Donohue v ACT Planning and Land Authority
[2014] ACTSC 44
•14 March 2014
Case Title: | DONOHUE v ACT PLANNING & LAND AUTHORITY |
Medium Neutral Citation: | [2014] ACTSC 44 (14 March 2014) |
Hearing Date(s): | 7 February 2014 |
Decision Date: | 14 March 2014 |
Before: | Penfold J |
Catchwords: | PROCEDURE – Costs – referral of question of law from ACT Civil and Administrative Tribunal to Supreme Court – initiating party unsuccessful in Supreme Court – whether question needed to be determined before Tribunal could make a decision – whether Supreme Court “stood in shoes of decision-maker” which had no power to award costs – whether circumstances of identification of initiating party meant that no costs order should be made – whether costs to be paid by initiating party should be indemnity costs for hearing days after first day – whether matter was “never seriously arguable” – costs of other active party to be paid by initiating party – no order for indemnity costs. |
Legislation cited: | Constitution, s 51(xxxi) ACT Self-Government Act 1988 (Cth), s 23(1)(a) ACT Civil and Administrative Tribunal Act 2008 (ACT), ss 84, 86 Court Procedures Rules 2006 (ACT), rr 5801, 5803, 5809 |
Cases cited: | Donohue v ACT Planning & Land Authority [2013] ACTSC 234 |
Decision: | 1. The Initiating Party is to pay the Other Active Party’s costs in the matter of Donohue v ACT Planning & Land Authority (SCA 11/2012), including the costs of obtaining this order, as agreed or taxed. |
Parties: | Christopher John Donohue (Initiating party) |
File Number(s): | SCA 11 of 2012 |
JUDGMENT
Introduction
On 22 November 2013 I handed down my decision in the matter of Donohue v ACT Planning & Land Authority [2013] ACTSC 234. This involved a question of law referred from the ACT Civil and Administrative Tribunal (ACAT), specifically whether rule 28 of the Territory Plan Multi-Unit Housing Development Code Part B (R28) was inconsistent with s 23(1)(a) of the ACT Self-Government Act 1988 (Cth) and was therefore invalid because it provided for an acquisition of property otherwise than on just terms.
My answer to the question was that R28 was not inconsistent with that Act and was not invalid. That is, the party identified as the Initiating Party was unsuccessful in the Supreme Court.
I also invited the parties to make submissions about what if any costs order should be made.
The matter that went to ACAT was an appeal by Christopher Donohue against the assessment made by the ACT Planning and Land Authority (ACTPLA) of a change of use charge in respect of Mr Donohue’s application to vary a residential lease of land in Turner, ACT, in order to permit him to subdivide the property under the Unit Titles Act 2001 (ACT). The lease variation was required because under R28, the subdivision could only be approved “where the lease expressly provides for the number of units or dwellings provided for in the proposed subdivision”.
Proceedings before ACAT
In written submissions filed in ACAT, Mr Donohue had raised the question of the validity of R28. On 6 October 2011, when the matter first came before ACAT constituted by Presidential Member Spender, there was discussion about the significance of this “constitutional” challenge to that rule.
Counsel for ACTPLA submitted that ACAT could proceed on the basis that the challenged rule was valid unless it believed there was “a real chance” that the rule was invalid, in which case the question would need to be referred to the Supreme Court under s 84 of the ACT Civil and Administrative Tribunal Act 2008 (ACT) (the ACAT Act). After further discussion that approach was agreed between the parties, and counsel for Mr Donohue began his submissions.
Later that morning, Presidential Member Spender gave a decision on the first question before her, relating to the interpretation of R28. She rejected the interpretation of R28 proposed by Mr Donohue, which left the challenge to the validity of R28 a live issue.
When the hearing resumed after the morning tea break, counsel for Mr Donohue announced that he and counsel for ACTPLA had agreed that the second question, relating to the validity of R28, should be referred to the Supreme Court. There was then discussion about an agreed statement of facts to be included in the referral, in the course of which counsel for ACTPLA noted on at least two occasions that the question to be framed for the Supreme Court was Mr Donohue’s question. Presidential Member Spender made consent orders referring the question to the Supreme Court, and ordered that “the form of the question ... will be settled by the parties and filed with the Tribunal by 14 October 2011”.
