Central Coast Council v 40 Gindurra Road Somersby Pty Ltd (No 3)

[2020] NSWLEC 25

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Central Coast Council v 40 Gindurra Road Somersby Pty Ltd (No 3) [2020] NSWLEC 25
Hearing dates:	21 November; 4 and 6, 11 December 2019 (written submissions)
Date of orders:	07 April 2020
Decision date:	07 April 2020
Jurisdiction:	Class 4
Before:	Pain J
Decision:	See [40] of judgment
Catchwords:	COSTS – exercise of discretion to award costs to successful applicant where two defendants – no award of costs made where no costs claim specified in amended summons joining party – no award of costs against party who filed submitting appearance as contradictor
Legislation Cited:	Civil Procedure Act 2005 s 98 Environmental Planning and Assessment Act 1979 former ss 4.31, 4.59, 101 Local Government Act 1993 Uniform Civil Procedure Rules 2005 r 42.1
Cases Cited:	Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 Brown v Randwick City Council (No 2) [2012] NSWLEC 28 Central Coast Council v 40 Gindurra Road Somersby Pty Ltd (No 2) [2019] NSWLEC 171 Central Coast Council v 40 Gindurra Road Somersby Pty Ltd [2018] NSWLEC 79 Cutcliffe v Lithgow City Council (2006) 147 LGERA 330; [2006] NSWLEC 463 GPT Re Limited v Wollongong City Council (2006) 151 LGERA 174; [2006] NSWLEC 658 Hytec Industries (Queensland) Pty Ltd v Tweed Shire Council (No 2) [2020] NSWLEC 5 Jeray v Blue Mountains City Council [2011] NSWLEC 135 Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537 (Mahoney JA)
Texts Cited:	Ritchie’s Uniform Civil Procedure NSW, LexisNexis Butterworths 2005 to date (loose-leaf)
Category:	Costs
Parties:	Central Coast Council (Applicant) 40 Gindurra Road Somersby Pty Ltd (First Respondent) William A Dagger (Second Respondent)
Representation:	COUNSEL: T To (Applicant) J Doyle (First Respondent) L Lyons, solicitor (Second Respondent)   SOLICITORS: Central Coast Council (Applicant) Balog and Associates (First Respondent) Clyde & Co (Second Respondent)
File Number(s):	18/156286

Judgment

1. In Central Coast Council v 40 Gindurra Road Somersby Pty Ltd (No 2) [2019] NSWLEC 171 (Central Coast Council (No 2)), I made declarations sought by the Central Coast Council (Council) that three complying development certificates (CDCs) (one “Masterplan CDC” and two CDCs modifying that CDC) were invalid and of no effect. These CDCs were issued by the Second Respondent Mr Dagger (certifier) to the First Respondent 40 Gindurra Road Somersby Pty Ltd (Gindurra). The CDCs permitted Gindurra to deposit large amounts of fill inter alia on an industrial site at Lots 1-7 SP 96758 known as 40 Gindurra Road, Somersby (Site). Unauthorised fill was also placed in a 10 metre buffer area along the boundary of the Site and in the neighbouring Council reserve. I stated at [240] that I intended to make orders relating to the removal of fill from the buffer area on the Site and the neighbouring Council reserve and orders for rehabilitation inter alia. I reserved my decision on the issue of costs as identified in [242]. This judgment concerns the award of costs in this matter, final orders having been made recently on 19 March 2020.

2. Gindurra was represented by its director Mr Clark in the substantive hearing the subject of Central Coast (No 2). Gindurra has been legally represented in the making of final orders and the costs phase of the proceedings. The certifier filed a submitting appearance save as to costs for the substantive hearing. His legal representative made submissions on costs. All parties had their legal representatives make written submissions on costs.

