Woollahra Municipal Council v Cameron

Land and Environment Court (NSW)|2024-06-03|Before: Pritchard J

Introduction

On 13 April 2021, Woollahra Municipal Council (Council) granted development consent DA 457/2020/1 subject to conditions (the development consent) for the "demolition of the existing building and construction of a new dwelling" at 35 Suttie Road, Bellevue Hill, Lot 5 DP 13285 (the site). Mr Andrew Cameron (the first respondent) and Ms Vanessa Green (the second respondent) are the registered proprietors of the site and have the benefit of the development consent to demolish an existing building and construct a three-storey dwelling on the site.
On 11 April 2022, the first and second respondents lodged modification application DA 457/2020/3 (the modification application), seeking to modify the development consent pursuant to s 4.55 of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act).
The modification application lodged on 11 April 2022 was recommended for approval by and subsequently approved by the Woollahra Local Planning Panel (the Local Planning Panel) on 16 June 2022 (the modified development consent), subject to condition C.1(d) requiring, inter alia, the "[d]eletion of the 'cellar' level and the associated excavation (imposed under DA 457/2020/3)".

Issues

The issues for determination in relation to costs identified by the first and second respondents are: 1. whether the error the subject of the proceedings was caused by the third respondent; 2. whether the third respondent actively defended the proceedings; 3. whether the actions of the third respondent increased the length and costs of the proceedings; and 4. how costs should be apportioned between the first and second respondents, and the third respondent.

Evidence

In addition to the factual findings in the principal judgment, the first and second respondents relied on the notice of appearance filed by the third respondent on 22 March 2023; the response to summons filed by the third respondent on 31 May 2023; and the affidavit of Mr Paul Aramini, the third respondent (the third respondent's affidavit), filed 29 September 2023, and a supporting exhibit 170 pages in length, and the third respondent's submitting appearance filed 6 October 2023.
In oral submissions, the third respondent said that he did not "need evidence", and that his submissions were based on "the court file".

Outcome

For the reasons that follow, I have determined that the respondents should, in equal share, pay the applicant's costs as agreed or assessed.

Background

The background to the Class 4 proceedings is set out in the principal judgment at [11]-[68]. For the purpose of the costs hearing, the parties placed particular emphasis on the following matters.
On 10 June 2022, the third respondent received the original application for the construction certificate from the first and second respondents. On 14 June 2022, the third respondent sent an email to the first and second respondents in respect of "outstanding documents and clarifications". In response, the first and second respondents sent architectural building specifications to the NSW Planning Portal.
On 16 June 2022, the Local Planning Panel approved the modification application subject to conditions including those requiring the approved plans and the construction certificate plans to be amended to delete the cellar level and associated excavation.
On 12 July 2022, the first and second respondents notified the third respondent of the approval of the modification application. On 15 July 2022, the first and second respondents uploaded "Structural Plans and Design Certificate" to the NSW Planning Portal. The third respondent "ask[ed] for the notation on the structural plans to be amended to read "for construction". This was done on 18 July 2022.
On 4 August 2022, the first and second respondents emailed the third respondent indicating that additional plans were to be "resubmitted". In August 2022, the third respondent commenced his review of the "CC application" following the grant of the modified development consent.
On 31 August 2022, the third respondent "reached a state of satisfaction" that the application for the construction certificate and the documentation satisfied the requirements under the EPA Act and subsidiary legislation, and issued the construction certificate.
On 1 March 2023, Council filed the amended summons. On 22 March 2023, the third respondent filed an unconditional notice of appearance. On the same day, the first and second respondents filed their response to the amended summons. On 31 May 2023, the third respondent filed a response to the amended summons.
On 24 March 2023, the first and second respondents filed a notice of motion seeking that the question of whether time for the commencement of the proceedings should be extended under r 59.10 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) be determined separately from any other question in the proceedings. On 6 April 2023, the motion was heard by Justice Duggan. A solicitor from HBA Legal appeared at the notice of motion on behalf of the third respondent. On 6 April 2023, Duggan J dismissed the motion.
On 29 September 2023, the third respondent filed the affidavit of Mr Aramini and a supporting exhibit 170 pages in length. In his affidavit, the third respondent deposed at [38] as follows: In my professional opinion, it was not unreasonable for me to issue the CC, having regard to the following: (a) The architectural plans provided for the CC were consistent with the original DA consent and the s4.55/3 modification in so far as they showed the deletion of the cellar and cellar level and did not show any excavation below the approved lower level for a cellar.
On 6 October 2023, the first and second respondents filed written submissions.
Also on 6 October 2023, the third respondent filed a submitting appearance which did not include the words "save as to costs".
On 9 October 2023, the first and second respondents filed objections to evidence. On 10 and 11 October 2023, the proceedings were heard before me.
At the commencement of the hearing in relation to costs on 3 June 2024, Mr Weinberger, solicitor for the third respondent, sought leave to address the Court on the question of costs. The first and second respondents opposed the grant of leave. I granted the third respondent leave, notwithstanding that the third respondent had not included the words "save as to costs" in his submitting appearance. I add that I was unable to find any case in which a court considered a submitting appearance without the words "save as to costs". In Seller v Jones [2] McColl JA (Basten JA and Ward JA agreeing) noted at [59] that r 6.11 of the UCPR does "not provide for costs implications of a submitting appearance". Further, the UCPR does not provide for the consequences of a submitting appearance, whether or not expressed to be "save as to costs". [3]

Relevant legislation

Sub-sections 98(1) and (2) of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) provide relevantly as follows in relation to the powers of the court as to costs: 98 Courts powers as to costs (1) 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. (2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court.
Rule 6.11 of the UCPR provides as follows in relation to submission to judgment by notice of appearance: 6.11 Defendant may submit to judgment by notice of appearance (1) A defendant who intends to take no active part in proceedings may include in the defendant's notice of appearance a statement to the effect that the defendant submits to the making of all orders sought and the giving or entry of judgment in respect of all claims made, to which may be added the words ", save as to costs". (2) Except by leave of the court, a defendant who has filed a notice of appearance containing a statement referred to in subrule (1) may not file a defence or affidavit or take any other step in the proceedings.
Rule 42.1 of the UCPR provides as follows in relation to the general rule that costs follow the event: 42.1 General rule that costs follow the event Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.

