on Mr Dickson to communicate with his counterpart experts to settle the joint report as a matter of urgency. We reserve any rights of our client arising from unnecessary time and cost thrown away arising from these unannounced delays. We also note that we have received no response from you regarding the draft section 97B orders and draft conditions in response. We will seek the proposed section 97B orders without your client's consent tomorrow if no agreement is reached prior to the recommencement of the hearing. As for the draft conditions in response, your client is well and truly in breach of Court directions and we simply will not be in a position to reply to them in advance of or during the hearing tomorrow. We reserve any rights that may arise in favour of our client for costs arising from your client's delays in that respect.

Dickson's retainer terminated? 104At 5.22pm (or so) on the 9th, Dickson emailed Morrish, Lamb, Briggs and Cottom (fol 57, and Briggs, fol 63 - emphasis mine): My services have been terminated this afternoon on the above matter. I had been seeking payment for my outstanding accounts in recent weeks. I have completed my portion of the joint report but at this stage I will hold onto it. At this stage my fees since September have been unpaid by the client. 105Briggs deposes (par 54) in respect of that email: It was not my understanding that Mr Dickson's services were terminated by Weriton/Thirroul/Mr Dimitrovski but rather, Mr Dickson terminated his services. 106At 5.36pm that evening, however, Dickson emailed to Briggs and the applicant (fol 59) "the completed joint report with my comments inserted", and commented: "it is a pity I thought we had a good case". At 7.19pm he forwarded that email to Morrish and Lamb, with copies to Cottom, Briggs, and the applicant (fol 59). 107At 11pm on the 9th, Dickson emailed Morrish and Lamb (copy to Briggs) saying (Briggs, fol 65): "I have been in touch with my side in this matter and they I (sic) have asked me to attend Court in the morning. Accordingly I ask that you review the unsigned copy of the joint report. If you are willing we may be able to sign the report in the morning." Morrish eventually replied to this email at 8.03am next morning, Friday 10 December 2010 (Exhibit C1, fol 60): "Sorry Nigel but this is defending (sic) into a farce. You have sent it to the lawyers in draft from (sic) not agreed by us. As far as I am concerned that voids the whole process and I am not prepared to sign anything on the basis on which this process has occurred". 108However, at 11.06pm on the evening of the 9th, Lamb had emailed Dickson (sending copies then to Morrish and later to Briggs), as follows (Briggs, fol 66): Thank you for the document, but it is not complete. Firstly I have only just seen it tonight. It contains more new material, contrary to our agreement that is at the beginning of the document, to keep it to salient detail, it is not complete (it still shows track changed, but only the ones you made), it contains my signature, which was not on the document you were given and has somehow been added and it has been sent to your Counsel and client, before it has been agreed among the experts. This is contrary to and contemptuous of the Expert Witness Practice Direction which specifically forbids your Counsel from having any role in Joint Conferencing and Reports before they are agreed between experts. This report is not agreed, not signed and should never have been sent out nor any comment be made on it. I am also very disappointed by the lack of procedural fairness that you extend to Gabrielle and I (sic) by once again expecting us to digest your latest massive last minute dissection of our comments on the night before it is due. There is with all due respect potentially no end to his game: this is supposed to be a dialogue between respectful colleagues, not brinkmanship. I am considering what I am going to do about this in the morning. I am not gong to sign it at present. 109Briggs deposes (pars 57-8 - emphasis mine): Throughout the late evening of Thursday 9 December 2010, I held extensive telephone discussions with both Mr Dimitrovski and Mr Dickson seeking to resolve the dispute between those parties in order that Mr Dickson may appear as an expert in the proceedings on 10 December 2010. My last telephone conversation with Mr Dickson took place after midnight ... At approximately 8.00am on Friday 10 December 2010, Mr Dickson telephoned me on my mobile telephone whilst I was driving to the city. Mr Dickson informed me that he would not be attending Court on that day. A lengthy discussion took place however, I was unable to convince Mr Dickson to attend Court. During those discussions, I made statements to Mr Dickson in words to the following effect: 'I would urge caution Nigel ...' 'There are mutual obligations upon both parties pursuant to the agreement ...' 'There are consequences for both parties if you terminate your services...' 'You have not completed your obligations under those terms on which you to (sic) have been retained...' 'You have duties to the Court...' 110Dimitrovski deposes (par 49) that Briggs rang him shortly after 8am to tell him that Dickson had "changed his mind from last night". (Dimitrovski had spoken to Dickson on the 8th and 9th - see par 46). Pickles told Dimitrovski (see par 50) that the applicant would "just have to proceed without" Dickson.

