Huajun Investments Pty Ltd v City of Canada Bay Council

Case •

[2020] NSWLEC 108

•

06 August 2020

Land and Environment Court


New South Wales

Medium Neutral Citation: Huajun Investments Pty Ltd v City of Canada Bay Council [2020] NSWLEC 108
Hearing dates: 30 March 2020
Date of orders: 6 August 2020
Decision date: 06 August 2020
Jurisdiction:Class 1
Before: Moore J
Decision:

See orders at [144]

Catchwords:

COSTS - application for costs of complete Class 1 merit proceedings - Applicant in merit proceedings unsuccessful on jurisdictional as well as merit grounds - whether failure on jurisdictional grounds provided a basis for concluding that it was fair and reasonable to award costs to the opposing party who successfully pressed the jurisdictional grounds - Applicant on notice as a consequence of Court of Appeal proceedings of two of the jurisdictional grounds said to be bars to approval of the Applicant’s proposed development - basis for pursuing the merit appeal unarguable on two foreshadowed jurisdictional grounds - general costs application in Class 1 merit proceedings appropriately brought - fair and reasonable to Second Respondent its costs for the whole proceedings - Applicant to pay Second Respondent’s costs of the Class 1 proceedings

COSTS - application for costs thrown away by Second Respondent as a consequence of amendments to the proposed development that were not minor - Second Respondent took lead role before the Acting Registrar on the issue of whether the proposed amendments were minor - appropriate that the Second Respondent receive its costs thrown away as a consequence of those amendments

COSTS - costs of the costs application - costs ordinarily follow the event for costs applications in Class 1 merit proceedings - appropriate that the costs Applicant be awarded its costs of the costs application

Legislation Cited:

Canada Bay Local Environmental Plan 2013

Environmental Planning and Assessment Act 1979, s 8.15(3)

Land and Environment Court Act 1979, s 74(1)(e)

Land and Environment Court Rules 2007, r 3.7

State Environmental Planning Policy (Infrastructure) 2007

State Environmental Planning Policy No 65—Design Quality of Residential Apartment Development

Uniform Civil Procedure Rules 2005, r 42.1

Cases Cited:

Agonic Holdings Pty Ltd v Lithgow City Council [2009] NSWLEC 34

Al Maha Pty Ltd v Huajan Investments Pty Ltd [2018] NSWCA 245

Arden Anglican School v Hornsby Shire Council [2008] NSWLEC 103

AT v Commissioner of Police, NSW [2010] NSWCA 131

Community Association DP270253 v Woollahra Municipal Council (2015) 207 LGERA 268; [2015] NSWCA 80

Coolah Holdings Pty Ltd v Eurobodalla Shire Council (No 2) [2012] NSWLEC 84

Dunford v Gosford City Council (No 3) [2015] NSWLEC 96

Grant v Kiama Municipal Council [2006] NSWLEC 70

Groeneveld v Wollongong City Council (2009) 168 LGERA 260; [2009] NSWLEC 149

Hillsong Church Limited v Council of the City of Sydney (No 2) [2012] NSWLEC 118

Huajun Investments Pty Ltd v City of Canada Bay Council (No 2) [2018] NSWLEC 194

Huajun Investments Pty Ltd v City of Canada Bay Council (No 3) [2019] NSWLEC 42

Hunter v Central Coast Council [2017] NSWLEC 154

Initial Action Pty Ltd v Woollahra Municipal Council (2018) 236 LGERA 256

Modern Motels Pty Ltd v Fairfield City Council [2013] NSWLEC 138

Moss Vale Projects Pty Ltd v Wingecarribee Shire Council [2018] NSWLEC 180

Owners - Strata Plan No 20226 v North Sydney Council [2012] NSWLEC 148

Pepperwood Ridge Pty Ltd v Newcastle City Council (2008) 160 LGERA 164; [2008] NSWLEC 196

Pet Carriers International Pty Ltd v Botany Bay [City] Council (No 2) [2013] NSWLEC 150

