Dexus Funds Management Limited v Blacktown City Council (No 4)

[2012] NSWLEC 60

Land and Environment Court

New South Wales

Medium Neutral Citation:

DEXUS Funds Management Limited v Blacktown City Council (No 4) [2012] NSWLEC 60

Hearing dates:

22 March 2012

Decision date:

23 March 2012

Jurisdiction:

Class 4

Before:

Pain J

Decision:

1. The Second Respondent is to pay 80 per cent of the Applicant's costs of the substantive proceedings as agreed or assessed apart from the costs the subject of the order of Craig J made on 1 September 2011.

2. The Second Respondent is to pay the costs of the costs hearing as agreed or assessed.

Catchwords:

COSTS - exercise of discretion to award costs where Applicant successful in Class 4 proceedings after late amendment of claim

Legislation Cited:

Civil Procedure Act 2005 s 98
Conveyancing Act 1919 s 88
Environmental Planning and Assessment Act 1979 s 97
Uniform Civil Procedure Rules 2005 r 42.1

Cases Cited:

Cutcliffe v Lithgow City Council [2006] NSWLEC 463 (2006); 147 LGERA 330
DEXUS Funds Management Limited v Blacktown City Council (No 3) [2011] NSWLEC 230
Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534
Trenwith v Sutherland Shire Council (No 3) [2006] NSWLEC 490

Category:

Costs

Parties:

DEXUS Funds Management Limited (Applicant)
Blacktown City Council (First Respondent)
Plumpton Park Developments Pty Ltd (Second Respondent)

Representation:

Mr N Hemmings QC (Applicant)
Mr J Lazarus (First Respondent)Ms A Pearman (Second Respondent)
Allens Arthur Robinson (Applicant)
Lindsay Taylor Lawyers (First Respondent)
Eakin McCaffery Cox Solicitors (Second Respondent)

File Number(s):

40430 of 2011

Judgment

1. In DEXUS Funds Management Limited v Blacktown City Council (No 3) [2011] NSWLEC 230 (Dexus (No 3)) I made a declaration of invalidity of a development consent in favour of DEXUS Funds Management Limited, the Applicant, in the absence of either Respondent. Both Respondents filed submitting appearances save as to costs at different times before the hearing date. The Applicant seeks costs from Plumpton Park Developments Pty Ltd, the Second Respondent. The Applicant agreed with the First Respondent, Blacktown City Council (the Council), that it would not seek costs against it when the Council filed a submitting appearance on 3 November 2011.

1. One of the bases for declaring the development consent invalid was that it relied on a right of way (ROW) which did not benefit the whole of the land the subject of the consent (other issues raised in the Points of Claim (POC) concerned assessment of traffic and contamination issues inter alia). The ROW was created by s 88B instrument under the Conveyancing Act 1919 to benefit lots 17 and 107 in certain deposited plans (DPs). Subsequently the lot configuration of the land was changed and the land the subject of the development consent became lots 102, 103 and 104 in different DPs. These lots are larger than the former lots 17 and 107 which had the benefit of the ROW.

1. These Class 4 proceedings were commenced on 27 May 2011. Points of Claim were served on 14 July 2011. The Respondents filed their Points of Defence. Following correspondence between the parties the Applicant served a reply raising the ROW issue. This was disputed as an appropriate course by the Second Respondent because a new issue was being raised. A Notice of Motion seeking to rely on amended POC (APOC) was filed on 27 October 2011. Leave was granted to rely on the APOC on 3 November 2011. The Council filed a submitting appearance that day. On 10 November 2011 the Second Respondent filed a Class 1 appeal pursuant to s 97 of the Environmental Planning and Assessment Act 1979 (the EPA Act) seeking a modification of the development consent and seeking to vacate the Class 4 hearing date by a Notice of Motion. The Notice of Motion was refused on 16 November 2011. The Second Respondent filed a submitting appearance save as to costs on 18 November 2011 not long before the hearing of this matter on 26 November 2011.

1. At the commencement of this costs hearing the Respondents handed up short minutes of order asking the Court to note an agreement reached between the Respondents that the Council would pay 45 per cent of any costs ordered to be paid by the Second Respondent.