When the hearing resumes on 10 December, again Dickson fails to appear 111The hearing proceeded on the 10th, as scheduled, but Dickson was not present. Cottom again says that he had no notice of this from Briggs. The court was notified only after the morning tea adjournment. Lamb and Morrish were present until the luncheon adjournment, and returned later in the afternoon when directed by the court to do so. 112All oral evidence in the case was completed by the conclusion of that day, and the hearing was adjourned to 1 February 2011.

Conclusion of the hearing February 2011 113When the hearing resumed on 1 February 2011, the Commissioners heard only closing submissions from counsel and reserved their decision.

The Applicant's position 114In his affidavit, Dimitrovski deposes (at pars 39, 51 and 52): I deny any inference that Thirroul did not make its best endeavours to keep Mr Dickson involved there were numerous telephone discussions - often late into the night between myself, Mr Briggs and Mr Dickson. Mr Dickson was well aware of my concerns that his costs had well exceeded his estimates and had not been budgeted for in the conduct of the Land and Environment Court proceedings. ... I deny any inference that I or Thirroul were directly responsible for Mr Dickson's failure to complete the joint reporting or attend at Court as an expert witness for the applicant in these proceedings. I and Thirroul deny terminating the services of Mr Dickson/DR Design. It was Mr Dickson who terminated his services - as late as the morning of 10 December 2010. Mr Dickson was retained by Thirroul to prepare evidence and appear in Court...

