Gold Coast City Council v Metrostar Pty Ltd

[2004] QPEC 29

PLANNING & ENVIRONMENT COURT

OF QUEENSLAND

CITATION:	Gold Coast City Council v Metrostar Pty Ltd & Ors [2004] QPEC 029
PARTIES:	GOLD COAST CITY COUNCIL (Applicant) v METROSTAR PTY LTD (First Respondent) and BAPTIST JERRY ROMANO (Second Respondent) and PATRICIA ANN ROMANO (Third Respondent) and ROMANO CONSTRUCTIONS PTY LTD (Fourth Respondent) and PATRICK JOHN CLARKE (Fifth Respondent)
FILE NO/S:	42 of 2003
DIVISION:	Planning and Environment
PROCEEDING:	Application
ORIGINATING  COURT:	Planning and Environment Court Brisbane
DELIVERED ON:	9 July 2004
DELIVERED AT:	Brisbane
HEARING DATE:	23 June 2004
JUDGE:	Alan Wilson SC DCJ
ORDER:	That the first and fourth respondents pay the applicant’s costs of and incidental to:

(a) the application filed 14 April 2004

(b) the first and fourth respondents cross-application filed by leave on 4 May 2004

assessed on an indemnity basis.

CATCHWORDS:	PLANNING LAW – COSTS – FRIVOLOUS OR VEXATIOUS PROCEEDINGS – discretion of Court – relevant considerations – Integrated Planning Act 1997, s.4.1.23
Integrated Planning Act 1997, s.4.1.23 Local Government (Planning and Environment) Act 1990, s.7.6(1A) Cases considered:
Attorney General v Duchy of Lancaster & L&MW Railway [1892] 3 Ch 277 Begley v Pine Rivers Shire Council [1995] QPLR 228 Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 Mudie v Gainriver Pty Ltd (No. 2) (2003) 2 Qd R 271 Mudie v Gatton Shire Council [2002] QPEC 030 Norman v Matthews [1916] 85 LJKB 857 Oceanic Sun Line Special Shipping Company Inc. v Fay (1988) 165 CLR 197 RD Williams Tractors Pty Ltd v State of Queensland [1998] QPELR 26 Stubberfield v Redland Shire Council & Paradise Grove Pty Ltd [1995] QPLR 152 Tait v Townsville City Council [2001] QPELR 268 Voth v Manildra Flour Mills Pty Ltd (1990) 171 CLR 538 Wilson v Laidley Shire Council [1994] QPLR 65
COUNSEL:	Mr WG Everson for the applicant Mr E J Morzone for the first and fourth respondents
SOLICITORS:	Minter Ellison Gold Coast for the applicant Macdonnells Solicitors for the first and fourth respondents

1. In November 2003 the applicant (Council) applied for orders against the first and fourth respondents (Metrostar) concerning development work at a large building site at Nerang. A history of the matter is set out in Reasons for Judgment in this matter delivered on 16 June 2004; in short, in proceedings heard on 3 November 2003 Council established Metrostar had performed considerable clearing work at the site without permission, and failed to perform other work required under its development approval. Appropriate declarations were made and Metrostar was directed to perform extensive remedial work. Subsequently, the parties returned to court on 14 November 2003 and obtained a second order on agreed terms, dealing quite precisely with that work.

2. On 14 April 2004 Council applied again seeking enforcement of the November orders with which, it alleged, Metrostar had not complied. The matter was heard on 4 and 5 May. While Metrostar conceded there had been non-compliance with some parts of the November orders, on the first morning of the hearing (4 May) it cross- applied for orders setting the greater part of them aside. Metrostar’s principal contentions were that the November orders were futile and, largely, should not have been made; or, that they were overtaken by a later agreement between a Council engineer and the second respondent, Mr Romano.

3. These contentions were rejected in my Reasons published 16 June 2004, in which the following findings were made:

   …

   [11] Instead, when Council’s engineer Mr Steer inspected the site on 16 December he discovered no revegetation work had begun on Stages 2 and 3. The following day he had a meeting at the site with the second Respondent Mr Romano and others including the respondents’ landscape architect. Both Mr Steer and Mr Romano filed affidavits and were cross- examined. I am satisfied that, at that meeting, only Stages 2 and 3 were discussed and Mr Romano expressed concern that the works required in those areas by the orders would be futile (because subsequent building work, to be undertaken in the foreseeable future, would damage plants and groundcover, and a change in the road and building layout was also anticipated); and, that Mr Steer spoke words at that meeting from which it could be inferred the Council would adopt a ‘practical’ approach to compliance with the orders[1].