Applicant's evidence and submissions

1. The Applicant submitted that as the successful party it is entitled to all its costs. There is no disentitling conduct suggesting otherwise. The Applicant relied on affidavits of Mr Lalich, solicitor, dated 27 October 2011 and 16 February 2012 attaching correspondence between the parties' respective solicitors detailing how the ROW issue came about after the filing of defences by the Respondents. (The defences identified to the Applicant for the first time that there was a potential issue arising in relation to the land the subject of the development consent not all benefitting from a ROW relied on for access.) By letter dated 21 November 2011 the Applicant's solicitor suggested to the Second Respondent's solicitor that the consent could be surrendered so that there was no need for a hearing. The Second Respondent did not surrender the consent.

1. As soon as the Applicant realised there was an issue in relation to the scope of the land benefitting from the ROW, it sought to raise this issue by way of reply. When the Second Respondent objected to that course, it then sought leave of the Court to rely on the APOC which was also opposed by the Second Respondent. There was no delay by the Applicant in raising the ROW issue once this became known to it. The replies which raised the ROW issue were filed on 30 September 2011, two months before the hearing. The Respondents were put on notice of the issue from that time.

1. The Applicant's agreement not to seek costs against the Council does not result in additional expense or cause injustice to the Second Respondent.

Second Respondent's evidence and submissions

1. The Second Respondent tendered a bundle of documents which included the s 88B instrument creating a ROW benefitting lots 17 and 107 in certain DPs attached to the Statement of Environmental Effects (SEE) supporting the Second Respondent's development application (DA). Conditions of consent identifying which lots the consent related to were also tendered.

1. The Second Respondent accepts that it should be ordered to pay some costs but submits these should be a maximum of 50 per cent or a lesser percentage determined by the Court because of the Applicant's behaviour in the proceedings. The Applicant was aware of the facts giving rise to the ROW issue which caused the Respondents to file submitting appearances after the proceedings had been on foot for a lengthy period and after incurring considerable costs meeting other issues raised by the Applicant concerning traffic impacts and contamination, inter alia.

1. There was no delay in filing a submitting appearance. The Second Respondent was entitled to try to "cure" the defect in the consent by making an application to vary the conditions of consent in Class 1 appeal proceedings. It filed a submitting appearance once its Notice of Motion seeking vacation of hearing dates and adjournment of these Class 4 proceedings was dismissed on 16 November 2011. The raising of a technical breach late in proceedings by the Applicant meant that substantial costs were unnecessarily incurred by all parties. The Applicant is not entitled to all its costs.

Council's evidence and submissions

1. The Council (and Second Respondent) relied on an affidavit of Mr Simington solicitor dated 15 March 2012 which stated at par 7 that but for the ROW issue being raised the Council would have pursued its defences against the other multiple issues raised in the Class 4 proceedings.

1. Both Respondents submitted that absent the APOC the Respondents believed they had reasonable defences in relation to the other issues raised by the Applicant's case. The Applicant could have raised the ROW issue at the outset of the proceedings as the relevant facts were known to it and had it done so substantial costs would have been saved.

Consideration

1. The Court's costs powers in these Class 4 proceedings arise under s 98 of the Civil Procedure Act 2005 (the CP Act) and r 42.1 of the Uniform Civil Procedure Rules 2005 (the UCPR). While the usual rule is that costs follow the event, the Court has wide discretion to award costs as it sees fit. Costs are compensatory rather than punitive so that the successful party would generally be entitled to its costs in the absence of disentitling conduct per Latoudis v Casey [1990] HCA 59; (1990) 170 CLR 534 at 542 - 543 and 547. Where there is more than one respondent costs are generally awarded on the basis of joint and several liability. While the Applicant is entitled to seek costs from one respondent only the more usual situation is that Respondents would share costs where both are ordinarily liable.

