Hoffie v Brisbane City Council

[2013] QPEC 41

PLANNING AND ENVIRONMENT COURT OF QUEENSLAND

CITATION:

Hoffie v Brisbane City Council & Anor [2013] QPEC 41

PARTIES:

Gregory HOFFIE

and

Roslyn HOFFIE

(Appellants)

-v-

BRISBANE CITY COUNCIL

(Respondent)

and

CLOVERDALE DEVELOPMENTS PTY LTD

(Co-Respondent)

FILE NO:

1420 of 2013

DIVISION:

Environment and Planning

PROCEEDING:

Application

ORIGINATING COURT:

Planning & Environment Court, Brisbane

DELIVERED ON:

07 August 2013

DELIVERED AT:

Townsville

HEARING DATE:

26 July 2013

JUDGE:

Durward SC DCJ

ORDERS:

1. The appeal is allowed in terms of the draft order of the appellant at Annexure “A”; and 

2.Costs are ordered in terms of the draft order of the appellant at Annexure “A”.

CATCHWORDS:

ENVIRONMENT & PLANNING – MEDIATION – AGREEMENT – whether post-mediation withdrawal of development application and abandonment of agreement made at mediation – whether s 457(4) Sustainable Planning Act relevant

ENVIRONMENT & PLANNING – COSTS – CONSIDERATIONS – construction of s 457 Sustainable Planning Act – whether had appellant had “relative success” in the proceeding in the context of co-respondents electing not to proceed further with development proposal despite mediated settlement – whether co-respondent acted unreasonably – whether costs order in respect of proceedings in favour of appellants appropriate in the circumstances

LEGISLATION:

Section 457 Sustainable Planning Act 2009; Planning and Environment Court Rules  2010 rule 4

CASES:

Oshlack v Richmond River Council (1988) 193 CLR 72; One.Tel v Deputy Commissioner of Taxation [2000] FCA 270; Kiama Council v Grant [2006] NSWLEC 96; Manly Wharf Pty Ltd v Manly Council [1997] NSWLEC 1005; Woollondilly Shire Council v Anh Nhu Le [2004] NSWLEC 524; Re: The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; ex parte Lai Qin (1997) 186 CLR 622; Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194; 116 ALR 523; R v Gold Coast City Council; ex parte Raysun Pty Ltd [1971] QWN 13.

ADVOCATES:

Mr J Hastie (solicitor) for the appellants

Mr T Chadwick (solicitor) for the respondent

Mr G N Timbs (solicitor) for the co-respondent

SOLICITORS:

King & Co for the appellants

Brisbane City Legal Practice for the respondent

Norton Rose Fullbright for the co-respondent

1. This judgment is about costs.

Background

1. The co-respondent made a Development Application to the respondent Council on 19 September 2010, seeking a development permit for a Material Change of Use for single unit dwellings, a Reconfiguration of a Lot and for a Material Change of Use for a staged multi-unit development. The appellants lodged a properly made submission objecting to the proposed development. The respondent Council approved the proposed development by issuing a Negotiated Decision Notice on 25 March 2013. 

1. The appellants filed a Notice of Appeal on 24 February 2013. On 17 May 2013 the Court made an Order for the parties to attend a mediation, which took place before the Registrar on 12 June 2013 and on 20 June 2013. 

1. The parties reached agreement at the end of the mediation whereby the appeal was to be allowed subject to, inter alia, amendments to the approved plans. The co-respondent agreed to provide amended plans to the respondent Council so that the conditions package could be finalised. The co-respondent did not do so. 

1. On 18 July 2013, I reviewed the matter in Court. I was told by Mr Timbs that the co-respondent may no longer wish to proceed with the Development Application. I ordered the co-respondent to inform the other parties whether it intended to proceed with the Development Application, by close of business on 25 July 2013.

1. On 19 July 2013, one of the two directors of the co-respondent, Mr Zhuang, informed the other parties by email that he had no knowledge of the mediation agreement, did not authorise it to be signed and stated that he wanted the mediation agreement to be revoked and the Development Application withdrawn.

1. On 22 July 2013, the solicitors for the co-respondent formally advised the parties that the co-respondent did not wish to proceed with the Development Application. 

The Issue

1. The appellants have applied for Orders allowing the appeal on the basis:

1.        That the co-respondent no longer seeks to pursue the Development Application; and

2.        That the co-respondent pay the appellant’s costs of and incidental to the proceeding to be assessed, or in a fixed amount to be agreed by the parties.

1. The co-respondent consents to the first proposed order but does not consent to the second proposed order. In lieu of the latter, it seeks an order that all parties bear their own costs of and incidental to the appeal.

