Zaymill Pty Ltd and Maksim Holdings Pty Ltd v Ryde City Council

LEGISLATION CITED: Environmental Planning and Assessment Act 1979, s 95(4)

Cutcliffe v Lithgow City Council [2006] NSWLEC 463, (2006) 147 LGERA 330 CASES CITED: Develtor Property Group Pty Ltd v Newcastle City Council [2001] NSWLEC 47 Zaymill Pty Limited and Maksim Holdings Pty Limited v Ryde City Council [2009] NSWLEC 86

APPLICANT: Mr C Gough SOLICITORS Storey and Gough LEGAL REPRESENTATIVES: RESPONDENT: Mr J Strati SOLICITORS The City of Ryde

JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES

EX TEMPORE JUDGMENT 1 HIS HONOUR: This is an application for costs by the successful applicant in these class 4 proceedings in which I made a declaration that a development consent granted by the respondent council for the construction of dwellings at Denistone had not lapsed pursuant to s 95(4) of the Environmental Planning and Assessment Act 1979: Zaymill Pty Limited and Maksim Holdings Pty Limited v Ryde City Council [2009] NSWLEC 86. The background was set out in the judgment at [2] - [9]. I shall restate the background to the extent necessary for the determination of this costs application. 2 In 2002 the council issued a development consent for the construction of the dwellings. In 2003 certain works were carried out in accordance with the conditions of the consent. Prior to commencement of these proceedings, there was correspondence between the applicant and the council. It is on the basis of this correspondence that this costs application for is brought.

3 On 27 September 2007 the applicant's solicitor wrote to the council requesting confirmation that the development had physically commenced, and setting out researched legal analysis in support of that proposition. In response on 2 October 2007 the council indicated that whilst it appreciated that the applicant wished some certainty as to the commencement issue, it was neither appropriate nor a duty of the council to provide such confirmation; and that it reserved its position should the commencement issue arise at some future point in time. On 13 June 2008, council wrote to the applicant regarding compliance with some conditions of the consent, and reiterated that council had reserved its position in relation to commencement of the consent.

4 On 9 October 2008, the council wrote to the applicant expressing the council's opinion that the consent had lapsed in October 2007 and stating that, consequently, the council would not consider plans submitted for approval under the conditions of consent. On 5 November 2008, the applicant's solicitor wrote to the council requesting that it reconsider its advice that physical commencement had not taken place, stating that, if the council did not confirm that physical commencement had occurred by 7 November 2008 class four proceedings would be commenced, seeking the declaration that the works undertaken on the land constituted physical commencement.

5 On 13 November 2008 the applicant's solicitor wrote to the council stating that, further to a recent telephone conversation, he understood that the council would now process the plans that had been lodged pursuant to the consent and noting that the council had stated it would continue to reserve its position on whether the development consent had lapsed. The email said this left the applicant in an untenable position as the council could at any time allege that it had lapsed. The council was requested to acknowledge that the works that had been undertaken constituted physical commencement and that the consent had not lapsed. It was said that if this acknowledgement was not provided by 19 November that the solicitor's instructions were to lodge class four proceedings seeking appropriate declarations and costs.

6 On 17 November 2008, the council's general counsel wrote to the applicant's solicitor stating: "Council has considered the matter further and, with respect, refuses to state one way or another whether the subject development consent has been physically commenced. In this regard, the statement in Council's letter of 9 October 2008 that the consent has lapsed is withdrawn.

As previously advised, it is not the duty of council to take a position in relation to this matter. I would also note that, even if council were to take a positive position, such position could not protect your client from third party claims under section 123 of the Environmental Planning and Assessment Act 1979 so no certainty could be achieved by your client on the issue even with Council's endorsement.

In addition to the above, I confirm that Council has determined to process the documents lodged by your client with Council to satisfy certain conditions of development consent No.1024/2001. Council staff will be in contact with your client (or agents) in that regard in due course.

I note your client's proposed intention to commence class 4 proceedings seeking a declaration of physical commencement. That is a matter for your client. In relation to costs, council notes once again that it is under no legal duty to take a position in relation to the matter." 7 These proceedings were commenced on 20 February 2009. The council filed an early submitting appearance save as to costs. The matter was heard in May 2009 when I delivered judgment and made a declaration that the development consent had not lapsed, as stated at [1] above. 8 The applicant submits that: (a) notwithstanding council's indication that it would deal with the plans, due to the council's continued refusal to acknowledge that the development had commenced, the applicant was compelled to commence and prosecute these proceedings; (b) the council is a statutory authority responsible for administering planning law as it relates to the property and that if contractors engaged to do work on the site or potential purchasers wished to enquire about the status of the consent they would contact the respondent council; (c) the council would be aware that, even on the strength of the legal advice the applicant held, undertaking work in accordance with the consent was a risk, and given the size of the development (which was large), the financial risk was significant; (d) the council would have been aware that the party most likely to allege the consent had lapsed would be the council itself and, that given the council had at one point changed its position from refusing to admit the development had physically commenced to indicating that the consent had lapsed, there was a real risk that this could occur if the applicant acted in accordance with its own legal advice; (e) the council's submitting appearance should not persuade the court to protect the council from a costs order, notwithstanding that that is an important consideration, because, in the circumstances of the case, the applicant acted reasonably in continuing with the case after the submitting appearance had been filed: Develtor Property Group Pty Ltd v Newcastle City Council [2001] NSWLEC 47; Cutcliffe v Lithgow City Council [2006] NSWLEC 463, (2006) 147 LGERA 330. 9 This is not a case, such as in Cutcliffe, where the proceedings were brought to set aside a consent or decision of a consent authority. Cutcliffe is distinguishable, the guidelines at [50] being directed to a different situation.

10 The applicant sought legal advice in relation to the commencement issue, the applicant's lawyers considered the matter in depth, communicated the substance of their advice to council, and in effect sought an assurance from council that their advice was correct. In my opinion, the council could not be compelled, nor was it under an obligation, to underwrite that advice by confirming that it was correct. The council was entitled to take no position, as it ultimately did, without being at risk as to costs. Although I do not doubt that that the council's position was a matter which the applicant took into account when deciding to commence the proceedings, I do not think that the conduct of the council prior to commencement of the proceedings should sound in costs. The proceedings having been brought, the council filed a submitting appearance save as to costs. At the end of the day, the applicant was engaged in a process of managing this particular development risk. It appears to have managed the risk prudently, including by bringing these proceedings, but I see no reason why the council should become the financier of that aspect of the applicant's risk management by being required to pay the applicant's costs. 11 For these reasons, the applicant's costs application is dismissed.

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