Port Stephens Council v Sansom (2007) 156 LGERA 125; [2007] NSWCA 299

Re Minister for Immigration & Ethnic Affairs of the Commonwealth of Australia; Ex Parte Lai Qin (1997) 186 CLR 622

Tomko v Palasty (No 2) (2007) 71 NSWLR 61; [2007] NSWCA 369

Category:Costs
Parties: Huajun Investments Pty Ltd (Applicant/Respondent on the Motion)
City of Canada Bay Council (First Respondent)
Al Maha Pty Ltd (Second Respondent/Applicant on the Motion)
Representation:

Counsel:
Mr C McEwen SC (Applicant/Respondent on the Motion)
Mr T Robertson SC (Second Respondent/Applicant on the Motion)

Solicitors:
Minter Ellison (Applicant/Respondent on the Motion)
Hall & Willcox - submitting appearance (First Respondent)
Fortislaw (Second Respondent/Applicant on the Motion)
File Number(s): 131433 of 2017
Publication restriction: No

TABLE OF CONTENTS

Introduction

The costs application

Council's role in the costs’ proceedings

The hearing

The relevant statutory provisions

Introduction

The Environmental Planning and Assessment Act 1979

The Court Act and the Court Rules

The evidence

An extension of time for the Neighbouring Owner

The general scope of matters arising from r 3.7 of the Court Rules

The Neighbouring Owner’s general costs’ claim

Introduction

The Neighbouring Owner's position

The Company’s position

Consideration of the Neighbouring Owner’s costs application

Summary of the costs’ outcome

The earliest intimation of a jurisdictional barrier to approval

The relevant matters to be drawn from the Court of Appeal proceedings

The joinder decision

My merit decision

Introduction

Summary of outcomes

The revealing of fundamental defects in the Company’s cl 4.6 request

The Infrastructure SEPP jurisdictional issue

Merit issues relating to the Company's proposed development

Analysis

An additional matter

Introduction

The relevant element of the costs application

The Acting Registrar’s hearing on 10 January 2019

The basis for this aspect of the costs application

The Neighbouring Owner's position

The Company's position

Consideration

Costs

Orders

JUDGMENT

Introduction

  1. The Class 1 merit proceedings giving rise to the costs application, dealt with in this decision, occurred as a consequence of the remitter of the Class 1 matter to this Court by the Court of Appeal for fresh consideration (see Al Maha Pty Ltd v Huajan Investments Pty Ltd [2018] NSWCA 245 - the Al Maha Court of Appeal decision). It is not necessary to recount the earlier procedural history that resulted in this occurring; it can be understood from the Al Maha Courto of Appeal decision at [42] to [51].

  2. When the matter was remitted, the owner of the property immediately to the south of the development site at 38-42 Leicester Avenue, Strathfield (the site), Al Maha Pty Ltd (the Neighbouring Owner), applied to be joined to the proceedings which were otherwise a contest between Huajun Investments Pty Ltd (the Company) and the City of Canada Bay Council (the Council).

  3. On 29 November 2018, Robson J joined the Neighbouring Owner as the Second Respondent to the Class 1 proceedings (Huajun Investments Pty Ltd v City of Canada Bay Council (No 2) [2018] NSWLEC 194). Although joined on the basis of a small number of additional contentions, the Neighbouring Owner was joined as a party to the proceedings for all purposes (including, as later discussed, all relevant procedural purposes).

  4. I heard the Class 1 merit appeal over a period of eight days commencing on 24 January 2019, with my decision being reserved on 29 March 2019. On 31 July 2019, I delivered my reserved decision of some 313 paragraphs refusing the Company’s development proposal for the site (Huajun Investments Pty Ltd v City of Canada Bay Council (No 3) [2019] NSWLEC 42 - my merit decision).

  5. At [313](5) of my merit decision, in addition to dismissing the Class 1 appeal and refusing development consent to the Company's proposed development, I reserved the question of costs (other than an earlier made order that no costs were to be paid pursuant to s 8.15(3) of the Environmental Planning and Assessment Act 1979 (the EP&A Act) for one amendment to the development proposal).