How did the court deal with the Dickson problem? 115Throughout the transcript of 6 December 2010 (Exhibit C2) there were several references (by Galasso) to ongoing work on that day on the joint report on urban design and visual impact, and to the possibility of the experts' evidence being dealt with during that day's hearing. When Galasso was apparently informed, late in the pre-lunch session that Dickson might not be able to "come in until 2pm" (Tp12, L44), he canvassed with the court that the visual/design evidence might have to be dealt with on the 7th. 116The Senior Commissioner took the view that that evidence should be taken before that of the planners, and put some pressure on the parties to "stimulate the ... experts to ... get their act together" quickly (see Tpp30-32). Immediately after the luncheon adjournment on the 6th, Pickles advised the court that Dickson was "about to get on a plane to Adelaide", and that his father was in hospital there. 117The court dealt with concurrent evidence from Lamb and a Mr Brooks on heritage matters, and then stood the hearing over to Tuesday the 7th. 118It is clear from the early stages of the transcript of 10 December 2010 (also in Exhibit C2) that the planners Brindle and Fletcher commenced their evidence on the 7th, and concluded it (at Tp32), prior to morning tea on the 10th (at Tp35). 119Immediately after morning tea on the 10th, the Senior Commissioner observed (Tp35, L27) that Dickson was not present, and Mr Galasso said (Tp35, LL29-43): GALASSO: No and there's no joint report. Can I say for the purposes of the record that this is a matter that we'll take up separately with an application which can't be to this Court, that Ms Morrish and Dr Lamb were engaged in a joint reporting process with Mr Dickson. That was terminated by Mr Dickson yesterday afternoon for reasons between Mr Dickson and his client and last evening that notwithstanding there was an attempt to send through another joint report which undid whatever had been done beforehand and then Ms Morrish this morning received an email saying Mr Dickson would be here some time today. ... So to be frank I don't know where we are. I don't know what we're meant to do about it. We've had our witnesses ready willing and able-- 120The court then embarked on a long and wide-ranging discussion of the situation (Tpp35-52) - the reports of Lamb and Morrish were responsive to Dickson's report, which was already in evidence, and the court was conscious that Dickson had "given evidence"(?) during the site inspection, and had produced photomontages, but was now not available for cross-examination, and perhaps would take no further part in the proceedings. 121On the question of precisely when it became known to the Council and the court that Dickson would not be attending on the 10th, Galasso said (Tp40, LL37-43): And can I say, in terms of the other question that you asked about why weren't you told at 10.01 and that's because at 10.01, from where we're sitting, there were three options available on what is occurring with Mr Dickson, either he's turning up, or he's turning up to complete a joint statement, or he's not turning up. Now when we resumed at 12, that was the first that it was confirmed of what Mr Dickson was doing because from Mr Dickson's communications with my witnesses, there were three different-- 122The Senior Commissioner made a lengthy statement just prior to lunch (Tpp43-44), reviewed his position over lunch, and made a further statement immediately after court resumed (Tp44). 123Galasso responded (Tp44, LL46-49): ...this whole case has proceeded upon an assumption that Mr Dickson was here to give evidence. He provided evidence. The expert reports from my client were in response to his evidence and if at the last minute Mr Dickson is no longer available to give evidence then his evidence should be struck out... 124Pickles remained anxious to proceed, and sought to cross-examine Lamb and Morrish on the evidence-in-chief in their reports. The Commissioners declined to reject Dickson's SOE, saying (Tp47, LL10-18) that a serious issue was the weight to be accorded to it, when it was unable to be tested by cross-examination. 125By that stage it was clear that the hearing would not finish that day, and the Senior Commissioner commented (Tp48, L50-p49, L1): ...the fact that the matter will of necessity go over arises principally from matters that have occurred in the applicant's camp .. 126Prior to the cross-examination of Morrish and Lamb (Tpp53-77), and the formal adjournment of the hearing to 1 February, the Senior Commissioner (at Tp51) made the comments quoted above (at [9]-[11]), upon which the Council relies in this costs application. 127After hearing submissions on 1 February 2011, the learned Commissioners reserved their decision. 128In their reserved judgment of 9 March 2011, the Commissioners made the following references to the problem the hearing had encountered as a result of Dickson's conduct: 22It is here appropriate to observe an unusual twist in the evidentiary unfolding of the proceedings. For the site inspection, one of the experts who participated on behalf of the applicant was Mr Rowan Dickson, an urban designer. Mr Dickson had produced an extensive report critiquing design aspects of the proposal including a number of schematics depicting the proposed development from various locations. Mr Dickson's report constituted a platform for significant elements of evidence given on behalf of the council by Dr Lamb, the council's visual impact and heritage impact expert, and Ms Morrish, the council's urban design expert. 23Mr Dickson's report was tendered in the proceedings and admitted as evidence. However, subsequently, for reasons about which we neither enquired nor now need to speculate, Mr Dickson played no further evidentiary part in the proceedings. However, a number of the schematics contained in Mr Dickson's statement of evidence were also the subject of informal evidence given by him, by Dr Lamb and by Ms Morrish during the course of the inspection. 24As a consequence, although Mr Dickson played no further part in the proceedings and gave no oral evidence in the courtroom, we considered it appropriate, indeed necessary, for the understanding of the evidence of Dr Lamb and Ms Morrish, to retain his statement as part of the tendered evidence. In addition, for reasons that will emerge later, one of the schematics in his report, reproduced in this decision, is of importance in our understanding of (and findings concerning) a significant element of the visual impact assessment case as it relates to the proposed serviced apartment/spa resort development on proposed Lot 8. ... 78.As earlier noted, Mr Dickson, the expert proposed to give evidence on these matters on behalf of the applicant, ceased to be available to give evidence during the period after the site inspection took place and prior to the courtroom evidence on this topic. ... 80In addition, it is relevant for at least part of our visual impact assessment to have regard to the schematics that were produced by Mr Dickson and which remained in evidence despite his cessation of participation in the proceedings. One of his schematics we found of particular assistance ... ... 85As earlier noted, because Mr Dickson ceased to participate in the proceedings, these opinions were uncontradicted. They also, in general, are consistent with the opinions we formed during the course of the site inspection and our consideration of Dr Lamb's photomontages and the various schematics produced by Mr Dickson depicting the development when viewed from the north. These general opinions are quite separate from any distinct and specific concerns relating to the proposed bed and breakfast elements on proposed Lots 6 and 7.