Relevant legal principles

In Oshlack v Richmond River Council [4] Gaudron and Gummow JJ said at [22] of the discretion then conferred by s 69(2) of the Land and Environment Court Act 1979 (NSW) (since repealed) (citations omitted): The terms of s 69(2) contain no positive indication of the considerations upon which the Court is to determine by whom and to what extent costs are to be paid. The power conferred by the section is to be exercised judicially, that is to say not arbitrarily, capriciously or so as to frustrate the legislative intent. However, subject to such considerations, the discretion conferred is, to adapt the words of Dixon J, unconfined except in so far as "the subject matter and the scope and purpose" of the legislation may enable an appellate court to pronounce the reasons given by the primary judge to be "definitely extraneous to any objects the legislature could have had in view".
And at [65] McHugh J said (citations omitted): Although the statutory discretion is broadly stated, it is not unqualified. It clearly cannot be exercised capriciously. Importantly, the discretion must be exercised judicially in accordance with established principle and factors directly connected with the litigation. In this manner, the law has gradually developed principles to guide the proper exercise of the discretion and, in some cases, to highlight extraneous considerations which, if taken into account, will cause the exercise of the discretion to miscarry.
In Northern Territory v Sangare [5] Kiefel CJ, Bell, Gageler, Keane and Nettle JJ at [24] said of the power to award costs (citations omitted): It is well established that the power to award costs is a discretionary power, but that it is a power that must be exercised judicially, by reference only to considerations relevant to its exercise and upon facts connected with or leading up to the litigation. While the width of the discretion "cannot be narrowed by a legal rule devised by the court to control its exercise", the formulation of principles according to which the discretion should be exercised does not "constitute a fetter upon the discretion not intended by the legislature". Rather, the formulation of principles to guide the exercise of the discretion avoids arbitrariness and serves the need for consistency that is an essential aspect of the exercise of judicial power.
In Cutcliffe v Lithgow City Council [6] (Cutcliffe) at [14]-[15], Biscoe J said as follows in relation to costs orders against two or more respondents and the apportionment of costs as between the respondents: 14. A costs order against two or more respondents is joint and several: Rushcutters Bay Smash Repairs Pty Ltd v H McKenna Netmakers Pty Ltd [2003] NSWSC 670 (Gzell J). Consequently, each respondent then has a right of equal contribution against the other. When making costs orders, the Court might determine that the contribution should not be equal. For example, in Belongil Progress Assn Inc v Byron Shire Council [2000] NSWLEC 118, the court declared that provisions of a local environmental plan were invalid. The two respondents were ordered to pay the applicant's costs. But as between the respondents, those costs were apportioned 70% to the respondent council and 30% to the other respondent. 15. Another way in which a court may exercise its discretion in where both respondents have actively and unsuccessfully defended, is to order each respondent to pay, in equal shares, the applicant's costs. Such an order was made in Sidney Harrison Pty Ltd v City of Tea Tree Gully (No 2) (2001) 112 LGERA 327 (SC/SA, Debelle J). There the plaintiff brought proceedings against a council and the holder of a development approval and obtained declaratory relief. Some of the issues arose from the fact that the council had not proceeded according to law when dealing with the development application. The council defended those issues but the holder of the development approval was prepared to abide the orders of the court and did not prolong the hearing in relation to those issues. The council was ordered to pay the applicant's costs of those issues. Both defendants opposed other issues and they were ordered to pay, in equal shares, the plaintiff's costs.
In Cutcliffe, Biscoe J at [50] formulated the following guidelines for the exercise of the Court's discretion to order costs: 50 The following general guidelines may be formulated, based on the cases and principles reviewed in this judgment, for the exercise of the Court's discretion to order costs where • an applicant successfully brings proceedings that are necessary to have declared invalid or set aside a development consent or decision of a consent authority; • the consent authority and the beneficiary of the development consent or decision are necessary or proper parties; and • the cause of the invalidity is an error of or attributable to the consent authority and not to the beneficiary: (a) the applicant will ordinarily be entitled to be compensated by an award in its favour of the costs of the proceedings unless it has engaged in disentitling conduct. (b) where the beneficiary does not defend the proceedings, the applicant's costs will ordinarily be awarded against the consent authority, whether or not the latter enters a submitting appearance. This is because the cause of the litigation is the error of the consent authority and not of the applicant or the beneficiary. The consent authority cannot immunise itself from costs consequences of its own error by entering a submitting appearance because then a successful applicant cannot be properly compensated in costs. It is not sufficient that a consent authority should bear the applicant's costs only up to the time of the consent authority's submitting appearance because the applicant must continue to incur costs thereafter in order to establish, by evidence and argument at a hearing, that it is entitled to declaratory and injunctive relief. (c) where the beneficiary does defend the proceedings, albeit unsuccessfully, the applicant's costs will ordinarily be awarded against both the beneficiary and the consent authority, whether or not the latter enters a submitting appearance. The award of costs against the consent authority is because its error is the cause of the litigation. It cannot immunise itself from costs by entering a submitting appearance for the reason given in (b) above. The award of costs against the beneficiary is because it chose to defend the proceedings. A qualification is that the beneficiary alone may be required to bear the applicant's costs to the extent that they exceed the costs that the applicant would have incurred if both respondents had submitted, being costs attributable to defences that the beneficiary has unsuccessfully raised and the consent authority has not raised. An example may be a defence by the beneficiary that, notwithstanding an invalidating error by the consent authority, the court, for discretionary reasons, ought not to grant any relief.
These principles were cited by Preston CJ of LEC in Brown v Randwick City Council (No 2) [7] at [25] as follows: 25 Ordinarily, where both the consent authority that grants a development consent or makes a decision and a beneficiary of the development consent or decision are joined as necessary or proper parties to a successful judicial review challenge to the development consent or decision, the successful applicant's costs will be awarded against both the consent authority and the beneficiary. As Biscoe J stated in Cutcliffe v Lithgow City Council [2006] NSWLEC 463; (2006) 147 LGERA 330 at [50], the award of costs against the consent authority is because its error is the cause of the litigation. The consent authority cannot immunise itself from costs by entering a submitting appearance because then a successful applicant cannot be properly compensated in costs. The award of costs against the beneficiary who chooses to defend proceedings and take an active part in them is because of that choice. If a beneficiary wishes to avoid costs, it must choose not to defend the proceedings.
In Kogarah City Council v Armstrong Alliance Pty Ltd (No 2) [8] (Kogarah City Council v Armstrong Alliance (No 2)), Pepper J made a declaration of invalidity in circumstances where there the development was not in conformity with the development consent and there was an inconsistency between the plans as approved and the plans as certified, and ordered the certifier who did not participate in the proceedings and had filed a submitting appearance to pay 100% of the applicant's costs. [9]
In Rossi v Living Choice Australia Ltd (Rossi), [10] Basten JA at [73] said of the circumstance engaging para (b) in [50] of Biscoe J's reasons in Cutcliffe (emphasis added): The circumstance engaging para (b) in Cutcliffe was that the beneficiary of the decision does not defend the proceedings; it was then said that the reason why the consent authority could not "immunise itself from costs consequences of its own error by entering a submitting appearance [was] because then a successful applicant cannot be properly compensated in costs." But that cannot be true in the case of proceedings which are actively defended by another party. The mere fact that the decision-maker is ultimately found to have erred in its approach is not, of itself, a sufficient reason to order costs against it, being costs incurred after the entry of a submitting appearance.
In Hornsby Shire Council v Trives (No 4) [11] (Trives (No 4)), Craig J made costs orders against a certifier who was found to have issued a complying development certificate in breach of the EPA Act, and thereby to be invalid and of no effect to authorise the development to which it purported to relate. At [22] Craig J said as follows (emphasis added): I accept the submission made on behalf of the second and third respondents that the costs incurred by them are minimal and that their actions in taking what might be described as a benign position in the proceedings, indicates that they have acted reasonably. The submission made by Mr Doyle, counsel for the second and third respondents in 14/40215 and by Mr Hudson in 14/40259 is that the position of their respective clients can be equated to that of a submitting respondent whose joinder has only been made necessary because of the unlawful action of another party. (Manns v Attorney General of NSW (No 2) [2010] NSWSC 325 at [16]-[17]; Hurstville City Council v Minister for Planning and Infrastructure (No 2) [2012] NSWLEC 196 at [41]-[42]). Whatever may have been their respective roles in submitting applications for complying development certificates to Mr Trives, they have not been responsible for the Council incurring costs of any significance in these proceedings. Understandably, they rely upon the circumstance that they proceeded with work on their respective properties, relying upon validity of the certificates issued by Mr Trives.
In Lou v IAG Limited t/as NRMA Insurance, [12] a case where the appellant (the first defendant below) filed a submitting appearance "save as to costs", the matter was heard without the appellant and her legal representatives present, and the primary judge awarded costs against the appellant, Payne JA (Gleeson JA agreeing) said at [47]: First, the appellant filed a submitting appearance shortly after her first appearance on 5 November 2018. Her prompt filing of a submitting appearance enabled the matter to be set down for hearing as soon as the Court became available. The appellant's conduct was consistent with her obligation to further the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in dispute contained in s 56(3) of the Civil Procedure Act. This was not a case in which the filing of a submitting appearance came at a late stage of the proceedings: cf IAG Limited t/a NRMA Insurance v Khaled [2019] NSWSC 320 per Bellew J.
In Inglis v Buckley (No 2), [13] Pain J at [47] adopted the following summary of principles applicable to liability for costs between respondents (citations omitted): 1. the rationale for the usual rule that costs follow the event is that the successful party to proceedings should be compensated and that an award of costs is not to be punitive: Latoudis; 2. ordinarily, an order for costs will not be made against a submitting party: Develtor Property Group Pty Ltd v Newcastle City Council [2001] NSWLEC 47 at [42]; Highland v Labraga (No 3) [2006] NSWSC 871 at [20]-[23]; Midson v Workers Compensation Commission (No 2) [2017] NSWSC 147 at [28]-[31]; 3. there is no prima facie rule that a submitting party will never be ordered to pay costs, contextual circumstances will be taken into consideration: Seller v Jones [2014] NSWCA 19 at [55], [59] cited with approval in Lou v IAG Ltd t/as NRMA Insurance (2019) 101 NSWLR 606; [2019] NSWCA 319 (Lou) at 614; 4. abiding by the limits of the Hardiman principle does not immunise a government authority from an adverse costs order: Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No 3) (1987) 77 ALR 609 at 612; 5. material considerations (House v King (1936) 55 CLR 499; [1936] HCA 40) to the exercise of discretion relevantly include: (a) whether the filing of a submitting appearance by the First Respondent and the 'role' taken by the Council were consistent with the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in dispute contained in s 56(3) of the Civil Procedure Act: Lou at [47]; (b) whether the error the subject of the proceeding was caused by a party: Lou at [44], Cutcliffe at [50], noting that it is a material consideration rather than a rule per Basten JA in Rossi v Living Choice Australia Ltd [2015] NSWCA 244 at [73]; and (c) whether the proceeding could have been resolved by consent: Lou at [44] (i.e. the conduct of the parties in the litigation).