1. Relevant principles to be considered where parties have filed submitting appearances save as to costs were identified in Cutcliffe v Lithgow City Council [2006] NSWLEC 463 (2006); 147 LGERA 330 at [50]:

The following general guidelines may be formulated, based on the cases and principles reviewed in this judgment, for the exercise of the Court's discretion to order costs where

·an applicant successfully brings proceedings that are necessary to have declared invalid or set aside a development consent or decision of a consent authority;

·the consent authority and the beneficiary of the development consent or decision are necessary or proper parties; and

·the cause of the invalidity is an error of or attributable to the consent authority and not to the beneficiary:

(a)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.

(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.

(c)where the beneficiary does defend the proceedings, albeit unsuccessfully, the applicant's costs will ordinarily be awarded against both the beneficiary and the consent authority, whether or not the latter enters a submitting appearance. The award of costs against the consent authority is because its error is the cause of the litigation. It cannot immunise itself from costs by entering a submitting appearance for the reason given in (b) above. The award of costs against the beneficiary is because it chose to defend the proceedings. ...

1. At [31] in Cutcliffe Biscoe J held that a successful applicant in declaratory proceedings should be awarded all costs reasonably incurred as a hearing is necessary for declaratory relief to be made. As with every case, the particular facts must be considered.

1. This matter differs from the circumstances referred to in Cutcliffe at [50] and Trenwith v Sutherland Shire Council (No 3) [2006] NSWLEC 490 where costs were sought against more than one party including a local council which submitted save as to costs. Here the Applicant brought proceedings necessary for the declaration of invalidity of the consent and the Council and Second Respondent are proper parties. In this case both Respondents filed submitting appearances before the hearing. As to the cause of invalidity being the ROW issue, as discussed below that was not an issue that occurred to any party apparently. Costs are not sought against the Council by the Applicant so that the circumstances are not like those identified in [50(b)] or [50(c)] in Cutcliffe. As I have been told the Council has agreed to pay 45 per cent of any costs order made against the Second Respondent, any concern I might have had about the Second Respondent being liable for an inordinate share of costs is ameliorated. This suggests any costs order made against the Second Respondent should not be limited to 50 per cent of the Applicant's costs.

1. The issue next arises of whether the Applicant should get 100 per cent of its costs in the circumstances of this case. It is certainly unfortunate that the ROW issue was not identified from the outset by the Applicant in these proceedings given the "raw" facts theoretically before it, nor was it an issue which had apparently occurred to either the Council as the consent authority or the Second Respondent, the applicant for development. The issue is not self-evident given that there was a change of lot numbers from those referred to in the s 88B instrument to those the subject of the development consent. The Applicant's evidence that it was only alerted to the issue upon the filing of the Respondents' defences does not give rise to substantial disentitling delay but there is some merit in the submission that given the known facts this could have and ideally would have been identified earlier by the Applicant.

1. Substantial costs are likely to have been incurred by all parties addressing other issues raised in the proceedings in the five months leading up to the hearing. The Council's solicitor's evidence is that it would have pursued the defences in relation to the other issues but for the ROW issue raised late in the proceedings. The Second Respondent submitted similarly. Had the ROW issue been identified at the outset those costs would not have been incurred.

1. In terms of the Second Respondents' behaviour and whether this resulted in additional costs, the Second Respondent unsuccessfully opposed the Applicant's Notice of Motion seeking to rely on the APOC. Further, the Second Respondent filed a Class 1 application which sought to modify the consent and the postponement of these proceedings. That course was rejected by the Court. The Second Respondent also did not surrender the consent as suggested by the Applicant so that a hearing was necessary.

1. Weighing up all these factors in order to make a costs order which fairly reflects the circumstances of this case, I will make an order in the Applicant's favour for 80 per cent of its costs to be paid by the Second Respondent as agreed or assessed. I note the agreement of the Council to pay 45 per cent of any costs ordered against the Second Respondent.

1. The Applicant has been largely successful in its application for costs and should also have its costs of the costs hearing paid by the Second Respondent.

Order

1. The Court makes the following orders:

1.   The Second Respondent is to pay 80 per cent of the Applicant's costs of the substantive proceedings as agreed or assessed apart from the costs the subject of the order of Craig J made on 1 September 2011.

2.   The Second Respondent is to pay the costs of the costs hearing as agreed or assessed.

Decision last updated: 26 March 2012