Fraser Waters Pty Ltd v Fraser Coast Regional Council
[2009] QPEC 104
•15/10/2009
[2009] QPEC 104
PLANNING & ENVIRONMENT COURT
JUDGE ALAN WILSON SC
P & E Appeal No 1005 of 2008
FRASER WATERS PTY LTD Appellant
and
FRASER COAST REGIONAL COUNCIL & ORS Respondent
BRISBANE
..DATE 15/10/2009
CATCHWORDS:
ENVIRONMENT AND PLANNING – ENVIRONMENTAL PLANNING – COSTS – where developer appellant discontinued the appeal – where appeal instituted for a collateral purpose, to obtain information to assist in another development application - whether the proceeding was frivolous or vexatious
ORDER
HIS HONOUR: This is an application by the first respondent, the Fraser Coast Regional Council for costs. The matter has a long history and I will touch upon some elements of that history in a moment.
It is appropriate to observe at the outset that the appellant against whom costs are sought has not appeared today. My associate has received some email communications from him in response to a request from her for the delivery and exchange of written submissions before the hearing today.
Mr Kleinschmidt, who appears to be a director of Fraser Waters Pty Ltd, has said in those emails that he does not intend appearing and the appellant will not otherwise be appearing either with legal representation or without. He has, however, attached to an email a document called "Appellant's Submissions" and I will deal with that as though it was read and filed in the customary way according to the Practice Direction which now governs the receipt of written submissions.
The history of the matter is set out in helpful submissions from Mr Storie, the barrister appearing for Fraser Coast Regional Council and, because I accept his submissions including his summary of the material facts in respect of his client's application or costs under section 4.23(2)(b) of the Integrated Planning Act 1997, I will, for the sake of clarifying any shortcomings in these ex tempore reasons, attach a copy of his submissions to those reasons.
That provision gives the Court a discretion to award costs where it considers the proceeding or part of the proceeding to have been frivolous or vexatious.
The background to the matter is set out in paragraphs 329 of Mr Storie's submissions. The appellant lodged a development application on the 19th of April 2005 seeking a reconfiguration of land at Toogoom Road, Toogoom from four lots into 622 lots and a park.
That application was made at a time when the Council Plan was what IPA calls a Transitional Planning Scheme, that is one that was not strictly IPA compliant. About 18 months after the lodgement of the development application, the Council's transitional planning scheme was repealed and replaced with an IPA compliance scheme.
On the 22nd of April 2008, that is about another 18 months later, the appellant instituted this appeal against the Council's deemed refusal of the original development application. Six months later, on the 11th of December, the appellant lodged a development application superseded planning scheme in respect of substantially the same land as that which was the subject of the original development application some three and a half years earlier.
I pause to note that the development application superseded planning scheme was made, I think, just within the two years allowed after the introduction of the IPA compliance scheme on the 15th of December 2006.
Between April and December 2008 some steps were carried out in respect of this appeal following orders of the Court about the provision of further and better particulars, disclosure and notification of experts. Earlier this year, in January, the appellant served on the other parties and filed in the Court a notice of discontinuance. Within a period stipulated in the Rules the Council brought the present application seeking its costs of the various steps carried out in the appeal.
The grounds upon which council asserts that the appeal proceedings are properly categorised as frivolous or vexatious appear in evidence attached to affidavits filed on the Council's behalf and, in particular, an email sent by Mr Kleinschmidt, a director of the appellant, to his fellow directors on the 26th of March 2008 which says, "The purpose of the appeal exercise is to draw Council's reasons and experts out and to endeavour to address them in the superseded planning scheme application."
The second piece of evidence is an affidavit from a Mr Ellery, who was an officer of the Council. He says he was told by town planning consultant, engaged by the appellant in December 2008, on the day the new application was lodged that the town planners had instructed the appellant's solicitors to proceed with the appeal and in particular to obtain further and better particulars about the reasons for refusal, and that they had done this so that they could use this information in the preparation of a new application to increase its chances of acceptance and hence approval by the Council.
It is said that in those circumstances I ought to be satisfied and to find that the appeal was not instituted for the purpose of obtaining approval of the original development application, but rather for the purpose of obtaining information for use in the preparation and lodgement of another development application, and that it therefore had a collateral or ulterior motive that it was never intended that it would proceed to an actual hearing and that it was productive of serious and unjustified trouble or harassment.
