Willoughby City Council v Blanc Black Projects Pty Limited

Submissions

1. Council seeks its costs of the s 56A appeal against Blanc Black. Blanc Black opposes such orders and submits that each party should bear its own costs on the basis that neither was successful. The parties' submissions proceeded on the basis that costs ordinarily follow the event in accordance with r 42.1 of the Uniform Civil Procedure Rules 2005 (NSW) ('UCPR'). However, their respective characterisation of the "event" which costs must follow differs.
2. Blanc Black submits that, in a s 56A appeal, the event is the "substantive, functional outcome of the proceedings" as opposed to the "technical" result. As such, the relevant focus must be on whether Condition 27 is ultimately imposed, a question which was yet to be determined at the time the parties made their submissions on costs. Blanc Black nevertheless submits that the Commissioner's further consideration of the matters is expected to lead to the grant of consent without Condition 27 being imposed. In any event, in circumstances where Council had sought to have the Commissioner's decision set aside, and to have the Court exercise its power under s 56A(2)(b) to vary the decision and impose Condition 27, Blanc Black submits that Council cannot therefore be properly characterised as a successful party.
3. If the Court was minded to make an adverse costs order, Blanc Black submits that apportionment of the costs would be appropriate. While Council succeeded on the first of its six grounds of appeal, the other grounds merely repeated the first ground or were rejected by the Court. Blanc Black emphasises that the issues upon which Council failed were significant, subject to substantial argument, and therefore resulted in considerable time and costs being incurred.
4. Council submits that the "event" in r 42.1 of the UCPR refers to the practical result of the particular claim. In a s 56A appeal, the "event" is therefore the outcome of the appeal, namely, for present purposes, the setting aside of the Commissioner's decision not to impose Condition 27. Council rejects Blanc Black's submission that the "event" is concerned with the ultimate outcome of the Class 1 appeal which was remitted to the Commissioner for further determination and submits that the untenability of such an argument is illustrated by the fact that it would require the Court to speculate as to what the outcome of the remitter would be.
5. Council does not dispute that the grounds it raised were somewhat overlapping and relies on the Court's finding that each of the grounds "primarily concerned the interpretation and application of legislative provisions concerning the imposition of affordable housing conditions". However, in circumstances where apportionment is only ordered where it appears that a particular issue is clearly dominant or separable, Council submits that this very circumstance militates against apportionment of the costs of the appeal on an issue-by-issue basis. In any event, Council emphasises that the grounds on which it did not succeed were not determinative of the appeal, and did not detract from its overall success in the appeal, or materially affect the complexity or costs of conducting the s 56A appeal.

Consideration

1. Section 98(1) of the Civil Procedure Act 2005 (NSW) confers upon the Court a wide discretionary power to determine costs, including by whom, to whom and to what extent costs are to be paid. Such discretion is however subject to the well-established principle that costs are not awarded by way of punishment but are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which they have been put by reason of the proceedings: Latoudis v Casey (1990) 170 CLR 534 (Mason CJ); [1990] HCA 59.
2. Rule 42.1 of the UCPR further informs the Court's exercise of its discretion as to costs and provides that generally costs follow the event unless it appears to the Court that some other order should be made as to the whole or part of the costs. The parties agreed, and I accept, that this rule applies to appeals brought pursuant to s 56A of the Court Act by operation of Sch 2 of the UCPR.
3. In circumstances where Council was successful in the s 56A appeal from the Commissioner's decision, it is prima facie entitled to its costs. However, as noted above, there was difference between the parties as to how the "event" should be determined in the present matter, with Blanc Black emphasising that although Council was successful, numerous of its grounds of appeal failed.
4. It is clear that the "event" for the purpose of the costs discretion is to be understood as referring to the practical result of a particular claim: Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15]. This must be ascertained by reference to who the successful party in the proceedings was, having in mind the issues in contest and who succeeded on them: John Conrad Hansen trading as Derrawee Pastoral Company v Monterey (Coolah) Pty Limited [2012] NSWSC 1383 at [29].
5. Here, if one looks at the s 56A appeal, what Council had sought was the setting aside of so much of the Commissioner's decision as concerned Condition 27. Properly considered, this constitutes the relevant "event" for the purpose of r 42.1. Although I accept that Council did not seek remittal of the matter to the Commissioner, but rather submitted that the condition be imposed in the appeal proceedings pursuant to the power in s 56A(2)(b) of the Court Act, this does not detract from its success in having that part of the decision set aside. Rather, on one view, remitter is merely a consequence of achieving that result.
6. In light of my above characterisation, I note for completeness that I do not accept Blanc Black's submissions that the "event" is whether or not Condition 27 is ultimately imposed in the development consent upon further consideration by the Commissioner. I consider the present s 56A appeal, which has been commenced by way of summons, to be separate from the Class 1 appeal proceeding before the Commissioner. The outcome of the Commissioner's subsequent decision, albeit related, is neither determinative of the outcome of the s 56A appeal nor relevant to my determination of the appropriate costs' orders.
7. As such, I find that the above circumstances support awarding costs in favour of Council. The question then becomes whether an apportionment should be made to account for Council's failure on a number of its grounds of appeal.
8. It is ordinarily not appropriate to deprive a successful party of a portion of the costs of the proceedings on the basis that, although that party was successful in the ultimate outcome of the matter, some of the issues raised failed: Sabah Yazgi v Permanent Custodians Limited (No 2) [2007] NSWCA 306 at [24]. However, the rule that costs follow the event does not limit the wide statutory discretion in s 98(1) of the Civil Procedure Act and I am mindful that my discretion must be exercised judicially with due regard to the particular circumstances of each case. I therefore give weight to Blanc Black's submission that, despite Council's success in obtaining the relief sought, it failed on a number of the grounds it had raised and thereby caused unnecessary expenses to be incurred.
9. A distinction has frequently been drawn between cases involving discrete issues for determination clearly separable from the matter which succeeded, where apportionment may more readily apply, and those in which the issues are linked to the overall disposition of the matter: James v Surf Road Nominees Pty Limited (No 2) [2005] NSWCA 296 ('James v Surf Road Nominees') at [34]). As Council submitted, I found in the primary judgment that, the grounds of appeal raised by Council were "separate and somewhat overlapping" and that the grounds "primarily concern[ed] the interpretation and application of legislative provisions concerning the imposition of affordable housing conditions" (primary judgment at [4], [11]). Despite this, Council did raise a number of discrete arguments (including for example, that the Commissioner's decision not to impose Condition 27 was legally unreasonable) which occupied some period of time and which, as I have noted above, were not successful.
10. After careful consideration of the parties' respective positions, and mindful of my findings in the primary judgment, I consider that there should be some apportionment of Council's costs. As for the extent of apportionment that should be ordered, I note that the assessment is very much a matter of discretion which cannot be answered with mathematical precision: James v Surf Road Nominees at [31]-[36], citing Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261. Doing the best I can, in all circumstances, I consider that a small percentage deduction in the overall costs ought to be allowed for, and that Council should receive 85% of its costs.

Orders

1. The orders of the Court are: 1. Blanc Black Projects Pty Limited is to pay 85% of the costs of Willoughby City Council in relation to the appeal brought pursuant to s 56A of the Land and Environment Court Act 1979 (NSW) and the application for costs.

Amendments 19 December 2023 - Paragraph [21] - typographical error corrected. 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: 19 December 2023