   [12] The respondents submit that their non-compliance should be considered in the light of that indication from Mr Steer, and their subsequent lodgement of a Banker’s Undertaking for $60,000 with Council, and of applications in January, February and March 2004 for variations of the proposed layout of the development of Stages 2 and 3, and earthworks and landscaping (none of which have yet been approved by Council); and, that these events satisfactorily explain why nothing has been done to revegetate under paragraphs 6.6 of the first Order or the whole of the second Order, and warrant excusing those failures or, at least, mean they should not be viewed harshly.

   [13] It was not contended that anything said by Mr Steer constituted a waiver of Council’s right to insist upon compliance with the orders, or gave rise to some form of estoppel which might avail the respondents in these proceedings. Otherwise, the respondents’ submissions cannot easily be accepted. As appears from the following reasons, their non-compliance has been, by any measure, serious and flagrant. Their subsequent conduct means it can readily be inferred that they quickly formed a resolve not only to ignore the orders, but to take steps which might discourage Council’s insistence upon compliance: for example, the subsequent applications were made piecemeal, and intermittently, rather than in a fashion consonant with ongoing efforts to achieve compliance on, say, new terms.

   [14] The discretion arising under s 4.3.27(3) is plainly a very wide one. The factors raised by the respondents are, I accept, relevant to it but they do not warrant the lenient approach for which they contend. The orders were clear in their terms. No appeal was brought against them. They followed clear breaches of development permits and the unlawful and almost complete destruction of natural vegetation on areas which clearly should not have been touched. Mr Romano’s protestations of good intentions, during his evidence, and willingness to do ‘whatever needs to be done’[2] were belied by the respondents’ long failure to respond to the Orders, or act in a way suggesting a serious or genuine intention to attempt to comply, however belated or ineffectual. In the interim, as the inspection showed, they have nevertheless been diligent in advancing the building works.

   [15] For these reasons, the respondents’ submissions about the way the discretion should be exercised have little force, and I am not persuaded there are any grounds for granting the relief they seek. There was, however, some evidence about aspects of the work the subject of the orders which is relevant to the terms of any particular further orders that should be made, and those matters are dealt with individually below.

   …

   [32] In essence what the respondents seek is to be excused their past non- compliance with the previous Orders, or future compliance, by dint of a change in their plans and, in essence, inconvenience. These proposals for relaxing the terms of the orders facilitate the respondents’ own future development work, in the face of initial breaches which were themselves very serious, and which have been compounded by unexplained non- compliance. The works under the previous orders were required to be completed by 5 January 2004 at the latest, but were absolutely ignored. The respondents have subsequently made three applications to the Council, not simultaneously, but in January, February and then March 2004 relating to landscaping, and Stages 2 and 3. As Mr Hinson SC for the Council fairly submitted, it is impossible to conclude other than that the respondents have been assiduous in seeking to protect their interests, but have shown scant regard for the court’s orders and the conditions of their existing approvals.

   [1] T 71.10-24.

   [2] T 135.17

4. Council now seeks the costs of the proceedings on 4 and 5 May 2004 and Mr Everson and Mr Morzone each delivered written submissions concerning costs which, in this jurisdiction, are governed by s.4.1.23 of the Integrated Planning Act 1997 (IPA):

   4.1.23 Costs
   (1) Each party to a proceeding in the court must bear the party’s own costs
   for the proceeding.

   (2) However, the court may order costs for the proceeding (including allowances to witnesses attending for giving evidence at the proceeding) as it considers appropriate in the following circumstances—

   (a) the court considers the proceeding was instituted merely to delay or

   obstruct;

   (b) the court considers the proceeding (or part of the proceeding) to have

   been frivolous or vexatious;

   (c) a party has not been given reasonable notice of intention to apply for

   an adjournment of the proceeding;

   (d) a party has incurred costs because the party is required to apply for an

   adjournment because of the conduct of another party;

   (e) a party has incurred costs because another party has defaulted in the

   court’s procedural requirements;

   (f) without limiting paragraph (d), a party has incurred costs because
   another party has introduced (or sought to introduce) new material;

   (g) if the proceeding is an appeal against a decision on a development application and the applicant did not, in responding to an information request, give all the information reasonably requested before the decision was made;

   (h) the court considers an assessment manager, a referral agency or a local government should have taken an active part in a proceeding and it did not do so;

   (i) an applicant, submitter, referral agency, assessment manager or local government does not properly discharge its responsibilities in the proceedings.

