Defence Housing Australia v Randwick City Council (No 3)

[2013] NSWLEC 179

Land and Environment Court

New South Wales

Medium Neutral Citation:	Defence Housing Australia v Randwick City Council (No 3) [2013] NSWLEC 179
Hearing dates:	21 October 2013
Decision date:	21 October 2013
Jurisdiction:	Class 1
Before:	Pain J
Decision:	See paragraph 22
Catchwords:	COSTS - whether court should exercise discretion to award costs in relation to s 56A appeal under rule 3.7
Legislation Cited:	Environmental Planning and Assessment Act 1979 s 89(2), s 97(1), Land and Environment Court Act s 56A Land and Environment Court Rules 2007 r 3.7
Cases Cited:	Defence Housing Australia v Randwick City Council [2012] NSWLEC 1181 Defence Housing Australia v Randwick City Council [2013] NSWLEC 59 Latoudis v Casey (1990) 170 CLR 534 R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13
Category:	Costs
Parties:	Defence Housing Australia (Appellant) Randwick City Council (Respondent)
Representation:	Ms A Allars SC (Appellant) Mr S Flanigan (Respondent) Piper Alderman (Appellant) Norton Rose Australia (Respondent)
File Number(s):	10919 of 2012

EX TEMPORE Judgment

1. In a merits appeal determined by two Commissioners of the Court Defence Housing Australia v Randwick City Council [2012] NSWLEC 1181, Defence Housing Australia's (DHA) appeal was dismissed on the basis that the Court lacked jurisdiction under s 97(1) of the Environmental Planning and Assessment Act 1979 (the EPA Act) because the DA was a Crown DA. DHA (or Randwick City Council) could seek review by the Joint Regional Panel (the Panel) under s 89(2) of the EPA Act. The Commissioners also considered the merits issues identified by the parties and determined these in favour of DHA.

1. The subsequent history of the matter is identified in the affidavit of Mr Andrew Price, solicitor, dated 16 August 2013 read by DHA. DHA approached the Panel when the Council did not. By letter dated 12 October 2012 from Mr Marcus Ray, Executive Director, Assessment System General Counsel of the Department of Planning and Infrastructure (the Department), the Regional Panels Secretariat notified DHA that it had not accepted the referral because the Panel did not have jurisdiction. The letter advised that, having obtained the advice of the Crown Solicitor's Office, it was of the view that the DA was not a "Crown development application". The summons commencing the appeal under s 56A of the Land and Environment Court Act 1979 (the Court Act) was filed earlier by DHA on 14 September 2012.

1. In the s 56A appeal before me DHA submitted the DA was not a Crown DA. I accepted that in the exercise of my discretion this position could be put, albeit contrary to the position submitted in the merits appeal before the Commissioners. I determined that the DA was not a Crown DA and was able to be dealt with within the Court's jurisdiction in Defence Housing Australia v Randwick City Council [2013] NSWLEC 59. The matter was remitted to the Commissioners for final consideration of any outstanding merits matters, if any. Consent orders granting conditional development consent were made on 8 May 2013 without the need for a further hearing.

1. DHA seeks its costs of the s 56A appeal on the basis that it was successful on the question of law before me. The Council opposes such an order and seeks its costs of the s 56A appeal.

1. Rule 3.7 of the Land and Environment Court Rules 2007 (the Court Rules) applies to Class 1 proceedings. No order for costs should be made unless fair and reasonable to do so in the circumstances, r 3.7(2). Rule 3.7 provides:

3.7 Costs in certain proceedings

(1) This rule applies to the following proceedings:

(a) all proceedings in Class 1 of the Court's jurisdiction,

...

(2) 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.

