Alpall v Blue Mountains City Council [No 2]

[2005] NSWLEC 720

Land and Environment Court

of New South Wales

CITATION:

Alpall v Blue Mountains City Council [No 2] [2005] NSWLEC 720

PARTIES:

Applicant:
Alpall Pty Ltd

Respondent:
Blue Mountains City Council

FILE NUMBER(S):

10492 of 2005 of 2005

CORAM:

Roseth SC

KEY ISSUES:

Costs - Development Application :- Principle for awarding costs in merit cases

CASES CITED:

Statewide Developments Pty Limited v Minister for Infrastructure and Planning [2005] NSWLEC 353

DATES OF HEARING:

13/12/2005

 
DATE OF JUDGMENT: 

12/21/2005

LEGAL REPRESENTATIVES:

Applicant:
Mr D White, solicotr of Benetatos White

Respondent:
Mr T Cork, solicitor of McPhee Kelshaw

JUDGMENT:

- 5 -

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Roseth SC

21 December 2005

10492 of 2005 Alpall Pty Ltd v Blue Mountains City Council

JUDGMENT

1 Senior Commissioner: This is an application for costs by the Blue Mountains City Council (the council) against Alpall Pty Ltd (the applicant) arising out of an appeal relating to a development for Seniors Living on lot B DP 391940, known as 33 Falls Road, Wentworth Falls. The appeal was determined on 9 November 2005 by refusal.

2 The council’s advocate, Mr T Cork, submitted that the council first indicated that it required information on solar access to the proposed development in its draft Statement of issues of 4 July 2005. The applicant did not supply this information in an acceptable form despite the fact that, in addition to the council, the two Court-appointed experts also requested it on several occasions. Mr Cork drew support from my judgment, in which I stated that:

…there appears to be no reason for the applicant’s failure to provide it (the information on solar access) at least in time for the hearing.

3 In Mr Cork’s submission, the applicant should pay the council’s legal costs accrued from 4 July 2005, a sum of approximately $8,000. The cost does not include the cost of experts.

4 The applicant’s advocate, Mr A White, submitted that the Court determined the application on a number of matters, not solar access alone. Mr White did not accept that the applicant failed to provide adequate information, but even on the assumption that the applicant was at fault, in Mr White’s submission, the outcome would have been the same with or without adequate information on solar access.

Costs in merit cases in the Land and Environment Court

5 Pt 16 rule 4(2) of the Court’s Rules applies to proceedings in classes 1, 2 and 3 of the Court’s jurisdiction brought under s95A, 96, 97, 98, 109K, 121ZK, 121ZM and 149F of the Environmental Planning and Assessment Act 1979; s176, 177, 178, 182 and 611 of the Local Government Act 1993, and s37 of the Valuation of Land Act 1916. Generally these proceedings may be described as merit and valuation cases. The discussion below deals with merit appeals; however, similar principles would apply to valuation appeals. Rule 4(2) states:

No order for the payment of costs will be made in proceedings to which this Rule applies unless the Court considers that the making of a cost order is, in the circumstances of the particular case, fair and reasonable.

6 The principles that govern the award of costs in merit cases in the Land and Environment Court are different from those applied by the Court in other classes of its jurisdiction or by other Courts, where the usual rule is that “costs follow the event”, ie the losing party is ordered to pay the costs of the winning party. In merit cases in the Land and Environment Court it is assumed that an applicant is entitled to test a council’s decision to refuse a development application (or its failure to determine it within 40 days) without fear of having to pay the council’s costs of defending the appeal, even if the Court finds that, on merit, the application should be refused. Similarly, a council is entitled to defend its decision to refuse an application (or its failure to determine it within 40 days) without fear of having to pay the applicant’s costs, even if the Court finds that, on merit, the application is worthy of approval.

7 In Statewide Developments Pty Limited v Minister for Infrastructure and Planning [2005] NSWLEC 353 Lloyd J paraphrased Part 16 Rule 4(2) as follows:

The language of the rule maintains the general presumption that there will not ordinarily be any order for costs in proceedings to which the rule applies, unless in the particular case there is some circumstance that would make it fair and reasonable that there should be an order for costs. In other words, costs will not be ordered in proceedings to which the rule applies unless in the particular case it is fair and reasonable to depart from the underlying presumption.

8 It appears useful to explore the concept of “fair and reasonable” in the context of cost orders. Lloyd J suggests that, to justify a cost order, there must have been a circumstance during the preparation and/or hearing of a case that makes the award of costs fair or reasonable. What is such a circumstance?

9 In most cases, though not all, the circumstance is to be found in the conduct of one or more of the parties. The conduct may be one of omission or commission. However, a conduct in litigation that falls short of fair or reasonable does not, of itself, justify the award of costs. While the Rule does not expressly state it, it is a settled matter that the purpose of awarding costs in merit cases is not to punish one or more of the parties, but to compensate a party for costs that have been incurred as a result of a circumstance, aspect or type of conduct. The above may be stated as a principle:

Principle for awarding costs in merit cases

10 For the Court to make an order for payment of costs in merit or valuation cases, two questions should be answered in the affirmative:

· Is there a circumstance, an aspect or a type of conduct in the preparation or hearing of the case that makes the award of costs fair or reasonable?

· Has the party seeking the award of costs incurred costs as a result of that circumstance, aspect or conduct?

11 Examples (not exhaustive) of conduct by applicants that may make the award of costs fair and reasonable include

· delaying the process of litigation without good reason;

· refusing or delaying the supply of information;

· amending proposals on numerous occasions thus necessitating numerous assessments; and

· submitting proposals that are either without any merit whatever or that aggressively and blatantly disregard council controls.

12 Examples (not exhaustive) of conduct by councils that may make the award of costs fair and reasonable include

· wrongly characterising an appeal as a merit appeal where the central issue is a question of law, such as whether consent can be granted at all;

· delaying the process of litigation without good reason;

· raising issues without rational basis (thus forcing applicants to provide unnecessary reports); and

· failing to communicate to an applicant in reasonable time the precise nature of the perceived shortcomings of a proposal.

13 I apply the above principle to the current case. I accept Mr Cork’s submission that the council and the Court-appointed experts had indicated on a number of occasions that the applicant should provide information on solar access. I also accept that the applicant has failed to provide that information before or during the hearing. I therefore asked Mr Cork to specify the legal costs that council incurred as a result of the applicant’s failure to provide the above information. Mr Cork’s response was that he could not specify any costs that arose from the applicant’s failure to provide information. I conclude therefore that the council’s costs in defending the appeal were the same as they would have been if the applicant had responded to the request for information.

14 In view of the above it would not be fair and reasonable to award costs against the applicant.

Orders

1. The council’s application for costs is dismissed.

2. The exhibits are returned.

________________
Dr John Roseth
Senior Commissioner