Consideration - NOM 1 129Expert witnesses these days play a crucial role in much of the work of the courts. 130They and their role is specifically recognised in the Uniform Civil Procedure Rules 2005, especially Part 31. Rule 31.23 provides that an expert witness must comply with the code of conduct set out in Schedule 7. Paragraph 2(2) of the Code says that: (2) An expert witness's paramount duty is to the court and not to any party to the proceedings (including the person retaining the expert witness). ... 131Paragraph 3 says that: An expert witness must abide by any direction of the court. 132Paragraph 4 requires the expert witness, when complying with a direction of the court to confer or to jointly report, to work co-operatively with such other experts. 133The Court's comprehensive Practice Note (issued 14 May 2007), regarding class 1 development appeals, provides (in par 59): If a breach of the Court's directions or of this practice note causes costs to be thrown away, a party or legal practitioner responsible for the breach may be ordered to pay those costs. 134It also includes, among the "usual first directions" in Schedule D, the following (as "G5"): Experts are directed to give written notice to the Court and the party instructing them if for any reason they anticipate that they cannot comply with these directions. In that case, or if the experts have failed to comply with these directions, the parties will promptly list the matter before the Court for directions and give written notice to the other parties. Default without leave of the Court can result in the imposition of sanctions. 135In 2005, the NSW Law Reform Commission issued a Report (No.109) on Expert Witnesses, which included a section (pp160-162) regarding sanctions for "inappropriate or unethical conduct". The focus of that discussion was on such behaviour as altering evidence to suit the client, tampering with reports, and concealment of relevant facts. 136There is no issue before me about the professionalism of Dickson's report as such, and the LRC Report does not deal, in terms, with a witness's non-attendance to give oral evidence. However, it says (in pars 9.75 and 9.76 on p162): 9.75 At present, giving unprofessional evidence may have a series of possible adverse consequences for the expert, which could be seen as "sanctions": · The expert witness might be criticised by the court, and may lose credibility, and thus a reduced prospect of further work as an expert witness. · Disciplinary proceedings might be taken against the expert witness within the relevant profession. · The court might make a costs order against the expert witness. · The expert witness might be charged with contempt or perjury. 9.76 The Commission considers that the existing "sanctions" are appropriate and sufficient, and that attempting to adopt a more punitive approach would be unlikely to be effective, and may have the unintended consequence of discouraging suitable experts from giving expert evidence. However, there should be a requirement, by rule or practice note, that expert witnesses be notified of the sanctions available in the case of inappropriate or unethical conduct. 137There is no application before the court for an order that Dickson pay any costs to either party. See Childs Family Kindergarten Limited v City of Sydney Council [2006] NSWLEC 784, and s 98(1)(b) of the CP Act. 138Any dispute between him and those who engaged him for this case is a commercial matter between them, and largely a function of their contractual arrangements. 139What the Council says, however, is that Dickson's failure to discharge his duties to the court should have been foreseen by the applicant, and caused the Council to incur additional costs, for which it should be compensated by the applicant, because the applicant "decided not to pay him" (T18.5.11, p31, L3), and, therefore, acted unreasonably. 140In fact, the clear evidence presented by the applicant is that no such decision was ever made, and Dimitrovski clearly pleaded several times with Dickson to trust the applicant to raise the necessary funds as quickly as possible. 141The applicant obviously knew that its retainer agreement specifically allowed for Dickson to withdraw from the engagement fairly peremptorily, if his fees were not paid according to the stipulated terms. 142The difficulty for the court is that Dickson had repeatedly threatened not to perform his duties, but continued to perform them until the very last moment. The threats regarding what might flow from the applicant's delay in raising funds to pay his fees gained fervour on and after about 3 December. On the eve of appearing in court on the 6th (as he promised at 10pm on the 5th), he received a "blast" from Lamb, and decided to go to Adelaide - a compassionate trip about which the court makes no criticism. When he returned the next night, he resumed work, and on the night of the 9th he forwarded the joint report, giving no hint to Lamb and Morrish that he may not appear. Regrettably, they separately "blasted" him again very late that night, and he withdrew next morning. The applicant decided to proceed without him. 143As Mr Johnson submits, Dickson owed duties to the court, not just to his client, and the applicant