Altitude Corporation Pty Ltd v Isaac Regional Council (No 2)

[2014] QPEC 55

PLANNING AND ENVIRONMENT COURT OF QUEENSLAND

CITATION:

Altitude Corporation Pty Ltd v Isaac Regional Council (No 2) [2014] QPEC 55

PARTIES:

ALTITUDE CORPORATION PTY LTD
(applicant/appellant)

v

ISAAC REGIONAL COUNCIL
(respondent)

FILE NO/S:

3576 of 2013

PROCEEDING:

Application for costs

ORIGINATING COURT:

Planning and Environment Court of Queensland

DELIVERED ON:

19 September 2014

DELIVERED AT:

Brisbane

HEARING DATE:

17 June 2014 with further material and submissions received to 10 July 2014

JUDGE:

Rackemann DCJ

ORDER:

Each party bear its own costs.

CATCHWORDS:

PLANNING AND ENVIRONMENT – COSTS – whether the respondent/council should pay the costs of the successful applicant/appellant – whether respondent/council although unsuccessful in the case had reasonable prospects of success and acted reasonably – whether opinions of the expert town planner engaged by the council were supportable – whether the council unreasonably refused settlement offer

COUNSEL: 

C Hughes QC and M Batty for the applicant/appellant

M Williamson for respondent

SOLICITORS:

McDonald Balanda & Associates  for the applicant/appellant

King & Company Solicitors for the respondent

1. This applicant appeal was against the respondent’s refusal of an application for a development approval for a material change of use to permit the development of multiple dwellings on land situated at Mills Avenue, Moranbah. By a judgment, supported by reasons given ex tempore on 1 April 2014, I indicated that the appeal would be allowed and I adjourned the further hearing to permit the parties to consider appropriate conditions of approval. Those conditions were finalised at a subsequent hearing on 3 June 2014. The outstanding issue relates to costs.

1. The successful appellant seeks the following orders:

(a)        an order that the respondent pay the costs of and incidental to the appeal up to and including 31 January 2014, being the date on which the Council rejected an offer to settle – those costs to be assessed on the standard basis;

(b)        an order that the respondent pay the appellant’s costs of and incidental to the appeal from 1 February 2014 on an indemnity basis or, in the alternative on a standard basis; and

(c)        an order that Queen’s Counsel be certified as an appropriate cost incurred by the appellant in the appeal.

1. The Court’s jurisdiction to make an order as to costs arises by reason of s 457(1) of the Sustainable Planning Act 2009 (SPA) which provides as follows:

‘(1) Costs of a proceeding or part of a proceeding, including an application in a proceeding, are in the discretion of the court.’

1. The discretion is an open one. It is to be exercised judicially, but without any presumption one way or the other. In particular, while the relative success of the parties is a relevant factor, and might, in a particular case, prove decisive, there is no presumption that costs should ordinarily follow the event.[1] Matters which are also of relevance include, for example, whether a party commenced or participated in the proceeding without reasonable prospects of success, whether there was a change to the proposal from that which was the subject matter of the Council’s decision and, if so, the circumstances of the change and its effect, whether the proceeding involved a matter of public interest and whether a party acted unreasonably either in the lead up to, or in the conduct of, the proceeding. In this regard s 457(2) and (3) provide:

   [1]Cox v Brisbane City Council & Anor (No 2) [2013] QPEC 78 at [2], YFG Shopping Centres Pty Ltd v Brisbane City Council & Ors (No 2) [2014] QPEC 43 at [15]-[16].