Submissions of the first and second respondents

The first and second respondents seek an order that the third respondent pays 50% of Council's costs, as agreed or assessed, for three reasons: 1. the error the subject of the proceeding was made by the third respondent: 1. the third respondent was aware of the terms of the modified development consent. He says in his affidavit at [16]: On or around 30 June 2022, I was informed by John Jell, author of the Architectural Plans, that the Woollahra Municipal Council (Council) issued a variation to the development approval dated 21 June 2022: DA 475/2020/3. 1. the third respondent took an active role in reviewing and refining the application for the construction certificate. He says in his affidavit at [23]-[24]: On or around 15 July 2022, I received an email from Cliftons (page 88) advising that they have uploaded the Structural Plans & Design Certificate to the NSW Planning Portal. I reviewed the uploaded Structural Plans & Design Certificate. I then caused an email to the sent from ALC to Cliftons (page 100) on the same day stating that the notation on the Structural Plans should be amended to read "for construction". 1. the first and second respondents were entitled to put the application for the construction certificate before the third respondent: Pilkington v Secretary of State for the Environment [14] (Lord Widgery CJ) (Bridge and May JJ agreeing) at 286; 2. the third respondent says in his affidavit at [38]: In my professional opinion, it was not unreasonable for me to issue the CC, having regard to the following: (a) The architectural plans provided for the CC were consistent with the original DA consent and the s4.55/3 modification in so far as they showed the deletion of the cellar and cellar level and did not show any excavation below the approved lower level for a cellar. and to the extent that the Court found to the contrary, the error was his. 1. the third respondent actively defended the proceedings: 1. on 22 March 2023, he filed an unconditional notice of appearance; 2. on 6 April 2023, the notice of motion filed 24 March 2023 was heard before Justice Duggan. The third respondent appeared represented. Duggan J dismissed the motion, and made an order that costs be costs in the cause. 3. on 31 May 2023, he filed a response to the amended summons which "did not rely on the [first and second respondents'] [d]efence"; 4. on 29 September 2023, he filed an affidavit and supporting exhibit 170 pages in length (some two months after the respondents' evidence was required to be filed and served in accordance with orders made by Duggan J on 28 April 2023), that evidence introducing "for the first time an explanation and reasoning as to the decision to issue the certificate and its reasonableness". For example, at [38] of his affidavit, the third respondent deposed: In my professional opinion, it was not unreasonable for me to issue the CC, having regard to the following: (a) The architectural plans provided for the CC were consistent with the original DA consent and the s4.55/3 modification in so far as they showed the deletion of the cellar and cellar level and did not show any excavation below the approved lower level for a cellar. 1. he did not enter a submitting appearance until two business days before the hearing on 6 October 2023; and 2. the authorities make clear that a submitting appearance does not immunise a consent authority from costs. 1. "to some extent", the actions of the third respondent increased the length and costs of the proceedings: 1. the evidence filed by the third respondent was extensive and included a 170-page exhibit; 2. his submitting appearance entered on 6 October 2023 occurred after all the pleadings, evidence and pre-trial steps had occurred and, from a temporal perspective, Council dealt with two active respondents for the "vast majority" of the proceedings; 3. the filing of the third respondent's affidavit and evidence in the two-week period before the proceedings "fell in the laps of the parties preparing for the litigation at a time when the evidence book and the Court book were due", and at the time "the parties were preparing written submissions and determining what evidence was to be tendered". Further: Proffering evidence as to the subjective state of mind of the certifier did involve difficulties and an increase in costs for the parties, and ultimately that was resolved when the certifier decided to submit only a few days later. 1. the "first indication" the first and second respondents had that that the certifier would be putting on a submitting appearance was the day that it was filed.
Mr Farrell for the first and second respondents submitted: … by reference to the statutory scheme, unlike a development consent which can be surrendered in response to litigation there is no ability to surrender a construction certificate. If a construction certificate is challenged the only way that it can be set aside is by an order of the Court, and your Honour is also aware of the authorities which say that the Court doesn't make a declaration by consent. So, one way or another, your Honour, in order for the council to get the relief that it sought in the proceedings, the matter would have needed to come before this court, the Court would needed to have been satisfied that notwithstanding the two relevant expiry periods …

Submissions of the third respondent

In submitting that there should be no order as to costs, "with the intention" that the third respondent pay his own costs, the third respondent relied on the guideline set out by Biscoe J in Cutcliffe at [50(c)], and said that the "error" is: not the beginning nor the end of the test. It's no different to any other piece of legislation where there's an independent decision-maker. Parties have a choice as to whether they accept the correctness or error of that decision. and that: The mistake is not the cause. The proximate cause, the real cause, the efficient cause, is the decision, first in time, taken by those with the vested interest in the outcome, namely the beneficiaries, to file their defence and to file evidence. They had a choice.
Further, the third respondent submitted that he did not actively defend the proceedings: 1. the first and second respondents filed a response to the amended summons first in time, a step that necessitated the preparation for the trial and the trial itself; 2. the first and second respondents defended the proceeding, and have filed a notice of appeal (this showing "who the true contradictor is"); 3. the third respondent formally participated in the proceeding up until 6 October 2023, his involvement not increasing the length and costs of the proceeding: 1. his affidavit filed less than 2 weeks prior to the trial was "relatively benign", did not add "any matter of significance to the pre-existing factual matrix and legal issues", and was not relied upon at the substantive hearing; 2. the costs incurred by Council were attributable to the defence and the evidence relied upon by the first and second respondents: Trives (No 4) at [22] (Craig J); 3. unlike the facts in Kogarah City Council v Armstrong Alliance (No 2), the third respondent's conduct cannot be said to have been egregious. Ultimately, the first and second respondents had a choice, and chose to defend the proceeding; 4. the first and second respondents raised defences not raised by the third respondent, the qualification in Cutcliffe at [50(c)] being apposite. The first and second respondents "took their chances. They were not obliged to do so. Only the [first and second respondents] stood to benefit from resisting the relief sought"; 5. in oral submissions, Mr Weinberger, solicitor for the third respondent said as follows: … beyond the cost of reading the one-page document which substantially contained denials, it didn't result in any additional costs over and above the costs which would have been incurred after the beneficiaries themselves filed it. … My friend says from the bar table, there was a bit of correspondence about whether it goes into the court book or not really, but what practical costs did that result in, beyond the microscopic analysis of having to send an email or make a telephone call about whether that affidavit goes into a court book. It didn't generate any costs, at all.

