Gee v Council of the City of Sydney [No 2]

[2005] NSWLEC 144

Land and Environment Court

of New South Wales

CITATION:	Gee v Council of the City of Sydney and Ors [No 2] [2005] NSWLEC 144
PARTIES:	APPLICANT: Elizabeth Gee FIRST RESPONDENT: Council of the City of Sydney SECOND RESPONDENTS: Shauna Alexander and William Hywall Clark
FILE NUMBER(S):	40508 of 2004
CORAM:	Pain J
KEY ISSUES:	Costs :- practice of awarding costs in proceedings with multiple respondents - whether a party should be entitled to costs where party filed a submitting appearance save as to costs
LEGISLATION CITED:	Land and Environment Court Act 1979 s 69 Land and Environment Court Rules 1996 Pt 6 r 1(2) Supreme Court Rules 1970 Pt 11 r 4(3)
CASES CITED:	Broberg v Cessnock City Council & Ors (Bignold J, NSWLEC, 27 February 1996, unreported); Cobden-Jones & Anor v Woollahra Municipal Council & Ors [2002] NSWLEC 221; Hillpalm v Heavens Door (2002) 55 NSWLR 446; Latoudis v Casey (1990) 170 CLR 534; Maule v Liporoni & Anor [No. 2] (2002) 122 LGERA 216; Oshlack v Richmond River Council (1998) 193 CLR 72; Trowbridge & Anor v Ledbury & Ors [No 2] [1999] NSWLEC 119
DATES OF HEARING:	23/02/2005
DATE OF JUDGMENT:	04/11/2005
LEGAL REPRESENTATIVES:	APPLICANT: Mr A Galasso (barrister) SOLICITORS: Abbott Tout FIRST RESPONDENT: submitting appearance SECOND RESPONDENTS: Ms H Irish (barrister) SOLICITORS: Minter Ellison

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Pain J

11 April 2005

40508 of 2004 Elizabeth Gee v Council of the City of Sydney and Shauna Alexander and William Hywall Clark [No 2]

JUDGMENT

1 Her Honour: On 23 November 2004, I made an order that the Applicant pay the First Respondent’s costs in the substantive proceedings as agreed or assessed. I reserved the question of whether the Applicant should pay the costs of the Second Respondents.

2 The Second Respondents have filed a Notice of Motion dated 30 November 2004 seeking orders that the Applicant pay their costs of these proceedings up to and including 13 August 2004, and their costs of this motion. The motion is supported by an affidavit sworn by Helen Elizabeth Macfarlane, solicitor, which sets out the details of the commencement of the proceedings, the context of the previous Class 4 proceedings against the Second Respondents’ development application and the progress of these proceedings up to and including the Second Respondents’ submitting appearance.

The Second Respondents’ Submissions

3 The Second Respondents argued that as they entered a submitting appearance to minimise their own costs they should be entitled to a costs order for their own costs of choosing to be separately represented until they filed that submitting appearance. The Second Respondents relied on Pt 11 r 4(3) of the Supreme Court Rules 1970 incorporated by Pt 6 r 1(2) of the Land and Environment Court Rules 1996 which provides that a defendant who wishes to take no active part in proceedings may submit to the making of orders “save as to costs”.

4 In arguing this point, the Second Respondents submitted that this was not a case where only one set of costs should be awarded in favour of the Respondents. On the basis of the decisions of Bignold J in Broberg v Cessnock City Council & Ors (Bignold J, NSWLEC, 27 February 1996, unreported), Talbot J in Trowbridge & Anor v Ledbury & Ors [No 2] [1999] NSWLEC 119, and my decision in Cobden-Jones & Anor v Woollahra Municipal Council & Ors [2002] NSWLEC 221, the Second Respondents submitted that as they did not prolong the hearing, had a legitimate interest in defending their position and their representation was not challenged or questioned, they were justified in participating in litigation and entitled to costs.

5 In addition, the Second Respondents pointed to the role they played in ensuring that the matter proceeded in a timely and efficient manner. The Second Respondents argued that as the Council of the City of Sydney (“the Council”) delayed in its active participation in the matter, it was necessary for the Second Respondents to participate in order to ensure there was proper attention to the matter by the Council and to ensure the matter proceeded in a timely manner. The Second Respondents submitted that once the Council’s defence and evidence were filed, they assessed the appropriate level of their involvement in the proceedings to that end.

6 Finally, the Second Respondents argued that there were no factors in this case that constitute special circumstances or disentitling conduct to characterise the matter as public interest litigation as identified by McHugh J in Oshlack v Richmond River Council (1998) 193 CLR 72 as applied in Maule v Liporoni & Anor [No. 2] (2002) 122 LGERA 216.

The Applicant’s Submissions

7 The Applicant opposed the Second Respondents’ motion on a number of bases. Firstly, the Applicant argued that as it is virtually mandatory in Class 4 proceedings against consent authorities to join the parties affected by the development consent, the Applicant should not necessarily be liable to pay the costs of the Second Respondents. In support of this argument, the Applicant relied on Hillpalm v Heavens Door (2002) 55 NSWLR 446 where Meagher JA found that rights attached to development consents are rights in rem.