Chronology

3. A brief chronology of the proceedings to date follows.

18 May 2018	Council commenced judicial review and civil enforcement proceedings against Gindurra. The summons sought various prayers of relief including “An order that the Respondent pay the Applicant’s costs of the proceedings” (order 7).
29 May 2018	Interlocutory orders made in Central Coast Council v 40 Gindurra Road Somersby Pty Ltd [2018] NSWLEC 79 requiring Gindurra to cease the importation and deposition of any material on the Site until further order.
28 November 2018	Council filed amended summons joining the certifier to the proceedings. Paragraphs 1A to 1C added. Prayer 7 was not amended.
4 December 2018	Amended summons served on the certifier.
9 July 2019	Certifier filed submitting appearance.
12 July 2019	Gindurra’s notice of motion dated 5 July 2019 seeking that the class 4 proceedings be adjourned until the class 1 merit appeal 19/90311 is determined refused.
29 July 2019	Council’s notice of motion dated 18 July 2019 seeking the setting aside of Gindurra’s notice to produce dated 18 July 2019 granted.
4-8 August 2019	Hearing of substantive proceedings and Gindurra’s notice of motion dated 29 July 2019 seeking joinder of 10 entities to the proceedings. On 6 August 2019 the Court dismissed Gindurra’s notice of motion.
30 August 2019	Council filed written submissions on the operation of ss 4.31 and 4.59 of the Environmental Planning and Assessment Act 1979 (EPA Act) and whether Council was out of time to challenge the validity of the CDCs.
10 September 2019	Gindurra filed written submissions on the operation of ss 4.31 and 4.59 of the EPA Act and whether Council was out of time to challenge the validity of the CDCs.
7 November 2019	Central Coast Council (No 2) delivered.

Amended summons

4. The amended summons stated:

RELIEF CLAIMED

1A.   A declaration that Complying Development Certificate No. 14-0912 issued on 21 December 2015 is invalid and of no effect (Masterplan CDC).

1B.   A declaration that Complying Development Certificate No. 14-0912 - 3 issued on 20 March 2017 is invalid and of no effect (MOD3 CDC).

1C.   A declaration that Complying Development Certificate No. 14-0912 - 4 issued on 26 September 2017 is invalid and of no effect (MOD4 CDC).

1.   A declaration that, in breach of s4.2(1)(a) [formerly s.76A(1)(a)] of the Environmental Planning & Assessment Act 1979, the Respondent has carried out development, namely the use of the land described as Lots 1-7 in Strata Plan 96758 and known as 40 Gindurra Road, Somersby (the Land) for the purpose of a waste or resource management facility, being development on the Land which may not be carried out except with development consent, which consent has not been obtained.

2.   An order that the Respondent, by itself, its servants and agents, be restrained from carrying out development for the purpose of a waste or resource management facility on the Land until development consent has been obtained for such use.

3.   A declaration that, in breach of s.4.2(1)(b) [formerly s.76A(1)(b)] of the Environmental Planning and Assessment Act 1979, the Respondent has carried out development, namely the filling of the Land, not in accordance with:

(a)   Development Consent 32465/2007 dated 22 November 2007, as modified (the Fill Consent); or

(b)   Complying Development Certificate 14-0912 dated 21 December 2015, as modified.

4. A declaration that, in breach of s120 of the Protection of the Environment Operations Act 1997, the Respondent has polluted the waters in the creeks situated on the public reserves adjoining the Land, being land described as Lot 4 DP 771309 and known as 32 Gindurra Road, Somersby and Lot 3 DP 771309 known as 34 Gindurra Road Somersby.

5.   An order that Respondent carry out the following actions and remedial works:

...

7.   An order that the Respondent pay the Applicant's costs of the proceedings.

8.   Such further or other orders as the Court thinks fit.

DETAILS OF DECISIONS

1.   The decision maker was the Second Respondent.

2.   The decisions to be reviewed are:

(a) the Second Respondent's determination that the development endorsed by the Masterplan CDC is complying development and complies with the relevant development standards under s.85A(3) of the Environmental Planning and Assessment Act 1979, as in force on the date of determination of the Masterplan CDC (21 December 2015);

(b) the Second Respondent's determination that the development endorsed by the MOD3 CDC is complying development and complies with the relevant development standards under s.85A(3) of the Environmental Planning and Assessment Act 1979, as in force on the date of determination of the MOD3 CDC (20 March 2017);

(c) the Second Respondent's determination that the development endorsed by the MOD4 CDC is complying development and complies with the relevant development standards under s.85A(3) of the Environmental Planning and Assessment Act 1979, as in force on the date of determination of the MOD4 CDC (26 September 2017).

