Bade v Rural City of Murray Bridge & Davies (No 2) - [2008] SASC 235

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
BADE v RURAL CITY OF MURRAY BRIDGE & DAVIES (No 2)
[2008] SASC 235
Judgment of The Full Court
(The Honourable Chief Justice Doyle, The Honourable Justice Bleby and The Honourable Justice Anderson)
27 August 2008
PROCEDURE - COSTS - DEPARTING FROM THE GENERAL RULE - NATURE OF PROCEEDINGS
Judicial review of decision of Council planning authority - plaintiff successful on appeal to Full Court - Council made a series of errors and oversights - developer deliberately concealed information - Council abiding order of the Court at trial and on appeal - developer actively contested appeal - whether Council liable for plaintiff's costs - whether Council liable for developer's costs - whether Council should indemnify second respondent if both respondents are liable for the appellant's costs - both respondents jointly and severally liable for appellant's costs - no special right of indemnity - council not liable for second respondent's costs.
Development Regulations 1993 (SA) Schedule 9, referred to.
Cutcliffe v Lithgow City Council (2006) 147 LGERA 330, not followed.
Bade v Rural City of Murray Bridge & Davies [2008] SASC 189, discussed.
Hall v Development Assessment Commission (No 2) [2001] SASC 181; Sidney Harrison Pty Ltd v City of Tea Tree Gully (No 2) (2001) 112 LGERA 327; GPT Re Ltd v Wollongong City Council (2006) 151 LGERA 174; Bungendore Residents' Group Inc v Palerang Council (No 5) [2007] NSWLEC 703; Latoudis v Casey (1990) 170 CLR 534, considered.

BADE v RURAL CITY OF MURRAY BRIDGE & DAVIES (No 2)
[2008] SASC 235
Full Court: Doyle CJ, Bleby and Anderson JJ