(3) Circumstances in which the Court might consider the making of a costs order to be fair and reasonable include (without limitation) the following:

(a) that the proceedings involve, as a central issue, a question of law, a question of fact or a question of mixed fact and law, and the determination of such question:

(i) in one way was, or was potentially, determinative of the proceedings, and

(ii) was preliminary to, or otherwise has not involved, an evaluation of the merits of any application the subject of the proceedings,

(b) that a party has failed to provide, or has unreasonably delayed in providing, information or documents:

(i) that are required by law to be provided in relation to any application the subject of the proceedings, or

(ii) that are necessary to enable a consent authority to gain a proper understanding of, and give proper consideration to, the application,

(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,

(e) that a party has commenced or defended the proceedings for an improper purpose,

(f) that a party has commenced or continued a claim in the proceedings, or maintained a defence to the proceedings, where:

(i) the claim or defence (as appropriate) did not have reasonable prospects of success, or

(ii) to commence or continue the claim, or to maintain the defence, was otherwise unreasonable.

DHA's submissions

1. DHA submitted that it acted reasonably in bringing the s 56A appeal on a question of law in which it achieved the substantive outcome sought. Rule 3.7(3)(a) applies. It has not engaged in any disentitling conduct and its change of position on whether DHA's DA is a Crown DA is not a material matter. It had no choice but to commence the s 56A appeal given the history of the matter leaving it no other avenue to pursue if it were to obtain development consent.

1. The Council acted unreasonably in the circumstances leading up to the appeal proceedings (r 3.7(3)(c)), during the conduct of the proceedings, r 3.7(3)(d) and maintained a defence which did not have reasonable prospects of success, r 3.7(3)(f)(i). For the same reasons the Council should not be awarded its costs because of this disentitling conduct.

1. The Council's behaviour effectively invited the litigation by not agreeing to settle the matter on the basis that it approve the development on its merits given the Commissioners' decision that no merits issue warranted refusal, not agreeing to refer the DA to the Panel, and being aware that the application to the Panel was not accepted because of legal advice that the DA was not a Crown DA.

1. The Council acted as protagonist in the course of the proceedings, treating DHA as an adversary. Its behaviour was not consistent with the Hardiman principle articulated by McHugh JA in R v AustralianBroadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13 at 35 - 36, that the proper role of a public authority engaged in litigation should not be as a protagonist.

1. Further, the Court's timetable for the filing of submissions in preparation for the s 56A appeal was not complied with.

1. The Council maintained its defence without reasonable prospects of success given the opinion of the Crown Solicitor that the relevant DA was not a Crown DA.

Council's submissions

1. The Council relied on an affidavit of Ms Victoria McGrath, solicitor, sworn 23 August 2013 which exhibits further correspondence between the parties. Costs of the s 56A appeal should be awarded in the Council's favour given the fundamental alteration of position by DHA in the s 56A appeal that it was not a Crown DA contrary to the position adopted by DHA before the Commissioners. That change was not fair and reasonable and resulted in the Council incurring unreasonable additional costs through its participation in the s 56A appeal.

1. Alternatively, it seeks the costs of the first day of the s 56A hearing which was unnecessarily extended to two days as a result of the need for DHA to clarify the questions of law arising in the appeal. There is no disentitling conduct by the Council suggesting it should not be awarded its costs. There was no disclosure of DHA's change of position on the fundamental issue of whether the DA was a Crown DA until receipt of counsel's submissions in the s 56A appeal. While there were several letters sent by DHA's solicitor suggesting settlement could be achieved in relation to merit issues there was no proper basis for settling the proceedings given the decision of the Commissioners that it lacked jurisdiction. The letter from Mr Ray of the Department was not received until after the s 56A appeal had been commenced and did not provide a copy of the Crown Solicitors' advice in any event. An obvious alternative course of action was for DHA to lodge a new DA with the Council on the basis it was not a Crown DA.

Finding

1. In Class 1 proceedings the Court awards costs in proceedings of this kind only if fair and reasonable in the circumstances to do so, as provided for in r 3.7(2). While examples of circumstances where the Court may consider awarding costs are identified in subrule (3), these circumstances are not exhaustive. Each case must be considered on its own facts. Costs awards are compensatory, not punitive per Latoudis v Casey (1990) 170 CLR 534 at 543 per Mascon CJ.

