Aeropelican Air Services Pty Limited v Lake Macquarie City Council
[2006] NSWLEC 281
•05/05/2006
Land and Environment Court
of New South Wales
CITATION: Aeropelican Air Services Pty Limited v Lake Macquarie City Council [2006] NSWLEC 281 PARTIES: APPLICANT
RESPONDENT
Aeropelican Air Services Pty Limited
Lake Macquarie City CouncilFILE NUMBER(S): 40107 of 2005 CORAM: Preston CJ KEY ISSUES: Costs :- applicant wholly unsuccessful in class 4 proceedings for judicial review of council's failure to acquire the applicant's land - whether any disentitling conduct by the council - whether a resolution of the council and late amendment of points of defence amounted to disentitling conduct by the council - as no disentitling conduct by council, the costs should follow the event. LEGISLATION CITED: City of Lake Macquarie Local Environmental Plan 1984, cl 19
Environmental Planning and Assessment Act 1979, s 124CASES CITED: Oshlack v Richmond River Council (1998) 193 CLR 72 DATES OF HEARING: 05/05/2006 EX TEMPORE JUDGMENT DATE: 05/05/2006 LEGAL REPRESENTATIVES: APPLICANT
Mr T S Hale SC
SOLICITOR
Mr P V HinesRESPONDENT
Mr T F Robertson SC
SOLICITOR
Mr P A Rees
JUDGMENT:
THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALESPRESTON CJ
5 May 2006
40107 of 2005
AEROPELICAN AIR SERVICES PTY LIMITED V LAKE MACQUARIE CITY COUNCIL
JUDGMENT
1 HIS HONOUR: By notice of motion of 22 February 2006 the respondent, Lake Macquarie City Council (“the Council”) seeks its costs of judicial review proceedings which were decided by Cowdroy J on 17 February 2006. The result of the decision was that the application by the applicant, Aeropelican Air Services Pty Limited, was dismissed. The question of the costs of the proceedings was reserved. It is these costs that the Council now seeks. The Council does not seek costs of the adjournment of the proceedings on 16 November 2005, as those costs were the subject of a special order which it does not seek to disturb.
2 The motion by the Council is contested by the applicant. The applicant submits that the proper order in the circumstances is that each party should pay its own costs. In the alternative, the applicant submits that the applicant should only be required to pay the Council’s costs on and from 16 November 2005. Like the Council, the applicant does not seek to disturb the cost order of Cowdroy J of 16 November 2005.
3 The substantive proceedings were class (4) proceedings brought by the applicant which sought a declaration that the Council was required, by operation of cl 19 of the City of Lake Macquarie Local Environmental Plan 1984 (the LEP) to acquire the applicant’s land at Aeropelican Airport at Belmont, New South Wales.
4 Clause 19 of the LEP relevantly provided that:
“(1) The owner of any land within:
may, by notice in writing, require:(a) Zone No. 5(a), 5(c), 6(c) or 7(b); or
(b) Zone number 7(c),
- (c) The Council; or
(d) The corporation,
respectively, to acquire the land.
(2) On receipt of a notice referred to in subcl (1), subject to subcl (3), the authority concerned shall acquire the land, unless the land may be required to be provided as a condition of consent to the carrying out of development.
(4) On the receipt of a notice referred to in subcl (1), the Council must acquire land No. 6(c) if the Council is of the opinion that the owner of the land will suffer hardship if the land it not acquired within a reasonable time.”(3) Nothing in this plan, other than subcl (4), shall require the Council to acquire any land within Zone No. 6(c) if, in the opinion of the Council, the need for the open space has not yet been created by residential development in the vicinity.
5 The land, the subject of the proceedings was zoned 6(c).
6 The applicant issued two notices to the Council requiring acquisition of its land, the first dated 9 December 2003 and the second dated 17 March 2004.
