Carbone v Camden Council (No 2)

[2015] NSWLEC 154

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Carbone v Camden Council (No 2) [2015] NSWLEC 154
Hearing dates:	29 September 2015
Date of orders:	01 October 2015
Decision date:	01 October 2015
Jurisdiction:	Class 1
Before:	Moore AJ
Decision:	1. The application for costs is dismissed; and 2. The Applicant is to pay the Respondent's costs of the motion as agreed or assessed.
Catchwords:	COSTS – “fair and reasonable” – costs for conciliation conference – costs for hearing – decision of council rejecting recommendation by staff for approval – failure of applicant at hearing on critical issue
Legislation Cited:	Civil Procedure Act 2005 s 56 Conveyancing Act 1919 s 88B Land and Environment Court Act 1979 s 34 Camden Development Control Plan 2011 Camden Local Environmental Plan 2010 Land and Environment Court Rules 2007 r 3.7
Cases Cited:	ACM Landmark Pty Limited v Cessnock City Council [2006] NSWLEC 256 Carbone v Camden Council [2015] NSWLEC 1161 Golden Max Pty Limited v Hurstville City Council [2015] NSWLEC 16; 208 LGERA 221 Grant v Kiama Municipal Council [2006] NSWLEC 70 Krivanek v Blue Mountains Council (No 2) [2004] NSWLEC 732
Category:	Costs
Parties:	Mr M Carbone (Applicant) Camden Council (Respondent)
Representation:	Counsel: Mr T S Hale SC (Applicant) Mr A M Pickles SC (Respondent)   Solicitors: Mr D Carbone, Barclays Law Group (Applicant) Mr C Drury, Sparke Helmore (Respondent)
File Number(s):	10922 of 2014
Publication restriction:	No

Contents

Judgment

Introduction

The statutory framework

The development application process

The basic dates

The assessment process

Commencement of proceedings

The Council’s decision-making process

The Court process

Before the Acting Registrar

The conciliation conference

The Council’s contentions

The hearing

The Acting Commissioner’s decision

Conclusion

Orders

Judgment

Introduction

1. On 16 June 2015, Mr Mario Carbone, the Applicant in this Class 1 appeal proceeding, filed a Notice of Motion seeking three orders:

1. The Respondent pay the Applicant’s costs of the conciliation conference as agreed or assessed.

2. The Respondent pay the Applicant’s costs of the proceedings as agreed or assessed.

3. The Respondent pay the Applicant’s costs of the Notice of Motion filed 15 June 2015, as agreed or assessed.

2. As can be seen from the terms of the motion, it is necessary to consider not only the general question of the conduct of the proceedings but also, separately, the matters leading up to (and to the conclusion of) the conciliation conference.

3. Unsurprisingly, Camden Council (“the Council”), the Respondent to the motion and in the proceedings, resists any order for costs being made.

4. In order to deal with these matters, it is necessary to consider the following:

1. the Council's development application assessment process for the subdivision that was subject to the Class 1 appeal;

2. the preliminary hearing processes in the Court prior to the conciliation conference;

3. the conciliation conference;

4. the hearing before Smithson AC; and

5. Smithson AC’s decision.

The statutory framework

5. Rule 3.7 of the Land and Environment Court Rules 2007 provides the regime for considering, relevantly, costs applications made in Class 1 proceedings. Rule 3.7(2) provides:

The Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances.

6. Although r 3.7(3) gives a list of circumstances in which the Court might consider the making of a costs order in Class 1 proceedings, the list is not exhaustive.

7. To the extent that, as I understand the Applicant's submissions, elements of r 3.7(3) are invoked, they are:

…

(c)   that a party has acted unreasonably in circumstances leading up to the commencement of the proceedings,

(d)   that a party has acted unreasonably in the conduct of the proceedings,

…

8. For the reasons set out below, neither is applicable in this case.

9. In expansion on the non-exhaustive list provided by the rule, Preston CJ set out, in Grant v Kiama Municipal Council [2006] NSWLEC 70 (when dealing with an earlier version of the rules to the same effect) at [15], a list of matters in expansion of, or supplementation to, the matters contained in r 3.7(3). It is unnecessary to set out that the list as none are here applicable.

The development application process

The basic dates

10. On 16 June 2014, the Applicant lodged development application DA 487/2014/1 with the Council seeking approval to subdivide 25 Elizabeth MacArthur Avenue, Camden South (“the site”) into four residential allotments.

11. On 7 November 2014, the Applicant commenced Class 1 proceedings in the Court against the Council's deemed refusal of the development application.

12. At an Ordinary Meeting of the Council on 25 November 2014, the Councillors considered a report from the Council's Director, Planning and Environmental Services, concerning the development application. The Director’s report recommended approval of the application subject to conditions. Despite this recommendation, the Councillors resolved to refuse the application.

The assessment process

13. Prior to lodgement of the formal development application, there had been pre-development application meetings and discussions between the Applicant and the Council staff, including meetings immediately prior to the purchase by the Applicant of the site in late June 2013.

14. By letter to the Applicant dated 28 June 2013, one of the Council's planners wrote to the Applicant indicating, amongst other things, that the Council had concerns about the number of trees that would be required to be removed from the site and expressing the view that, at that stage, the Council's view was that permitting tree removal would require a reduction in the number of lots proposed in order to reduce the number of trees which would need to be removed.