‘(2) In making an order for costs, the court may have regard to any of the following matters—

(a) the relative success of the parties in the proceeding;

(b) the commercial interests of the parties in the proceeding;

(c) whether a party commenced or participated in the proceeding for an improper purpose;

(d) whether a party commenced or participated in the proceeding without reasonable prospects of success;

(e) if the proceeding is an appeal against a decision on a development application and the court decides the decision conflicts with a relevant instrument as defined under section 326(2) or 329(2), whether the matters mentioned in section 326(1) or 329(1) have been satisfied;

(f) if the proceeding is an appeal to which section 495(2) applies and there is a change to the application on which the decision being appealed was made, the circumstances relating to making the change and its effect on the proceeding;

(g) whether the proceeding involves an issue that affects, or may affect, a matter of public interest, in addition to any personal right or interest of a party to the proceeding;

(h) whether a party has acted unreasonably leading up to the proceeding, including, for example, if the proceeding is an appeal against a decision on a development application, the party did not, in responding to an information request, give all the information reasonably requested before the decision was made;

(i) whether a party has acted unreasonably in the conduct of the proceeding, including, for example—

(i) by not giving another party reasonable notice of the party’s intention to apply for an adjournment of the proceeding; or

(ii) by causing an adjournment of the proceeding because of the conduct of the party;

(j) whether a party has incurred costs because another party has introduced, or sought to introduce, new material;

(k) whether a party has incurred costs because another party has not complied with, or has not fully complied with, a provision of this Act or another Act relating to a matter the subject of the proceeding;

(l) whether a party has incurred costs because another party has defaulted in the court’s procedural requirements;

(m) whether a party should have taken a more active part in a proceeding and did not do so.

(3)      Subsection (2) does not limit the matters to which the court may have regard in making an order as to costs.’

1. The costs application is brought against the respondent as the local government which decided the development application and unsuccessfully resisted the appeal from its decision. As the assessment manager, the respondent is a party to the proceeding.[2] It is not a party by election. The appellant bore the onus in the appeal.

   [2]s 485(2) SPA.

1. There is no basis for criticising the Council’s conduct in reaching the decision against which the appeal was brought. The Council engaged an experienced and highly respected firm of consultant town planners to provide an independent assessment of the development application for consideration by the Council. The Council’s decision to refuse the development application was consistent with the professional advice it received. A director of that firm was called to give town planning evidence at the subsequent hearing.

1. There is no sufficient basis to conclude that, in resisting the appeal, the Council was not, at all times, acting for a proper purpose, concerning planning within this part of its local government area. That is, of course, a matter of public interest. While the Council is itself a developer, there is no proper basis to conclude that it was concerned with any commercial interest when deciding the development application or in resisting the appeal.

1. It was submitted, on behalf of the appellant, that in addition to its ultimate success, the following seven matters justify a costs order:

1.          the land was included in the Urban Zone;

2.          the proposal was code assessable;

3.          the proposal was supported by specific provisions with respect to the Urban Zone;

4.          there was compliance with almost all the relevant quantitative provisions of the planning scheme;

5.          two of the Council’s witnesses (ie those called in relation to landscaping and traffic respectively) conceded that approval with conditions was appropriate, while Ms Roughan’s reasons for refusal on town planning grounds were unsupportable;

6.          the respondent unreasonably rejected an offer to settle;

7.          the Council’s attitude to this appeal and a previous appeal.

1. The fact that the land was suitably zoned does not, of itself, dictate that the application should be approved. There was a need to assess the application against the relevant provisions governing the acceptability of development with the zoned area.

1. The appellant sought to make something of the fact that, while the land fell within a zone which accommodates a wide range of residential activities, the Council had unsuccessfully opposed an earlier subdivision to create 28 lots (upon which dwelling houses might then be built)[3] and was, in this appeal, also opposed to a multiple dwelling proposal. There is no proper basis however, to conclude that the Council’s position in this appeal was one which sought to deny the zoning, rather than one based on an assessment of the proposal against the relevant provisions of the scheme in relation to that zoning.

   [3]Altitude Corporation Pty Ltd v Isaac Regional Council [2010] QPEC 127.

1. The fact that the proposal was code assessable is, of itself, of little consequence for present purposes. It is how the proposal responded to the relevant provisions of the applicable code which is more important.  