7 On 15 February 2005, the applicant commenced the class (4) proceedings to compel the Council to acquire its land. In the original points of claim, served on the Council around 19 April 2005, the applicant pleaded that the applicant as owner of the land had served on the Council a notice dated 9 December 2003 calling on the Council to acquire the land (paragraph 8) and that subsequently, on 18 March 2004, the applicant had served a second notice requesting the Council to acquire the land pursuant to cl 19 of the LEP (paragraph 15). The applicant pleaded in paragraphs 16-24 that it would suffer hardship if the acquisition was not effected. The applicant sought in paragraph 25 an order that the respondent acquire the land.
8 The applicant amended its points of claim in May 2005 and served these on the Council around 16 May 2005. In paragraph 12 of the amended points of claim, the applicant pleaded that by reason of the Council having received the two notices in writing calling upon the Council to acquire the land, the Council was required by cl 19(2) of the LEP to acquire the land. In paragraph 13, the applicant pleaded that in breach of cl 19(2) of the LEP, the Council had not acquired the land and had taken no step to acquire the land. Accordingly in paragraph 14, the applicant claimed, inter alia, a declaration that the Council was required to acquire the land.
9 The Council filed points of defence to the amended points of claim. The amended points of defence were dated 1 June 2005. Apart from the normal admissions and denials, there was a substantive pleading in paragraph 12 of the points of defence. There, the Council pleaded that it had formed the opinion that the need for the open space had not yet been created by residential development in the vicinity, within the meaning of cl 19(3) of the LEP. This opinion was said to be formed by various resolutions of the Council to send the draft of the LEP to the Department of Infrastructure Planning and Natural Resources and to adopt a contributions plan for the Council which did not identify the land for acquisition. The Council also stated that it had not formed the opinion that the owner of the land would suffer hardship if the land was not acquired within a reasonable time.
10 On 27 June 2005, the Council passed a resolution that:
C. Council is of the opinion that the owner of Belmont Airport will not suffer hardship if the land known as Belmont Airport is not acquired within a reasonable time.”“B. Council is of the opinion that the need for open space, being the land known as Belmont Airport, has not yet been created by residential development in the vicinity.
11 On 15 November 2005, the hearing of the applicant’s proceedings commenced before Cowdroy J. In that hearing, the Council indicated that it would be relying upon the resolution of the Council on 27 June 2005. At that point in time the points of defence had not expressly pleaded reliance upon the resolution of 27 June 2005. The hearing continued on to 16 November 2005 on which day the Court made directions that amended pleadings, both points of claim and points of defence, should be drawn to deal with the Council’s reliance upon the resolution of 27 June 2005 and the counter-response by the applicant to challenge the validity of that resolution. The further hearing of the matter was adjourned pending the applicant filing and serving its amended application and points of claim and the respondent filing and serving its amended points of defence. Cowdroy J made a specific order that the respondent, the Council, was to pay the applicant’s costs thrown away by reason of the adjournment, confined to one and a half lost hearing days.
12 On 18 November 2005, the applicant served further amended points of claim, made pursuant to the orders of Cowdroy J on 16 November 2005. Paragraphs 12 and 13 of the further amended points of claim were the same as the amended points of claim. That is, that the applicant pleaded that the Council was required by cl 19(2) of the LEP to acquire the land. Paragraph 14 introduced the new claim by the applicant, challenging the validity of the Council’s resolution on 27 June 2005.
13 In paragraph 15, the applicant pleaded that the resolution was ineffective to establish that the Council had formed the two opinions that it said it had formed, for five reasons:
(a) that the resolution was not bona fide, did not represent the opinion of the respondent and was for an improper purpose;
(b) that in making the resolution the Council had denied the respondent procedural fairness;
(c) that in making the resolution, the Council erred in its construction and understanding of the meaning of hardship in cl 19(3) of the LEP and failed to take into account a relevant consideration;
(d) having refused to acquire the land without having formed the opinion in cl 19(3) of the LEP, the Council could not thereafter justify that refusal by a subsequently formed opinion; and
(e) that the resolution did not amount to a refusal to acquire the land.