15. On 4 July 2014, shortly after lodgement of the development application, the same Council planner communicated with the Applicant by email saying, amongst other things:

Building envelopes - it is requested that you provide plan showing the indicative building envelopes for dwellings within the proposed subdivision which maximises the retention of tree and which complies with the relevant provisions of the Camden DCP including, but not limited to, setbacks, site coverage and landscaped area.

16. In response, on 9 July 2014 the Applicant's consultant town planner, Mr Chris Weston, wrote to the Council's General Manager (marked for attention to the council planner who had earlier corresponded by letter and email with the Applicant) indicating:

The applicant does not wish to be prejudiced by providing building envelopes on the subdivision plan which may later frustrate future development applications for the erection of dwelling houses on the proposed lots.

17. On 24 July 2014, the Council's planner wrote to the Applicant in response to the 9 July 2014 letter. This letter said, relevantly:

The planning principle of Parrott v Kiama [2004] NSWLEC 77 states a subdivision should include information of buildings to be built on the resulting allotments when the “proposed allotments are [..] environmentally sensitive or where significant impacts on neighbours is likely and needs careful design to minimise them”. In this respect the subject site is mapped as being environmentally sensitive land in that it contains Cumberland Plain Woodland. The resulting buildings on the proposed allotments are likely to impact upon the existing vegetation on the site which contains threatened and endangered trees belonging to the Cumberland Plain Woodland community. The impact on the existing vegetation needs to be understood prior to consent being given for the subdivision. Further, any future building(s) on the proposed allotments are likely to extend forward of the existing front building lines on Elizabeth Macarthur Avenue and Bowman Avenue and the likelihood of adverse impacts to neighbours and the streetscape is high.

Having regard to Parrott v Kiama [2004] NSWLEC 77 and Section 79C of the Environmental Planning and Assessment Act 1979, which requires an assessment of the likely impacts of the development and the suitability of the site for the development, it is requested that nominated building envelopes and indicative accessways be provided for each proposed allotment to enable an assessment of the potential impacts to the environmentally sensitive features of the site, adjoining neighbours and the streetscape.

18. The information was requested to be provided to the Council by 15 August 2014.

19. Mr Weston responded by letter on 28 July 2014 addressing the mapping of the site as containing Cumberland Plain Woodland. The letter did not deal with the question of building envelopes.

20. A further letter from the Council's planner, this time addressed to the Applicant's consultant, was dated 6 August 2014. It indicated, inter alia, that an arborist's assessment on the impact on existing vegetation as a result of nominated building envelopes was required. The letter also said:

The provision of building envelopes and associated arborist advice are an essential requirement in the assessment of the subject subdivision application for reasons outlined in the previous correspondence dated 24 July 2014. In the event that this information is not provided, the development application is likely to be refused.

21. On 27 August 2014, an amended plan of subdivision was prepared by the Applicant's surveyors and submitted to the Council. This identified the location of the existing residence on the site (proposed to be retained) and a possible footprint for future dwelling on each of the other proposed allotments.

22. On 1 September 2014, a revision of this plan (stated, in the Applicant’s solicitor’s affidavit read on this motion, at [21] to be in compliance with the Council's requirements as to setbacks) was submitted with an addendum arborist report. These plans of subdivision and the addendum arborist report were exhibited to the affidavit. The addendum arborist report was based on the building envelopes identified in the revised subdivision plan. This arborist's report included a table nominating trees for removal based upon the conflicting location they present with the proposed envelopes. The table nominated five trees that would be required to be removed as being in a conflicting location and one tree that should be removed because of its poor form.

23. The conclusion to this arborist's report notes that, of the trees commented upon in the report, 18 formed part of the Cumberland Plain Woodland Endangered Ecological Community; four of the five trees nominated as requiring removal were ones within the nominated building footprints; and one was proposed to be removed because of its close vicinity to the proposed driveway.

24. An email from to the Applicant, copying in the Applicant’s consultant planner, was sent by the Council's planner on 23 September 2014. The email said, inter alia:

Reasonable building envelopes (i.e. envelopes which are not so small as to be undevelopable) are to be provided which respect the prevailing front setbacks of the area and which preserves the significant trees on site.

25. A further amended plan of subdivision prepared by the Applicant's surveyors was prepared in response to this request.

26. In response to a conversation between the Applicant and the Council's planner (attested as having occurred in the Applicant’s solicitor’s affidavit but without any details of the conversation being provided), the Applicant provided a further amended plan of subdivision which included an increased building envelope for one of the proposed allotments, the retention of one of the trees (Tree 5), (a tree already identified in the arborist’s report as proposed to be retained) but with the removal of Tree 6 - a tree identified in the arborist report as having been proposed to be retained.

Commencement of proceedings

27. As earlier noted, on 7 November 2014, the Applicant commenced these Class 1 proceedings in the Court appealing against the Council's deemed refusal of his development application.

The Council’s decision-making process

28. At the Ordinary Meeting of the Council held on 25 November 2014, a report concerning the development application was presented to the Council by its Director, Planning and Environmental Services. A copy of this report was annexed to the Applicant’s solicitor’s affidavit. The summary of recommendation, on the first page of the report, was in the following terms:

That Council determine DA 487/2014 [sic] for a subdivision to create four residential lots and associated site works pursuant to Section 80 of the Environmental Planning and Assessment Act 1979 by granting consent subject to conditions contained in this report.