was entitled to expect that, whatever passed between it and Dickson, Dickson would fulfil his duties to the court - Dickson having relented at the last minute, and submitted the joint report, the applicant was entitled to expect he would then come to court to give concurrent evidence with the respondent's experts on the proposed last hearing day (the 10th), albeit that he had not attended, as expected, on the 6th. 144The evidence indicates that, despite regular moments of drama, not least the sudden reversal of his postponement of the visit to his sick father, which led to his failure to attend court and/or a conclave with Lamb and Morrish on the 6th, Dickson fulfilled all but that last duty, and also failed to give notice to the court, as required by the Practice Note, that he could/would not comply with that element of the standard expert witness direction. (The administration of sanctions for that type of breach by an expert is largely unexplored territory). 145His failure to attend on the 10th was envisaged by the terms of the retainer, and notice of it was given in his letter dated 6 December, but apparently not seen by the applicant's side until the 8th. 146When the stipulated deadline passed at 12 noon on the 9th, Murray rather elliptically said that Dickson and she would "proceed in accordance with the terms reflected in said letter". Those terms specifically suggested his non-attendance at court. 147Whatever sympathy one might have for the applicant, faced with the loss of evidence and a witness seen as vital to its case, I reject Mr Johnson's submissions that the applicant had no opportunity to mitigate any damage or loss (T18.5.11, p52, LL5-6), and that the circumstances in this case are such that the court should not hold the applicant responsible for the failures of its expert witness (written submissions par 7) - as he acknowledged in that submission, "it all depends on the circumstances", and the circumstances here do not favour the applicant. 148Dickson's threat was made in clear written terms. It came to the applicant's notice, at the latest 36 hours before the hearing on the 10th. It was executed at 1.30pm on the 9th by Murray's email. It was confirmed at 8am on the 10th by Dickson's call to Briggs. 149Yet, no effort at all appears to have been made by the applicant's side to warn the court, nor apparently the Council's representatives, prior to the revelation around noon. 150That specific failure on the applicant's part, rather than its lack of success in managing Dickson and securing his attendance, is the element of unreasonable conduct upon which I have decided to make an order in favour of the Council. 151What then should such an order embrace? The Council particularises the following "costs thrown away", in NOM 1 (as amended during the hearing - see [5] and [8] above): (a) the costs incurred after 22 October 2010 by Lamb and Morrish in reviewing Dickson's SOE filed 20 September 2010, and revising their own individual reports. (b)the costs of Lamb and Morrish joint-conferencing and preparing of the joint report. (c)the costs of Lamb and Morrish attending court on the 6th, and early on 10th December. (d)the costs of lawyers' appearances on 1 February 2011. 152The joint conferencing was effectively aborted by Dickson's departure for Adelaide on 6-7th, and his final withdrawal on the 10th, and I consider the order in Council's favour should embrace (a) and (b), but with care taken to avoid any double-dipping as between them. 153On the 6th, in the unexpected absence of Dickson, Lamb and Morrish were working on the joint report, in the court building, and standing by to be called as witnesses. Lamb was indeed called, and it was reasonable to have both of them there, regardless of the Dickson issue. They gave their visual/design evidence on the 10th, after it became clear that Dickson would not attend. Their evidence was important to Council's case in any event, and, accordingly, I would not make order (c) against the applicant. 154I turn, therefore, to claim (d). Clearly much court time was lost in the week 6-10 December, as a result of Dickson's erratic involvement, and it seems to me that a claim for some of Council's representatives' appearance fees should be allowed. I am not satisfied that it should amount to one full day's work out of six hearing days, as claimed in (d), as I am not satisfied that, if Dickson had stayed fully involved 6-10 December, the hearing would have been concluded on the 10th. In any event, the whole of 1 February was not required to conclude it. Doing the best I can, I will allow one-eighth of the costs incurred by way of appearance fees over all six days of hearing. 155Having been largely successful on NOM 1, Council should also recover its costs on the motion. 156I should add in regard to this decision that I have felt no obligation at all arising out of anything said by the Commissioners regarding costs. Rule 3.10 of the Court's Rules precludes Commissioners' making such orders as to costs as were sought here, and their opinion on the matter has no weight. The judge hearing the application must consider the history of the conduct of the case outside the courtroom, as well as the official record of what occurred inside it.