The submissions given to me refer to the well-known passages in the Court of Appeal decision in Mudie v. Gainriver Pty Ltd (No 2) adopting what Deane J said in the decision of the High Court in Oceanic Sunline Special Shipping Company v. Fay 1988 165 Commonwealth Law Reports 197 at 147 in which his Honour said that vexatious means what I just said. That is namely productive of serious and unjustified trouble or harassment.
The submissions also argue persuasively that at the time the appeal was lodged the appellant had no intention of pursuing the original development application and that conclusion is further supported by the difference in the apparent prospects of success between the original development application and the similar application lodged much later under the superseded planning scheme. I accept those submissions which are set out in paragraphs 24 and 25.
It is appropriate to record that on first considering the submissions I was troubled to a degree because they seemed to me to be arguing that strategic or tactical steps underlying or explaining an appeal might themselves qualify as frivolous or vexatious.
It is neither a disservice nor a discredit to parties and lawyers who appear from time to time in this Court to say that it occasionally seems to the Court that there is more than one motive for, or explanation of, appeal proceedings and that it is not necessarily an uncommon thing that appeal proceedings might have some tactical or strategic element.
I was not sure that the decisions to which I had been referred necessarily encompassed acts or motives of that kind to a degree which would enable them to be categorised as frivolous or vexatious.
In my earlier decision in Hamill v. Brisbane City Council reported at 2005 QPELR 23 I was dealing with an application which was on its face, as the appellants frankly conceded, a proceeding which had been brought for a plainly ulterior motive and indeed one which could never have succeeded. That is to say the appeal itself was misguided.
In considering those circumstances, I referred to what Williams JA said in Mudie v. Gainriver at 291 and the longer version of the passage in which his Honour quoted Dean J in Oceanic Sunline. At paragraph 24 on page 27 I observed that the appeal had plainly been lodged to delay or obstruct the co-respondent's activities and was frivolous or vexatious in that it was manifestly groundless and I referred, perhaps with excessive self reverence, to my other earlier decision in Sinnathamby v.Purcell at 2003 QPELR 237 at 240.
While the circumstances here are a little different, it does not seem to me an inherently surprising proposition that there is a line, a barrier or a balance between proceedings which, while they have some ulterior motive or tactical basis or are part of some wider strategy may, on the one hand, still constitute legitimate appeal proceedings and the conduct of them may be described as not frivolous nor vexatious.
But on the other side of that line it seems to me there will be proceedings which have motives of that kind and which do qualify within the ordinary meaning of that phrase. This seems to me to be such a proceeding. What reinforces that conclusion is the history of the conduct of the matter which I have just set out.
It is, I think, inescapable that the appellant was always primarily motivated by tactical reasons and that the history of the matter is itself corroboration of what is recorded in the email and the conversations I related a little while ago.
For these reasons it seems to me that the ordinary rules set out in section 4.1.23(1), under which parties in this jurisdiction are expected to pay their own price, is here subsumed by the exceptions in subsection (2) and in particular that appearing in subsection (2)(b) which allows the Court a discretion to award costs where the proceedings have been frivolous or vexatious.
...
HIS HONOUR: The order should be that the appellant pay the respondent's costs of and incidental to the appeal including reserved costs assessed on the standard basis.
‑‑‑‑‑
In the Planning and Environment Appeal No.1005 of 2008
Court
Held at: Brisbane
Between:
FRASER WATERS PTY LTD
ACN 104 999 297Appellant
And:
FRASER COAST REGIONAL COUNCIL
First Respondent
And:
CHIEF EXECUTIVE UNDER THE TRANSPORT INFRASTRUCTURE ACT 1994
Second Respondent
And:
CHIEF EXECUTIVE UNDER THE COASTAL PROTECTION AND MANAGEMENT ACT 1995
Third Respondent
FIRST RESPONDENT’S WRITTEN SUBMISSIONS
Introduction
This is the First Respondent’s application in pending proceedings for orders pursuant to section 4.1.23 of the Integrated Planning Act 1997 (“IPA”), that the Appellant pay the First Respondent’s costs of carrying out various steps in the appeal.
The Second and Third Respondents in the appeal were excused from the further conduct of the proceedings by Order of the Court dated 25 February 2009.
Background to the Application
The development application the subject of the appeal (“the Original Development Application”) was lodged on or about 19 April 2005 and sought, in respect of land situated at Toogoom Road, Toogoom and more particularly described as Lots 1 and 2 on SP159238, Lot 1 on RP174516 and Lot 3 on RB840119, the following:
(a)a development permit for a material change of use for residential low density development;
(b)a development permit for the reconfiguration of a Lot (4 Lots into 622 Lots and park);
(c)a preliminary approval for a material change of use overriding the transitional planning scheme; and
(d)a preliminary approval for operational works[1].