29. The executive summary in the report contains two references to building envelopes. They are in the third and seventh paragraphs of the second page of the Director’s report. The first of the paragraphs is in the following terms:

Indicative building envelopes have been proposed for lots 50 to 52. A total of up to 8 trees may require removal to accommodate future dwellings within the indicative building envelopes (16 trees are to be retained). The indicative building envelopes are suitably sited on the proposed lots to minimise the loss of the most significant trees on the site and are acceptable. The removal of these trees on proposed lots 50 to 52 will be subject to separate approval.

30. The second of the paragraphs is in the following terms:

Indicative building envelopes have been provided for the development. The front and rear setbacks of the indicative building envelopes are acceptable having regard to the objectives and controls of the DCP and future potential amenity impacts to the neighbouring properties. A section 88B restriction is recommended to restrict building on these lots to the indicative building envelopes provided.

31. Then followed a detailed analysis in the report concerning compliance with the provisions of the Camden Local Environmental Plan 2010 and the Camden Development Control Plan 2011 (“the DCP”). Concerning cl B1.5 Trees and Vegetation of the DCP, the report concluded that the proposal was compliant but observed:

Indicative building envelopes have been provided for proposed lots 50 to 52. A total of up to 8 trees may require removal to accommodate future dwellings within the indicative building envelopes (16 trees are to be retained). The indicative building envelopes are suitably sited on the proposed lots to minimise the loss of the most significant trees on the site and are acceptable.

[Repeating that which had been included in the executive summary – see [29] above]

32. With respect to the DCP's provisions concerning environmentally sensitive land (cl B1.6) arising because of the presence of the Cumberland Plain Woodland species, the assessment was that this aspect of the development was compliant. The following comment, however, was made:

A large component of the site is mapped as being ESL. As mentioned above, the proposed removal of the silky oak is not considered significant on the basis that a suitable replacement tree will be provided as part of the proposed development. Further, the indicative building envelopes provided with the subdivision plan are suitably sited to minimise the loss of the most significant trees on the site and are acceptable.

33. With respect to primary residential controls (cl D2.1 of the DCP), the report noted a number of non-compliances by the building envelopes but concluded that, based on those identified building envelopes, the non-compliances were acceptable.

34. With respect to private open space, site cover and landscaped area (cl D2.1.5 of the DCP), the report notes, based on the indicative building envelopes, that the three new allotments were capable of accommodating dwellings that were compliant with the relevant controls.

35. The Director’s report also set out, as was proper and necessary, the conditions that the staff proposed should be attached to a four-lot subdivision development consent. One of them, condition 5.0(9), proposed that the building envelopes that had been identified for the three proposed allotments without dwellings should be mandated to be at the locations identified on the plan that was proposed for approval. This mandating was proposed to be by a public positive covenant in favour of the Council (the registration of which, on the title of the three allotments involved, would put any prospective purchaser of any of those allotments on notice of the requirement). The proposed condition was in the following terms:

…

(9) Section 88B Instrument – The developer must prepare a Section 88B Instrument for approval by the Principal Certifying Authority which incorporates the following easements and restrictions to user:

(a)   Easement for services.

(b)   Restriction as to user on all lots specifying that the indicative building envelopes inclusive of the driveways (with the exception of the driveway for lot 50) shown on Site Master Plan numbered Sheet A01, prepared by Algorry Zappia & Associates, dated 13 October 2014, is the only area which can be built upon. Note: the gross floor areas (GFA) shown on the indicative building envelopes are indicative only and no implied approval is given for dwellings of the noted GFA. The driveway of lot 50 is to be realigned to minimise the extent of cut and fill.

(c)   Salinity – Any future dwellings, landscaping and associated works for the development shall comply with the requirements of Councils policy “Building in a Saline Prone Environment.”

(d)   The structural design of the proposal dwelling adjacent tree 5 as identified on Site Master Plan number Sheet A01, prepared by Algorry Zappia & Associates, dated 13 October 2014 shall be pier and beam type footings or other construction method that minimises damage to the structural root zone of the tree. Careful means of excavation must be exercised to avoid excessive root pruning. Where roots are unavoidably damaged they must be cleanly cut off by saw. Excavation and root pruning is to overseen by qualified Arborist. All the measures prescribed in Section 7.0 ‘Protection Specification’ of the Arboricultural Impact Assessment, prepared by Allied Tree Consultancy, dated 12 May 2014, must be in practice at the time of construction works.

36. The elected Council, however, did not adopt the Director’s recommendation but rejected the proposed subdivision. The grounds for rejection contained in the Council's resolution were in the following terms:

MOTION

Resolved: that Council refuse the application on the following grounds:

i.   non-compliance with Council’s DCP in relation to the lot depth and setbacks;

ii.   not keeping with the character of the area due to the proposed lot size;

iii.   the site is the gateway to two major heritage items, namely Camden Park and Belgenny Farm; and

iv.   the proposed development not part of the Growth Centres.

37. It has been necessary to set out, in this detail, elements from the Council's internal processes leading up to the Council meeting on 25 November 2014 in order to understand the centrality of building envelope identification and certainty as a critical element fundamental to, and underpinning, the recommendation to the Council for approval of the application. A correct understanding of this is essential to understand why, in my view, this costs application made by the Applicant is fundamentally misconceived and is to be rejected.