Conclusion and Orders 157The Council has failed on one of its motions, and been largely successful on the other. 158The formal Orders of the court will be: (1)The respondent's Notice of Motion dated 31 March 2011, touching matters 10459-10465 of 2010 (Court document D11 - 3753) is dismissed. (2)The respondent is ordered to pay the applicant's costs on that first motion. (3)On the respondent's Notice of Motion dated 31 March 2011, touching matters 10231, 10459-10465, and 10528 of 2010 (court document D11-3755), the applicant is ordered to pay the following costs of the respondent: (a)The costs incurred after 22 October 2010 in respect of Dr Richard Lamb and Ms Gabrielle Morrish reviewing Robert Nigel Dickson's Statement of Evidence filed 20 September 2010 and revising their respective draft individual expert reports to deal with matters raised in that Statement of Evidence. (b)The costs incurred in respect of Dr Richard Lamb and Ms Gabrielle Morrish engaging in joint conferencing and preparation of a joint report in conjunction with Mr Dickson, except in so far as such costs are already caught by the terms of par (a) of this order. (c)One-eighth of the total costs incurred in respect of the respondent's legal representatives appearing before the court over the six days of hearing between and including 21 October 2010 and 1 February 2011. (4)The applicant is ordered to pay the respondent's costs on that second motion. (5)The exhibits may be returned.