DOYLE CJ: I agree with the orders proposed by Bleby J, and with the reasons that he gives for making those orders. There is nothing that I wish to add.
BLEBY J
Introduction
On 9 July 2008 this Court allowed the appellant’s appeal and made consequential orders associated with the quashing of the development approval issued to the second defendant by the first defendant.[1] We have since heard argument from all parties as to the costs orders that should follow.
[1] Bade v Rural City of Murray Bridge & Davies [2008] SASC 189.
The successful appellant, Mrs Bade, seeks an order for costs of the proceedings below, and of this appeal, against the defendants. The second defendant, Mrs Davies, seeks an order that the first defendant, the Council, pay the appellant’s costs of the trial and of the appeal and an order that the Council also pay her costs of the trial and of the appeal. Alternatively, she seeks an order that, if both the respondents are jointly liable for Mrs Bade’s costs of the trial and the appeal, she should have an indemnity from the Council as to those costs.
Mrs Bade’s claim for costs against Mrs Davies
Mrs Davies opposed the making of the orders sought by Mrs Bade both before Debelle J and on the appeal. She was unsuccessful. She must pay the costs of Mrs Bade of both the application before Debelle J and of the appeal.
Mrs Bade’s claim for costs against the Council
The Council opposes Mrs Bade’s application for costs against it. It did not appear in the proceedings before Debelle J or on the appeal, having indicated that it would abide the order of the Court other than in relation to costs.
In most cases, an award of costs would not generally be made against a submitting authority whose actions are the subject of judicial review, at least after the time of submission to any order, and where the order is opposed by the person whose rights and interests are affected by a successful order for judicial review.[2] Particularly this is so where an innocent error of law has been made and the authority has made a genuine attempt to discharge its obligations according to law. It is different, of course, where the authority itself opposes the application. It may also be different if the interested party also consents or submits to an order, thereby acknowledging the invalidity.[3] In such circumstances the successful plaintiff, having been forced to institute proceedings to invalidate the decision, would be entitled to a compensatory order from someone. The only person who caused the plaintiff to incur the costs would be the decision-maker. However, that is not this case.
[2] See, for example, Hall v Development Assessment Commission (No 2) [2001] SASC 181.
[3] See, for example, Sidney Harrison Pty Ltd v City of Tea Tree Gully (No 2) (2001) 112 LGERA 327, 332; [2001] SASC 34, [17]; Cutcliffe v Lithgow City Council (2006) 147 LGERA 330; [2006] NSWLEC 463.
Mr Henry, counsel for Mrs Davies, sought to rely on the “general guidelines” for the exercise of the Court’s discretion in judicial review proceedings of this nature expressed by Biscoe J in Cutcliffe v Lithgow City Council.[4] The application of those guidelines suggests that in most cases a successful applicant’s costs will ordinarily be awarded against both the beneficiaries of the invalid consent and the consenting authority itself, whether or not the authority submits to the order of the Court. That principle has not been applied in this State. I consider that the Court’s unfettered discretion to award costs should not be constrained by general guidelines of that nature. Costs should be awarded according to the circumstances relevant in each particular case. The New South Wales experience, in the relatively short time since Cutcliffe was decided, indicates the need to apply further qualifications to the guidelines,[5] and that circumstances will arise where they should not apply.[6]
[4] (2006) 147 LGERA 330, 345-346; [2006] NSWLEC 463, [50].
[5] As in GPT Re Ltd v Wollongong City Council (2006) 151 LGERA 174; [2006] NSWLEC 658 where Biscoe J himself was constrained to express a further qualification on the guidelines at [29].
[6] For example, Bungendore Residents’ Group Inc v Palerang Council (No 5) [2007] NSWLEC 703, [22].
Orders for costs are intended to be compensatory for the cost of having to bring proceedings to correct an error.[7] They are not by way of a penalty for making a wrong decision. The practice of this court has been not to order costs against a submitting decision maker in judicial review proceedings, at least not ordinarily. In that regard the Court has not followed the practice suggested by Biscoe J in Cutcliffe. Notwithstanding this Court’s general practice, without the need to consider whether that general practice is correct, there are circumstances in this case which warrant departing from that general practice, even though the Council was a submitting party.
[7] Latoudis v Casey (1990) 170 CLR 534.
Had the only mistake of the Council been to assign the development to a wrong category as a result of genuinely misinterpreting the regulations, the general practice might well have prevailed. However, this Court has identified a series of errors and oversights by the Council but for which the development application should have been rejected. Had the Council checked the second application for development approval against the previous development approval, it would have been obvious that the second application was based on an unauthorised development.[8] The Council had been warned by Mr Bade of some of the defects in the application but apparently took no notice.
[8] See the observations in Bade v Rural City of Murray Bridge & Davies [2008] SASC 189, [74], [78], [85], [114].
The Council also classified the development as a Category 1 development in circumstances which I described as being “difficult to see how any development authority could possibly classify this development as falling within any of” the relevant paragraphs of Schedule 9 of the Development Regulations 1993.[9]
[9] Ibid [51].
In this case there was therefore more than a mere wrong decision. There was a failure of process on the part of the Council which was a contributing cause of the appellant having to incur the costs that she did in seeking to have the approval set aside.
It was also the wrong classification by the Council of the development as a Category 1 development which caused Mrs Bade to receive no notice of the development application or of its approval, and which caused her in turn to have to apply for an extension of time within which to bring proceedings, and which rendered her unable, in practice, to commence the proceedings until after construction of the building was substantially completed. However, that is not to detract from Mr and Mrs Davies’ deliberate concealment from Mr and Mrs Bade of the fact that they had obtained development approval.
In my opinion it is appropriate, in the unusual circumstances of this case, that the Council should also be liable to Mrs Bade for her costs. That liability should be joint and several.
Indemnities as between defendants
The next question which arises, assuming a joint and several liability on the part of the Council and Mrs Davies to pay Mrs Bade’s costs, is whether there should be an indemnity between the two respondents on a basis which differs from the consequences of their joint and several liability. Once again, bearing in mind that costs are in the nature of compensation for having to conduct the proceedings, it is relevant to consider both apportionment of responsibility for Mrs Bade having to bring the proceedings in the first place and the extent to which the costs incurred were caused by the conduct of the proceedings themselves. In respect of this latter aspect, it is relevant that a substantial amount of time in both the trial and the appeal was taken up in considering the discretionary issues which I have described and for which both defendants must bear some responsibility.
In deciding the extent of any apportionment in a case like the present, one must necessarily wield a fairly broad axe. Taking all the circumstances into account I can see no reason why the usual right to indemnity consequent upon joint and several liability should not apply, both in relation to the trial and to the appeal.
Mrs Davies’ application for costs against the Council
Although there were defects in the approval process at the hands of the Council they were compounded and induced, in part, by the conduct of Mrs Davies or that of her husband and agent, Mr Davies. If Mr and Mrs Davies had been frank about the status of the earlier boat shed development and the fact that it was unauthorised for various reasons and encroached on Mrs Bade’s lease, all of which they knew, the development might never have been approved.
It might be different if Mrs Davies commenced construction unaware of any defect in the consent and in reliance on it. However, that was not this case. Mr and Mrs Davies were fully aware of some of the major defects which invalidated the consent, and they deliberately concealed them. Mr and Mrs Davies also raised substantial discretionary issues in opposition to the relief claimed by Mrs Bade. Those discretionary issues did not depend on any act or neglect of the Council. Most of the oral evidence at the hearing was directed to issues relating to Mrs Bade’s application for an extension of time in which to commence the proceedings and to the exercise of the Court’s discretion to grant relief based on prejudice to Mrs Davies. Those issues of prejudice were in turn based on the actions of Mr and Mrs Davies taken in purported reliance on the development approval which they must be taken to have known was defective. Those issues also turned on factual issues on which, at trial, Mr Davies was disbelieved.
I would therefore reject Mrs Davies’ application for costs against the Council.
Other matters and orders
The Council points out that, subsequent to the judgment under appeal, proceedings continued between Mrs Bade and Mrs Davies in relation to the encroachment on Mrs Bade’s land of Mrs Davies’ building, and that that is a matter entirely between these two parties. That may be so, but the finding as to the encroachment was part of Mrs Bade’s case in favour of the invalidity of the development approval. While accepting that there appears to be an ongoing issue between Mrs Bade and Mrs Davies as to the resolution of the encroachment issue, I would nevertheless order that the respondents pay the appellant’s costs of the application before Debelle J to the date of the judgment the subject of the appeal and that they also pay the appellant’s costs of the appeal, including the application for costs. That liability will be joint and several. There should be no order as to the costs of this application as between the respondents.
ANDERSON J. I agree with the orders proposed by Bleby J for the reasons he gives.