   (3) If a person brings a proceeding in the court for a declaration against an owner who sought the cancellation of a development approval without the consent of the other person mentioned in section 3.5.26, and the court makes the order, the court must award costs against the owner.

   (4) If a person brings an appeal under section 4.1.35 and the appeal is not withdrawn, the court must award costs against the relevant Minister or local government—

   (a) if the appeal is upheld; and

   (b) if the appeal is against a deemed refusal—even if the appeal is
   not upheld.

   (5) If a person brings a proceeding in the court for a declaration requiring a designator to give, under section 2.6.23 a notice of intention to resume an interest in land under the Acquisition of Land Act 1967 and the court makes an order about the declaration, the court must award costs against the designator.

   (6) If a person brings a proceeding in the court for a declaration and order requiring an assessment manager to give, under section 3.2.3 an acknowledgment notice and the court makes the order, the court must award costs against the assessment manager.

   (7) If the court allows an assessment manager to withdraw from an appeal,
   the court must not award costs against the assessment manager.

   (8) The court may, if it considers it appropriate, order the costs to be decided by the appropriate costs taxing officer of the Supreme Court, under the scale of costs prescribed by law for proceedings in the District Court.

   (9) If the court makes an order under subsection (8), the taxing officer may

   decide the appropriate scale to be used in taxing the costs.

   (10) An order made under this section may be made an order of the District
   Court and enforced in the District Court.

5. As I understood the submissions of Mr Everson, it was contended by Council that Metrostar’s non-compliance with the November orders was itself a proper basis for an award of costs under s.4.1.23(2)(b); i.e., that the events behind the findings set out above could themselves be categorised as frivolous, or vexatious, within a proceeding. Reliance was placed upon the decision of the Court of Appeal in Mudie v Gainriver Pty Ltd (No. 2) (2003) 2 Qd R 271, but although some parts of the joint decision of McMurdo P and Atkinson J at pp 282-4 might be construed to suggest that the wrongful conduct of a party, which explains and necessitates the enforcement proceedings, can be used as the basis for an adverse costs order under the subsection I do not think the case supports the proposition that behaviour which is sufficiently bad to attract an enforcement order falls within the meaning of the phrase “proceeding (the court considers) frivolous and vexatious”.

6. So much is clear, I think, from the following extracts from the joint judgment, which emphasise the proceedings themselves, and not the conduct which caused them to be brought:

   [30]. The sub-paragraphs of s.7.6(1)A suggests the legislative intent is to give the court a power to award costs to compensate a party disadvantaged by the unmeritorious conduct of another party, as particularised in those sub-paragraphs. The legislature must have intended to give the courts a discretion to award costs when any party conducts the proceedings in a way that is frivolous or vexatious.

   …

   [40] ... Much of the respondent’s defence of the proceeding was vexatious

   and oppressive.

   …

   [42] Once it is established a party’s conduct of proceedings is frivolous or vexatious, there is an unfettered discretion to award costs. … (My emphasis).

7. While it might be thought surprising that legislation permits costs in certain circumstances arising from the conduct of proceedings but not, ordinarily, as a consequence of behaviour which itself attracts sanctions under the legislation, that is the legislative effect of s.4.1.23. As Brabazon QC, DCJ said on the occasion of an earlier hearing in Mudie[3]:

   It is notable that the costs provisions in the repealed Act, and now in IPA, provide generally that each party will pay its own costs and then sets out a number of circumstances when orders for costs against a party may or must be made. That way of approaching the problem means that there will always be cases which do not fall within the particular provisions about costs even though it can be seen that litigants in those cases deserve compensation for the costs of litigation. It is odd that costs can be awarded for procedural defaults, but not for recalcitrance that leads to an order to punish for contempt of court.