3.   The Applicant seeks relief from the whole of each decision in that the grant of the Masterplan CDC, MOD3 CDC and the MOD4 CDC, was in each case contrary to the Environmental Planning and Assessment Act 1979.

5. The Council pursued the following grounds:

1. the Masterplan CDC was invalid because staged development cannot be the subject of a CDC, the development the subject of the Masterplan CDC was impermissibly designated development, and the development was not complying development. (Gindurra also argued that the proceedings were statute-barred);

2. the two modifications of the Masterplan CDC were invalid because the development was not complying development;

3. fill was deposited on the Site without development consent;

4. Gindurra operated a resource recovery facility on the Site without development consent; and

5. Gindurra polluted water by causing the deposition of fill and sediment in creeks in neighbouring council reserves.

6. In Central Coast (No 2) I found in favour of the Council on all the substantive legal issues identified above in the amended summons as summarised in [5] above. I indicated that I would not require Gindurra to remove all the substantial fill placed on the Site sought to be removed in the consequential orders of the Council due to the Council’s delay in the commencement of the proceedings, at [234]-[238]. I made substantial orders on 19 March 2020 requiring extensive work to be done by Gindurra in relation to the preparation of a survey, removal of substantial amounts of fill in the Council reserve adjoining the Site and in the 10 metre buffer area on the boundary of the Site. I required extensive revegetation of the affected areas of the Council’s reserve and the buffer area on the Site.

Council’s submissions

7. Gindurra and the certifier should be ordered to pay the Council’s costs of Central Coast Council (No 2) on the ordinary basis as the Council is the successful party. As to Gindurra:

1. all aspects of the Council’s case were put into issue by Gindurra. It was necessary for the Council to prove, by evidence and submissions, the unlawfulness of the filling of the Site, the attribution of responsibility for that filling to Gindurra and the invalidity of each of the CDCs challenged;

2. the Council was completely successful on all issues raised and substantially successful in obtaining relief to ameliorate the environmental impacts of the filling. That the Court did not order the complete removal of unlawful fill does not detract from the practical success achieved by the Council in the proceedings; and

3. there is no basis to reduce or discount costs by reference to the amendment of the summons. Each of the elements in the original summons were pursued, resisted and determined adversely to Gindurra.

8. The submitting appearance of the certifier is not a reason not to be ordered to pay costs. His invalid approvals of the three CDCs gave rise to the proceedings.

9. Such an outcome is consistent with authority in this Court that ordinarily a consent authority whose error caused the litigation is liable for costs and cannot immunise itself from an adverse costs order by entering a submitting appearance: Cutcliffe v Lithgow City Council (2006) 147 LGERA 330; [2006] NSWLEC 463 (Cutcliffe) at [50].

10. This case is relevantly on all fours with Brown v Randwick City Council (No 2) [2012] NSWLEC 28 at [25]-[26] which involved a submitting council and the beneficiaries of the consent who actively defended the proceedings, including by raising former s 101 of the EPA Act issues and discretion.

11. Costs orders against both respondents will operate jointly and severally subject to any express orders that the Court may make. There is no reason to depart from this usual position as to do so may expose the Council to greater risk that one or other party is unable to meet the costs order.

12. The Council makes no submission about whether any orders should be made as between Gindurra and the certifier dealing with the burden of costs as between those parties.

Gindurra’s submissions

13. The Council amended its Class 4 application substantially when the amended summons was filed on 28 November 2018. The relief sought in relation to the invalidity of the CDCs was not sought in the original summons and is quite different from that originally applied for. The Council should not have an order for its costs incurred before the date of that amendment or such costs should be appropriately discounted.

14. The principal relief granted was the invalidity of the CDCs issued by the certifier. The relevant principles applying where a consent authority seeks similar relief were discussed by the Court of Appeal in Rossi v Living Choice Australia Ltd [2015] NSWCA 244 (Rossi) (which disapproved the Court’s decision in Cutcliffe) and Preston CJ in Platford v van Veenendaal and Shoalhaven City Council (No 2) [2018] NSWLEC 86 at [21]-[23]. Having regard to those principles the certifier ought to be liable for costs up until he filed a submitting appearance: Rossi at [73].