Whether the error the subject of the proceedings was caused by the third respondent

It is clear that the declaration of invalidity made in the principal judgment related to a decision of the third respondent. It might also be accepted, as submitted by the third respondent, that the first and second respondents had a choice as to whether to defend the proceedings brought by Council. However, the evidence before me does not permit a finding as to the role of the first and second respondents in lodging an application for a construction certificate into the system of the third respondent specifying plans, specifications and standards of building work which the Court found in the principal judgment to be inconsistent with the modified development consent.

Whether the third respondent actively defended the proceedings

It is undoubtedly correct, as held by Basten JA in Rossi at [73], that the mere fact that the decision-maker is ultimately found to have erred in its approach is not, of itself, a sufficient reason to order costs against it, being costs incurred after the entry of a submitting appearance.
Here, however, I find that the third respondent actively defended the proceedings.
The uncontroversial facts are, as submitted by the first and second respondents, that the third respondent filed an unconditional notice of appearance on 22 March 2023, appeared represented at the hearing of the notice of motion on 6 April 2023, filed a response to the amended summons on 31 May 2023, filed an affidavit and supporting exhibit on 29 May 2023 (some two months after the respondents' evidence was directed to be filed), and entered a submitting appearance only two business days before the hearing on 6 October 2023.

Whether the actions of the third respondent increased the length and costs of the proceedings

In relation to the question of whether the actions of the third respondent increased the length and costs of the proceedings, it follows from my findings that the third respondent actively defended the proceedings, and entered a submitting appearance only two business days before the hearing on 6 October 2023, that the actions of the third respondent increased the length and costs of the proceedings.

Apportionment of costs

In relation to the costs of multiple parties, G E Dal Pont, Law of Costs, 5th ed (2021) (Dal Pont) at [11.2] [15] comments that as a general rule, where a court orders that costs be paid by two or more persons, the costs liability is joint and several. However, at [11.3] Dal Pont observes that it should not be assumed that the courts slavishly apply the general rule, and that the court may apportion costs as between the persons liable, rather than expect them to apportion inter se. This is said to reflect no more than the court's general costs discretion, the relevant inquiry being whether it is just in the circumstances to order that particular defendants pay or get a proportion of the costs of a successful plaintiff. [16]
In Morris v Riverwild Management Pty Ltd, [17] Pagone J said at [13] as follows in relation to the apportionment of costs between parties (footnote omitted, emphasis added): A pragmatic, albeit inexact, measure for apportioning costs between parties on the basis of the number of parties may not always be appropriate or fair, but in many cases it may well be appropriate and fair in the interest of producing finality of dispute between the parties. The discretionary nature of costs orders may permit a less rigorous apportionment of costs as between different parties than might be required when determining the apportionment of liability to reflect fault or causation. The apportionment of costs between parties should bear some relationship to the part played by the parties in the overall proceeding however imprecise that relationship must be in any given case. A measure based upon the number of parties (with appropriate adjustments where two or more parties should be considered as in effect one) may be inexact but is rational. …
I find that the third respondent should pay 50% of Council's costs. It follows from the principal judgment that the third respondent caused the error in issuing the construction certificate found by the Court to be invalid. He actively defended the proceedings until two business days before the hearing on 6 October 2023. This was after pleadings, evidence and written submissions by Council and the first and second respondents had been filed.
Such an approach to the apportionment of costs is consistent with the authorities, including Cutcliffe and Rossi. Such an apportionment of costs against the certifier is considerably less than that in Kogarah City Council v Armstrong Alliance (No 2), namely 100%, in circumstances where the certifier had entered an early submitting appearance and consented to a costs order against him.

Costs of the costs hearing

The first and second respondents submitted that they should be awarded the costs of the costs argument. In oral submissions, Mr Farrell for the first and second respondents submitted that they "put a reasonable position to the [third respondent] being 50%".
Notwithstanding Mr Farrell's submission, I will make an order that the first and second respondents, and the third respondent, each pay their costs of the costs proceedings.

Orders

The Court makes the following orders: 1. The first and second respondents, and the third respondent, in equal shares, pay the applicant's costs, as agreed or assessed. 2. The first and second respondents, and the third respondent, pay their costs of the costs proceedings, as agreed or assessed.

Endnotes

[2024] NSWLEC 27 (Pritchard J).
[2014] NSWCA 19 at [59] (McColl JA) (Basten JA and Ward JA agreeing).
Ritchie's Uniform Civil Procedure NSW (LexisNexis, 2024) at [r 6.11].
(1998) 193 CLR 72; [1998] HCA 11 at [22] (Gaudron and Gummow JJ).
Northern Territory v Sangare (2019) 265 CLR 164; [2019] HCA 25 (Northern Territory v Sangare) at [24] (Kiefel CJ, Bell, Gageler, Keane and Nettle JJ); see also Williams v Lewer [1974] 2 NSWLR 91 at 95 (Rath J).
(2006) 147 LGERA 330; [2006] NSWLEC 463 at [14]-[15] (Biscoe J).
[2012] NSWLEC 28 at [25] (Preston CJ of LEC).
[2013] NSWLEC 32 (Pepper J).
Kogarah City Council v Armstrong Alliance (No 2) at [26] (Pepper J).
[2015] NSWCA 244 at [73] (Basten JA).
[2016] NSWLEC 28 at [22] (Craig J).
(2019) 101 NSWLR 606; [2019] NSWCA 319 at [47] (Payne JA) (Gleeson JA agreeing).
[2023] NSWLEC 113 at [47] (Pain J).
[1974] 1 All ER 283 at 286; [1973] 1 WLR 1527; (1973) 72 LGR 303 (Lord Widgery CJ) (Bridge and May JJ agreeing).
Dal Pont at [11.2].
Dal Pont at [11.3]. See also M Friston, Friston on Costs, (Oxford University Press, 4th ed, 2023) at [20.17] in relation to the doctrine of equal apportionment.
[2009] VSC 439 at [13] (Pagone J). 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: 02 July 2024

