Easton v Shoalhaven City Council

[1999] NSWLEC 108

Land and Environment Court

of New South Wales

CITATION:	Easton & Anor v Shoalhaven City Council & Ors [1999] NSWLEC 108
PARTIES	FIRST APPLICANT Robert Easton SECOND APPLICANT Ian Trevor McCarthy
FIRST RESPONDENT Shoalhaven City Council SECOND RESPONDENT Premier Coast Home Plan Service J Curran THIRD RESPONDENT Keyseem Pty Ltd
NUMBER:	40151 of 1998
CORAM:	Sheahan J
KEY ISSUES:	:- in Class 4
LEGISLATION CITED:	in Class 4
DATES OF HEARING:	04/13/1999; 05/05/1999
DATE OF JUDGMENT DELIVERY:	05/11/1999
LEGAL REPRESENTATIVES:	FIRST & SECOND APPLICANTS Mr S Berveling of EnviroLawyers FIRST RESPONDENT Mr J Webster Barrister, instructed by Mr G Gleeson of Morton & Harris SECOND & THIRD RESPONDENTS Mr M Webeck of Michell Sillar

JUDGMENT:


IN THE LAND AND Matter No: 40151 of 1998
ENVIRONMENT COURT Coram: Sheahan J
OF NEW SOUTH WALES 11 May 1999

ROBERT EASTON
First Applicant
IAN TREVOR McCARTHY
Second Applicant

v

SHOALHAVEN CITY COUNCIL
First Respondent
PREMIER COAST HOME PLAN SERVICE J CURRAN
Second Respondent
KEYSEEM PTY LIMITED
Third Respondent
JUDGMENT


Introduction

1. When I delivered my judgment in this matter on 15 December 1998, I made some preliminary comments on the question of costs , but expressly reserved it. In doing so I said that “ the applicants clearly have a prima facie entitlement to their costs ”, and urged the parties to negotiate the question in the light of my judgment.

2. The proceedings came before Bignold J as Duty Judge on 13 April 1999, by way of a Notice of Motion by the applicants dated 1 April 1999. His Honour made certain orders by consent, but declined to deal finally with that part of the Notice of Motion which sought an order that the respondents pay the applicants’ costs of the proceedings.

3. His Honour granted leave for the amendment of the costs order sought, to read “That the First and Third Respondents pay the Applicants’ costs in these proceedings”, and decided that the costs issues were best left to the trial judge to determine. He directed that the parties should make written submissions on the question of costs - the two relevant respondents within 14 days, and the applicants within 7 days thereafter - and that I should then adjudicate upon those submissions.

4. Written submissions were filed on behalf of the First Respondent on 29 April 1999, on behalf of the Third Respondent on 28 and 30 April 1999, and on behalf of the applicants on 4 May 1999. The First Respondent then sought leave to file further submissions. I formally grant that leave and have considered those late submissions dated 5 May 1999.

5. The only order formally sought at this stage is that the First and Third Respondents pay the applicants’ costs. However, the Third Respondent in its submissions seeks an order that the Council should pay the Third Respondent’s costs and indemnify the Third Respondent in respect of any order made against it in respect of the applicants’ costs. This judgment will deal primarily with the question of who is to be responsible for the applicants’ costs.

Background

6. I need not repeat the contents of my judgment of 15 December 1998, but the following salient points from the evidence and that judgment must be borne in mind as the Court addresses the question of costs.

(1) On 7 April 1998 the First Respondent (Council) granted to the Second Respondent a building approval (98/1462) to construct a garage and carry out additions and alterations to a dwelling on premises, owned by the Third Respondent and situated near properties owned and occupied by the applicants.

(2) I granted interlocutory relief on an ex parte basis on 5 August 1998, but Lloyd J declined to continue that relief, following submissions on behalf of the parties, on 12 August 1998.

(3) When the substantive proceedings came on for hearing on 7-8 October 1998, the applicants sought a declaration that the approval was void, and an order restraining “ any work ” in relation to it. Council and the Second Respondent made submitting appearances , save as to costs, and the Third Respondent defended the proceedings.

(4) In respect of the exposure of Council to any order as to costs, it having made a submitting appearance and produced its files, it must be remembered that it was made clear in the evidence, and mentioned in my judgment (at par 3) that Council declined to allow its officers, and indeed its former officers, to provide statements or swear affidavits in the proceedings.