1. The facts of this case are unusual as can be gleaned from its history. A central matter is that before the Commissioners the parties agreed that the DA was a Crown DA. That led to a conclusion by the Commissioners that that Court lacked jurisdiction to determine the matter. Before me in the s 56A appeal, DHA changed its position to assert that it was not a Crown DA and the Court had jurisdiction to determine the merits appeal. In order to entertain that argument it was necessary that I determine whether I should exercise my discretion to allow a new issue to be raised given that it was contrary to the position at first instance and would ordinarily not be allowed in a s 56A appeal. I resolved that I would allow the change of position after considering relevant authorities at [27] - [30]. I then determined as a new issue, after detailed argument, that the DA was not a Crown DA in favour of DHA.

1. While the result of the s 56A appeal is that DHA was successful on a point of law which was determinative of the proceedings as referred to in subrule (3)(a) of r 3.7, all of the circumstances of the appeal need to be considered. That there was a reversal of position on a matter that was fundamental to whether the Court had jurisdiction is a highly material matter to whether costs ought be awarded in DHA's favour. I do not consider in these circumstances that DHA should have an award of costs in its favour under subrule (3)(a).

1. DHA also alleges that the Council acted unreasonably in various respects which also entitles it to its costs under rule 3.7(3)(c) and (d). DHA is critical of the Council in not settling the matter before the commencement of the s 56A appeal. There are a number of difficulties with that submission. That settlement could be achieved through the filing of consent orders with the Court when it considered at that stage it did not have jurisdiction to determine the matter is not clear. The appeal was commenced by summons filed on 14 September 2012. The letter from Mr Ray of the Department advising of the Department's position on the advice of Crown Solicitor's office was dated 12 October 2012, after the s 56A appeal was commenced. The opinion of the Crown Solicitor was not provided to the Council. It is not apparent that the Council acted unreasonably in not agreeing to settle the matter.

1. I do not agree that the Council did not have reasonable prospects of success in maintaining its defensive position that DHA's DA was a Crown DA, the issues raised were complicated and warranted a hearing in my view. Nor did the Council have the benefit of the Crown solicitor's advice at any stage. Even if it did, it is not clear to me that it was bound to adopt it, as implied by DHA's submissions. There is no basis for an award of costs in DHA's favour under rule 3.7(3)(f).

1. There does not appear to be any basis for awarding costs in DHA's favour because of the alleged non-compliance with the timetable by the Council, no prejudice or disruption to the hearing being identified by DHA to result from this. The Hardiman principle, assuming it exists and could apply in circumstances such as this (about which I make no finding), has no application in these circumstances.

1. The Council seeks its costs although it was unsuccessful in the appeal, the most obvious impediment to it receiving a costs order in its favour. I consider that the history of the matter does not suggest disentitling conduct by DHA sufficient to justify an award of costs in the Council's favour. The history of the matter is best described as resulting from an unfortunate and erroneous position before the Commissioners about which no party is particularly at fault. While DHA could have filed a new DA with the Council its preference to have the present DA considered by the Court is understandable. The Council participates as the relevant consent authority in whatever manner it considers appropriate in the circumstances.

1. The Council also sought an order for the partial award of costs for the first day of hearing only. While it was necessary for DHA's counsel to clarify the terms of the questions of law requiring resolution, as reflected ultimately in [13] of the s 56A appeal judgment, I consider the issues were complex and not surprisingly took more than one day. I also take into account that the Council's counsel filed extensive additional submissions in preparation for the second day of hearing which were presumably considered necessary for the consideration of all the issues by the Court. No partial award of costs in the Council's favour is warranted.

1. The most appropriate costs order is that each party should pay its own costs of the s 56A appeal and its costs of these costs applications.

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Decision last updated: 24 October 2013