14 In paragraph 16, the applicant claimed relief, including the declaration that it had originally sought, that is, that the Council was required to acquire the land, together with a declaration that the resolution of the Council on 27 June 2005 was ineffective.
15 The Council served its amended points of defence containing the foreshadowed reliance upon the resolution of 27 June 2005.
16 Between 24 November 2005 and 1 December 2005, there were various interlocutory applications, principally concerned with access to documents and claims for legal professional privilege. These were heard before Pain J. Ultimately, Pain J ruled on these applications and also made an order that the costs in relation to the applications be costs in the cause.
17 On 2 December 2005, the hearing of the substantive proceedings resumed before Cowdroy J. The hearing continued on 14 December 2005 and was concluded except for the written submissions of each party. Those written submissions were subsequently filed.
18 On 17 February 2006, Cowdroy J delivered judgment dismissing the applicant’s application. The relevant findings of Cowdroy J are as follows.
19 In relation to the construction of cll 19(2) and (3) of the LEP, Cowdroy J held that the obligation to acquire the land under subcl (2) is not triggered until the Council turns its mind to and forms an opinion one way or another in relation to the matter in subcl (3). The matter in subcl (3) is whether the need for the open space has yet been created by residential development in the vicinity. If the Council has not formed the requisite opinion under subcl (3), then the obligation under subcl (2) is not activated: see [73] and [74] of the judgment.
20 Cowdroy J held that it was not sufficient for the Council to have no opinion or to rely upon a general policy. Cowdroy J held that there was an implied duty under subcl (3), which was activated upon service of a notice to acquire the land on the Council, to give genuine consideration to the matter under subcl (3).
21 The consequence of this construction of subcll (2) and (3) of cl 19 of the LEP was that, at the time of commencement of the proceedings by the applicant, there was no obligation to acquire the land under cl 19(2).
22 When the Council made its determination on 27 June 2005, forming the opinion that the need for the open space had not yet been created by residential development in the vicinity, that discharged the Council’s implied obligation to give genuine consideration to the matter under cl 19(3) of the LEP. It, of course, did not trigger an obligation under subcl (2) because the very terms of subcl (3) is that nothing in the plan required the Council to acquire the land if it formed the opinion that the need for the open space had not yet been created by residential development in the vicinity.
23 Thus, the situation both before the resolution of the Council on 27 June 2005 and after that resolution, remained the same on Cowdroy J’s construction. Before the resolution, there was no obligation on the part of the Council because the opinion had not been addressed under subcl (3); after the resolution there was still no obligation under subcl (2) because, although the opinion had been formed, it was an opinion that the need for the open space had not yet been created by residential development in the vicinity which never activated any obligation under subcl (2).
24 On the construction of Cowdroy J, the only way in which the obligation to acquire land in response to a notice received from an owner of land could be activated under subcl (2), is if the Council addressed its mind to the matter under subcl (3) but formed the opinion that the need for the open space had been created by residential development in the vicinity.
25 I have set out this construction of Cowdroy J at some length because it is critical to understanding the nature of the contest on the question of costs.
26 Cowdroy J then dealt with the pleading by the Council, contained in its original points of defence and continued thereafter, that the Council had formed an opinion under subcl (3) of cl 19 of the LEP by its resolutions concerning the draft Local Environmental Plan and the Council’s contributions plan. Cowdroy J rejected the Council’s argument that those resolutions constituted the formation of the opinion under cl 19(3): see paragraphs [77] - [81]. However, Cowdroy J accepted that the 27 June 2005 resolution was the formation of an opinion under subcl (3) of cl 19 of the LEP.