(5) The central issues in the case concerned the role, terms, interpretation and application of Council’s notification policies. There was no dispute that the applicants were not notified of the relevant application and the approval. They had no objections to renovation of the dwelling house, but strong objections to the impact of the garage on the amenity of their properties.

(6) The applicants said they had been notified on earlier occasions of projects which had minor, if any, impact on their properties. However, they became aware of this approval only when the old garage was demolished and the new one began to take shape, and they observed that it was wider, taller, and further away from the relevant dividing fence than the one it replaced.

(7) The town planning evidence satisfied me that:
(a) the adverse impact on the applicants’ properties was significant, especially on the question of views,
(b) the enjoyment of their land would be “ detrimentally affected ”, and
(c) the garage was not in keeping with the character and nature of adjacent development “ due to its location and excessive bulk and height ”, exacerbated by the slope in the area.

(8) The relevant Council officer (Peter Ryan), who assessed the application, and then left Council’s employ, was called to give oral evidence, in the absence of any affidavit or statement of his evidence. His evidence is summarised at length at pages 9-12 of my judgment. At par 29, I said:

There is no evidence of the Council’s practice in considering such applications, beyond the practices employed by Ryan while he was in their employment. The Court simply does not know what occurred at the Council, which had complete control over the situation. It may simply have made a mistake. There was no evidence that the Council refused to notify the two applicants in this case - there is no evidence of whether any decision-making process at all was undertaken. Nonetheless, the Council certainly failed or neglected to notify the applicants. There is, therefore, a technical breach of Council’s obligation under common law to notify the applicants, who had a reasonable expectation that such notification would occur.


(9) From the evidence, I went on to infer that Council did not comply with its statutory obligations under the relevant provisions of the Local Government Act 1993, and to find that the Council’s breach of the law was serious.

(10) I then turned my attention to the questions involved in determining the appropriate orders to be made.

(11) I noted that the Third Respondent was entitled to rely on the approval it obtained from the First Respondent and I found its conduct “ reasonable and appropriate ”. I commented that both the applicants and the Third Respondent could be regarded as “ innocent ” parties, and that granting relief to the applicants could cause the Third Respondent “ a significant loss ” and “ some hardship ”.

(12) I concluded that the applicants were “ clearly entitled to relief ”, and that the Third Respondent was “ entitled to an opportunity to remedy the situation in which, through no fault of its own, it finds itself ”. Accordingly, I made the declaration the applicants sought, but, instead of the order they sought, I ordered that the Third Respondent demolish the garage “ unless lawful approval or certification is obtained from the Council ”. (I stipulated that such should be obtained within three months, but that time has been twice extended by the Court, by consent).

The Written Submissions

7. Summarising them briefly, the thrust of the various submissions is as follows:

(a) The applicants say they are entitled to an order for costs in their favour covering the work done both before and since judgment was delivered. They have no particular concern as to the apportionment of costs between the First and Third Respondents, as they say they had no alternative but to commence Class 4 proceedings because, firstly, the Council failed to notify the neighbours of the proposals for the Third Respondent’s dwelling house property, and, secondly, the Third Respondent declined to stop work, even though the strength of the applicants’ challenge to the relevant consent was made clear in correspondence dated 28 July 1998.

As against the First Respondent, the applicants say that the submitting appearance did not relieve the applicants from the need to prove their case. No admissions were made, and, although relevant inferences were possible, they were not conceded at any time by the First Respondent.

For its part, the Third Respondent defended the matter vigorously, putting the applicants to proof of their assertions in respect of the consent, and then argued discretion on the question of relief.

(b) The First Respondent says that, as the relevant Council, it was obliged to treat its consent as valid until the Court declared it invalid. It should not be exposed to costs other than, perhaps, for the very early stages of the matter, as it entered a submitting appearance on the first return date, once it “ had formed the view … that it had not complied with its own internal proceedings [sic] with regards to notice ”, and then made “ its file and officers available to both parties ”.

The First Respondent relies on Trust Company of Australia Ltd v Perpetual Trustees (WA) Ltd (1995) 36 NSWLR 654 as authority for the proposition that a plaintiff met by a submitting appearance is generally entitled to a judgment without formal proof of its claim. The applicants incurred substantial costs as a result primarily of the First Respondent’s decision to become the contradictor.

(c) The Third Respondent says that it was an innocent party, entitled to rely on its consent, and on a presumption of the regularity of Council’s affairs between March and June of 1998. In all the circumstances its conduct was reasonable and appropriate, but, as a consequence of Council’s defective processing of the application, the Third Respondent incurred building/demolition expenses, despite in no way being responsible for the making (or declaring) of the void consent.