The costs application

  1. On 13 September 2019, the Neighbouring Owner filed a Notice of Motion (the Motion) seeking an order for costs in its favour, with those costs proposed to be ordered to be paid by the Company.

  2. The costs application was not made on a purely “yes or no” basis, but pressed a series of discrete alternatives based on various aspects of the hearing in my decision if the Neighbouring Owner was unsuccessful in its broader overall costs application as sought in (1) of the Motion. The terms of the Motion are set out below:

  1. That the Applicant pay the Second Respondent’s costs of the proceedings.

  2. In the alternative, that the Applicant pay the Second Respondent’s costs thrown away in relation to the leave granted to the Applicant on 10 January 2019 to rely on the amended plans and reports set out in annexure A to the motion filed on 8 January.

  3. Further or in the alternative to order 2, the Applicant pay the Second Respondent’s costs in relation to:

    a.   the joint traffic expert conferencing conducted on 21 January 2019 and 24 January 2019; and

    b. the Notice of Motion filed 18 January 2019 and heard 22 January 2019, referred to at [26] and [27] of Huajun Investments Pty Ltd v City of Canada Bay Council (No 3) [2019] NSWLEC 42; and

    c.   any other costs incurred relating to the purported restriction of the Second Respondent to the issues identified in relation to the clause 4.6 contention, including the costs of the re-opening application by Notice of Motion filed 21 March 2019 and heard 26 March 2019.

  4. Further or in the alternative to orders 2 and 3, the Applicant pay the Second Respondent's costs of the proceedings in relation to the clause 4.6 contention, including the costs of the re-opening application by notice of motion filed 21 March 2019 and heard 26 March 2019.

  5. Further or other orders.

  6. Costs of this application.

    1. As a consequence, the matters requiring to be dealt with in this decision are whether the Neighbouring Owner should be awarded its costs, as agreed or assessed, for any or all of the matters set out in the Motion.

Council's role in the costs’ proceedings

  1. It is appropriate to note that the Council has not sought any costs order in its favour that is in addition to any earlier costs order of which it has the benefit (see, for example, subsequent discussion of the costs’ issues arising from the decision of the Acting Registrar on 10 January 2019 to permit the Company to rely on amended plans).

  2. On 24 September 2019, the Council filed a submitting appearance (save as to costs) in respect of this Motion. As a consequence, the Council did not seek to be heard on this application by the Neighbouring Owner for costs orders in its favour.

The hearing

  1. Because of the restrictions necessarily imposed as a consequence of the COVID-19 virus pandemic, this hearing was conducted by telephone with Mr Robertson SC for the Neighbouring Owner and Mr McEwen SC for the Company participating in a conference call hearing conducted by me from my courtroom.

The relevant statutory provisions

Introduction

  1. Jurisdictional issues arising from cll 4.3 and 4.6 of the Canada Bay Local Environmental Plan 2013 (the LEP) were engaged in my merit decision. Although it will be necessary to refer to them, it is unnecessary to set them out in full in this decision. Similarly, jurisdictional issues arose from State Environmental Planning Policy (Infrastructure) 2007 (the Infrastructure SEPP).

  2. A number of provisions in two of the Council’s Development Control Plans; the Infrastructure SEPP; and the Apartment Design Guide (the ADG) arising from State Environmental Planning Policy No 65—Design Quality of Residential Apartment Development also gave rise to matters requiring merit consideration. It is not necessary to set out the relevant provisions of these that were engaged for those merit considerations, although it will be necessary to refer to the issues which did arise, and which are engaged for consideration in these costs proceedings.

The Environmental Planning and Assessment Act 1979

  1. The EP&A Act contains, in s 8.15(3), the provision potentially giving rise to mandatory costs’ consequences when a development applicant seeks leave of the Court to amend a development application being dealt with in a Class 1 merit appeal. This provision is in the following terms:

8.15   Miscellaneous provisions relating to appeals under this Division

(1)   …

(2)   …

(3) If the Court on an appeal by an applicant under this Division allows the applicant to file an amended application for development consent (other than to make a minor amendment), the Court must make an order for the payment by the applicant of those costs of the consent authority that have been thrown away as a result of the amendment of the application for development consent. This subsection does not apply to proceedings to which section 34AA of the Land and Environment Court Act 1979 applies.

