Gosford Waterfront Alliance Inc v To Gosford Pty Ltd

[2016] NSWLEC 130

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Gosford Waterfront Alliance Inc v TO Gosford Pty Ltd [2016] NSWLEC 130

Hearing dates:

28 September 2016

Date of orders:

29 September 2016

Decision date:

29 September 2016

Jurisdiction:

Class 4

Before:

Robson J

Decision:

(1)   The first respondent pay half of the applicant’s costs for:

 

(a)   preparing and attending the directions on 13 September 2016;

 

(b)   preparing the affidavit of Ms Braund; and

 

(c)   appearing at the hearing of the motion on 28 September 2016.

(2)   The first respondent pay all of the applicant’s costs for the preparation of its submissions for the hearing of the motion on 28 September 2016.

Catchwords:

COSTS – motion for security of costs – motion withdrawn – whether applicant entitled to costs thrown away – when costs order should be made – order for costs granted

Legislation Cited:

Civil Liability Act 2005 (NSW)
Land and Environment Court Rules 2007 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Boronia Park Preservation Group v MSMG Developments Pty Ltd (2015) 209 LGERA 259; [2015] NSWLEC 112
Ritson v Leighton [2015] NSWCA 62
Save Little Beach Manly Foreshore Incorporated v Manly Council (2013) 198 LGERA 304; [2013] NSWLEC 155

Category:

Costs

Parties:

Gosford Waterfront Alliance Inc (Applicant)
TO Gosford Pty Ltd (First Respondent)
Central Coast Council (Second Respondent)

Representation:

Counsel:
M Fraser (Applicant)
F J Berglund (First Respondent)

  Solicitors:
Taperell Rutledge (Applicant)
Hartley Solicitors (First Respondent)

File Number(s):

2016/00245156

EX TEMPORE Judgment

1. By motion filed 6 September 2016, the first respondent in the primary proceedings, TO Gosford Pty Ltd (‘TO Gosford’), sought orders for (a) the final hearing to be expedited and (b) security of costs in the sum of $50,000. Whilst TO Gosford no longer presses for either order, the applicant in the primary proceedings, Gosford Waterfront Alliance Inc (‘GWA’), seeks an order for costs in relation to the now withdrawn motion. The second respondent, Central Coast Council (‘Council’), did not appear at the hearing on costs.

2. The primary proceedings relate to a class 4 application for judicial review brought by GWA, a community action group, in relation to the proposed development of mixed use commercial and retail premises at 99 Georgiana Terrace, Gosford. This land is owned by TO Gosford, which in turn is part of the Doma Group. Deferred development consent for this development was granted by Council on 30 June 2016, based on a determination from the Hunter and Central Coast Joint Regional Planning Panel (‘JRPP’). On 4 August 2016, Council confirmed that the deferred commencement conditions had been satisfied.

3. GWA commenced the primary proceedings by way of summons on 15 August 2016. It alleges that the JRPP made a number of legal errors in the course of considering the development application and recommending it for approval. No injunction preventing commencement of the development has been sought by GWA.

4. The issue before the Court is whether costs should be awarded to GWA for costs thrown away in relation to this motion.

5. Before proceeding, it is noted that TO Gosford no longer pursues an order for expedition, given that this matter at the behest of the parties has been set down for hearing on 1 and 2 November 2016, and that GWA does not seek costs in relation to this element of the motion.

Background

6. During the hearing on costs, a bundle of correspondence between the parties was tendered by counsel for GWA, Mr Fraser. Counsel for TO Gosford, Ms Berglund, accepted that this bundle was an accurate representation of the relevant correspondence between the parties. Whilst I note that some (but not all) of this correspondence is marked “without prejudice” and “without prejudice save as to costs”, both parties sought to rely upon the bundle as evidence for the purposes of this hearing on costs, and I consider it was appropriate for me to have recourse to it.