The court process

Before the Acting Registrar

38. The first return date for the Class 1 appeal before the Acting Registrar was 5 December 2014. On that date, the Council had not yet retained an independent consultant town planner to deal with the matter on behalf of the Council, this course being both necessary and appropriate as a consequence of the internal staff recommendation being one for approval. The necessity to engage an external town planner under these circumstances is entirely uncontroversial and the ordinary course followed in virtually all circumstances where an elected council has refused a development application contrary to the advice given by the council's employed staff.

38. The Court's file records that, when the matter was before the Acting Registrar on 5 December 2014, the Council's legal representative appeared and mentioned the matter on behalf of the Applicant. The file notes that:

Deemed refusal now actually refused - Council needs external expert.

40. The matter was stood over, by consent, for one week to give the Council time to engage such a consultant. This, in my view, was a not unreasonable state of affairs given that the elected Council had only refused the development application some 10 days’ prior to this attendance before the Acting Registrar.

41. Following the first return on 5 December 2014, the Applicant's solicitor wrote to the Council's legal representative (in response to an email confirming the adjournment of the matter until 12 December 2014). The letter said, relevantly:

Secondly in terms of the general conduct of the matter, we understand that you have discussed with our Counsel Mr Peter McEwen SC, his view that the evidence should be filed before the s 34 Conference, notwithstanding the Practice Note. This would allow the Commissioner to move from the confidential stage of the Conference, failing resolution to determine the dispute. This is really only an issue of timing for the filing of the evidence, nothing more, as it appears that the matter is unlikely to resolve at Conciliation. The week adjournment should allow sufficient time to locate your proposed expert and gauge from him/her the timing for the filing of expert evidence sufficient to allow the exchange of evidence before the s 34 Conciliation Conference. We would urge that you obtain instructions from your client to consent to this, so as to avoid unnecessary costs or time being taken to finalise the Court application.

Thirdly in relation to the use of expert evidence to counter Council’s planning department recommendation of the approval (as modified after extensive discussions and interaction between Council and our client’s experts and consultants including planners, arborists and surveyors) we note Practice Note at paragraph 53 of which no doubt you are aware. The Practice Note requires the parties “to consider whether expert evidence is genuinely necessary to resolve the issues in dispute in development appeals.”

The issues in dispute have been extensively dealt with by Council planning staff and as summarised at pages 28-59 of the Camden Council Business Paper dated 25th November 2015.

It would appear that the equitable doctrine of election would preclude the Council from engaging an expert or running the litigation on the basis of “genuine necessity” under the Practice Note to effect acceptance of part of Council’s planning staff submissions but reject those parts unfavourable to the Council, and it is not in the public interest to conduct proceedings in this matter. This inconsistency in our view causes considerable difficulties and the qualifying of an expert to provide an inconsistent planning opinion and report, purely for the purpose of mounting a case against the application, makes pursuit of the opinion and or argument inequitable.

The principle of benefit and burden, supports the doctrine of approbate and reprobate in legal proceedings. The deployment of two inconsistent documents, that is the Council planning recommendation and the proposed reliance on an expert to counter Council’s planning staff, is not in our view a proper engagement of an expert consistent with the purport and intent of the Practice Note. It only services to heighten the issues in dispute and render the Conciliation Conference nugatory.

It was anticipated that the retention of your firm would result in an approach to the proceedings which Council, perhaps for varying reasons, could not reach.

42. This letter demonstrates, in my view, a misunderstanding of the right of the Council to disagree with the advice given to it by its professional staff and to refuse a development application as it had done on 25 November 2014.

43. By letter of 8 December 2014, the Applicant's then senior counsel, Mr Peter McEwen SC, sent the Applicant's solicitor a brief note touching upon a variety of matters. It is appropriate to set out what I consider to be the relevant portion of this letter. It is in the following terms:

1 I note the proceedings have been stood over for a week. I had suggested this in circumstances where Couch said he was unable to agree to a timetable in the circumstances – i.e., he was unable to agree to putting on evidence before a s.34 conference.

I had emphasised to him the utility in doing so in the event that the s.34 conference does not resolve the matter. In that event, the day fixed for the s.34 conference cannot be utilised for the second phase of a s.34 – i.e., it cannot move from the initial confidential stage to the open stage of a hearing without evidence. If the evidence is there, and there is no agreement in the confidential stage, then the day can be utilised for the matter to actually be determined by the Commissioner.

Whilst the usual practice is for there to be no evidence for s.34 conference, that is not the rule, just something endorsed (by its absence) by the Practice Note.

Here, the usual procedure would be for the Council to simply give us a statement of facts and contentions, and absent an expert to support the contentions, w we would anticipate a reproduction of the reasons for refusal.

(I suspect that Council’s solicitors are having difficulty securing the services of a planner to support the reasons for refusal; however, we will never know.)

There is an advantage to Mario in taking a date without evidence insofar as all of the material that would be available to the Commissioner sitting on the Conference would be that produced in favour of the application; it still leaves the Council able to resist any agreed outcome, even though they have nobody to support the reasons for refusal.