27 Cowdroy J then turned to deal with cl 19(4) of the LEP. This subclause is differently drafted to subcls (2) and (3). This subclause provides that the Council will come under an obligation to acquire land if it forms the opinion that the owner of land will suffer hardship if the land is not acquired within a reasonable time. Hence, it is a condition precedent in order for the obligation to arise in this way that the Council form an opinion of that kind. If the Council does not turn its mind the question or does not form the opinion, then the obligation cannot be triggered under subcl (4).
28 The Council did turn its mind to the question under subcl (4) by its resolution of 27 June 2005, however, it formed the opposite conclusion to that stated in subcl (4). That is to say, it formed the opinion that the owner of the land would not suffer hardship if the land was not acquired within a reasonable time.
29 Cowdroy J held that, in those circumstances, cl 19(4) was not triggered: see paragraphs [83] and [85].
30 Nevertheless, Cowdroy J then went on to determine the applicant’s challenge to the resolution of 27 June 2005 which contained the two opinions, the first opinion being in relation to the matter under subcl (3) and the second opinion being in relation to the matter under subcl (4). He dealt with each of the claims: see paragraphs [86] - [97].
31 Cowdroy J then came to deal with the claim concerning subcll (2) and (3) that was founded on the argument that an obligation to acquire land under subcl (2) could crystallise if more than a reasonable period of time had expired before the Council had turned its mind to the opinion under subcl (3). This claim is set out in paragraph 55 of the judgment. Cowdroy J recorded that the applicant submitted that the Council must form its opinion under cl 19(3) within a reasonable time and that, following the expiration of a reasonable period of time, the right to have the land acquired crystallises. Upon the occurrence of such event, the right of the applicant may be enforced under s 124 of the Environmental Planning and Assessment Act 1979 (“the Act”) as a failure to comply with the Act and the LEP.
32 In order to deal with this claim, Cowdroy J first made a finding that the time period from when the Council received a notice to acquire the land from the applicant until the Council first forming opinions on 27 June 2005, was unreasonable: see paragraph [100]. Cowdroy J then needed to turn to what was the legal consequence, if any, of the effluxion of more than a reasonable period of time. Cowdroy J did so in paragraphs 101-103. Cowdroy J concluded that notwithstanding the effluxion of more than a reasonable period of time, there still was no activation of an obligation under subcl (2) to acquire the land: see paragraph [102].
33 Cowdroy J then made a statement, which having regard to the pleadings and claims made by the applicant must be considered to be obiter dicta, that there would be no utility in the Court being asked to make any order in the nature of mandamus to form the opinions under cll 19(3) and (4). In fact, the applicant had never asked the Court to make any declaration in the nature of mandamus. This is evident from the points of claim that I have recited above. The reason for Cowdroy J stating that there would be no utility in making an order of mandamus was that, after the institution of the proceedings, the Council had, by the resolution of 27 June 2005, formed the opinions under cll 19(3) and 19(4). His Honour then said at [103]:
- “However, it reflects upon the reasonableness of the applicant in commencing the proceedings after a prolonged delay by the Council in considering the acquisition notices.”
34 It is that last sentence of the judgment upon which the applicant seeks to found its resistance to the Council’s motion for costs.
35 For these reasons, it can be seen that the applicant was wholly unsuccessful in its claim brought in the proceedings.
36 The general rule is that in civil enforcement or judicial review proceedings the usual order as to costs should prevail, that is, that a successful party should be entitled to an order for costs in its favour: see Oshlack v Richmond River Council (1998) 193 CLR 72 at [67]-[70].
37 The exceptions to the usual order as to costs are limited, and are usually focussed upon any disentitling conduct by the successful party.
38 The applicant, in resisting the Council’s application for costs, submits that there was disentitling conduct by the Council. This disentitling conduct was the Council’s resolution of 27 June 2005 and the late amendment of its points of defence in November 2005 to rely upon the 27 June 2005 resolution. The applicant submits that the comment by Cowdroy J in paragraph 103 of his judgment is a recognition of this fact.