   [3] Mudie v Gatton Shire Council [2002] QPEC 030

8. The power to award costs and limits on that power have a checkered history in this court and its predecessors, traced by Skoien SJDC (up to 1995) in Begley v Pine Rivers Shire Council [1995] QPLR 228, at 228-9. Some explanation for the oddity remarked by Brabazon QC, DCJ may be found in IPA Chapter 4 Part 4 under which Council might, in the present circumstances, have chosen to bring summary proceedings for development offences against Metrostar and sought the imposition of a fine and, at least, costs and expenses associated with obtaining evidence for the prosecution[4].

   [4] ss. 4.4.4, 4.4.6

9. There remains, nevertheless, the question whether Metrostar’s conduct of the proceedings - resisting the enforcement order, and cross-applying for other orders - may be categorised as frivolous, or vexatious. The subsection (4.1.23(2)(b)) and its predecessors have been considered on a number of previous occasions in this court. A helpful summary of the relevant case law is to be found in Wilson v Laidley Shire Council [1994] QPLR 65, 66-67. There, a successful applicant had sought costs against the respondent Council, and although O’Sullivan DCJ found the Council’s conduct to be unmeritorious, it was not categorised as vexatious.

10. In Stubberfield v Redland Shire Council & Paradise Grove Pty Ltd [1995] QPLR 152, Skoien SJDC said at 153:

    ‘Frivolous or vexatious’ has been held to mean, amongst other things, that

    an appeal is obviously unsustainable. See, for example, Attorney General v Duchy of Lancaster & L&MW Railway [1892-3] Ch.277 per Lindley LJ; or that a reasonable person could properly treat as bona fide and contend that he had a grievance which he was entitled to bring before the court, Norman v Matthews [1916] 85 LJKB 857 per Lush J at 859. Similar statements are contained in the authoritative dictionaries.

    In RD Williams Tractors Pty Ltd v State of Queensland [1998] QPELR 26, his Honour awarded costs against an appellant where it was held to have no right of appeal and the proceedings themselves were manifestly groundless, and struck out as vexatious. In Tait v Townsville City Council [2001] QPELR 268 Wall QC, DCJ held the application was itself so unmeritorious as to be frivolous and vexatious, and ordered the applicant pay the respondent’s costs.

11. In Mudie v Gainriver Pty Ltd (No. 2)[5], McMurdo P and Atkinson J said at 284:

    [36] Unquestionably, something much more than lack of success needs to be shown before a party’s proceedings are frivolous or vexatious. Although in a different context, some assistance can be gained from the discussion of the meaning of these words in Oceanic Sun Line Special Shipping Company Inc. v Fay where Deane J states that ‘oppressive’ means seriously and unfairly burdensome, prejudicial or damaging and ‘vexatious’ means productive of serious and unjustified trouble and harassment, meanings apparently approved by Mason CJ,. Deane, Dawson and Gaudron JJ, in Voth v Manildra Flour Mills Pty Ltd. Those meanings are apposite here.

    [37] Whether proceedings are vexatious or oppressive will turn on the circumstances of the case and will include public policy considerations and the interests of justice.”

    [5] supra

12. Williams JA said, at 291:

    Section 7.6 of the Local Government (Planning and Environment) Act 1990 clearly could apply to the situation where an appeal was struck out because it was groundless, but there is no reason to so limit the operation of the provision. If it was only to apply to the striking out of an appeal then it would have been easy for the legislation to have so provided. In this area of the law it quite often happens that more than one party is dissatisfied with a decision of a local authority which may be the subject of an appeal. In those circumstances it is often merely an accident that a particular party is the appellant for purposes of the appeal. Once the appeal is instituted other affected parties may raise additional issues for determination by the court. If a party resisted such an appeal by relying on assertions which were groundless then there is no reason why that party’s conduct should not be described as being ‘frivolous or vexatious’. To adapt the phraseology of Dixon J., in such circumstances there has been an abuse of process in that the court’s time and resources have been employed in exposing a groundless basis for resisting the appellant’s claim. Further, the meaning attributed to the word vexatious by Deane J. in Oceanic Sun Line Special Shipping Company Inc v Fay (1988) 165 CLR 197 at 247 also covers that situation; there it was said: “Vexatious should be understood as meaning productive of serious and unjustified trouble and harassment’. A developer and local authority clearly produce unjustified trouble and harassment when they resist in court the setting aside of void decisions and seek to justify unlawful conduct on wholly unmeritorious grounds. Such resistance would, in ordinary parlance, be described as ‘frivolous and vexatious.’