7. The correspondence between the parties can be summarised as follows:

1. on 26 August 2016, TO Gosford requested that GWA provide evidence that it could meet a costs order of approximately $50,000 by close of business on 2 September 2016;

2. on 2 September 2016, GWA replied and stated that there were no special circumstances in the present case pursuant to r 59.11 of the Uniform Civil Procedure Rules 2005 (NSW) (‘UCPR’), that any order for security of costs would not be in the public interest, and that it would seek indemnity costs in relation to any motion for security of costs;

3. on 6 September 2016, TO Gosford filed and served the motion on GWA;

4. on 9 September 2016, GWA reiterated its position outlined on 2 September 2016, and further noted that, in the event that GWA was unsuccessful at final hearing, the Court would also be unlikely to make an order for security of costs pursuant to the operation of r 4.2(2) of the Land and Environment Court Rules 2007 (NSW) (‘LECR’);

5. on 19 September 2016, TO Gosford sent a letter to GWA marked “without prejudice save as to costs” that stated it would not press for security for costs on the condition that GWA agreed to no order as to costs;

6. on 20 September 2016, GWA sent a letter to TO Gosford marked “without prejudice” rejecting the offer, and reiterating its position that it would seek indemnity costs;

7. on 21 September 2016, TO Gosford sent a further letter to GWA marked “without prejudice save as to costs” that stated TO Gosford proposed to withdraw the security for costs application and that the costs be reserved until the hearing, and sought consent from GWA for this course of action;

8. on 23 September 2016, GWA sent a letter to TO Gosford that was not marked in relation to prejudice which outlined in some detail the prior correspondence on this point, and rejected TO Gosford’s revised proposal;

9. later on 23 September 2016, TO Gosford wrote to GWA and notified it that it would not press its application for security of costs, that it would seek an order for costs to be reserved and that it proposed to communicate this position to the Court; and

10. on 26 September 2016, GWA requested that TO Gosford notify it once it had communicated its position on the motion to the Court.

8. Whilst not forming part of the bundle, it should also be noted that:

1. the Court made directions in relation to the motion at a preliminary hearing on 13 September 2016;

2. on 14 September 2016, the affidavit of Ms Claire Braund was filed on behalf of GWA;

3. TO Gosford did not file or serve its written submissions relating to the motion by 19 September 2016 (or at all) as directed by the Court;

4. GWA filed its submissions in relation to the motion at 12:49pm on 23 September 2016; and

5. the Court did not receive any communication from TO Gosford relating to the motion as proposed in its letter dated 23 September 2016.

Submissions

9. GWA submitted that costs ordinarily follow the event of abandonment of a motion, such as occurred in the present case. It was submitted that TO Gosford was on notice prior to 13 September 2016 regarding the probable futility of their application for security of costs, and determined to proceed regardless. It was further submitted that GWA had “incurred” the costs of preparing its written submissions for the hearing of the motion in order to comply with directions of the Court. GWA submitted that these costs had been “incurred” for little purpose, given that TO Gosford subsequently withdrew the motion, and that it should be compensated. It was finally submitted that TO Gosford should be ordered to pay costs from a public policy perspective, as to do otherwise would encourage similar respondents to make doomed applications for security of costs with impunity.

10. I note that I place “incurred” in inverted commas as, given that GWA is represented by Taperell Rutledge and Mr Fraser on a pro bono basis, GWA has not personally incurred any actual costs, and the costs that have been incurred have been the time costs for its representatives.

11. TO Gosford took the position that costs of the motion should be reserved and decided at the hearing of the primary proceedings. It was submitted that TO Gosford was entitled to bring a claim for security of costs, and that respondents in a similar situation should not be discouraged from doing so. It further submitted that TO Gosford was only made aware of the public interest nature of the claim by way of the affidavit of Ms Braund dated 14 September 2016, which was served after the directions hearing on 13 September 2016. It was finally submitted that it would be difficult to determine the precise costs if an order were to be made now, as various activities undertaken by GWA could serve another purpose and would not necessarily be costs thrown away in any event.

12. GWA submitted in reply that there was no evidence that TO Gosford had relied upon the affidavit of Ms Braund at any point, that TO Gosford had ample time to withdraw the motion before various costs were incurred, and that difficulties in determining the quantum of costs should not discourage such an order being made. On this last point, GWA submitted that an order could include costs relating to the motion up to 23 September 2016, being the date that TO Gosford informed GWA that it would not press for security for costs, and half the costs for its attendance at this hearing.