On 13 April 2021, Woollahra Municipal Council (Council) granted development consent DA 457/2020/1 subject to conditions (the development consent) for the "demolition of the existing building and construction of a new dwelling" at 35 Suttie Road, Bellevue Hill, Lot 5 DP 13285 (the site). Mr Andrew Cameron (the first respondent) and Ms Vanessa Green (the second respondent) are the registered proprietors of the site and have the benefit of the development consent to demolish an existing building and construct a three-storey dwelling on the site.
On 11 April 2022, the first and second respondents lodged modification application DA 457/2020/3 (the modification application), seeking to modify the development consent pursuant to s 4.55 of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act).
The modification application lodged on 11 April 2022 was recommended for approval by and subsequently approved by the Woollahra Local Planning Panel (the Local Planning Panel) on 16 June 2022 (the modified development consent), subject to condition C.1(d) requiring, inter alia, the "[d]eletion of the 'cellar' level and the associated excavation (imposed under DA 457/2020/3)".
In Woollahra Municipal Council v Cameron (the principal judgment),[1] in Class 4 judicial review proceedings brought by Council, the Court found that the decision of the principal certifying authority Mr Paul Aramini (the third respondent) on 31 August 2022 to issue construction certificate 21/345 (the construction certificate) for the development of the site in accordance with the modified development consent was legally unreasonable.
Following delivery of the principal judgment, the applicant and first and second respondents came to an agreement in relation to the form of declaration and injunction to be made by the Court. Accordingly, the Court made the following declaration:

1. The Court declares that construction certificate 21/345, issued by Paul Aramini, on 31 August 2022 (CC) for the demolition of the existing dwelling and the construction of a new dwelling at 35 Suttie Road, Bellevue Hill, is invalid and of no effect in so far as it purports to approve below RL 18.28 in the area hatched in red on the attached plan:

a. excavation;

b. structures including lift, lift shafts, stairs, walls, floor, and crane base; and

c. other works in that area.

2. Order that the First and Second Respondents, by themselves, their servants and agents, are restrained from carrying out any development in reliance on that part of the CC referred to in Order 1 above.

In the principal judgment, the Court reserved the question of costs (at [206(2)]).
In an agreed communication with the applicant and the third respondent, the first and second respondents informed the Court that the parties had been unable to reach agreement "in relation to the liability of the Applicant's costs", and proposed that the matter be listed for a hearing on costs.
On 3 June 2024, the hearing on costs was listed before the Court (the costs hearing).
In summary, the position of each of the parties as to costs was as follows:

(1) Council, the successful applicant, sought an order that the respondents pay its costs on an ordinary basis in accordance with the general costs rule, and did not make any submission as to how costs should be apportioned between the respondents;

(2) the first and second respondents sought an order that the third respondent pay 50% of Council's costs, and that the first and second respondents pay 50% of Council's costs as the third respondent had filed a late submitting appearance; and

(3) the third respondent submitted that there should be no order as to costs, "with the intention" that the third respondent pay his own costs.

The issues for determination in relation to costs identified by the first and second respondents are:

(1) whether the error the subject of the proceedings was caused by the third respondent;

(2) whether the third respondent actively defended the proceedings;

(3) whether the actions of the third respondent increased the length and costs of the proceedings; and

(4) how costs should be apportioned between the first and second respondents, and the third respondent.

In addition to the factual findings in the principal judgment, the first and second respondents relied on the notice of appearance filed by the third respondent on 22 March 2023; the response to summons filed by the third respondent on 31 May 2023; and the affidavit of Mr Paul Aramini, the third respondent (the third respondent's affidavit), filed 29 September 2023, and a supporting exhibit 170 pages in length, and the third respondent's submitting appearance filed 6 October 2023.
In oral submissions, the third respondent said that he did not "need evidence", and that his submissions were based on "the court file".

For the reasons that follow, I have determined that the respondents should, in equal share, pay the applicant's costs as agreed or assessed.

The background to the Class 4 proceedings is set out in the principal judgment at [11]-[68]. For the purpose of the costs hearing, the parties placed particular emphasis on the following matters.
On 10 June 2022, the third respondent received the original application for the construction certificate from the first and second respondents. On 14 June 2022, the third respondent sent an email to the first and second respondents in respect of "outstanding documents and clarifications". In response, the first and second respondents sent architectural building specifications to the NSW Planning Portal.
On 16 June 2022, the Local Planning Panel approved the modification application subject to conditions including those requiring the approved plans and the construction certificate plans to be amended to delete the cellar level and associated excavation.
On 12 July 2022, the first and second respondents notified the third respondent of the approval of the modification application. On 15 July 2022, the first and second respondents uploaded "Structural Plans and Design Certificate" to the NSW Planning Portal. The third respondent "ask[ed] for the notation on the structural plans to be amended to read "for construction". This was done on 18 July 2022.
On 4 August 2022, the first and second respondents emailed the third respondent indicating that additional plans were to be "resubmitted". In August 2022, the third respondent commenced his review of the "CC application" following the grant of the modified development consent.
On 31 August 2022, the third respondent "reached a state of satisfaction" that the application for the construction certificate and the documentation satisfied the requirements under the EPA Act and subsidiary legislation, and issued the construction certificate.
On 1 March 2023, Council filed the amended summons. On 22 March 2023, the third respondent filed an unconditional notice of appearance. On the same day, the first and second respondents filed their response to the amended summons. On 31 May 2023, the third respondent filed a response to the amended summons.
On 24 March 2023, the first and second respondents filed a notice of motion seeking that the question of whether time for the commencement of the proceedings should be extended under r 59.10 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) be determined separately from any other question in the proceedings. On 6 April 2023, the motion was heard by Justice Duggan. A solicitor from HBA Legal appeared at the notice of motion on behalf of the third respondent. On 6 April 2023, Duggan J dismissed the motion.
On 29 September 2023, the third respondent filed the affidavit of Mr Aramini and a supporting exhibit 170 pages in length. In his affidavit, the third respondent deposed at [38] as follows:

In my professional opinion, it was not unreasonable for me to issue the CC, having regard to the following:

(a) The architectural plans provided for the CC were consistent with the original DA consent and the s4.55/3 modification in so far as they showed the deletion of the cellar and cellar level and did not show any excavation below the approved lower level for a cellar.

On 6 October 2023, the first and second respondents filed written submissions.
Also on 6 October 2023, the third respondent filed a submitting appearance which did not include the words "save as to costs".
On 9 October 2023, the first and second respondents filed objections to evidence. On 10 and 11 October 2023, the proceedings were heard before me.
At the commencement of the hearing in relation to costs on 3 June 2024, Mr Weinberger, solicitor for the third respondent, sought leave to address the Court on the question of costs. The first and second respondents opposed the grant of leave. I granted the third respondent leave, notwithstanding that the third respondent had not included the words "save as to costs" in his submitting appearance. I add that I was unable to find any case in which a court considered a submitting appearance without the words "save as to costs". In Seller v Jones[2] McColl JA (Basten JA and Ward JA agreeing) noted at [59] that r 6.11 of the UCPR does "not provide for costs implications of a submitting appearance". Further, the UCPR does not provide for the consequences of a submitting appearance, whether or not expressed to be "save as to costs".[3]

Sub-sections 98(1) and (2) of the Civil Procedure Act 2005 (NSW) (Civil Procedure Act) provide relevantly as follows in relation to the powers of the court as to costs:

98 Courts powers as to costs

(1) 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.

(2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court.

Rule 6.11 of the UCPR provides as follows in relation to submission to judgment by notice of appearance:

6.11 Defendant may submit to judgment by notice of appearance

(1) A defendant who intends to take no active part in proceedings may include in the defendant's notice of appearance a statement to the effect that the defendant submits to the making of all orders sought and the giving or entry of judgment in respect of all claims made, to which may be added the words ", save as to costs".

(2) Except by leave of the court, a defendant who has filed a notice of appearance containing a statement referred to in subrule (1) may not file a defence or affidavit or take any other step in the proceedings.

Rule 42.1 of the UCPR provides as follows in relation to the general rule that costs follow the event:

42.1 General rule that costs follow the event

Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.