15. The need for the relief granted was generated by work conducted in open view and with knowledge of the Council which engaged in substantial delay in commencing proceedings (Central Coast Council (No 2) at [234] and [236]). The fact that the Council, through its delay, has contributed both to the problem and the need for the litigation (a factor which saw it only partly successful in obtaining the relief it sought) is a circumstance to be taken into account in the general mix of factors relevant to a broad brush approach to costs. The parties’ evidence, and therefore the duration of the hearing, would have been materially less had that delay not occurred.

Certifier’s submissions

16. The certifier contended that he should not be liable for any of the Council’s costs of Central Coast Council (No 2) or, in the alternative, should only be liable for a portion of costs.

17. Firstly, the Council should not be able to obtain an order as to costs against the certifier because the Council indicated throughout the substantive proceedings that it sought such an order against Gindurra only. Against that background, the certifier made decisions as to what role, if any, he would take in the proceedings. A submitting appearance was filed. The Council’s submissions on costs dated 21 November 2019 are in effect an amendment of prayer 7 of the amended summons. Prayer 7 was not amended to claim costs from the certifier.

18. Instrumentalities of the state as well as councils constituted under the Local Government Act 1993 should act as model litigants: Scott v Handley (1999) 58 ALD 373; [1999] FCA 404 at [43]-[44]; Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537 (Mahoney JA) at 558-559; Jeray v Blue Mountains City Council [2011] NSWLEC 135 at [39]. That obligation involves at the very least the obligation of fair dealing and to act with complete propriety, fairly and in accordance with the highest professional standards. This includes acting consistently in the handling of the litigation.

19. Model litigants are entitled to enforce costs orders and seek to recover same. However the Council (as it does for the first time through its submissions), should not now be entitled to change the course it elected to take throughout the entirety of the proceedings, a change that:

1. has only occurred after the Court made its decision;

2. has been made without any explanation as to why it did not elect to follow a different path earlier in time and why it failed to foreshadow that possibility to the certifier earlier in time; and

3. is premised only on a line of authority that must have been known to the Council from the outset of the proceedings (see Council’s submissions above at [9]-[10]).

20. The observations of the High Court in Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 at [102]-[103], albeit in a different context, are apt.

21. The Council should especially be prevented from changing its position in circumstances where the certifier filed a submitting appearance and took no active role in the litigation. It is not a complaint without substance given that the certifier gave up valuable legal rights he otherwise had. It would be improper for the Council, having enticed that position because no adverse orders were being sought against the certifier, to now be allowed to seek a form of relief it never foreshadowed.

22. It is accepted that the “general guidelines” articulated in Cutcliffe at [50] for the exercise of the costs discretion in judicial review proceedings, although not a principle of law, apply in the present case. Ultimately the Court’s discretion to award costs must be exercised judicially.

23. Two matters are of relevance in those guidelines. Firstly, the applicant will ordinarily be entitled to be compensated by an award in its favour of the costs of the proceedings “unless it has engaged in disentitling conduct”. For the reasons stated above, the Council has engaged in disentitling conduct in so far as it seeks its costs against the certifier. It is well known that litigation is “not a game” and the Council should not, especially in the absence of any explanation and given the lateness of the application, be permitted to change the course it has allowed the parties to the litigation to proceed upon and obtain a costs order against the certifier.

24. Secondly, given the beneficiary (Gindurra) defended the proceedings, the Court should have regard to the qualification contained in the rule in Cutcliffe at [50] which the Council’s proposed order ignores. That qualification is that “the beneficiary alone may be required to bear the applicant’s costs to the extent that they exceed the costs that the applicant would have incurred if both respondents had submitted, being costs attributable to defences that the beneficiary has unsuccessfully raised and the consent authority has not raised”. The Council’s proposed order does not provide for this.

25. That is not a complaint without substance given that, as far as the certifier can discern from Central Coast Council (No 2), costs were incurred in the proceedings about matters unrelated to the certifier and because of positions (including arguments as to law) taken by the active parties to the proceedings (that is, the Council and Gindurra: eg Central Coast Council (No 2) at [34]-[64]) that the certifier did not take. It would not be appropriate for costs orders to be made against the certifier for arguments (including as to law) that he, by filing a submitting appearance, expressly disavowed himself of. It would also not be appropriate for costs orders to be made against the certifier for litigation that had no relevance to his conduct (eg Central Coast Council (No 2) at [164]-[194]) or that the Council lost on.