The referral
It seems that resolving the form of the referral was not straightforward. A document headed “Referral of Question of Law to ACT Supreme Court” dated 31 October 2011 was signed by the solicitors for the parties, but on 13 January 2012 the matter came before Presidential Member Spender again, and she made comments suggesting that there had already been some email communications about aspects of the referral.
Identification of initiating party
At the 13 January 2012 mention, questions were asked about who was to be the initiating party for the purpose of the referral.
Division 5.7.1 of the Court Procedures Rules 2006 (ACT) (the CPRs) deals with questions referred to the Supreme Court. Rule 5801 is relevantly as follows:
5801 Definitions—div 5.7.1
In this division:
initiating party means—
(a)the party who requested that the question be referred; or
(b)if the question was referred by the referring court or tribunal on its own initiative and the court or tribunal is a party to the proceeding—the court or tribunal; or
(c)if the question was referred by the referring court or tribunal on its own initiative and the court or tribunal is not a party to the proceeding—the entity that made the decision to which the proceeding before the referring court or tribunal relates.
At first it was agreed that the identification of the initiating party depended on whether par (a) or (c) of the definition of “initiating party” in r 5801 applied, but then Presidential Member Spender raised the possibility that ACAT itself was a party to the proceeding (referring to foreshadowed changes to the CPRs), which would have made par (b) rather than par (c) applicable. In discussion about the significance of r 5803 (which in fact applies to the process by which the special case is drafted rather than the identification of the initiating party), Presidential Member Spender said of the question to be referred:
This is a question that’s been agitated by the applicant ... This is an issue that’s been raised by the applicant from the beginning. ... It’s an important question and it’s a question that should be properly agitated by the person who raises the question.
A draft referral document that had been produced by counsel for ACTPLA was then discussed. Counsel for Mr Donohue suggested that it did not matter who was the initiating party, but Presidential Member Spender dismissed what she appeared to interpret as a suggestion that ACTPLA should be identified as the initiating party. Shortly afterwards, in the course of further discussion about the operation of r 5803, there was the following exchange between Presidential Member Spender and Mr Arthur (counsel for Mr Donohue):
Mr Arthur: Well, except that we’re not the initiating party.
President Spender: Well, I suggest – – –
Mr Arthur: Well, when I say – – –
President Spender: I’m going to make an order that you’re the initiating party...
...
President Spender: I don’t think there’s any doubt that we’ve talked about who the proponent of the point is, and so what I don’t want to do is to revisit that question.
Discussion then followed about how the special case would be finalised, and Presidential Member Spender noted that on 6 October 2011 she had made consent orders that the matter be referred to the Supreme Court. Mr Arthur said, “In which case we’re both initiating parties”, to which Presidential Member Spender replied “Yes, there is no doubt that there is a consent element to it.”
Shortly afterwards, however, Presidential Member Spender told Mr Arthur that “If there’s any queries from the registry we’ll refer it on to you, as the initiating party.”
Submissions on costs
Counsel for Mr Donohue conceded before me that the usual position in the Supreme Court was that costs follow the event, but submitted that in this case there should be no order for costs. He said:
(a)that it was “a matter of accident that the issues arising in the Tribunal proceedings included one which the Tribunal was unable to decide and had to refer to the Court”;
(b)that the Supreme Court proceedings should be seen as an extension of the ACAT proceedings; that in those proceedings, ACAT stood in the shoes of the primary decision-maker (ACTPLA) which does not have the power to award costs; and that it would therefore have been appropriate for ACAT (and by extension the Supreme Court) to adopt the approach of not awarding costs;
(c)that it had been a joint decision that the question should be referred to the Supreme Court;
(d)that Mr Donohue had become the initiating party because someone had to be the initiating party; and
(e)that the issues raised by the question were “conceptually complex”, and that in hindsight “it is apparent that the one-day estimate was not realistic”;
(f)that ACTPLA’s submission that Mr Donohue was unable to identify what property was being acquired “is to say no more than that was what the Court found”, and that only if the point was “never seriously arguable” should the Court depart from the approach described at (b) above)of not making a costs order at all.