Given Mario’s anxiety to have the matter resolved as quickly as possible, I was initially of the view that we ought try to force the Council’s hand as to putting on of evidence. However, they cannot be compelled to do so and I expect the Registrar would be reluctant to make an order in that regard; and if such an order was made it would probably result in an prospective date being put off for a further 4 or 6 weeks. Hence, albeit in the face of a risk of an evidence-free s.34 conference not resolving the matter, it may nonetheless be preferable to take the first available date, and run the risk of a later date for an actual hearing if the matter is not resolved.

(When speaking with Crouch I mentioned the difficulty of having any dialogue absent an expert to support the reasons for refusal. He told me that, to the contrary, there would be council officers available – I pointed out that the reporting officer recommended approval, and hence it would be difficult for other officers to express contrary views. He had no reply to this observation.)

44. By email on 11 December 2014, the Council's solicitor advised that the Council will be seeking that the matter be listed for a s 34 conference.

45. When the matter next came before the Acting Registrar on 12 December 2014, there was a contest between the parties as to whether or not the matter should be referred to a conciliation conference to be held pursuant to s 34 of the Land and Environment Court Act 1979 (“the Court Act”). The desirability of a conciliation conference was pressed by the solicitor appearing for the Council but was resisted by the solicitor for the Applicant. The Acting Registrar determined that it was appropriate for the matter to be subject to the conciliation process (as is frequently the case in such matters). Indeed, it is almost the default position for such matters. The matter was set down for a conciliation conference on 21 January 2015.

46. There was also a contest between the parties as to whether or not they should be required to file and serve the Statements of Evidence of each party's expert town planner prior to the holding of the conciliation conference. This was pressed on behalf of the Applicant on the basis that it would permit, if the conciliation were unsuccessful as the Applicant anticipated would be the case, the matter would be ready to proceed to an immediate hearing if both parties were to consent pursuant to s 34(4)(b) of the Court Act that the conciliating Commissioner could act as the determining Commissioner.

47. The position advanced on behalf of the Applicant before the Acting Registrar (and repeated in submissions by Mr Timothy Hale SC, counsel for the Applicant on this costs motion and also appearing for the Applicant in the substantive proceedings before Smithson AC, as discussed later) was that the conciliation process was futile, given that the fundamental position adopted on behalf of the elected Council was that a three-lot subdivision would be capable of being given approval but that a four-lot subdivision was not so capable.

48. At the mention before the Acting Registrar on 12 December 2014, the Council's Statement of Facts and Contentions was filed in Court. This Statement of Facts and Contentions provided the basis for discussion at the conciliation conference (self-evident from the report of Pearson C discussed later) and for the hearing before Smithson AC (self-evident from her written decision).

49. The Applicant was represented by junior counsel, Ms Natasha Hammond, at the mention before the Registrar on 12 December 2014. After that appearance, Ms Hammond wrote to the Applicant's solicitor reporting on the outcome. Relevantly for this consideration, she said:

As you know, the Court ordinarily lists Class 1 appeals for a conciliation conference under s.34 of the Land and Environment Court Act 1979. Before the Registrar, I put on record the applicant’s concern that the s.34 conference is likely to be futile in circumstances where the council’s planning officer recommended approval, the Council then resolved to refuse, and the Council is unlikely to provide a person with delegated authority to settle the matter. Registrar Walton noted this, but considered that the matter should proceed to a s.34 conference in the circumstances where Council sees a s.34 conference.

I note that Mr Couch has provided assurances that an officer with appropriate delegation will attend the s.34 conference, and the Council will participate in good faith.

The conciliation conference

50. The conciliation conference was conducted by Pearson C, commencing on site and then returning to the Council Chambers.

51. At the conciliation conference on 21 January 2015, the Applicant attended personally and had Mr McEwen, Mr Dominic Carbone, the applicant’s solicitor, Mr Weston, his consultant town planner, and Mr Warwick Varley, his consultant arborist, with him. The Council was represented by its solicitor, Mr Christopher Drury, its consultant town planner, Mr Vince Hardy, and two Council officers, Messrs Fuller and Pritchard. There is no evidence that would suggest that these Council officers did not have the appropriate delegation, as was reported by Ms Hammond as earlier set out.

52. Although the conciliation conference did not resolve the matter (and I have no agreement between the parties pursuant to s 34(10) of the Court Act to be informed as to what took place during the course of the conciliation conference), it is clear that there was no agreement reached that would have led to a development consent on conditions for a four-lot subdivision being effected by agreement pursuant to s 34(3) and that there had, by inference from Pearson C's report to the Court, been no narrowing of the contentions that had been raised in the Council's Statement of Facts and Contentions of 12 December 2014.

53. The Court file notes that the parties were to advise, by eCourt, by the close of business on 22 January 2015, if they agreed to Pearson C determining the matter pursuant to s 34 of the Court Act. The Commissioner adjourned the conciliation conference on 21 January to enable the parties to consider whether they wished to have her continue and determine the matter. By email to the parties on 22 January 2015, the Listings Manager advised the parties that:

Commissioner Pearson notes the advice received from the parties today that the Applicant consents to her continuing in this matter, but the Respondent does not. As discussed with the parties on 21 January 2015, Commissioner Pearson terminates the conciliation conference and will prepare a report as required by s 34(4)(a) of the Land and Environment Court Act 1979.

