Couttie v Bayside City Council
[2017] VSC 181
•12 April 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
VALUATION, COMPENSATION & PLANNING LIST
S CI 2015 06495
| ANTHONY COUTTIE and DORA COUTTIE | Applicants |
| v | |
| BAYSIDE CITY COUNCIL & ORS | Respondents |
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JUDGE: | EMERTON J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 31 March 2017 |
DATE OF JUDGMENT: | 12 April 2017 |
CASE MAY BE CITED AS: | Couttie v Bayside City Council |
MEDIUM NEUTRAL CITATION: | [2017] VSC 181 (Revised 16 June 2017) |
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COSTS – Application for leave to appeal and appeal from the Victorian Civil and Administrative Tribunal – Applicants successful – Application for orders that the named respondents pay the applicants’ costs of the appeal – Respondents did not participate in the appeal – Whether costs order should be made against non-participating party – Practice Note SC CL 8 in the Valuation, Compensation and Planning List - Appeal Costs Act 1998 (Vic) s 4 – Application for costs dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicants | Mr David R J O’Brien | DSA Lawyers |
| For the First Respondent For the Second Respondent | Mr Jason Kane Mr Paul Chiappi | HWL Ebsworth Lawyers Prior Law |
HER HONOUR:
On 14 December 2016, the Court delivered judgment in this proceeding. The Court granted leave to appeal and allowed the appeal, holding that some of the grounds of appeal had been made out. The order of the Victorian Civil and Administrative Tribunal made on 30 November 2015, that a permit to develop land should be issued, was set aside and the proceeding was remitted to the Tribunal differently constituted to be determined according to law.
There were a number of respondents to the application for leave to appeal and the appeal (‘appeal’). They included the developer, Mr Marko Pintar, Bayside City Council and a number of persons who had opposed the development as objectors and been parties to the application for review in the Tribunal. However, none of the respondents took an active part in the appeal. Each of them informed the Court that they did not propose to participate in the appeal and would abide the decision of the Court, other than on the question of costs.
This stance was in accordance with paragraphs 6.2 and 6.3 of Practice Note SC No. 8 of 2015 (‘Practice Note’), which concern the conduct of appeals from the Tribunal in planning matters. The Practice Note provides for respondents in appeals in planning matters to inform the Court that they do not wish to participate in the appeal. Non-participating parties will be excused from attendance at the hearing of the appeal and that, as a result of their non-participation, ‘non-participating parties will not usually be the subject of any costs orders at the conclusion of the appeal’.
By this procedure, the Practice Note recognises that parties to Tribunal proceedings, especially objectors, may not wish to be involved in an appeal to the Supreme Court from the Tribunal’s decision. However, they are made respondents to the appeal by operation of the Rules rather than by choice.
In this case, the complete absence of any active respondents to the appeal was unusual. The developer, in particular, had the benefit of the Tribunal’s decision that a permit issue and might have been expected to appear to defend the Tribunal’s decision. However, the developer chose not to participate. The Council also chose not to participate. It had refused to grant a permit for the development and opposed the grant of a permit by the Tribunal, as did the objector/respondents.
The applicants were successful in their application for leave to appeal and in the appeal itself, and now seek their costs of the appeal against both the developer and the Council.
The applicants have stated that they do not seek costs orders against the developer and the Council beyond what would recoverable by them from the Appeal Costs Board under the Appeal Costs Act 1998 (Vic). However, they are concerned that without an order for the payment of their costs by one or more of the respondents, there is no right for any party to seek an indemnity certificate under s 4 of the Appeal Costs Act permitting recovery of any part of their costs.
The form of the order sought by the applicants is as follows:
(1)That the first and second respondents pay the costs of the applicants of and incidental to the appeal (including all reserved costs and the costs of and incidental to this application) on a standard basis within the meaning of r 63.30 of the Supreme Court Rules up to the maximum amount that the defendants can be indemnified against under s 4 of the Appeal Costs Act.
(2)That the first and second defendants be entitled to an indemnity certificate under s 4 of the Appeal Costs Act in relation to the orders made under paragraph 1.
(3)Such further order as this honourable Court deems appropriate.
Both the developer and the Council oppose the application for costs, even though an attempt has been made to formulate the costs order so as to avoid either of them having to reach into their own pocket to satisfy the order. Each of them opposes the application for costs the basis that, conformably with what is provided for in the Practice Note, they chose not to participate in the appeal because they did not wish to be exposed to the costs of a Supreme Court proceeding.
The applicants submit that the opposition to the proposed costs orders is unreasonable, given the clear indication that any costs ordered against the respondents would be limited to the amount recoverable pursuant to an indemnity certificate.
The developer, in particular, is emphatic no costs order be made against him, even if only to enable the grant of an indemnity certificate under the Appeal Costs Act. He says that he made a decision not to be involved in the Supreme Court litigation and, in particular, not to be involved in litigation with the applicants, who were prepared to spend a very large amount of money to pursue their case. Being a party to a Supreme Court proceeding involves stress and worry. Even with the benefit of an indemnity certificate, an order for costs against him will require him to pay out money to the applicants in the hope of recovering it later and, inevitably, require him to retain lawyers to deal with the Appeal Costs Board, taxations, costs consultants, negotiations and the like. He submits that his decision not to participate in the appeal was a legitimate and rational choice for a private individual like him, and that he should not now be burdened with a costs order.
The Council also relied on the procedure in the Practice Note, giving notice to all of the parties that it intended not to participate in the appeal. It said that it understood the Practice Note to create a presumption that if there was no participation, costs would not follow the event unless there was a very good reason or special circumstance, and submitted no such reason or circumstance existed in this case.