The Third Respondent asks for an order in its favour against the First Respondent in respect of costs as between them, and asks also for an indemnity from the First Respondent in respect of any exposure to costs ordered in favour of the applicants.

The Third Respondent relies upon the decision of Cowdroy AJ in Echt & Anor v Ryde City Council & Ors (“ Echt ”) (40074 of 1998, 21 August 1998) in which the applicants sought a declaration that the Council had wrongly refused to take any action under the Local Government Act 1993, or at all, to enforce certain conditions of a building approval granted to their neighbours (the second respondents). At issue was whether Council was obliged to enforce the conditions of approval, whether a declaration without orders against Council was appropriate and whether Council should bear both the applicants’ and second respondents’ costs. In relation to the question of costs, Cowdroy AJ held:

Having considered the matter, I am of the view that had the Council taken more positive action to ensure that the conditions of its building approval were fulfilled, the proceedings would have been unnecessary. In the circumstances, the Court makes an order that the Council bear the cost of the applicants and also of the second respondents. In making such determination, the Court is mindful of the pivotal role which Councils should play in disputes of this type. Councils have an obligation to ensure that, so far as is possible, active steps are taken to settle such a dispute. I reject the submission of Council that this was a dispute between two neighbours, in respect of which the Council had no role to play .

In Echt, Cowdroy AJ ordered that the Council pay the costs of the applicants and of the second respondents.


Consideration

8. The purpose of an order for the payment of costs is to indemnify a successful party in respect of liability for professional fees and out of pocket expenses reasonably incurred in connection with the litigation - it is compensatory and not punitive. [See the decision of the High Court in Latoudis v Casey (“ Latoudis ”) (1990) 170 CLR 534].

9. Long before Latoudis , it was accepted that the discretion to make an order for costs is absolute and unfettered, although it is to be exercised judicially, that is to say, not by reference to irrelevant or extraneous considerations, but only upon facts connected with or leading up to the litigation.

10. A court should not exercise its discretion against a successful party “ except for some reason connected with the case ”: Donald Campbell & Co v Pollak [1927] AC 732, and the Court cannot act arbitrarily or upon the ground of some misconduct wholly unconnected with the prosecution, or of some prejudice. See Latoudis at 557, 564 and 568-9.

11. No argument has been advanced that the applicants should not have an order for costs. In Class 4 matters, costs usually follow the event, and, in reviewing the conduct of the parties, there is no ground for suggesting that the commencement of these proceedings was not completely justified [see discussion in Re The Minister for Immigration & Ethnic Affairs; ex parte Lai Qin (1997) 187 CLR 622 per McHugh J at 624-5].

12. The Court makes no criticism at all of the decision taken by the First Respondent to enter a submitting appearance. Nor does the Court criticise the decision of the Third Respondent to defend its consent.

13. However, the action of the First Respondent, as proven in the evidence, in making it at least difficult, if not impossible, for the parties remaining active in the litigation to be clear, in advance, as to the evidence which could be given by Mr Ryan, added significantly to the overall cost of these proceedings.

14. I have already referred to my finding on the evidence that Council “ declined to allow ” Ryan to provide a statement or affidavit, but that attitude/action was not acknowledged at all in any of Council’s submissions on costs.

15. Had Ryan’s evidence been available pre-hearing, by way of statement or affidavit, the disposition of this matter could well have been different, but it would certainly have been quicker, and the result, I believe, the same.

16. Accordingly, I believe that the applicants are entitled to all of their costs up to and including the date of this judgment; that they are entitled to expect both the First and Third Respondents to contribute to the payment of those costs; and that the appropriate apportionment of that responsibility between the First and Third Respondents should be that three-quarters of the applicants’ costs should be paid by the First Respondent, and one-quarter by the Third Respondent.

17. I decline to make any order that the First Respondent should indemnify the Third Respondent in respect of the Third Respondent’s liability to satisfy such an order for costs. I am also of the view that, as between themselves, the First Respondent and the Third Respondent should each bear their own costs.

18. Accordingly, the formal orders of the Court in respect of costs will be as follows:

1. That the First Respondent pay three-quarters of the applicants’ costs up to and including 11 May 1999.
2. That the Third Respondent pay one-quarter of the applicants’ costs up to and including 11 May 1999.