[1] Affidavit of Michael Thomas Ellery (court file document number 27) at paragraph 2
On or about 15 December 2006, First Respondent’s transitional planning scheme (“the Superseded Scheme”) was repealed and replaced with an IPA-compliant scheme (“the Current Scheme”).
On 22 April 2008, the Appellant instituted this appeal against the First Respondent’s deemed refusal of the Original Development Application.
On 11 December 2008, the Appellant lodged a development application (superseded planning scheme) (“the New Development Application”), in respect of substantially the same land as that the subject of the Original Development Application[2].
[2] Ibid at paragraph 28
Between 22 April 2008 and 11 December 2008, a number of steps were carried out in the appeal by the First Respondent, pursuant to the orders of the Court, including:
(a)the provision of further and better particulars of its reasons for refusal;
(b)disclosure; and
(c)notification of its experts[3].
[3] Ibid at paragraphs 9 to 27 and affidavit of Michael John Connor filed 31 August 2009 (court file document number 32) at paragraph 2
On 20 and 21 January 2009, respectively, the Appellant served on the other parties and filed in the Court, a notice of discontinuance in respect of the appeal[4].
[4]Affidavit of Michael Thomas Ellery at paragraph 30 and affidavit of Michael John Connor filed 31 August 2009 at paragraph 2
On 3 February 2009, the First Respondent brought the present application in pending proceeding, seeking its costs of various steps carried out in the appeal.
The First Respondent contends that:
(a)prior to the institution of the appeal, the Appellant had resolved not to pursue approval of the Original Development Application, but to seek approval instead of another development application, to be lodged as a development application (superseded planning scheme) (“the New Development Application”);
(b)the appeal was instituted only for the purpose of obtaining information from the First Respondent to be used in the preparation of the New Development Application; and
(c)in this respect the appeal was “frivolous or vexatious” for the purposes of section 4.1.23 of IPA; and
It is further the First Respondent’s contention that the Appellant failed, in the course of the appeal, to properly comply with its obligations of disclosure and as such, defaulted in the Court’s procedural requirements.
Jurisdiction
An active party to a proceeding in the Court is entitled to make an application about the proceeding within 14 days of being served with a copy of a notice of discontinuance in the proceeding[5].
[5] Rule 14 of the Planning and Environment Court Rules 2008
The First Respondent:
(a)is an active party to the proceeding;
(b)was served with a copy of the notice of discontinuance on 20 January 2009[6]; and
(c)brought the present application on 3 February 2009.
[6] Affidavit of Michael Thomas Ellery at paragraph 30 and affidavit of Michael John Connor filed 31 August 2009 at paragraph 2
Power to Award Costs
The Court has a discretion to order costs for a proceeding as it considers appropriate where, inter alia:
(a)it considers the proceeding (or part of the proceeding) to have been frivolous or vexatious[7]; or
(b)a party has incurred costs because another party has defaulted in the court's procedural requirements[8].
[7] Section 4.1.23(2)(b) of IPA
[8] Section 4.1.23(2)(e) of IPA
Proceeding (or Part of a Proceeding) Frivolous or Vexatious
Section 4.1.23(2)(b) of IPA grants the Court a discretion to award costs where it “considers the proceeding (or part of the proceeding) to have been frivolous or vexatious”.
The word “part” in section 4.1.23(2)(b) of IPA can “relate to the temporal course of proceedings, not just to the different issues which constitute them. So if, in the course of valid proceedings an event occurs which makes their continuance frivolous and vexatious the provision can apply to costs incurred after that point”[9].
[9] Juniper Development Corporation Pty Ltd v Jewry [2006] QPELR 202 per Skoien DCJ at [23]
“Vexatious” in this context means, inter alia, “productive of serious and unjustified trouble or harassment”[10].
[10] Mudie v Gainriver Pty Ltd (No.2) [2003] 2 Qd R 271 at paragraph 36 adopting the description of Deane J in Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197 at 247
It is submitted that to the extent proceedings are commenced or continued for a collateral or ulterior purpose, they are “productive of serious and unjustified trouble or harassment” for the other parties to the proceeding and as such, are “vexatious” within the meaning of that term in section 4.1.23(2)(b) of IPA.