26. Consequently, if the Court is minded to make a costs order against the certifier, it should be one that reflects the certifier being liable for half of those costs that the Council would have incurred if both respondents had submitted in respect of that part of the amended summons that concerns the declarations that the three CDCs were invalid and which the Council succeeded on.

27. Those are the costs that the certifier has truly caused. Those costs that have been incurred by reason of the conduct of the other parties to the litigation, including unsuccessful arguments run by the Council and Gindurra and the costs of interlocutory applications brought by the parties, all of which were never contested by the certifier, should not be borne by the certifier.

20. As to this apportionment, it is accepted that when considering apportionment of costs in a multi-issue case, mathematical precision may often be illusory and the discretion depends upon matters of impression and evaluation, where a broad brush approach may be appropriate: GPT Re Limited v Wollongong City Council (2006) 151 LGERA 174; [2006] NSWLEC 658 at [25] and the authorities cited there. It is difficult (if not impossible) for the certifier to make any positive submission as to how that percentage should be applied because it filed a submitting appearance and therefore was not privy to how the hearing was conducted and which issue or issues resulted in greater focus in the litigation and which did not – a position that further supports why the Court should not make any order for costs against the certifier. Should the Court be minded to make such an order the Court should take a conservative approach in assessing the proportion of the Council’s costs that are the subject of the declarations that the three CDCs were invalid and which the Council succeeded on.

Council’s response to certifier’s submissions

29. Costs should be determined by reference to the Court’s general discretion pursuant to s 98 of the Civil Procedure Act 2005. The Council is entitled to costs up to the time the certifier filed the submitting appearance, 9 July 2019.

30. Beyond that point, the absence of liability of the certifier for costs is not determined merely by its submitting appearance. The certifier did not positively concede invalidity or consent to orders setting aside the CDCs. Even if Gindurra had not actively defended the CDCs, the Council was put in the position of having to demonstrate invalidity.

31. This is sufficient to render the certifier liable as to costs: cf Mahenthirarasa v State Rail Authority of New South Wales (No 2) (2008) 72 NSWLR 273; [2008] NSWCA 201 (Mahenthirarasa). The question of costs is to be looked at primarily from the perspective of the successful party: Mahenthirarasa. The compensatory principle and the position taken by the certifier justify an award of costs against the certifier.

32. The certifier also argued that the amended summons did not seek costs against the certifier and that the certifier relied on this in making its submitting appearance, so that it would not be just to order costs against it. The Council accepted that following amendment the summons was ambiguous in relation to the costs claim. No clarification was ever sought by the certifier that costs would not be sought, either before or after its decision to submit.

33. The certifier’s submission that its decision to enter a submitting appearance was influenced by its assumption about costs not being sought against him is of no substance. If the certifier truly thought costs were not being sought against him, there was no costs reason for him to refrain from defending the validity of the CDCs. This shows that the reason for entering a submitting appearance could not have been logically connected to what he thought the amended summons provided as to costs. Further, the certifier is in no different a position than if he had not submitted. He would be potentially liable to costs and would (as now) be entitled to be heard.

Consideration

34. Under s 98 of the Civil Procedure Act costs are at the discretion of the court. Under r 42.1 of the Uniform Civil Procedure Rules 2005 costs in Class 4 proceedings generally follow the event. The Council as the generally successful party in the proceedings should obtain its costs. It was successful in all the legal issues which arose in the substantive proceedings. The Council did not obtain all the relief sought in terms of removal of fill in terms of removal of all fill the subject of the proceedings because of delay in commencing proceedings but did obtain substantial orders for work to be done by Gindurra as made on 19 March 2020. It did obtain substantial orders for work to be done by Gindurra in the final orders made by me on 19 March 2020 as identified above in [1] and [6]. That delay does not amount to disentitling conduct considering the proceedings as a whole. Gindurra should be liable for the Council’s costs. The only issue remaining is whether the certifier should also be liable for the Council’s costs.