Counsel for ACTPLA submitted:
(a)that there was no need for the validity of R28 to have been determined before ACAT finalised its review of ACTPLA’s decision (ACAT could have proceeded on the assumption that R28 was valid, which could then have been a ground of any appeal taken by Mr Donohue from that decision) and therefore, there is no reason to approach the costs decision any differently from the way in which it would have been approached if the initiating party had appealed an ACAT decision assuming the validity of R28 to the Supreme Court under s 86 of the ACAT Act;
(b)that the matter was a commercial matter which had been pursued in order to challenge a valuation (and the resulting assessment of a change of use charge);
(c)that Mr Donohue’s application for review of ACTPLA’s decision set out two questions to be answered, the second one being a question about the validity of R28, which, counsel said, must have amounted to an application for a declaration that R28 was invalid;
(d)that the applicant had already appealed to the Supreme Court from ACAT’s decision about the interpretation of R28, and was already well aware that the Supreme Court was a costs jurisdiction in which the loser would be expected to pay the costs of the successful party;
(e)that although the referral to the Supreme Court had been by consent, there had been no agreement between the parties under r 5809 as to the costs of the referral;
(f)that the question of the validity of R28 had always been part of Mr Donohue’s case; this was not a case in which a “constitutional” issue had been identified by ACAT in the course of the proceedings;
(g)that ACTPLA’s actions in preparing a draft of the special case had never reflected any belief that ACTPLA was or should have been the initiating party, but only a desire to keep the matter moving;
(h)that ACTPLA had not contributed to or pursued this dispute, and had never accepted that the validity of R28 was genuinely in issue (a view which, it was argued, could be seen as vindicated by the description in my judgment at [61] of Mr Donohue’s struggle to formulate the property that was said to have been acquired by the operation of R28);
(i)that the Supreme Court was exercising judicial power under section 84 of the ACAT Act, it was not standing in the shoes of the decision-maker, and the Supreme Court proceedings were not in any sense an extension of the ACAT proceedings;
(j)that ACTPLA had been put to additional costs by the need to prepare further submissions in reply to Mr Donohue’s further submissions and to be represented at a hearing which extended over three days instead of the estimated one day.
ACTPLA also submitted that costs awarded should be on the basis that Mr Donohue should pay the costs of the first day as agreed or taxed and the costs of the second and third days on an indemnity basis.
Consideration
Several distinct arguments emerged from these submissions.
Liability for costs
Need for early determination of validity of R28?
As to whether it was “necessary” for the validity of R28 to be determined before ACAT finalised its review of ACTPLA’s decision, I accept ACTPLA’s submission that there was no such necessity.
The question having been raised by Mr Donohue before ACAT, I can see no reason why the validity of R28 could not have provided a ground of appeal for Mr Donohue from an ACAT decision in ACTPLA’s favour. Nor can I see that a party which would face the usual costs risks in an appeal to the Supreme Court from an ACAT decision should be able to protect itself from those costs risks by seeking a Supreme Court determination of a fundamental aspect of the matter in the course of the ACAT proceedings and without waiting for ACAT to determine the matter. Presumably a party which succeeded in the Supreme Court (whether after or during ACAT proceedings) as a result of a finding that the original decision-maker had acted under invalid legislation would expect to get the benefit of the Supreme Court’s costs powers.
Furthermore, I reject the submission on behalf of Mr Donohue that the inclusion in submissions to ACAT of an argument about the validity of legislation was “a matter of accident”; it was clear that this issue was from the earliest point raised by Mr Donohue and recognised as creating jurisdictional questions for ACAT.
Decision-maker’s inability to award costs
In Thaina Town (On Goulburn) Pty Ltd v City of Sydney Council [2007] NSWCA 300, Spigelman CJ said at [79]:
However, unlike many other Class 1 proceedings it cannot be said that the Court simply takes the place of the primary decision-maker in an appeal under Pt 9.2 of the POEO Act. In my opinion, the usual position on a merits review that an appeal tribunal stands in the shoes of the primary decision-maker is a significant element in the practice of such tribunals not to exercise such power, if any, to award costs as are conferred upon them. Administrative decision-makers do not award costs. Where a judicial or quasi-judicial function is expressly placed in the position of such a decision-maker then it is more appropriate that it adopt the same general approach. Part 9.2 of the POEO Act is different in this respect.