In Oshlack v Richmond River Council[4] Gaudron and Gummow JJ said at [22] of the discretion then conferred by s 69(2) of the Land and Environment Court Act 1979 (NSW) (since repealed) (citations omitted):

The terms of s 69(2) contain no positive indication of the considerations upon which the Court is to determine by whom and to what extent costs are to be paid. The power conferred by the section is to be exercised judicially, that is to say not arbitrarily, capriciously or so as to frustrate the legislative intent. However, subject to such considerations, the discretion conferred is, to adapt the words of Dixon J, unconfined except in so far as "the subject matter and the scope and purpose" of the legislation may enable an appellate court to pronounce the reasons given by the primary judge to be "definitely extraneous to any objects the legislature could have had in view".

And at [65] McHugh J said (citations omitted):

Although the statutory discretion is broadly stated, it is not unqualified. It clearly cannot be exercised capriciously. Importantly, the discretion must be exercised judicially in accordance with established principle and factors directly connected with the litigation. In this manner, the law has gradually developed principles to guide the proper exercise of the discretion and, in some cases, to highlight extraneous considerations which, if taken into account, will cause the exercise of the discretion to miscarry.

In Northern Territory v Sangare[5] Kiefel CJ, Bell, Gageler, Keane and Nettle JJ at [24] said of the power to award costs (citations omitted):

It is well established that the power to award costs is a discretionary power, but that it is a power that must be exercised judicially, by reference only to considerations relevant to its exercise and upon facts connected with or leading up to the litigation. While the width of the discretion "cannot be narrowed by a legal rule devised by the court to control its exercise", the formulation of principles according to which the discretion should be exercised does not "constitute a fetter upon the discretion not intended by the legislature". Rather, the formulation of principles to guide the exercise of the discretion avoids arbitrariness and serves the need for consistency that is an essential aspect of the exercise of judicial power.

In Cutcliffe v Lithgow City Council[6] (Cutcliffe) at [14]-[15], Biscoe J said as follows in relation to costs orders against two or more respondents and the apportionment of costs as between the respondents:

14. A costs order against two or more respondents is joint and several: Rushcutters Bay Smash Repairs Pty Ltd v H McKenna Netmakers Pty Ltd [2003] NSWSC 670 (Gzell J). Consequently, each respondent then has a right of equal contribution against the other. When making costs orders, the Court might determine that the contribution should not be equal. For example, in Belongil Progress Assn Inc v Byron Shire Council [2000] NSWLEC 118, the court declared that provisions of a local environmental plan were invalid. The two respondents were ordered to pay the applicant's costs. But as between the respondents, those costs were apportioned 70% to the respondent council and 30% to the other respondent.

15. Another way in which a court may exercise its discretion in where both respondents have actively and unsuccessfully defended, is to order each respondent to pay, in equal shares, the applicant's costs. Such an order was made in Sidney Harrison Pty Ltd v City of Tea Tree Gully (No 2) [2001] SASC 34; (2001) 112 LGERA 327 (SC/SA, Debelle J). There the plaintiff brought proceedings against a council and the holder of a development approval and obtained declaratory relief. Some of the issues arose from the fact that the council had not proceeded according to law when dealing with the development application. The council defended those issues but the holder of the development approval was prepared to abide the orders of the court and did not prolong the hearing in relation to those issues. The council was ordered to pay the applicant's costs of those issues. Both defendants opposed other issues and they were ordered to pay, in equal shares, the plaintiff's costs.

In Cutcliffe, Biscoe J at [50] formulated the following guidelines for the exercise of the Court's discretion to order costs:

50 The following general guidelines may be formulated, based on the cases and principles reviewed in this judgment, for the exercise of the Court's discretion to order costs where

• an applicant successfully brings proceedings that are necessary to have declared invalid or set aside a development consent or decision of a consent authority;

• the consent authority and the beneficiary of the development consent or decision are necessary or proper parties; and

• the cause of the invalidity is an error of or attributable to the consent authority and not to the beneficiary:

(a) the applicant will ordinarily be entitled to be compensated by an award in its favour of the costs of the proceedings unless it has engaged in disentitling conduct.

(b) where the beneficiary does not defend the proceedings, the applicant's costs will ordinarily be awarded against the consent authority, whether or not the latter enters a submitting appearance. This is because the cause of the litigation is the error of the consent authority and not of the applicant or the beneficiary. The consent authority cannot immunise itself from costs consequences of its own error by entering a submitting appearance because then a successful applicant cannot be properly compensated in costs. It is not sufficient that a consent authority should bear the applicant's costs only up to the time of the consent authority's submitting appearance because the applicant must continue to incur costs thereafter in order to establish, by evidence and argument at a hearing, that it is entitled to declaratory and injunctive relief.

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

These principles were cited by Preston CJ of LEC in Brown v Randwick City Council (No 2)[7] at [25] as follows:

25 Ordinarily, where both the consent authority that grants a development consent or makes a decision and a beneficiary of the development consent or decision are joined as necessary or proper parties to a successful judicial review challenge to the development consent or decision, the successful applicant's costs will be awarded against both the consent authority and the beneficiary. As Biscoe J stated in Cutcliffe v Lithgow City Council [2006] NSWLEC 463; (2006) 147 LGERA 330 at [50], the award of costs against the consent authority is because its error is the cause of the litigation. The consent authority cannot immunise itself from costs by entering a submitting appearance because then a successful applicant cannot be properly compensated in costs. The award of costs against the beneficiary who chooses to defend proceedings and take an active part in them is because of that choice. If a beneficiary wishes to avoid costs, it must choose not to defend the proceedings.

In Kogarah City Council v Armstrong Alliance Pty Ltd (No 2)[8] (Kogarah City Council v Armstrong Alliance (No 2)), Pepper J made a declaration of invalidity in circumstances where there the development was not in conformity with the development consent and there was an inconsistency between the plans as approved and the plans as certified, and ordered the certifier who did not participate in the proceedings and had filed a submitting appearance to pay 100% of the applicant's costs_._[9]
In Rossi v Living Choice Australia Ltd (Rossi),[10] Basten JA at [73] said of the circumstance engaging para (b) in [50] of Biscoe J's reasons in Cutcliffe (emphasis added):

The circumstance engaging para (b) in Cutcliffe was that the beneficiary of the decision does not defend the proceedings; it was then said that the reason why the consent authority could not "immunise itself from costs consequences of its own error by entering a submitting appearance [was] because then a successful applicant cannot be properly compensated in costs." But that cannot be true in the case of proceedings which are actively defended by another party. The mere fact that the decision-maker is ultimately found to have erred in its approach is not, of itself, a sufficient reason to order costs against it, being costs incurred after the entry of a submitting appearance.

In Hornsby Shire Council v Trives (No 4)[11] (Trives (No 4)), Craig J made costs orders against a certifier who was found to have issued a complying development certificate in breach of the EPA Act, and thereby to be invalid and of no effect to authorise the development to which it purported to relate. At [22] Craig J said as follows (emphasis added):

I accept the submission made on behalf of the second and third respondents that the costs incurred by them are minimal and that their actions in taking what might be described as a benign position in the proceedings, indicates that they have acted reasonably. The submission made by Mr Doyle, counsel for the second and third respondents in 14/40215 and by Mr Hudson in 14/40259 is that the position of their respective clients can be equated to that of a submitting respondent whose joinder has only been made necessary because of the unlawful action of another party. (Manns v Attorney General of NSW (No 2) [2010] NSWSC 325 at [16]- [17]; Hurstville City Council v Minister for Planning and Infrastructure (No 2) [2012] NSWLEC 196 at [41]-[42]). Whatever may have been their respective roles in submitting applications for complying development certificates to Mr Trives, they have not been responsible for the Council incurring costs of any significance in these proceedings. Understandably, they rely upon the circumstance that they proceeded with work on their respective properties, relying upon validity of the certificates issued by Mr Trives.