54. Pearson C prepared her report that day. Relevantly, the terms of the report are:

Outcome of conference

1 The s 34 conference was held on site and at Council Chambers.

2   The parties did not reach agreement and the conciliation conference was terminated.

3   The issues as contained in the Statement of Facts and Contentions filed by the Council remain in dispute.

55. As I understood Mr Hale's oral submissions on costs, and the Applicant's written submissions (prepared by his solicitor) on costs, the primary complaint about the holding of a conciliation conference without the prior preparation of the Council's expert evidence being filed was that it was a futility as demonstrated by the outcome not being that which was sought by the Applicant.

56. This, in my view, fundamentally misunderstands the nature of the conciliation conference as has evolved over the past several years in the Court. Although the preferred outcome of a conciliation conference (to give effect to the overriding purpose of civil litigation as set out in s 56 of the Civil Procedure Act 2005 to achieve the just, quick and cheap resolution of the issues genuinely in dispute between the parties), this is by no means the sole use to which such conferences are put.

57. If the preferred outcome is unable to be achieved, it is not unusual for conciliation conferences to narrow the range of issues needing to be determined at a final hearing or further refinement of a development proposal often resulting in the preparation of amended plans and/or conditions of development consent. This secondary utility of the conciliation process was acknowledged by Biscoe J in his decision in Golden Max Pty Limited v Hurstville City Council [2015] NSWLEC 16; 208 LGERA 221 at [10] when reviewing the decision of the Registrar not to arrange a conciliation conference in those proceedings.

58. On 28 January 2015, the Registrar set the matter down for a hearing and made directions in the standard form for the process leading up to and holding of the hearing.

The Council’s contentions

59. The Applicant also complains that the contentions prepared by Mr Hardy, after he was retained by the Council as an independent expert town planner, went beyond the reasons for refusal given in the Council's resolution of 25 November 2014.

60. First, to the extent that there is some faint inherent suggestion that there may be some form of estoppel that prevents, on proper expert advice, an elected council relying on an expanded range of contentions, this is to be rejected. It is not unusual to be observed in Class 1 appeals that there is a refinement and/or expansion of those matters prayed in aid as warranting refusal, or as contributing to warranting refusal, between the time of commencement of proceedings and the filing of a statement of facts and contentions. Indeed, from time to time, additional contentions may be added, by leave, by the filing of Amended Statements of Facts and Contentions if new issues emerge during the course of preparation for a hearing.

61. Second, whilst an elected council, faced with a recommendation for approval of a development application, may refuse it on the bases set out in its resolution, it is not, thereafter, forever bound by what might be the compass of the terms of that resolution. Indeed, there are not infrequently instances where there is a staff recommendation for refusal on grounds set out in a report to the council and where an elected council resolves to refuse on other or additional grounds.

62. The fact that, properly advised by their independent town planning expert, the Council's contentions were wider than those adopted in the Council resolution provides no basis for considering it proper to require the Council to pay any of the Applicant's costs.

The hearing

63. The hearing commenced on site on 19 March 2015 before Smithson AC. The hearing continued on 20 March 2015 when the Acting Commissioner reserved her decision. The Acting Commissioner's decision and the reasons for it were published by the Registrar on 19 May 2015. The orders made were in the following terms:

(1) The appeal is upheld.

(2) Development Application DA 487/2014 [sic] for subdivision of 4 residential lots and associated site works at 25 Elizabeth MacArthur Avenue, Camden South be approved subject to the conditions at Annexure A.

(3)      That the exhibits be returned other than Exhibits 1 and 5 and the Supplementary Index to Exhibit B.

The acting Commissioner’s decision

64. Smithson AC's decision in Carbone v Camden Council [2015] NSWLEC 1161 of 19 May 2015 contained a comprehensive analysis of the matters that were contended by the Council as warranting refusal or, in one instance (that of the use of an instrument pursuant to s 88B of the Conveyancing Act 1919 to create a public positive covenant in favour of the Council concerning the location of the identified building envelopes), where a proposed condition of consent was resisted by the Applicant.

65. Before commencing dealing with her decision in detail, it is appropriate to observe that the Council had previously filed and served, as required, its “without prejudice” conditions of consent. These were filed on 4 March 2015, some two weeks’ prior to the hearing. On page 10 of those conditions, there appears a proposal for a condition of consent requiring the preparation of the public positive covenant earlier discussed. This proposed condition, unamended, was incorporated in the conditions of consent attached to the development approval ordered by Smithson AC:

(10) Section 88B Instrument - The developer must prepare a Section 88B Instrument for approval by the Principal Certifying Authority which incorporates the following easements and restrictions to user:

(a) Easement for services,

(b) Restriction as to user on all lots specifying that the indicative building envelopes shown on Site Master Plan numbered Sheet A01, prepared by Algorry Zappia & Associates, dated 13 October 2014, is the only area which can be built upon. (Note: the gross floor areas (GFA) shown on the indicative building envelopes are indicative only and no implied approval is given for dwellings of the noted GFA),

(c) Salinity – Any future dwellings, landscaping and associated works for the development must comply with the requirements of Councils policy “building in a Saline Prone Environment”, and

(d) The structural design of the proposed dwelling adjacent tree 5 as identified on Site Master Plan numbered Sheet A01, prepared by Algorry Zappia & Associates, dated 13 October 2014 must be pier and beam type footings or other construction method that minimises damage to the structural root zone of the tree. Careful means of excavation must be exercised to avoid excessive root pruning. Where roots are unavoidably damaged they must be cleanly cut off by saw. Excavation and root pruning is to overseen by a qualified Arborist. All the measures prescribed in Section 7.0 ‘Protection Specification’ of the Arboricultual Impact Assessment, prepared by Allied Tree

Consultancy, dated 12 May 2014 must be in practice at the time of construction works.