There is evidence before the Court in the form of:
(a)an email sent by Fred Kleinschmidt, a director of the Appellant, to his fellow directors (“the Kleinschmidt Email”)[11]; and
(b)affidavit testimony of Michael Thomas Ellery (“Mr Ellery”), the Executive Manager Development Assessment of the First Respondent;
that supports the contention that the appeal was commenced for the purpose of obtaining information for use in the preparation of the New Application and that the Appellant had no intention of pursuing an approval of the Original Application through the appeal process.
[11] Exhibit MJC-1 to the affidavit of Michael John Connor, sworn 13 October 2009, to be filed.
The Kleinschmidt Email
It is noted that the Kleinschmidt Email:
(a)is dated 26 March 2008, i.e. prior to the date the appeal was lodged; and
(b)states unequivocally, that “The purpose of the appeal exercise is to draw Council’s reasons and experts out and to endeavour to address them in the superseded planning scheme application.”[12]
[12] Fourth paragraph below bullet point on page 2 of email
Affidavit of Mr Ellery
Mr Ellery deposes to being told by Simon Pollock of Conics (the town planning consultants of the Appellant) on or about 11 December 2008 (i.e. the day the New Application was lodged) that:
(a) “…they (Conics) had instructed the Appellant’s solicitors to proceed with the appeal and in particular to obtain the better and further particulars about the reasons for refusal…”[13]; and
(b)“…that they had done this so that they could use this information in the preparation of the new application to increase its chances of acceptance and hence approval by Council”[14].
[13] Affidavit of Michael Thomas Ellery at paragraph 30
[14] Id
In the circumstances, the Court ought be satisfied that:
(a)the appeal was not instituted for the purpose of obtaining approval of the Original Development Application, but rather for the purpose of obtaining information for use in the preparation and lodgement of another development application;
(b)such purpose is properly characterised as “collateral or ulterior”;
(c)the appeal is “productive of serious and unjustified trouble or harassment” for the First Respondent; and
(d)the appeal is “frivolous or vexatious” for the purposes of section 4.1.23 of IPA.
Relative Prospects of Approval of the Original and New Development Applications
It is submitted that the First Respondent’s contention, that at the time the appeal was lodged the Appellant had no intention of pursuing the approval of the Original Development Application, is further supported by the differential prospects of success of the Original Development Application and a similar application lodged as a development application (superseded planning scheme), that would have been apparent to the Appellant prior to the appeal being lodged.
In this regard, it is noted that:
(a)the First Respondent’s transitional planning scheme (“the Superseded Scheme”) was repealed and replaced with an IPA-compliant scheme (“the Current Scheme”) on 15 December 2006, i.e. after the lodgement of the Appellant’s Original Development Application, but before the institution of the appeal;
(b)under the Superseded Scheme, the land the subject of the Original Development Application, although zoned Rural, had a Strategic Plan designation of “Tourist Village”;
(c)under the Current Scheme, the land the subject of the Original Development Application is again zoned Rural, but no similar concession exists to potentially allow development of the kind applied for by the Appellant;
(d)although the Current Scheme came into force after the Original Development Application had entered the decision stage, pursuant to the Coty principle[15] any development that would cut across the implementation of the new scheme would not be approved; and
(e)an application made as a development application (superseded planning scheme) within two years of the date of the repeal of the Transitional Scheme, either:
(i)would be assessed solely against the Transitional Scheme; or
(ii)if the Council elected to assess it against the Current Scheme, the Council would be liable to pay compensation if the development application is refused, approved in part or approved subject to conditions[16].
[15] Coty (England) Pty Ltd v Sydney City Council (1957) 2 LGRA 117; Lewiac Pty Ltd v Council for the City of Gold Coast (1994) 83 LGERA 224
[16] Section 3.2.5 and 5.4.2 of IPA
In the premises, it is submitted that:
(a)the Original Development Application clearly cuts across the implementation of the Current Scheme, which does not provide in any way for urban uses in the rural zone;
(b)as such, the prospects of successfully obtaining an approval for development of the kind sought by the Appellant is significantly greater if assessed solely under the Superseded Scheme; and
(c)this fact would have been manifestly obvious to an experienced planning and environment lawyer prior to the time the appeal was instituted and certainly prior to the time the Particulars were provided.
Default in the Court’s Procedural Requirements
Section 4.1.23(2)(e) of IPA grants the Court a discretion to award costs where “a party has incurred costs because another party has defaulted in the court's procedural requirements”.
In this context, the “court’s procedural requirements” include the rules of the Court and orders and directions made by the Court[17].