In Lou v IAG Limited t/as NRMA Insurance,[12] a case where the appellant (the first defendant below) filed a submitting appearance "save as to costs", the matter was heard without the appellant and her legal representatives present, and the primary judge awarded costs against the appellant, Payne JA (Gleeson JA agreeing) said at [47]:

First, the appellant filed a submitting appearance shortly after her first appearance on 5 November 2018. Her prompt filing of a submitting appearance enabled the matter to be set down for hearing as soon as the Court became available. The appellant's conduct was consistent with her obligation to further the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in dispute contained in s 56(3) of the Civil Procedure Act. This was not a case in which the filing of a submitting appearance came at a late stage of the proceedings: cf IAG Limited t/a NRMA Insurance v Khaled [2019] NSWSC 320 per Bellew J.

In Inglis v Buckley (No 2),[13] Pain J at [47] adopted the following summary of principles applicable to liability for costs between respondents (citations omitted):

1. the rationale for the usual rule that costs follow the event is that the successful party to proceedings should be compensated and that an award of costs is not to be punitive: Latoudis;

2. ordinarily, an order for costs will not be made against a submitting party: Develtor Property Group Pty Ltd v Newcastle City Council [2001] NSWLEC 47 at [42]; Highland v Labraga (No 3) [2006] NSWSC 871 at [20]- [23]; Midson v Workers Compensation Commission (No 2) [2017] NSWSC 147 at [28]- [31];

3. there is no prima facie rule that a submitting party will never be ordered to pay costs, contextual circumstances will be taken into consideration: Seller v Jones [2014] NSWCA 19 at [55], [59] cited with approval in Lou v IAG Ltd t/as NRMA Insurance (2019) 101 NSWLR 606; [2019] NSWCA 319 (Lou) at 614;

4. abiding by the limits of the Hardiman principle does not immunise a government authority from an adverse costs order: Our Town FM Pty Ltd v Australian Broadcasting Tribunal (No 3) [1987] FCA 393; (1987) 77 ALR 609 at 612;

5. material considerations (House v King (1936) 55 CLR 499; [1936] HCA 40) to the exercise of discretion relevantly include:

(a) whether the filing of a submitting appearance by the First Respondent and the 'role' taken by the Council were consistent with the overriding purpose of facilitating the just, quick and cheap resolution of the real issues in dispute contained in s 56(3) of the Civil Procedure Act: Lou at [47];

(b) whether the error the subject of the proceeding was caused by a party: Lou at [44], Cutcliffe at [50], noting that it is a material consideration rather than a rule per Basten JA in Rossi v Living Choice Australia Ltd [2015] NSWCA 244 at [73]; and

(c) whether the proceeding could have been resolved by consent: Lou at [44] (i.e. the conduct of the parties in the litigation).

Submissions of the first and second respondents

The first and second respondents seek an order that the third respondent pays 50% of Council's costs, as agreed or assessed, for three reasons:

(1) the error the subject of the proceeding was made by the third respondent:

(a) the third respondent was aware of the terms of the modified development consent. He says in his affidavit at [16]:

On or around 30 June 2022, I was informed by John Jell, author of the Architectural Plans, that the Woollahra Municipal Council (Council) issued a variation to the development approval dated 21 June 2022: DA 475/2020/3.

(b) the third respondent took an active role in reviewing and refining the application for the construction certificate. He says in his affidavit at [23]-[24]:

On or around 15 July 2022, I received an email from Cliftons (page 88) advising that they have uploaded the Structural Plans & Design Certificate to the NSW Planning Portal. I reviewed the uploaded Structural Plans & Design Certificate.

I then caused an email to the sent from ALC to Cliftons (page 100) on the same day stating that the notation on the Structural Plans should be amended to read "for construction".

(c) the first and second respondents were entitled to put the application for the construction certificate before the third respondent: Pilkington v Secretary of State for the Environment[14] (Lord Widgery CJ) (Bridge and May JJ agreeing) at 286;

(d) the third respondent says in his affidavit at [38]:

In my professional opinion, it was not unreasonable for me to issue the CC, having regard to the following:

(a) The architectural plans provided for the CC were consistent with the original DA consent and the s4.55/3 modification in so far as they showed the deletion of the cellar and cellar level and did not show any excavation below the approved lower level for a cellar.

and to the extent that the Court found to the contrary, the error was his.

(2) the third respondent actively defended the proceedings:

(a) on 22 March 2023, he filed an unconditional notice of appearance;

(b) on 6 April 2023, the notice of motion filed 24 March 2023 was heard before Justice Duggan. The third respondent appeared represented. Duggan J dismissed the motion, and made an order that costs be costs in the cause.

(c) on 31 May 2023, he filed a response to the amended summons which "did not rely on the [first and second respondents'] [d]efence";

(d) on 29 September 2023, he filed an affidavit and supporting exhibit 170 pages in length (some two months after the respondents' evidence was required to be filed and served in accordance with orders made by Duggan J on 28 April 2023), that evidence introducing "for the first time an explanation and reasoning as to the decision to issue the certificate and its reasonableness". For example, at [38] of his affidavit, the third respondent deposed:

In my professional opinion, it was not unreasonable for me to issue the CC, having regard to the following:

(a) The architectural plans provided for the CC were consistent with the original DA consent and the s4.55/3 modification in so far as they showed the deletion of the cellar and cellar level and did not show any excavation below the approved lower level for a cellar.

(e) he did not enter a submitting appearance until two business days before the hearing on 6 October 2023; and

(f) the authorities make clear that a submitting appearance does not immunise a consent authority from costs.

(3) "to some extent", the actions of the third respondent increased the length and costs of the proceedings:

(a) the evidence filed by the third respondent was extensive and included a 170-page exhibit;

(b) his submitting appearance entered on 6 October 2023 occurred after all the pleadings, evidence and pre-trial steps had occurred and, from a temporal perspective, Council dealt with two active respondents for the "vast majority" of the proceedings;

(c) the filing of the third respondent's affidavit and evidence in the two-week period before the proceedings "fell in the laps of the parties preparing for the litigation at a time when the evidence book and the Court book were due", and at the time "the parties were preparing written submissions and determining what evidence was to be tendered". Further:

Proffering evidence as to the subjective state of mind of the certifier did involve difficulties and an increase in costs for the parties, and ultimately that was resolved when the certifier decided to submit only a few days later.

(d) the "first indication" the first and second respondents had that that the certifier would be putting on a submitting appearance was the day that it was filed.

Mr Farrell for the first and second respondents submitted:

... by reference to the statutory scheme, unlike a development consent which can be surrendered in response to litigation there is no ability to surrender a construction certificate.

If a construction certificate is challenged the only way that it can be set aside is by an order of the Court, and your Honour is also aware of the authorities which say that the Court doesn't make a declaration by consent. So, one way or another, your Honour, in order for the council to get the relief that it sought in the proceedings, the matter would have needed to come before this court, the Court would needed to have been satisfied that notwithstanding the two relevant expiry periods ...

In submitting that there should be no order as to costs, "with the intention" that the third respondent pay his own costs, the third respondent relied on the guideline set out by Biscoe J in Cutcliffe at [50(c)], and said that the "error" is:

not the beginning nor the end of the test. It's no different to any other piece of legislation where there's an independent decision-maker. Parties have a choice as to whether they accept the correctness or error of that decision.

The mistake is not the cause. The proximate cause, the real cause, the efficient cause, is the decision, first in time, taken by those with the vested interest in the outcome, namely the beneficiaries, to file their defence and to file evidence. They had a choice.