13. These passages make it clear that the word “proceeding” in the subsection includes, as part of its ordinary construction, not just the initiating proceeding but also a respondent’s defence, or resistance to it[6]. As in Mudie, Metrostar had committed serious breaches of its development permit which were not the result of a reasonable mistake and in respect of which a strong inference arose that private gain was involved[7]. Metrostar’s non-compliance with the November orders was obvious, and indeed vivid. Its few attempts to comply were desultory, and evasive[8]. The application of the Oceanic test means resistance to the Council’s application for enforcement orders was unjustified and without substance and, I am satisfied, frivolous or vexatious within the meaning of that test.

    [6] Mudie v Gainriver (supra) at para. [40].

    [7] Reasons for Judgment 16 June 2004, para [32]

    [8] Reasons for Judgment, para [13]

1. The same conclusion applies to Metrostar’s cross-application which, brought very late in the proceedings, can only be categorised as an unwarranted attempt to avoid the highly probable consequences of serious and flagrant non-compliance with the earlier orders. Metrostar contended that the meeting between the Council officer and the second respondent in December 2003 and Metrostar’s subsequent conduct signified genuine attempts to mitigate the non-compliance but just as those contentions were unpersuasive in the enforcement proceedings[9] they are not grounds for a finding the cross-application was appropriate, or reasonably warranted or justified.

   [9] Reasons for Judgment, para [14]

2. Both Metrostar’s defence to the enforcement proceedings and its cross application were frivolous and vexatious and the circumstances warrant an order that the first and fourth respondents pay the costs associated with those proceedings.

3. Council also seeks an order that the costs be paid on an indemnity basis. IPA s 4.1.23(8) gives this court a discretion to order costs to be taxed by a “Taxing Officer of the Supreme Court” under the District Court Scales and, under sub-s (9) the Taxing Officer may decide the appropriate scale at taxation. In that respect the section has been overtaken by the provisions of the Uniform Civil Procedure Rules, which apply if the Rules of this court do not address the matter: Planning and Environment Court Rules 1999, Rule 3(2). Those rules are, in fact, silent about costs or the basis upon which they may be assessed. The reference to the UCPR means this court has, then, the discretion arising under UCPR Rule 704 (“Indemnity Basis of Assessment”).

4. The principles and circumstances touching the question whether costs in a matter might be awarded on indemnity basis were considered by Sheppard J in Colgate Palmolive Co v Cussons Pty Ltd (1993) 118 ALR 248 and include: evidence of misconduct causing loss of time to the court, and other parties; whether the proceedings were commenced or continued for some ulterior motive; and, the undue prolongation of a case by groundless contentions[10]. Metrostar was originally guilty of serious misconduct leading to the orders in November 2003, powerfully aggravated by its non-compliance with those orders. It attempted to explain its non- compliance in a way which was transparently unsustainable and involved contentions found to be groundless.

   [10] At 257

5. I do not doubt that in the Queensland civil courts those circumstances would most likely attract an assessment of costs against Metrostar on an indemnity basis, and the only question is whether the particular terms of IPA s 4.1.23 militate in some way against a similar conclusion. The same provision under the preceding legislation (Local Government Planning and Environment Act 1990, s 7.6(1A)) was described in these terms by McMurdo P and Atkinson J in Mudie, at 282:

   [30]         The sub paragraphs of 7.6(1A) suggest the legislative intent is to

   give the court a power to award costs to compensate a party disadvantaged by the unmeritorious conduct of another party, as particularised in those sub-paragraphs. (My emphasis)

   Council has been put to the trouble and expense of pursuing the enforcement of orders which were clear and with which Metrostar should have complied. It is not too large a step to include, in the contemplation of the kinds of orders a court might make in those circumstances, the imposition of an award of costs on the higher scale. I am persuaded that is the appropriate order here.

6. Council also sought an order that the costs of appearance by Senior Counsel at the hearing on 4 and 5 May be allowed, but that is a matter which may appropriately be left to the assessor.