[17]Davnat Developments 7 Pty Ltd v Gold Coast CC [2008] QPEC 62 at 14
The Planning and Environment Court Rules 2008 (“the PEC Rules”) apply to proceedings in the Court[18], but where the PEC Rules do not provide for a matter, the rules applying to the District Court apply with necessary changes[19].
[18] Rule 3(1) of the PEC Rules
[19] Rule 3(2) of the PEC Rules
The Uniform Civil Procedure Rules 1999 (“the UCPR”) apply to all civil proceedings in the District Court[20].
[20] Rule 3(1) of the UCPR
Paragraph 4 of the Order of the Court of 22 October 2008, required the parties to make disclosure by 31 October 2008 and complete inspection by 5 November 2008.
The process of disclosure is not provided for in the PEC Rules, but it is dealt with by chapter 7 of the UCPR.
Rule 211 of the UCPR provides:
“211 Duty of disclosure
(1) A party to a proceeding has a duty to disclose to each other party each document--
(a) in the possession or under the control of the first party; and
(b) directly relevant to an allegation in issue in the pleadings; and
(c) if there are no pleadings--directly relevant to a matter in issue in the proceeding.”
“Directly relevant” in this context means “something which tends to prove or disprove a fact in issue”[21].
[21] Robson v REB Engineering Pty Ltd [1997] 2 Qd R 102 at 105
Rule 214 of the UCPR provides:
“214 Disclosure by delivery of list of documents and copies
(1) Subject to rules 216 and 223, a party to a proceeding performs the duty of disclosure by--
(a) delivering to the other parties in accordance with this part a list of the documents to which the duty relates and the documents in relation to which privilege from disclosure is claimed (the list of documents); and
(b) at a party's request, delivering to the party copies of the documents mentioned in the list of documents, other than the documents in relation to which privilege from disclosure is claimed.”(Underlining added)
Together, rules 211 and 214 of the UCPR cast an onus upon the party preparing the list of documents to consider the question of direct relevance[22]. A party’s disclosure obligations are not discharged by simply disclosing all documents in a party’s possession without any attempt being made to eliminate those that are not directly relevant to the matters in issue.
[22] Carsburg Earthmoving Pty Ltd v Geroff & Ors [2007] QDC 136 at [5]
In the present case, the First Respondent contends that the Appellant failed to discharge its obligations with respect to disclosure as required by paragraph 4 of the Order of the Court of 22 October 2008 and chapter 7 of the UCPR.
On 31 October 2008, the Appellant provided the First Respondent with its List of Documents. That List of Documents is exhibited to the affidavit of Hayley Elizabeth Rayment (“Ms Rayment”)[23], a solicitor in the employ of Connor O’Meara Solicitors, the solicitors for the First Respondent in this proceeding.
[23] Court file document number 18
That List of Documents is some 54 pages long and comprises over 1000 documents.
On the face of the List of Documents:
(a)many of the documents appear to have no relevance to the issues in dispute in the appeal; and
(b)there is insufficient information to determine whether many of the documents have any relevance.
Further, Ms Rayment deposes that:
(a)she spent approximately a day and a half inspecting the documents listed in the List of Documents, at the Appellant’s solicitors’ offices;
(b)it appeared to her that the Appellant had disclosed every document in its possession including several drafts of reports and letters;
(c)she was of the opinion that the Appellant had disclosed a number of documents that were not in any way relevant to any issue in the proceedings;
(d)the Appellant frequently disclosed several copies of documents which appeared at various intervals throughout the Appellant’s List of Documents; and
(e)the List of Documents was not in chronological order but appeared to be merely in the order that the documents were already on the file.
It is submitted that in the premises the Appellant failed to comply with the orders and rules of the Court, so far as they relate to disclosure and that as a result of that failure, the First Respondent incurred costs, being those costs incurred in undertaking an inspection at the Appellant’s premises, which lasted for a day and a half.
Indemnity Basis of Costs Assessment
An award of costs under section 4.1.23 of IPA can be made on the indemnity basis and the principles governing such an award are the same as those governing the Court’s discretion to award costs on an indemnity basis pursuant to rule 704 of the Uniform Civil Procedure Rules 1999 (“the UCPR”)[24].
[24] Gold Coast CC v Metrostar [2005] QPELR 17
The commencement or continuance of proceedings for an ulterior motive is a recognised ground upon which costs may be awarded on the indemnity basis[25].
[25] Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248
It is submitted that if the Court is of the view that the appeal was commenced or continued for a collateral or ulterior purpose, then the appropriate order for costs is on the indemnity basis.
A D Storie
Counsel for the First Respondent
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