(e) Restriction as to user on lots 51, 52 and 53 specifying that no boundary fencing shall be erected in front of the front building setback to both Elizabeth Macarthur Ave and Bowman Avenue.

66. It is to be observed that this condition is, relevantly as to (a) to (d), in identical terms to that proposed in the Director’s report presented to the Council on 25 November 2014.

66. The matters that were dealt with by the Acting Commissioner finding in favour of the Applicant were:

1. Lot Size at [16] to [21];

2. Lot Depth at [22] to [27];

3. Tree Loss at [33] to [41];

4. Front Setbacks at [42] to [52];

5. Scale, Density and Character of Development at [53] to [61]; and

6. Open Space and Visual and Acoustic Privacy at [62] to [71].

68. The Council did not succeed on any of these issues. It is fair to observe that, with respect to lot size, the Acting Commissioner made it clear (at [21]) that she did not consider that the Council's contention on this basis was an arguable one.

69. However, with respect to each of the other matters, including the building envelopes issue and the s 88B Instrument, it is clear that there was genuine engagement between the two expert town planners, presenting competing evidentiary positions on each point, requiring the Acting Commissioner to make a determination on them. In none of the other matters did she make any comment indicating that there was no valid basis for the particular contention. Indeed, with respect to lot depth, the Acting Commissioner needed to determine (as she did at [27]) that a non-compliance with the DCP was not a basis to refuse the application.

70. The matter that was resisted by the Applicant was the imposition of the public positive covenant. This was dealt with in the Acting Commissioner's decision under the heading “Building Envelopes” between [28] and [32]. The Commissioner’s decision on this point is in the following terms:

28   Before turning to the other matters of concern to the Council, it is relevant to consider Mr Hale’s argument that the previously considered two contentions are the only contentions directly related to the actual subdivision the subject of the DA. In his view, the remaining contentions relate to concerns with the form of development that may arise from future development within the nominated building envelopes on the lots should they be created and are therefore not appropriate to be addressed in this appeal. Mr Drury was however, of the view that it is appropriate to consider the location and likely form of future development that creation of the lots would facilitate as it is inevitable that creating the lots will result in the development of three additional dwellings on the site and there will be limitations on their design and unavoidable consequences for the streetscape and the area as a result.

29 For the above reasons, if the application was to be approved by the Court, the Council sought a proposed condition of consent, namely condition 5.0 (10) (Exhibit 5), requiring that a Section 88B instrument be prepared which included, inter alia; easements for services; restricting future development on the lots to the nominated building envelopes shown on the DA plans; precluding fencing in front of the building setbacks; and stipulating particular structural design and construction details for any dwelling adjacent to Tree 5 (as designated on the DA plan) to protect that tree.

30 Mr Hale objected to the imposition of a condition requiring a section 88B Instrument and referenced a number of cases that have been dealt with by this Court on use of such instruments. His concern was that the instrument would have the effect of restricting the Council in considering future development applications for dwellings on the lots on the basis of the merits of the application.

31 Mr Drury stated that the Council has imposed similar s.88B conditions on other subdivisions and that such a condition was important to ensure that commitments by the Applicant to the Council and to the neighbours that the subdivision had been designed to minimise tree loss had to be ‘carried through’ to the future development of the created lots. Further that the future dwellings on the lots could be approved by a certifier as complying development without the need for a DA to be lodged with the Council. Therefore, without the s.88B restriction on Titles, there would be no ability for the Council to ensure the tree retention or street setbacks that the Applicant relied on to gain support to the subdivision. Mr Hardy also expressed these reservations.

32 On this issue, I accept that a condition requiring a section 88B instrument is not unreasonable or inappropriate in the circumstances and that it is an instrument able to be used for this purpose. As will be seen in following contentions, the Applicant relies significantly on the support of Council officers in advancing the case for approval of the subdivision notwithstanding some CDCP non-compliances and this support was clearly on the basis that future dwellings on the site would be confined to the building envelopes thus minimising tree loss and maximising front setbacks to the adjacent streets. The instrument does not preclude the Council from determining future DA’s that may be received for dwellings on the lots on the basis of merit as Mr Hale contends but only specifies the envelope in which they must be located unless the instrument is removed or modified. The CDCP may always require building envelopes for lots under 450m² but it does not preclude building envelopes being also required to be designated for larger lots if they are considered necessary by the Council to demonstrate the CDCP objectives for the area in which the subdivision is proposed can be met. If Mr Hale’s arguments are correct on this issue, the controls in many Council’s DCP’s requiring building envelopes to be designated for future dwelling locations on subdivision plans as a pre-requisite for gaining approval would have no effective means of enforcement given building envelopes are not works undertaken in carrying out subdivision per se. In my view therefore any approval for this subdivision should reasonably be conditioned to require future dwellings to be confined to the building envelopes nominated on the DA plans, unless those envelopes are subsequently modified with the agreement of the Council, or the section 88B instrument removed.

71. The Acting Commissioner found in favour of the Council on this contested point. The adoption of the requirement to mandate building envelopes; provide Council with the added protection of a public positive covenant registered on title; and, as a consequence of this, will put prospective purchasers of any of the three allotments on notice of the existence of the covenant and of the identified building envelopes.