1. The relevant code was the Urban Zone Code. The appellant made much of the fact that the Council unsuccessfully sought to make out a case of overdevelopment, notwithstanding that, as I observed in my earlier reasons, the proposal met and, in some cases, very comfortably met, the acceptable solutions in relation to measurable things such as site cover, open space provisions, building set-backs (subject to one minor and uncontroversial aspect) and height. Non-compliance with some or all of those provisions is often regarded as a potential sign of overdevelopment, but it would be too simplistic to assert that the level of compliance with those parameters necessarily negatived the overdevelopment issue.

1. While I accept the high degree of compliance with those measurable parameters, it must also be acknowledged that:

(i)       the code does not contain only quantitative standards, but also has provisions which call for qualitative assessments;

(ii)     compliance with the abovementioned quantitative standards in acceptable solutions to some of the performance criteria does not obviate the need to look at other performance criteria;

(iii)   development may, depending on the circumstances, be found to be unacceptable, notwithstanding compliance with the measurable parameters referred to.

1. There were, ultimately, four performance criterion with which there was alleged to be conflict, namely PC’s 5, 16, 18 and 30.

1. PC 5 concerns the protection of residential amenity from transport movements. For residential activities, such as proposed, there is no acceptable solution. Insofar as the likely impact on Nonette Street is concerned, Mr Williams, the traffic engineer engaged by the Council, expressed the opinion, in the joint report (and confirmed in his testimony), that this was not sufficient, of itself, to justify refusal, but considered it to be symptomatic of the wider overdevelopment issue and of relevance to the reasonable expectations of existing residents and amenity. It was, at best for the Council, a supporting, rather than a decisive, issue.

1. Insofar as the new road is concerned, Mr Williams acknowledged in examination in chief that, with alterations, the proposal would be adequate from a traffic perspective.[4] The appellant also pointed to part of its earlier letter, containing its settlement offer, in which the solicitors for the appellant had asserted that a ‘design resolution’ may be readily available. That design solution was however, not formulated at that time. In the joint report Mr Williams had expressed the view that, in its then current form, the design ‘is not appropriate and would not safely and efficiently cater for the anticipated traffic demands.’ The joint report records consideration of competing demands to be resolved in achieving an appropriate design. In that respect Mr Williams opined, in the joint report as follows:

‘Mr Williams is of the view that this apparent conflict between the need to facilitate on-street parking to cater for likely visitor demands and the desirability of reduced pavement width to positively manage vehicle speeds supports his view that the proposal represents over development on the subject site. The above issue could be easily managed and appropriately dealt with if the proposal remained at the development intensity as per the existing approval of 28 residential allotments.’

[4]T2-31.

1. In its letter rejecting the appellant’s offer, the solicitors for the Council said:

‘As to whether a design in connection with appropriate conditions may be readily available to address the traffic engineering issues, we have not been provided with any further material from your client directly, nor do we understand that Mr Williams has received anything capable of being considered by Council and endorsed as a resolution of these issues.’

The design solution emerged during the hearing. When it did, the Council reasonably accepted that the issue was able to be dealt with satisfactorily, subject to the imposition of conditions.[5]

[5]See para 25 of the written submissions on behalf of the respondent dated 1 April 2014.

1. PC 16, which concerns streetscape and landscape has no prescribed acceptable solution, leaving matters for assessment and judgment. Reference was also made, in relation to these types of concerns, to sub-paragraphs (3)(b) and (4)(c) of the purpose of the code. This was an area of particular difference and debate between the experienced consultant town planners who gave evidence.[6] The competing views were open.

   [6]Mr Cumming also gave evidence.

1. PC 18 seeks to ensure that garages and parking structures or areas do not dominate the street frontage. It is supported by a relevant acceptable solution, conformity or otherwise with which can be established by measurement. This is a respect however, in which the proposal departed from an acceptable solution. Whether the proposal nevertheless met the performance criteria became a matter of assessment and judgment, in relation to which competing views were available.