Amended summons fails to claim costs from certifier

35. When the Council amended its summons in November 2018 to seek declarations of invalidity of the three CDCs in issue (prayers 1A to 1C) and join the certifier as second respondent, prayer 7 concerning costs was not amended. There was no ambiguity in prayer 7, it being unamended. The only claim for costs made by the Council was in relation to Gindurra, the respondent identified from the commencement of proceedings. I do not accept the Council’s submissions that the certifier could have sought clarification of whether costs were sought, given that absence of ambiguity. There was no reason for the certifier to seek clarification. While this is not a court of strict pleading, care must be taken in framing the relief sought when initiating and amending a summons.

36. This circumstance outweighs the usual expectation that a successful applicant will obtain a compensatory costs order in its favour in the absence of disentitling conduct. The usual approach can only fairly arise if the intention to claim costs is made known to the other parties in a timely manner. There is no challenge to the certifier’s submission that the first time he knew that costs would be claimed against him was when the Council’s costs submissions were received, well after the substantive hearing. That is not a timely claim for costs by the Council, as the certifier submitted. For this reason the certifier should not be liable for costs up to the filing of a submitting appearance on 9 July 2019.

Submitting appearance

37. The Council also submitted that the certifier ought be liable for costs after the date of the submitting appearance on 9 July 2019. The usual outcome of a submitting appearance generally is that no liability for costs arises from that date: Ritchie’s Uniform Civil Procedure NSW at [42.3.30]. Provided that a contradictor exists a submitting party is not generally liable for costs. I considered this issue recently in Hytec Industries (Queensland) Pty Ltd v Tweed Shire Council (No 2) [2020] NSWLEC 5 where I found:

27   In Cutcliffe, Biscoe J stated at [50(b)]:

where the beneficiary does not defend the proceedings, the applicant’s costs will ordinarily be awarded against the consent authority, whether or not the latter enters a submitting appearance. This is because the cause of the litigation is the error of the consent authority and not of the applicant or the beneficiary. The consent authority cannot immunise itself from costs consequences of its own error by entering a submitting appearance because then a successful applicant cannot be properly compensated in costs. It is not sufficient that a consent authority should bear the applicant’s costs only up to the time of the consent authority’s submitting appearance because the applicant must continue to incur costs thereafter in order to establish, by evidence and argument at a hearing, that it is entitled to declaratory and injunctive relief.

28   In GPT, Biscoe J stated at [29]:

Costs guidelines can be no more than general. They must be flexible. They must be understood to be the servant, not the master, of the interests of justice, and so must yield where appropriate to the circumstances of the individual case. …

29   In Platford both respondents (a council as the consent authority and a beneficiary of a development consent) filed a submitting appearance and the Court considered whether it was appropriate for costs to be awarded against only the council or both respondents. Preston CJ of the LEC ordered costs against both the consent authority and the beneficiary of the consent, holding at [21] that the ordinary rule that no order for costs should be made against a submitting party has less applicability in judicial review proceedings where both respondents file submitting appearances. Application of the ordinary rule would result in the successful applicant not being compensated for the costs of the proceedings.

30      In Rossi (CA), Basten JA stated at [73] (Ward JA agreeing):

The circumstance engaging par (b) in Cutcliffe was that the beneficiary of the decision does not defend the proceedings; it was then said that the reason why the consent authority could not “immunise itself from costs consequences of its own error by entering a submitting appearance [was] because then a successful applicant cannot be properly compensated in costs.” But that cannot be true in the case of proceedings which are actively defended by another party. The mere fact that the decision-maker is ultimately found to have erred in its approach is not, of itself, a sufficient reason to order costs against it, being costs incurred after the entry of a submitting appearance. So far as the guidelines in Cutcliffe suggest otherwise, they should not be applied.

38. The particular circumstances of this case must be considered in light of the principles referred to above. The primary outcome to be achieved is that the successful Applicant is appropriately compensated. Gindurra was the contradictor in the proceedings and I have determined already that it should be liable to a costs order in the Council’s favour. In these circumstances there is no basis for also making a costs order as against the certifier.

39. It is unnecessary to consider the apportionment of costs as between the respondents.

Order

40. The Court orders as follows:

1. The First Respondent is to pay the Applicant’s costs of the proceedings.

2. Exhibits to be returned.

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Amendments

09 April 2020 - typographical error - repeated sentence in [35].

Decision last updated: 09 April 2020