Consideration

Legal Context

13. Before outlining my findings, it is worth noting the terms of the provisions relevant to a determination for security of costs.

14. TO Gosford sought security of costs pursuant to rule 42.21(1)(d) of the UCPR as it considered that there was “reason to believe that the plaintiff, being a corporation, will be unable to pay the costs of the defendant if ordered to do so”. Rule 42.21(1A) of the UCPR enumerates a number of considerations the Court may have recourse to when exercising this discretion.

15. Rule 42.21 of the UCPR, however, is subject to a number of other provisions. For present purposes, the most pertinent of these is r 59.11 of the UCPR, which relevantly states:

(1)    A plaintiff is not to be required to provide security for costs in respect of judicial review proceedings except in exceptional circumstances.

…

(3) This rule has effect despite rule 42.21.

16. Also relevant is r 4.2(2) of the LECR, which states:

(2)    The Court may decide not to make an order requiring an applicant in any proceedings to give security for the respondent’s costs if it is satisfied that the proceedings have been brought in the public interest.

17. With regard to r 59.11 of the UCPR, it is clear that the primary proceedings are judicial review proceedings: Boronia Park Preservation Group v MSMG Developments Pty Ltd (2015) 209 LGERA 259; [2015] NSWLEC 112 at [33] (Pepper J). This rule would have therefore been engaged. For exceptional circumstances to exist, there must be something (or some things) that are unusual about the circumstances that are outside of what is regularly encountered by the Court: Ritson v Leighton [2015] NSWCA 62 at [25] (Ward JA) (‘Ritson’). Being impecunious is not an exceptional circumstance: Save Little Beach Manly Foreshore Incorporated v Manly Council (2013) 198 LGERA 304; [2013] NSWLEC 155 at [9] and [12] (Biscoe J).

18. Upon review of the evidence available to me, which includes the affidavit of Gordon Hartley in support of the motion, I do not consider that there is anything exceptional about the present circumstances and am of the opinion that TO Gosford would not have been able to satisfy this test.

19. Importantly, r 59.11 of the UCPR makes no reference to the ‘public interest’, nor does it provide a discretion to the Court, unlike r 4.2(2) of the LECR.

20. With this in mind, there are three questions that need to be considered:

1. Should the Court make an order regarding costs now?

2. If the answer to the above is “yes”, should GWA be awarded its costs in relation to the motion?

3. If the answer to both the above questions is “yes”, what are the terms of the order for costs?

Should the Court make a costs order now?

21. Whilst there has been no other order as a result of the motion, and so costs cannot follow the event as no “event” has occurred, I consider that in order “to facilitate the just, quick and cheap resolution of the real issues in the proceedings” pursuant to s 56(1) of the Civil Liability Act 2005 (NSW), this is a matter best dealt with presently. In particular, I consider an order to reserve costs would require a rehearing on this issue, which would be inefficient and expensive, and potentially distract from the substantial issues in the proceedings. To do otherwise would contravene the overriding purpose of the Court.

22. Whilst I note TO Gosford’s submission that there are some difficulties in presently making a costs order, I do not consider these difficulties to be insurmountable. I accept that some of the preparation undertaken by GWA, such as the swearing of Ms Braund’s affidavit, could potentially be used for other purposes in these proceedings. However, any such alternate purpose at this stage is speculative at best, and may not come to pass. Further, other preparations, such as the attendance at the directions on 13 September 2016 and the drafting of written submissions, will likely not serve a potential alternate purpose that is not yet known. As such, I do not consider these difficulties displace the inefficiency of hearing submissions on costs on this motion subsequent to the hearing.

23. I therefore find that an order in relation to costs should be made at the present time, rather than reserving them for a future determination.

Should GWA be awarded its costs?

24. It is clear from the evidence available to me that TO Gosford either was, or should have been, aware of r 59.11 of the UCPR, particularly given the fact it was raised by GWA in its letters on 2 September 2016, 9 September 2016 and 23 September 2016. As such, TO Gosford should have been aware from at least 2 September 2016 that it was unlikely to succeed if it were to continue its application for security of costs. It first made an offer to withdraw the motion two weeks later on 16 September 2016, and only confirmed that it would not press its application for security of costs three weeks later on 23 September 2016.