1. As was observed in the letter containing the appellant’s settlement offer, the issues in relation to PC 16 and 18 involved ‘differing individual perceptions on streetscape and design of the two (2) town planners.’ The competing views were open. I reject the submission that Ms Roughan’s professional opinions were not based on the provisions of the scheme, lacked a rational basis or were obviously unsupportable, albeit that I did not accept them.

1. PC 30 required maintenance of a visual buffer to the easement, as well as a separation distance. Attention was drawn to the concession by Mr Bishop (the expert retained by the respondent) that suitable landscaping could be achieved. As was pointed out for the respondent and as was acknowledged in my earlier reasons:

‘He raised doubts however, as to whether the appellant would be able to plant as many trees as it was offering to be obligated to do. He pointed to a range of issues which might potentially create issues with respect to tree planting, survival and growth.’

1. That is an important qualification to the concession relied upon by the appellant. A plan showing where the promised trees would be planted was only produced shortly before trial.[7] The above matters of qualification were the subject of differing professional opinion. That debate also occurred in the context of the application’s reliance, at that stage, on the earlier 28 lot subdivision approval and operational works approval. The Council raised the prospect of inconsistency between the earlier approvals and what was now contemplated. That was not finally resolved until after the close of evidence, when reliance on the earlier approvals was abandoned.

   [7]The appellant’s solicitors, by letter dated 19 March 2014, provided a plan identifying the additional 336 trees to be planted.

1. It was open to the Council to assert relevant conflict with the planning scheme, notwithstanding the extent of the proposal’s compliance with quantitative development standards and notwithstanding that I ultimately found that:

‘A fair-minded assessment against the relevant code reveals a very high level of compliance, if not full compliance. To the extent to which there is arguable conflict, for the reasons I have indicated, it seems to me that there are sufficient grounds for approval, notwithstanding the conflict.’

1. I endorse the submission, on behalf of the appellant, to the effect that a local government in the position of the respondent ought:

(i)       not just identify issues, but assess whether they call for a refusal of the application or are matters for conditions only;

(ii)     be concerned not just with whether there is an expert which supports its position, but with whether that expert’s opinion is supportable, particularly by reference to the planning scheme, and

(iii)    keep its attitude under review having regard to information and developments which emerge in the course of the case.

1. Nevertheless, whilst I formed a strong view that the appellant’s ultimate proposal ought be approved, the Council could not, in my view, be said, at any stage, to have had no reasonable prospects of success in resisting the appeal. A case is without reasonable prospects of success if it is so lacking in merit or substance as to be not fairly arguable.[8] The Council’s position was appropriately modified as further information came to hand (e.g. the traffic solution), albeit that it remained opposed to the development. It had, in my view, a fairly arguable case supported by appropriate evidence. Whilst that does not, of itself, necessarily protect a party from the prospect of an adverse costs order, it is a relevant consideration.

   [8]Degiorgio v Dunn (No 2) (2005) 62 NSWLR 284, Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300; Keddie & Ors v Stacks (2012) 293 ALR 764.

1. The appellant’s success in the appeal is a relevant consideration. The appellant was successful in obtaining approval, subject to conditions, to facilitate the 103 dwelling unit development that it ultimately sought. It had a relatively strong case in support of that on the evidence at the hearing and was, in substance,[9] successful on each of the issues.

   [9]I say ‘in substance’ because my reasons admit of the possibility of some arguable conflict, but the existence of sufficient grounds to approve notwithstanding.

1. The proposal for which approval was ultimately obtained was altered from that which it had applied for to the Council. The original proposal applied for 123 multiple dwellings. An amended proposal for 118 multiple dwellings was contended for by the appellant from the response to information request (5 July 2013), past the decision stage and the institution of this appeal (in September 2013) and until notification of a further amendment to the proposal (on 13 February 2014). An offer for 103 multiple dwellings as put forward as an offer from 20 January 2014 until 31 January 2014 when the offer was rejected. The appellant subsequently gave notice that it adopted a 103 multiple dwelling proposal.