Further, the third respondent submitted that he did not actively defend the proceedings:

(1) the first and second respondents filed a response to the amended summons first in time, a step that necessitated the preparation for the trial and the trial itself;

(2) the first and second respondents defended the proceeding, and have filed a notice of appeal (this showing "who the true contradictor is");

(3) the third respondent formally participated in the proceeding up until 6 October 2023, his involvement not increasing the length and costs of the proceeding:

(a) his affidavit filed less than 2 weeks prior to the trial was "relatively benign", did not add "any matter of significance to the pre-existing factual matrix and legal issues", and was not relied upon at the substantive hearing;

(b) the costs incurred by Council were attributable to the defence and the evidence relied upon by the first and second respondents: Trives (No 4) at [22] (Craig J);

(c) unlike the facts in Kogarah City Council v Armstrong Alliance (No 2), the third respondent's conduct cannot be said to have been egregious. Ultimately, the first and second respondents had a choice, and chose to defend the proceeding;

(d) the first and second respondents raised defences not raised by the third respondent, the qualification in Cutcliffe at [50(c)] being apposite. The first and second respondents "took their chances. They were not obliged to do so. Only the [first and second respondents] stood to benefit from resisting the relief sought";

(e) in oral submissions, Mr Weinberger, solicitor for the third respondent said as follows:

... beyond the cost of reading the one-page document which substantially contained denials, it didn't result in any additional costs over and above the costs which would have been incurred after the beneficiaries themselves filed it.

...

My friend says from the bar table, there was a bit of correspondence about whether it goes into the court book or not really, but what practical costs did that result in, beyond the microscopic analysis of having to send an email or make a telephone call about whether that affidavit goes into a court book. It didn't generate any costs, at all.

Whether the error the subject of the proceedings was caused by the third respondent

It is clear that the declaration of invalidity made in the principal judgment related to a decision of the third respondent. It might also be accepted, as submitted by the third respondent, that the first and second respondents had a choice as to whether to defend the proceedings brought by Council. However, the evidence before me does not permit a finding as to the role of the first and second respondents in lodging an application for a construction certificate into the system of the third respondent specifying plans, specifications and standards of building work which the Court found in the principal judgment to be inconsistent with the modified development consent.

Whether the third respondent actively defended the proceedings

It is undoubtedly correct, as held by Basten JA in Rossi at [73], that the mere fact that the decision-maker is ultimately found to have erred in its approach is not, of itself, a sufficient reason to order costs against it, being costs incurred after the entry of a submitting appearance.
Here, however, I find that the third respondent actively defended the proceedings.
The uncontroversial facts are, as submitted by the first and second respondents, that the third respondent filed an unconditional notice of appearance on 22 March 2023, appeared represented at the hearing of the notice of motion on 6 April 2023, filed a response to the amended summons on 31 May 2023, filed an affidavit and supporting exhibit on 29 May 2023 (some two months after the respondents' evidence was directed to be filed), and entered a submitting appearance only two business days before the hearing on 6 October 2023.

Whether the actions of the third respondent increased the length and costs of the proceedings

In relation to the question of whether the actions of the third respondent increased the length and costs of the proceedings, it follows from my findings that the third respondent actively defended the proceedings, and entered a submitting appearance only two business days before the hearing on 6 October 2023, that the actions of the third respondent increased the length and costs of the proceedings.

In relation to the costs of multiple parties, G E Dal Pont, Law of Costs, 5th ed (2021) (Dal Pont) at [11.2][15] comments that as a general rule, where a court orders that costs be paid by two or more persons, the costs liability is joint and several. However, at [11.3] Dal Pont observes that it should not be assumed that the courts slavishly apply the general rule, and that the court may apportion costs as between the persons liable, rather than expect them to apportion inter se. This is said to reflect no more than the court's general costs discretion, the relevant inquiry being whether it is just in the circumstances to order that particular defendants pay or get a proportion of the costs of a successful plaintiff.[16]
In Morris v Riverwild Management Pty Ltd,[17] Pagone J said at [13] as follows in relation to the apportionment of costs between parties (footnote omitted, emphasis added):

A pragmatic, albeit inexact, measure for apportioning costs between parties on the basis of the number of parties may not always be appropriate or fair, but in many cases it may well be appropriate and fair in the interest of producing finality of dispute between the parties. The discretionary nature of costs orders may permit a less rigorous apportionment of costs as between different parties than might be required when determining the apportionment of liability to reflect fault or causation. The apportionment of costs between parties should bear some relationship to the part played by the parties in the overall proceeding however imprecise that relationship must be in any given case. A measure based upon the number of parties (with appropriate adjustments where two or more parties should be considered as in effect one) may be inexact but is rational. ...

I find that the third respondent should pay 50% of Council's costs. It follows from the principal judgment that the third respondent caused the error in issuing the construction certificate found by the Court to be invalid. He actively defended the proceedings until two business days before the hearing on 6 October 2023. This was after pleadings, evidence and written submissions by Council and the first and second respondents had been filed.
Such an approach to the apportionment of costs is consistent with the authorities, including Cutcliffe and Rossi. Such an apportionment of costs against the certifier is considerably less than that in Kogarah City Council v Armstrong Alliance (No 2), namely 100%, in circumstances where the certifier had entered an early submitting appearance and consented to a costs order against him.

The first and second respondents submitted that they should be awarded the costs of the costs argument. In oral submissions, Mr Farrell for the first and second respondents submitted that they "put a reasonable position to the [third respondent] being 50%".
Notwithstanding Mr Farrell's submission, I will make an order that the first and second respondents, and the third respondent, each pay their costs of the costs proceedings.

(1) The first and second respondents, and the third respondent, in equal shares, pay the applicant's costs, as agreed or assessed.

(2) The first and second respondents, and the third respondent, pay their costs of the costs proceedings, as agreed or assessed.

[2] [2014] NSWCA 19 at [59] (McColl JA) (Basten JA and Ward JA agreeing).

[3] Ritchie's Uniform Civil Procedure NSW (LexisNexis, 2024) at [r 6.11].

[4] (1998) 193 CLR 72; [1998] HCA 11 at [22] (Gaudron and Gummow JJ).

[5] Northern Territory v Sangare (2019) 265 CLR 164; [2019] HCA 25 (Northern Territory v Sangare) at [24] (Kiefel CJ, Bell, Gageler, Keane and Nettle JJ); see also Williams v Lewer [1974] 2 NSWLR 91 at 95 (Rath J).

[7] [2012] NSWLEC 28 at [25] (Preston CJ of LEC).

[9] Kogarah City Council v Armstrong Alliance (No 2) at [26] (Pepper J).

[10] [2015] NSWCA 244 at [73] (Basten JA).

[11] [2016] NSWLEC 28 at [22] (Craig J).

[12] (2019) 101 NSWLR 606; [2019] NSWCA 319 at [47] (Payne JA) (Gleeson JA agreeing).

[14] [1974] 1 All ER 283 at 286; [1973] 1 WLR 1527; (1973) 72 LGR 303 (Lord Widgery CJ) (Bridge and May JJ agreeing).

[16] Dal Pont at [11.3]. See also M Friston, Friston on Costs, (Oxford University Press, 4th ed, 2023) at [20.17] in relation to the doctrine of equal apportionment.

[17] [2009] VSC 439 at [13] (Pagone J).

Planning and Assessment Act 1979

Civil Procedure Rules 2005

(2006) 147 LGERA 330

(2019) 101 NSWLR 606

(2001) 112 LGERA 327

At a glance

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Judgment (113 paragraphs)

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Legislation Cited (7)

Cases Cited (28)

Cited By (2)