The Power to Award Costs

1. Section 457 of the Sustainable Planning Act 2009 (“SPA”), as amended in 2012, relevantly provides as follows:

“457Costs   

(1)   Costs of a proceeding or part of a proceeding, including an application in a proceeding, are in the discretion of the Court.

(2)   In making an order for costs the Court may have regard to any of the following matters –

(a)  the relative success of the parties in the proceeding;

… …

(i)   whether a party has acted unreasonably in the conduct of the proceeding, including, for example -        

(i)        by not giving another party reasonable notice of the party’s intention to apply for an adjournment of the proceeding; or

(ii)       by causing an adjournment of the proceeding because of the conduct of the party.

(3)   Subsection (2) does not limit the matters to which the Court may have regard in making an order as to costs.

(4)   Despite subsection (1), if –

(a)  early in a proceeding the parties to the proceeding participate in a dispute resolution process under the ADR provisions of the Planning and Environment Court Rules 2010; and

(b)  the proceeding is resolved during the dispute resolution process or soon after it has been finalised,

each party to the proceeding must bear the party’s own costs for the proceeding unless the Court orders otherwise.”

1. The section as amended commenced on the date of assent, namely 22 November 2012.

The Submissions

1. The appellants contend that:

(a)         They have succeeded in gaining the relief sought in the appeal; and

(b)         The co-respondent acted unreasonably in its conduct of the proceeding.

1. The co-respondent contends that:

(a) The appeal was resolved after mediation and the parties must bear their own costs of the proceedings unless the Court orders otherwise: s 457(4) SPA;

(b)         There was no determination on the merits of the proceeding. The appeal is to be allowed only because the co-respondent no longer intends to proceed with the Development Application; and

(c)         The co-respondent has not acted unreasonably.

Discussion

1. Relative success:s 457(2)(a) 

1. The appellants have essentially got what they set out to obtain - the appeal is to be allowed. The unilateral decision of the co-respondent to not proceed with the Development Application, either in its original form or in its amended form, is irrelevant so far as the appellant’s application for costs is concerned.

1. The Australian Law Dictionary (Oxford University Press 2010, Version 2012) defines “merits” of a case, in a general sense, as:

“The relative strengths and weaknesses of the plaintiff’s and defendant’s claims in a civil case.  More specifically, a ‘hearing on the merits’ is a full consideration of the ‘merits of a case’.”

1. The Macquarie Dictionary 2^nd revised edition, relevantly defines “merit” as “the substantial right or wrong of a matter unobscured by technicalities: the merits of a case”.

1. Mr Timbs for the co-respondent submitted that there had been no determination by the Court of the merits of the application. He referred to Re: The Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; ex parte Lai Qin (1997) 186 CLR 622, particularly McHugh J at 624-627. The statements of principle stated by his Honour and relied on by the co-respondent are not contentious. Mr Timbs highlighted a number of passages of the judgment of his Honour, including the following (at p624):

“… In some cases, however, the Court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action.”

1. However, Mr Timbs did not highlight the following passage (that preceded the one cited above, at p624):

“In an appropriate case, a Court will make an order for costs even where there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The Court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided.”

See also:  Australian Securities Commission v Aust-Home Investments Ltd (1993) 44 FCR 194, at 201; 116 ALR 523, at 530; R v Gold Coast City Council; ex parte Raysun Pty Ltd [1971] QWN 13.

1. The co-respondent has overlooked the critical matter of a mediation that produced an agreement. The merits of the case, in the holistic sense that I have referred to, have been determined in the mediation by the inevitable process of compromise that is a central feature of dispute resolution.

1. In my view the contention on behalf of the co-respondent that the proceeding was not determined on its merits is incorrect. There was an agreed outcome following the mediation. It is implicit in that event that the parties’ appreciation of the merits of each of their cases was compromised by agreement to achieve a settlement of the proceeding. That is as much a merit determination as is a judgment of the Court. 

1. Alternatively, the unilateral decision of the co-respondent to not proceed further with the Development Application, whether for one or other or both of the reasons deposed by Mr Timbs in his affidavit filed by leave at the second of the review hearings, or for any other reason privy to the co-respondent, is a “surrender” by the co-respondent to the appellants, such as was discussed by Burchett J in One.Tel v Deputy Commissioner of Taxation [2000] FCA 270 at [6]; as in the summary of principles adopted by Preston CJ in Kiama Council v Grant [2006] NSWLEC 96; as discussed by Bignold J in his reference to costs ordinarily being awarded against a “discontinuing party”, in Manly Wharf Pty Ltd v Manly Council [1997] NSWLEC 1005; and see Woollondilly Shire Council v Anh Nhu Le [2004] NSWLEC 524.