25. Whilst I accept that such an order may provide a disincentive for organisations like TO Gosford to bring applications for security of costs, I consider that this effect would be minimal, and consider that it is also in the public interest that potential applicants consider whether there are exceptional circumstances present before making an application. I also consider that whether TO Gosford had access to Ms Braund’s affidavit is of limited relevance. Rule 59.11 makes no reference to the public interest, and so such information would have not assisted in overcoming that provision. Further, and in any event, the Facebook extract and newspaper articles annexed to Mr Hartley’s affidavit provide at least some evidence that GWA had brought these proceedings in what it considers to be the public interest.

26. I therefore find that GWA is entitled to at least some of its costs in relation to defending the motion.

What are the terms for the order of costs?

27. As a preliminary point, I am of the opinion that I should not make an order that GWA’s costs be in the cause. GWA unnecessarily expended costs, and it is not in the interests of justice that those costs become conditional on GWA succeeding in the primary proceedings. Further, given the evidence before me and noting that GWA no longer presses this point, I am also of the opinion that ordering a lump sum would also be against the interests of justice.

28. I consider that GWA’s costs can be broken up into four categories:

1. the cost of preparation and attendance at the directions on 13 September 2016;

2. the cost of preparing the affidavit of Ms Braund;

3. the cost of preparing submissions, as directed by the Court; and

4. the cost of appearing at the hearing of the motion on 28 September 2016.

29. With regard to the directions on 13 September 2016, I consider that half of these costs should be awarded to GWA. Approximately half of this directions hearing dealt with directions for the substantive proceedings, which should not be recovered by GWA. However, TO Gosford should pay the costs of the other half of the directions, as it was (or should have been) aware of r 59.11 of the UCPR.

30. With regard to the cost of preparing Ms Braund’s affidavit, I consider that half of those costs should be awarded to GWA. Whilst it could have been used to support a ‘public interest’ defence to the application for security of costs pursuant to r 4.2(2) of the LECR, it does not refer specifically to this motion, and could theoretically be used for another purpose later in these proceedings. However, given that none of these theoretical purposes are a certainty, some costs should be awarded for its preparation.

31. With regard to the costs of preparing submissions, I consider that those costs should be awarded to GWA. It was agreed and directed at the directions on 13 September 2016 that each party was to file and serve their written submissions. Whilst it is not clear on the evidence available whether GWA’s submissions were filed before or after they received confirmation from TO Gosford that they were not pressing their application for security of costs, this is of limited relevance given the time that would have been taken to prepare the submissions. Further, and from a public policy perspective, I also consider it is in the interests of justice to encourage parties to comply with directions of the Court generally, regardless of what other settlement negotiations may be going on in the background.

32. With regard to the cost of appearing at the hearing on 28 September 2016, I consider that GWA should be awarded half of its costs. This is on the basis that approximately half of the hearing was spent discussing directions relating to the primary proceedings, whilst half was spent in submissions on costs. Given that GWA was successful on its application for costs, it should be awarded the costs of making that application.

33. Given the above, I consider that TO Gosford should pay half of GWA costs for:

1. preparing and attending the directions on 13 September 2016;

2. preparing the affidavit of Ms Braund; and

3. appearing at the hearing of the motion on 28 September 2016 only.

34. I also consider that TO Gosford should pay all of GWA’s costs for the preparation of its submissions for the hearing of the motion.

Orders

35. The Court orders that:

1. The first respondent pay half of the applicant’s costs for:

1. preparing and attending the directions on 13 September 2016;

2. preparing the affidavit of Ms Braund; and

3. appearing at the hearing of the motion on 28 September 2016.

2. The first respondent pay all of the applicant’s costs for the preparation of its submissions for the hearing of the motion on 28 September 2016.

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Amendments

05 October 2016 - TO Gosford replaced RMS in paragraph 11 of Decision.

TO Gosford replaced RMS in paragraph 12 of Decision.

Typographical error in surname corrected in paragraph 22 of Decision.

Typographical error in surname corrected in paragraph 25 of Decision.

Typographical error in surname corrected in paragraph 30 of Decision.

Decision last updated: 05 October 2016