This comment was relied on by Mr Donohue as authority for the proposition that ACAT “stood in the shoes of the decision-maker” (ACTPLA, a body with no power to award costs), and should therefore not exercise any costs powers it had, and further, that it would be appropriate for the Supreme Court to adopt the same general approach.
Spigelman CJ’s comment referred to the distinction between cases in which a court “is expressly placed in the position of” the primary decision-maker, and those in which it is not; in the former case, his Honour suggested, it may be appropriate that the court also adopt the general approach of not making costs orders.
It was however conceded by Mr Donohue that the Supreme Court dealing with a question of law referred from ACAT is not placed in the position of the primary decision-maker. There is accordingly no support for the proposition that the Supreme Court should refrain from exercising its costs powers in a case of this kind.
Mr Donohue’s role as initiating party
I take account of the way the referral to the Supreme Court developed in ACAT (at [10] to [15] above), and in particular to Presidential Member Spender’s clear and repeated indications:
(a)that the question referred was Mr Donohue’s question and no-one else’s; and
(b)that he was properly (and not just as a matter of convenience) the initiating party.
By reference to those matters, I am satisfied:
(a)that there is no basis for any claim that Mr Donohue was identified as the initiating party by default, by accident, or as a matter of convenience; and
(b)that he is properly regarded as the person who initiated the referral to the Supreme Court.
Conclusion
I can see no reason in any of the arguments advanced on behalf of Mr Donohue for departing from the usual Supreme Court position that costs follow the event. Mr Donohue, as the unsuccessful initiator of the Supreme Court proceedings, must pay the costs of the other active party, ACTPLA.
Nature of costs order
Duration of hearing
As noted, ACTPLA sought indemnity costs in respect of the second and third days of the hearing of this matter, in reliance on submissions outlined at [17](h) and (j) above about the strength of the case and the extended hearing time.
The hearing began on 24 April 2012 at 10.42am (after I had dealt with an extended directions hearing in another matter) and was adjourned part-heard, after a period that included a lunch adjournment, at 4.08pm. That was roughly an hour less than the five hours of hearing time normally available for a matter set down for “one day”.
The next day of hearing, 28 September 2012, began at 12.24pm and concluded at 4.29pm, again after a lunch break. That allowed roughly three hours of hearing time.
The hearing came before me twice more before I reserved my decision, on 16 November 2012 and 17 December 2012. On 16 November the matter took 13 minutes and on 17 December 9 minutes.
I mention these details not to address any suggestion that the matter took longer than it should have done, or to minimise the cost or inconvenience of the four separate appearances, but only to clarify that the total time devoted to the hearing was around seven and a half hours, equivalent to one and a half days of court time, and that it is therefore misleading in one sense to describe the hearing as having taken three days rather than the estimated one day.
Strength of arguments
While it is true that in my judgment I rejected all Mr Donohue’s arguments, I would not be prepared to say that the matter “was never seriously arguable”; it is apparent from the cases mentioned in my judgment that the categories of property that have been found to have been acquired for the purposes of s 51(xxxi) of the Constitution (which provides a direct guide to the scope of s 23(1)(a) of the ACT Self-Government Act) or that might be so found in the future, are broad and in some ways disparate, and that the categories of “property” that have been claimed (sometimes through several appeal stages) to have been acquired have been even more broad and disparate.
Conclusion
ACTPLA’s criticisms of Mr Donohue’s arguments, or of the extended period during which those arguments were developed, do not in my view provide a basis for ordering costs against Mr Donohue on an indemnity basis, even in respect of the extension of the hearing beyond the first day.
Orders
The order will be that the Initiating Party pay the Other Active Party’s costs, including the costs of obtaining this order, as agreed or taxed.
I certify that the preceding thirty-seven (37) numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Justice Penfold.
Associate:
Date: 14 March 2014
Representation: | Counsel: |
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