72. This was a critical point, it is obvious, from the Acting Commissioner’s decision, in her acceptance of this requirement. This appears in [39] where she records:

The Court agrees that a feature of the site which is of value to the streetscape and the neighbours and is part of the character of the area is the number of mature trees the site contains. The existing dwelling on the site is well set back from both streets and largely screened by the trees. It is the case that the subdivision itself will only require the removal of one or at most two of these trees. It is because of the concern at the potential impact on the streetscape and on the character of the area associated with the loss of trees and the location of the dwellings constructed once the lots are created that the Council required building envelopes to be nominated. Council officers required these envelopes to be setback respectively 12m to Elizabeth Macarthur Avenue and 9m to Bowman Avenue primarily so that the setbacks are more respectful of prevailing deeper street setbacks in the area but which, as a consequence, means that the majority of trees on the site will be retained, and be in the front setbacks which will assist with screening existing and future dwellings on the site. (emphasis added)

73. On the same point, she said in [40]:

In my view, the loss of some trees is inevitable to facilitate any subdivision of the lot and the proposed subdivision, by requiring only 2 of the 26 trees to be removed, is an acceptable impact. I do accept however, the Council and neighbours’ concerns that the subdivision will create a right for dwellings to be constructed on the created lots in the future and that the construction of these dwelling will result inevitably in the loss of further trees. For this reason and given the unique treed characteristics of the site and the estate, I agree it is a reasonable requirement of the Council to confine future development on the lots to the nominated building envelopes, and to condition any approval to protect the remaining trees outside these envelopes to ensure overall that tree loss is minimised and confined to a maximum of 8 trees as is argued by the Applicant in support of the subdivision. (emphasis added)

74. Finally, it is important to note what the Acting Commissioner said in [61] about the importance of this condition. She said, dealing with the question of scale, density and character development, as follows:

It is not known what exact form the future dwellings on the created lots will take. Purchasers of the lots will be aware of the proximity of adjacent development. They may choose to maximise development resulting in two storey dwellings across all of the envelopes. Conversely however, one or more may choose single storey development or dwelling designs which retain trees within the envelopes that are assumed by this DA to be removed in the future. With proposed conditions of consent which will restrict development to the nominated building envelopes which have setbacks to the streets which are generally greater than those of the existing dwellings opposite and which protect and supplement the existing trees outside the building envelopes and which are not required to be removed by the subdivision works, on balance there are not sufficient grounds to refuse this application on the basis of the scale, character or density of development. (emphasis added)

75. It is clear that her above statement, “on balance there are not sufficient grounds to refuse this application on the basis of the scale, character or density of the development” is one that:

1. reflects that this issue was one raised by the Council which had considerable merit; and

2. shows that only the imposition of the requirement for the 88B Instrument tipped the balance in favour of the Applicant on this point – a tipping that might not have occurred without the imposition of the instrument.

76. Unlike the position in the decisions by Preston CJ in ACM Landmark Pty Limited v Cessnock City Council [2006] NSWLEC 256 (at [72]) or McClellan CJ in Krivanek v Blue Mountains Council (No 2) [2004] NSWLEC 732 (at [2]) where there was no expert evidence in support of the positions adopted by the Council in each case, that is not the position in these proceedings.

77. Not only was there expert evidence in support of the Council's contentions, it is clear that the Council succeeded, over the strong objections of senior counsel appearing for the Applicant, in proposing that a s 88B Instrument should be required and that imposition of this s 88B Instrument requirement was critical to the Acting Commissioner upholding the appeal and granting development consent.

78. For the reasons also discussed, the imposition of that requirement was a significant (indeed, with respect to one issue might reasonably be assumed to be fundamental) in the success of the Applicant in the overall proceedings.

Conclusion

79. It seems to me that Mr Carbone’s basic complaint is that he did not get what he wanted as fast as he felt he was entitled to get it. There are two fallacies inherent in this as earlier demonstrated. They are, in summary:

1. He did not get all he wanted (as an s 88B instrument was required over his objection); and

2. The complete process undertaken by the Council was critical to him getting what he did get (and then only just, as it were – see [74] and [75] above).

80. Having set out my analysis of the process and outcome, it is unnecessary to canvass, in any detail, the submissions by Mr Pickles SC on behalf of the Council in reply to the motion, as it is inevitable that the Applicant must fail, entirely, in his quest for a costs order against the Council. It clearly would not be “fair and reasonable” so to order as there is nothing unreasonable to be seen in the continuum of the behaviour of the Council, its staff, its expert or its legal advisors – indeed, as demonstrated, a contrary conclusion should be drawn.

81. Equally, as can be seen from the totality of my analysis, there is no basis for any apportionment order being made in favour of the Applicant as there was no unreasonable conduct by or on behalf of the Council at any point in the process.

82. As is ordinarily the case with such motions, costs follow the event and, therefore, the Applicant is to be ordered to pay the Council's costs of this costs application.

Orders

83. It therefore follows that the orders of the Court are:

1. The application for costs is dismissed; and

2. The Applicant is to pay the Respondent's costs of the motion as agreed or assessed.

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Amendments

02 October 2015 - Reference to [28] in quotation in [31] should be [29].

Decision last updated: 02 October 2015