1. The fact that until adoption of the 103 dwelling proposal, the appellant was relying on a proposal which was more intense than that which it ultimately submitted to the Court for consideration and achieved success in respect of is a matter of relevance to the application for costs, at least to that point.

1. Insofar as the ‘Calderbank’ offer for a 103 dwelling proposal is concerned, it must be remembered that the applicable costs regime is not one where there is a presumption in favour of costs following the event. The fact that, in a matter such as this, an applicant might ultimately do as well or better than a ‘Calderbank’ offer does not, of itself, lead to the conclusion that a costs order should be made nor that the party to which the offer was made acted unreasonably in refusing it.

1. Had I concluded that an order for costs was warranted in relation to the appellant’s successful pursuit of the 103 dwelling proposal, then the fact that it had earlier offered to settle on that basis would have been an important factor in considering the application for costs on an indemnity basis for the period from 1 February 2014. In that event it would also have been relevant to explore the reasonableness of rejecting that offer in the circumstances which then applied. In that regard Counsel for the respondent drew attention to two things.

1. First, the offer called on the respondent to consent to the approval of the 103 dwelling proposal ‘subject to the adoption of reasonable and relevant conditions’ about which the offer contemplated some further negotiation. It was submitted on behalf of the respondent, that the ‘offer was not capable of acceptance, as a complete resolution of the matter, since it left something for negotiation.’ As Senior Counsel for the appellant pointed out however, it is common for parties to agree on whether an approval ought be forthcoming, so long as they agree that appropriate conditions can be (even though they have not yet been) settled. Indeed the court regularly determines approval/refusal issues in advance of conditions (as it did in this case). The evident intent of the offer was to avoid the expense of the hearing of approval/refusal issues.

1. Secondly, the respondent was not in possession of all the information subsequently available at trial at the time it was called upon to consider the offer. Indeed, the absence of sufficient information and material to support the offered option was relied upon by the Council in rejecting the offer at the time.

1. The 103 dwelling option (called option 2) had been the subject of earlier ‘without prejudice’ negotiations. The Council’s solicitors, by a letter dated 6 November 2013 had nominated issues which needed to be addressed. Those issues included vegetation and landscaping, traffic and town planning. In its letter of 31 January 2014 rejecting the appellant’s ‘Calderbank’ offer, it referred to its previous correspondence and said:

‘Excluding the preparation of the joint expert reports (which relate to a proposal for 118 multiple dwellings), it is noted that no further information has been provided to the Council in support of option 2, or to address the matters raised in the letter dated 6 November 2013. On this basis, the Council’s position remains that it is unable to indicate support for option 2.

For the reasons outlined above, including the absence of information and material in support of option 2 that could properly form the basis of a resolution of the appeal, the Council is unable to accept your offer.’

1. There were changes and new information which post-dated the rejection of the offer. Those are set out in the affidavit of Ms Roughan. In this regard:

It has already been observed that the letter which contained the offer expressed some optimism that the traffic engineers could come up with a design solution in relation to the new road, but had not then done so.

·        The letter containing the offer also expressed the view that ‘the experts seem to agree that conditions of approval which would apply to the preparation of a landscape management plan may be drafted to facilitate approval of the development application (118 attached dwellings) subject to compliance with those conditions.’ In their first joint report, the experts differed on the number of trees which would be removed (Mr Bishop thought 112 whilst Mr O’Brien thought only 27) and, adopting a 3 to 1 replacement ratio, on the replacement plantings (Mr O’Brien thought 81 while Mr Bishop thought 336). Indeed Mr Bishop then described the number of replacement trees required as a ‘major point of difference’ between the experts. Whilst, in their supplementary report, they formulated ‘appropriate conditions of approval to preserve existing trees and to effect new landscaping’ which involved a replacement ratio of 3:1, Mr Bishop contended that adequate space for planting had not yet been demonstrated. At that stage there was no detailed plan showing where up to 336 replacement trees would be provided and reliance was still being placed on the earlier approvals. In that context, the Council’s response to the appellant’s offer on 31 January included the following:

‘While the experts have adopted their own approach in respect of the preparation of the JER, the points of disagreement are still discernable. Central to the issues raised by Mr Bishop is that the appellant will still need to provide the necessary landscaping plans and an appropriate landscape management statement to demonstrate that there is sufficient area on the subject land to accommodate the proposed development with appropriate landscaping, including compensatory landscaping in accordance with previous approvals relating to the land acted upon and sought to be relied upon by the appellant. Further, while it is noted that the landscaping JER considers appropriate conditions of approval, the final formulation of those conditions remains a matter that would still need to be agreed between the parties and documented.’

·        In relation to town planning issues, the offered option was not supported by design plans for some new building types. A full set of development plans were included in material subsequently exchanged. Another example is the provision of detail with respect to the calculation of areas for communal and private open spaces which had been requested from even prior to the decision on the development application but which was not provided until just prior to the appeal hearing.

1. The changes or further information which subsequently came to hand did not cause the Council to support the development application, but as Counsel for the respondent pointed out, they put Council’s response to the offer, at the time it was made, into some context.  It was submitted for the respondent that:

‘(a)    the application approved by the Court, unlike the development the subject of the letter of 20 January 2014, applied to a significantly greater area of land. This change had the effect of incorporating a proposed road and proposed public park which were otherwise excluded from the development application – this change impacted on two issues: (1) the design of the road; and (2) the ability of the proposal to demonstrate compliance with the earlier and related development approvals in terms of the number of replacement trees;

(b)   the application approved by the Court, unlike the development the subject of the letter of 20 January 2014, is not reliant upon the two earlier development approvals (for reconfiguration of a lot and operational works) – the reliance on the earlier approvals was not abandoned until the last day of the hearing and after the close of evidence: see Transcript T4-3 to T4-4. This again, was relevant to the traffic engineering and landscaping issues in the appeal;

(c)    the application approved by the Court, unlike the development subject of the letter of 20 January 2014, was illustrated in a complete set of architectural plans with elevations and details. The details included calculations for communal and private open space and the location of 336 replacement trees – the details were relevant to the proper assessment of the proposal against the applicable Code; and

(d)   the application approved by the Court, unlike the development the subject of the letter of 20 January 2014, had a definable traffic engineering solution with respect to safe access.’

1. In any event, for the reasons I have given, the Council had a proper basis for continuing to resist the appeal on the basis of the 103 dwelling proposal, even though it was ultimately unsuccessful in doing so.

1. There was some reference to the Council’s conduct in the arguments about conditions. In particular, attention was drawn to the Council’s refusal to accept dedication (and therefore ongoing responsibility) for the new road as a public road or the park and open space. It was pointed out, on behalf of the appellant, that this attitude was not evident during the substantive hearing. This conducted was painted as ‘borne of a certain petulant caprice.’ As Counsel for the respondent pointed out however, it was not until after the close of the evidence that the appellant dropped reliance on the earlier approvals, which presented the opportunity for the Council to reconsider the road and park areas. The Council’s attitude to conditions otherwise does not lead me to conclude that it was acting unreasonably. The disputed conditions, which were not all resolved one way, were settled in the course of a hearing which lasted less than two hours.

1. In weighing the various considerations, I am conscious that the appellant was successful in obtaining approval for the proposal it ultimately sought and that its case, on the evidence at trial, was relatively strong, but I am also conscious of the other matters to which I have referred in the course of these reasons. The matter is relatively finely balanced overall, but I have come to the conclusion that the appropriate exercise of discretion in this case is to order that each party bear its own costs of this appeal. This makes it unnecessary to consider the basis for calculating costs or the appropriateness of briefing Senior Counsel.