8 Secondly, the Applicant argued that there was no justifiable reason for the Second Respondents to participate in the proceedings and, accordingly, they should not be entitled to costs. The Applicant submitted that as the proceedings related principally to the Council, and not the Second Respondents, the Second Respondents should have been aware that the Council was going to actively defend the development consent at all times. Further, as the Second Respondents did not supplement or expand on any of the submissions made by the Council at the hearing there was no justifiable reason for the Second Respondents to participate in the proceedings.

9 Thirdly, the Applicant submitted that the Second Respondents should not be awarded costs on the basis that costs are compensatory and not punitive. In this respect, the Applicant relied on the judgment of Mason CJ in Latoudis v Casey (1990) 170 CLR 534. The Applicant argued that the Second Respondents are not entitled to any compensation because they did not contribute anything to the success of the Council in defending the development consent in the substantive proceedings.

10 Fourthly, the Applicant submitted that the Second Respondents should not be awarded costs on the basis of their disentitling conduct. The Applicant submitted that in situations where a respondent participates in a matter on the basis that another respondent may not properly conduct a defence, and the other respondent does, in fact, conduct a proper defence, this amounts to disentitling conduct as contemplated by McHugh J in Oshlack.

Finding

11 These Class 4 proceedings concern a challenge to the validity of a council’s development consent, a common form of litigation undertaken in this Court. Such cases generally involve the joinder of the relevant council and the beneficiary of the development consent. As is common the substantive issues in this case concerned whether the Council had correctly decided to grant consent. The Court has wide discretion to award costs under s 69 of the Land and Environment Court Act 1979. Any such exercise of discretion must be undertaken judicially. The general approach to costs in Class 4 proceedings is that an unsuccessful party should pay the costs of the successful party. That has occurred in relation to the costs of the Council by agreement between the parties. It does not necessarily follow that the Second Respondents should get their costs in circumstances where they did not actively participate in the hearing. They are not a successful party in the sense that they have participated in proceedings where their arguments won.

12 The only issue which was directly relevant to the Second Respondents’ actions and was a matter about which they could have had relevant evidence and submissions, was the exercise of the Court’s discretion in the event that the Applicant successfully argued the development consent was invalid. As a submitting appearance was filed by the Second Respondents before the hearing and no evidence was filed on this issue there is no discrete area of legal work undertaken in relation to which costs can be awarded in my view.

13 I agree with the Applicant’s second and third arguments that there is no reason for the Second Respondents to have their costs in the circumstances before me. In my view, awarding costs would be rewarding duplication of work by multiple respondents, which is not a practice this Court wishes to encourage. While it reflects extensive practice in this Court that both a council and the beneficiary of a consent will be joined in Class 4 proceedings challenging a consent, it should not be expected that both parties will receive their costs in full or in part where the costs they incur are a duplication of effort, as is arguably the case here.

14 It is not self evident that the involvement of the Second Respondents’ lawyers in the litigation was necessary to ensure the matter proceeded in a timely fashion and that the Council adequately covered all the relevant issues. Even if the involvement of the Second Respondents’ lawyers at some level was necessary to achieve these aims, these can be achieved by means other than being an active party in the litigation. It is not self evident that costs should be payable by an unsuccessful applicant for work which duplicates work undertaken by another respondent who actually participates in the final hearing. In making these comments I am not adopting the fourth argument of the Applicant that there was disentitling conduct on the Second Respondents’ part, however.

15 While it may well be true that no suggestion was made to the Second Respondents by any judge or by the Applicant that they could not assume that their costs would be paid that is not a reason to award them now. To this extent I am departing from my earlier decision in Cobden-Jones at [23]. In that case I took into account as relevant factors in awarding costs that the applicants commenced proceedings against more than one respondent and that there was no indication that the applicants objected at the time to the fact that the respondents had separate representation. I am aware that in case management of similar Class 4 matters such as this the presiding judge is now indicating to multiple respondents that they cannot assume that all respondents’ costs will be paid where there is possible duplication of effort.

16 I do consider that prudent applicants should give consideration to the issue of costs where multiple respondents are involved and seek to clarify the costs position as they see it early in the proceedings once all relevant issues have been clarified. The Second Respondents submitted that the Applicant could have done more to protect herself in relation to costs by writing early in the proceedings suggesting that:

In view of the prayer for relief sought against you, and the Points of Claim [and/or your Points of Defence], you are invited to enter a submitting appearance [or “a submitting appearance save as to your defence of discretion”]. If you continue to insist on separate representation [“save as to your defence of discretion”], the Applicant will rely on this written notice in any application made by you for your costs.

This failure is not a sufficient reason to award costs in favour of the Second Respondents now but I raise the submission here to highlight that applicants can give early consideration to costs issues when undertaking litigation against multiple respondents, as indeed should those multiple respondents.

17 While the Applicant has successfully opposed the Notice of Motion I consider that my reasons for judgment are based on a different approach to that taken by me previously. Given that the Second Respondents sought to rely on that approach it is appropriate that each party pay its own costs of the motion.

Orders

18 The Court makes the following orders:

1. That the Second Respondents’ Notice of Motion dated 30 November 2004 be dismissed.

2. That each party pay its costs of the Notice of Motion dated 30 November 2004.