39 The Council submits that the 27 June 2005 resolution was legally irrelevant to the determination of the proceedings in the reasons given by Cowdroy J. On Cowdroy J’s construction of subcll (2) and (3) of cl 19, there was no obligation under cl 19(2) to acquire the land unless and until an opinion was formed by the Council under subcl (3) that the need for open space had been created by residential development in the vicinity. As a matter of fact, such an opinion had never been, and was never, made. The resolution of 27 June 2003 was not such an opinion.
40 Indeed, it was an opinion to the contrary, namely that the need for the open space had not yet been created by residential development in the vicinity. Accordingly, regardless of the resolution of 27 June 2005, there was never was an obligation to acquire the land under subcl (2) on Cowdroy J’s reasoning. Moreover, Cowdroy J held that an obligation under subcl (2) could not crystallise by the effluxion of more than a reasonable period of time.
41 Cowdroy J’s determination that there was an implied obligation under cl 19(3) to form an opinion under subcl (3), which might be compellable by mandamus, was not pleaded and, in any event, was not the subject of any determination. Accordingly, the resolution of 27 June 2005, insofar as it addressed the matter under subcl (3), did not make any difference to the resolution of the proceedings.
42 In relation to subcl 19(4), again the requisite opinion that needed to be formed, namely that the owner of the land would suffer hardship if the land was not acquired within reasonable time, was never formed. The resolution of 27 June 2005 was not such an opinion. Again, therefore, Council submits that the resolution of 27 June 2005, insofar as it concerned the matter under subcl (4), was legally irrelevant.
43 In these circumstances, although it is a fact that the Council made a resolution on 27 June 2005 and relied upon it as one of its defences, it was nevertheless not a matter that affected the outcome of the case.
44 In my opinion there is force in the Council’s submissions. Obviously I was not the trial judge. In ruling on the question of costs I have to accept the findings of Cowdroy J on the matters that were in issue. I have endeavoured to set out the reasoning process of Cowdroy J in this judgment. When one follows that reasoning process, I am of the opinion that the Council’s argument is correct, that the resolution of 27 June 2005 becomes legally irrelevant to the fate of the applicant’s claim.
45 It is true that, as a matter of fact, the Council passed that resolution. It is also true that the Council chose to add that resolution as yet another string to its bow in defending the claim. However, if it had not done so, the result of the proceedings would have been identical.
46 The only difference which could have occurred had the Council not passed the resolution of 27 June 2005 and relied upon it in its defence, would have been that there still would, on Cowdroy J’s construction of cl 19(3), be an implied duty on the Council to turn its mind to the opinion under subcl (3). It is possible, therefore, that if that situation had still applied, Cowdroy J could have said that the applicant could have brought a claim for mandamus to compel the Council to make a decision in relation to the opinion one way or another.
47 However, that would have been for the future. It was not at any point in time part of the applicant’s case that the Council needed to form an opinion under subcl (3) in order to trigger the obligation under subcl (2) to acquire the land. Quite to the contrary, from the outset and continually through to the conclusion of the proceedings, the applicant maintained that the Council was already under an obligation under subcl (2) and that the formation of the opinion under subcl (3) could only ever relieve the Council of the obligation, not trigger it.
48 Accordingly, to now rely upon Cowdroy J’s obiter comments that mandamus may have been available had there been no resolution on 27 June 2005, is to recast the nature of the proceedings.
49 Having regard to the reasons for the decision of Cowdroy J, and the way in which the case was pleaded and brought by the applicant, the making of the resolution by the Council on 27 June 2005, and the Council’s subsequent conduct in amending its pleadings to rely upon that resolution, cannot be seen to be disentitling conduct. Accordingly, the usual order for costs should be made.
50 The Court makes the following orders:
2. The applicant should pay the respondent’s costs of the motion for costs dated 22 February 2006, as agreed or assessed.
1. Subject to the costs order of Cowdroy J of 16 November 2005, the applicant should pay the respondent’s costs of the proceedings as agreed or assessed.
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