2. Section 457(4) SPA

1. The mediation resulted in an agreement. The agreement was that the appeal be allowed subject to the co-respondent providing amended plans to the respondent. It is not correct to say, as was advanced on behalf of the co-respondent, that the appeal is to be allowed only because the co-respondent no longer intends to proceed with the Development Application. That certainly was the position adopted by the co-respondent some weeks after the agreement was made at the mediation, but it was not the reason why the appeal was to be allowed in the first instance as a result of the mediation.

1. About five weeks had passed before the co-respondent advised its decision not to proceed with the Development Application, in effect in any form. The agreement prima facie was always enforceable at the suit of the appellants, if the co-respondent had tried to retreat from it. 

1. The agreement has been abandoned by the co-respondent. Section 457(4) SPA clearly refers to a mediated resolution that remains on foot and by its terms directs the parties as to the continuation or determination of, in an appeal, a Development Application. It does not purport to refer to the circumstance that occurred here where the appeal is now to be allowed on a basis that was not contemplated in the terms of the agreement made at the mediation.

1. In my view section 457(4) does not apply in the circumstances of this case.

3. Unreasonable conduct of co-respondent:s 457(2)(i) SPA 

1. Rule (4) of the Planning and Environment Court Rules 2010 expresses the philosophy – the overriding obligation of parties and the Court in facilitating resolution of proceedings.

1. The parties were obliged by an Order of the court to attend and participate in the mediation. Whilst an agreement was made at the mediation, one of the directors of the co-respondent subsequently claims not to be bound by it, implying that the agreement was made without authority. I have noted (infra) that I accept that Norton Rose Fulbright had authority to attend and to resolve the matter at the mediation.

1. The co-respondent did not comply with the requirement of the agreement, namely the provision of amended plans to the respondent Council. The appellants were not informed of the co-respondent’s position until the second of the two reviews in Court that I have referred to. The appellants participated in good faith at two mediation sessions and incurred costs, including the cost of briefing an expert to assist in the mediation process. The inference open to be drawn on the email correspondence of Mr Zhuang was that the co-respondent was not acting in good faith. It is an inference I am prepared to draw in the circumstances.

1. I consider that in all of the circumstances, the co-respondent has acted unreasonably.

Conclusion

1. The general principle in awarding costs is that stated in Oshlack v Richmond River Council (1988) 193 CLR 72, namely: “The primary purpose of an award of costs is to indemnify the successful party”.

1. This is a proceeding to which s 457(2) should apply and in respect of which the appellant should succeed, for the reasons I have referred to: that is, in summary –

·     The ‘relative success’ of the appellant.

·     The unreasonable conduct of the co-respondent: that is, the conduct of a mediation without good faith; non-compliance with an order in the mediation agreement; and delay.

·     The unilateral abandonment of an agreement, which was concluded in a mediation, by the co-respondent who after several weeks and despite a mandated Court review, delayed in informing the appellant of the change of the decision not to proceed with a development application in any form.

1. The appellants have incurred costs that could have been avoided, or at least mitigated, had the true position of the co-respondent been made known and if the co-respondent had proceeded bona fide at the mediation. 

1. The explanations deposed by Mr Timbs in his affidavit filed by leave at the second review hearing, namely that:

“(a)     a breakdown in the relationship between the 2 directors of the co-respondent company whereby an agreement cannot be reached that would allow the development as proposed or amended to proceed;

(b)       the costs of proceeding with the appeal including the costs incurred to date responding to the appeal have made the proposed development marginal and no longer desirable from a financial perspective”,

are not supported by any sworn deposition by either director. There is simply the email from Mr Zhuang, denying the agreement and foreshadowing a “withdrawal” of the Development Application.

1. I do not consider that the explanation, whether supported by other affidavit or not, has any merit on the costs issue. I accept that Mr Timbs has faithfully deposed his instructions. I have, as I have observed, also accepted that his firm had authority to attend and to resolve the matter at mediation.

1. The explanation is not a compelling matter in my consideration of the issue of costs. The non-contentious chronology of procedural events and their effect in the proceedings is factually sufficient, upon my construction of s 457(1) and (2) of SPA, to entitle the appellants to succeed on their claim for costs of the proceeding. The circumstances I have referred to justify such an order. Costs of only the latter part of the proceeding are neither just nor appropriate.

1. The draft order sought by the appellant is attached at Annexure “A” to this judgment.

Orders

1.          The appeal is allowed in terms of the draft order of the appellant at Annexure “A”; and 

2.          Costs are ordered in terms of the draft order of the appellant at Annexure “A”.

Attachment: Annexure “A”