Amendments 04 May 2012 - "Council" changed to "counsel" Amended paragraphs: 113 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: 04 May 2012

Introduction 1This is an application by the respondent Council for an order for costs against only the applicant, in respect of nine Class 1 appeals dealt with together by Senior Commissioner Moore and Commissioner Morris over six hearing days between 21 October 2010 and 1 February 2011. 2The learned Commissioners delivered three judgments, with their final decision coming down on 9 March 2011 - Weriton Finance v Wollongong City Council [2011] NSWLEC 1046. 3In their final judgment they dismissed seven of the appeals. The other two were upheld, subject to some directions being obeyed, and final orders in favour of the applicant were made in both of those, in Chambers, on 23 May 2011. 4In the meantime I heard the argument on costs on 18 May 2011, dealing with two separate Notices of Motion ('NOM') filed by Council.

Notice of Motion No 2 12In the other NOM (NOM 2), Council sought the following orders in each of seven of the nine matters, namely Nos 10459 to 10465 of 2010 inclusive, in all of which the company's appeals, against Council's refusal of development applications for "bed and breakfast" ('B&B') establishments, were dismissed: 1.That the applicant pay the respondent's costs of the proceedings as agreed or assessed. 2.Alternatively, that the applicant pay the respondent's costs of the proceedings from 16 November 2010 as agreed or assessed. 3.That the applicant pay the respondent's costs of this motion. 13Council says the applicant should pay Council's costs because it was clear, from a date well before the final days of the hearing (namely from the date of a judgment delivered by the Commissioners on 16 November 2010, to which I will return - see [30]ff below), that the seven B&B appeals had "no reasonable prospects of success", due to the absence of evidence to support the project's compliance with relevant provisions of the Wollongong Local Environmental Plan 1990 ('the 1990 LEP'). 14Council relies upon remarks made by the Commissioners in their judgment of 9 March 2011 (at [64]). For completeness, I will quote those remarks in their immediate context, noting the importance to it of cl 11(2)(g) of the LEP, to which I will also return (see [34] below): 63. As a further consequence, there is, in our view, not a scintilla of evidence of any nature whatsoever provided on behalf of the applicant that could found the satisfaction of cl 11(2)(g) for the bed and breakfast elements of the proposal as a specific category of tourism development or as part of some broader, general of tourism development range. 64. As a consequence, we are of the view that, with no relevant, contemporary evidence addressing cl 11(2)(g) being provided - a position which for the reasons set out above at some length has not occurred - we are of the view that, at least from the time our decision in Weriton Finance Pty Ltd v Wollongong City Council (No 2) [2010] NSWLEC 1313 was read and considered by the applicant, the appeals in Matters Nos 10459 to 10465 of 2010 have been without any prospect of success whatsoever absent the production of relevant, contemporary evidence aimed at satisfying the prerequisite test in cl 11(2)(g). 65. Whilst it is entirely inappropriate for us to speculate how the applicant might have sought to provide more contemporary material in order to satisfy us on this point or for us to delineate some specific point of time to found evidence that could provide such satisfaction to us, a document that is seven years old and which is necessarily based on data derived from some time earlier than the date of that final report cannot be used to provide support for a contemporary conclusion as to what is the state of the demand for tourism accommodation, generally, or bed and breakfast accommodation specifically.

Rules and Principles regarding Costs in Class 1 18Costs orders are made to compensate a party, not to punish its opponent: Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534. 19Section 98(1) of the Civil Procedure Act 2005 ('CP Act') provides: Subject to rules of court and to this or any other Act: (a) costs are in the discretion of the court, and (b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and (c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis. 20Rule 3.7 of the Land and Environment Court Rules 2007 applies to Class 1 proceedings, such as all nine of these, and relevantly provides: (2) The Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances. (3) Circumstances in which the Court might consider the making of a costs order to be fair and reasonable include (without limitation) the following: (a) that the proceedings involve, as a central issue, a question of law, a question of fact or a question of mixed fact and law, and the determination of such question: (i) in one way was, or was potentially, determinative of the proceedings, and (ii) was preliminary to, or otherwise has not involved, an evaluation of the merits of any application the subject of the proceedings, (b) that a party has failed to provide, or has unreasonably delayed in providing, information or documents: (i) that are required by law to be provided in relation to any application the subject of the proceedings, or (ii) that are necessary to enable a consent authority to gain a proper understanding of, and give proper consideration to, the application, (c) that a party has acted unreasonably in circumstances leading up to the commencement of the proceedings, (d) that a party has acted unreasonably in the conduct of the proceedings, (e) that a party has commenced or defended the proceedings for an improper purpose, (f) that a party has commenced or continued a claim in the proceedings, or maintained a defence to the proceedings, where: (i) the claim or defence (as appropriate) did not have reasonable prospects of success, or (ii) to commence or continue the claim, or to maintain the defence, was otherwise unreasonable. 21Biscoe J said in Arden Anglican School v Hornsby Shire Council [2008] NSWLEC 103; (2008) 158 LGERA 224 (at [9]): In the context of the presumptive rule that there will be no order as to costs in planning appeals, the power to make a costs order is in the broadest of terms, that is, what is "fair and reasonable in the circumstances". All rational considerations are relevant to the formulation of that judgment. In the end, the question is whether, in the opinion of the Court, they are of sufficient weight to overcome the presumptive rule. 22I discussed the general and fundamental approach, and many relevant authorities, in Universal Childcare Pty Ltd v Leichhardt Municipal Council [2008] NSWLEC 277 (at [5]-[14]), and I again adopt and apply those principles. 23It is necessary to establish the facts in some detail before turning to apply those principles to the motions now before the court, as, in deciding if it is appropriate for a compensatory costs order to be made, the court must assess the "reasonableness" of the parties' conduct in all the circumstances of the case.

(2008) 158 LGERA 224

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Cases Cited (9)