Grace v Thomas Street Café Pty Ltd (No 2)

The Court of Appeal of New South Wales considered an application to set aside or vary costs orders previously made. The dispute concerned whether certain premises enjoyed existing use rights for restaurant or café purposes under the *Environmental Planning and Assessment Act 1979* (NSW). The appellants sought to overturn a decision of the primary judge, while the respondents, including North Sydney Council, sought to uphold it.

The central legal issues before the Court of Appeal were whether the primary judge erred in finding that the premises had existing use rights for a restaurant or café, and consequently, what orders should be made regarding the appeal and the costs of the proceedings. The Court also had to consider the implications of the absence of a formal Calderbank offer on the costs of the appeal.

The Court allowed the appeal, setting aside the orders of the primary judge. It declared that the premises did not have the benefit of existing use rights for a restaurant or café. The matter was remitted to the Land and Environment Court for determination of appropriate injunctive or other relief. The Court ordered that the respondents pay the appellants' costs of the appeal, with an exception for costs related to the issue of relief by way of injunction, which were reserved. The costs of the first instance hearing were to be determined by the trial judge on the remitted hearing, and the parties were to bear their own costs of the notice of motion.