The applicants have spent an alarmingly large amount of money pursuing the appeal in this Court. They were successful in establishing that the Tribunal had made errors of law. Those errors were not attributable to any of the respondents. However, had any one or more of the respondents participated in the appeal to defend the Tribunal’s decision, an order for costs could have been made in favour of the applicants as the successful parties. This would reflect the usual rule that costs follow the event.
However, because of the procedure described in the Practice Note and the decision by each of the respondents not to participate in the proceeding, the usual rule that costs follow the event provides only limited guidance as to how the Court should exercise its discretion on costs in this case. That discretion is, of course, to be exercised judicially, but it is a wide discretion that must take into account the particular circumstances of the case at hand.
Each of the respondents and the applicants made choices against the legislative, procedural and factual background in this case.
The respondents chose not to participate because they did not wish to be exposed on costs. The Council and objectors had nothing that they wished to defend; the developer feared he would be ‘out-gunned’ by the applicants and preferred to spend his limited funds on the proposed development rather than on litigation.
For their part, the applicants made a choice to challenge the Tribunal’s decision to grant a permit to the developer. They did so in the knowledge that there might not be a contradictor and, in that circumstance, there would be an obstacle to obtaining an indemnity certificate under the Appeal Costs Act, because a successful appellant cannot apply for a certificate. Hence, the availability of funds from the Appeal Costs Board would depend on a costs order being made against a non-participating respondent. This was always going to present difficulties, having regard to the words in the Practice Note limiting the availability of costs orders against non-participating respondents.
The Court should not start from the position that its discretion on costs ought to be exercised against the developer and/or the Council because they can be protected by an indemnity certificate. The starting point is that neither the developer nor the Council participated in the proceeding, each of them having taken the option described in the Practice Note. They made that decision on the basis that costs would not ‘usually’ be ordered against a non-participating respondent. While the prospect of an indemnity certificate can be taken into consideration, it ought not to be determinative in the exercise of the Court’s discretion.
I have had regard to the authorities on costs to which the applicants referred the Court.[1] They confirm the Court’s power to make a costs order limited to the amount recoverable under the Appeal Costs Act. However, none of them deal with a circumstance like the present where the parties elected not to participate in the litigation at all, yet a costs order is sought against them.
[1]The authorities to which the Court was referred included Western Water v Rozen & Anor [2008] VSC 384; Norville Nominees Pty Ltd v Strathbogie Shire Council [2008] VSC 347; Maple v Derino and Impact Shop Fitting [2002] VSC 499; AED Oil Limited & Anor v Puffin FPSO Limited (No 2) [2010] VSCA 109; Crown Melbourne Limited v Cosmopolitan Hotel (Vic) Pty Ltd & Anor (No 2) [2013] VSC 698.
Ultimately, the Court must decide where justice lies, having regard to the particular circumstances of this case.
I do not consider that the developer should be ordered to pay the applicants’ costs of the appeal. He chose to avail himself of the option in the Practice Note because he felt out of his depth in Supreme Court litigation involving the applicants. It is not to the point to cast the developer as ‘the beneficiary’ of the Tribunal’s decision. A permit was granted to develop the land subject to conditions. It may have been of benefit to the developer to obtain that permit, or it may not, depending on the conditions. Whether or not the developer benefitted from the decision that has been set aside, the developer cannot be described as an ‘unsuccessful’ party. As a non-participating party, he was neither successful nor unsuccessful.
In my view, it would be unfair to make a costs order against the developer. He is an individual — not a corporate developer — who chose not to become involved in the Supreme Court proceeding because he felt he could not afford to do so. He is entitled to rely on the procedure set out in and the comfort given by the Practice Note.
The Council is in a different position. It was the responsible authority, as well as the planning authority for the municipal district. Pursuant to s 4(2)(b) of the Planning and Environment Act, it is an objective of planning in Victoria that there be a system of planning schemes based on municipal districts, giving local councils a central role in planning. Pursuant to s 14, the duties of local councils as responsible authorities include the efficient administration and enforcement of the planning scheme[2] and the implementation of its objectives.[3]
[2]Planning and Environment Act 1987, s 14(a).
[3]Planning and Environment Act 1987, s 14(b).
Having regard to their statutory responsibilities, local councils must be prepared take an active role as respondents to planning appeals in the Supreme Court. As the responsible authority and original decision-maker, the Council was concerned with proper application of the Bayside Planning Scheme — at every level of disputation — and had a responsibility to secure the orderly use and development of land in its municipal district.
The Practice Note is not intended to provide a means for local councils to avoid their responsibilities. It is intended to apply principally to individuals exercising
third-party rights, who are content to make submissions in the Tribunal but who then find themselves swept up in complex and costly Supreme Court litigation by the operation of the Rules.
Having said that, in this case, the Council could have provided only limited assistance to the Court as contradictor because, like the applicants, it opposed the grant of a permit for the development. It was, for the most part, on the same side as the applicants. Nonetheless, its submissions on the construction of the relevant parts of the Bayside Planning Scheme would have assisted the Court. On one question, the Council’s views did not align with those of the applicants, namely, whether a permit was required under the design and development overlay. This was a question of construction in respect of which the Council’s submissions would have been of considerable assistance to the Court.
As a result, I have given very careful consideration to whether the Council should be ordered to pay the applicants’ costs of the appeal. I have concluded, however, that it would be an odd outcome for the Council to be ordered to pay the costs of the applicants in circumstances where the applicants were successful and the worst that could be said about the Council is that it failed to make submissions to support them or that it failed to make submissions on a point that the applicants failed to make out in any event.
In these circumstances, an order for costs against the Council would merely be a mechanism to engage the Appeal Costs Act. It would reflect neither the conduct of the appeal nor the outcome.
As a result, I have decided that no costs order should be made.
The application for costs is dismissed.
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