(4)   …

(5)   …

The Court Act and the Court Rules

  1. Because the substantive proceedings were Class 1 merit ones, s 74(1)(e) of the Land and Environment Court Act 1979 (the Court Act) and r 3.7 of the Land and Environment Court Rules 2007 (the Court Rules) act together to set aside the ordinary civil litigation presumption (contained in r 42.1 of the Uniform Civil Procedure Rules 2005) that “costs follow the event”.

  2. However, it is also to be noted that costs applications, such as I am here considering, do attract the ordinary civil litigation presumption that “costs follow the event”.

  3. Section 74(1)(e) of the Court Act permits the making of rules for or with respect to:

(e)   the costs of proceedings in the Court

  1. The relevant provision in the Court Rules is in the following terms:

3.7   Costs in certain proceedings

(1)   This rule applies to the following proceedings (except for appeals under section 56A of the Act):

(a)   all proceedings in Class 1 of the Court’s jurisdiction,

(b)   …,

(c)   ….

(2)   The Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances.

(3)   Circumstances in which the Court might consider the making of a costs order to be fair and reasonable include (without limitation) the following:

(a)   that the proceedings involve, as a central issue, a question of law, a question of fact or a question of mixed fact and law, and the determination of such question:

(i)   in one way was, or was potentially, determinative of the proceedings, and

(ii)   was preliminary to, or otherwise has not involved, an evaluation of the merits of any application the subject of the proceedings,

(b)   that a party has failed to provide, or has unreasonably delayed in providing, information or documents:

(i)   that are required by law to be provided in relation to any application the subject of the proceedings, or

(ii)   that are necessary to enable a consent authority to gain a proper understanding of, and give proper consideration to, the application,

(c)   that a party has acted unreasonably in circumstances leading up to the commencement of the proceedings,

(d)   that a party has acted unreasonably in the conduct of the proceedings,

(e)   that a party has commenced or defended the proceedings for an improper purpose,

(f)   that a party has commenced or continued a claim in the proceedings, or maintained a defence to the proceedings, where:

(i)   the claim or defence (as appropriate) did not have reasonable prospects of success, or

(ii)   to commence or continue the claim, or to maintain the defence, was otherwise unreasonable.

The evidence

  1. The evidence in the costs hearing comprised:

  1. For the Neighbouring Owner:

  • an affidavit by Mr Christopher Nehme, the Neighbouring Owner's (now) solicitor;

  • two folders of material exhibited to this affidavit. These folders became Exhibits A and B;

  • a letter dated 14 January 2018 from the legal representatives of the Company to an officer of the Roads and Maritime Services concerning the Company's proposal to access its development from Leicester Avenue; and

  • a copy of a Notice to Produce issued on behalf of the Company to the Council dated 22 January 2019 seeking production of documents concerning the proposed compulsory acquisition by the Council of the Neighbouring Owner’s property adjacent to the Company's site.

  1. The evidence for the Company comprised an affidavit of Ms Lee Cone, a solicitor employed by its legal representative, together with a range of documents annexed to that affidavit. Ms Cone’s affidavit and annexed documents totalled 118 pages.

  2. Exhibits A and B comprised 1,192 pages of material, divided by a total of 23 tabs. It included a copy of my merit decision and a transcript of the hearing upon which it was founded.

  3. It is to be observed that both affidavits were read without objection. There was also no objection to any of the documentary material placed in evidence.

An extension of time for the Neighbouring Owner

  1. During the course of this costs hearing, Mr Robertson referred to that aspect of the Neighbouring Owner’s costs application that concerned the costs determination made by the Acting Registrar on 10 January 2019 as an appeal or a review. In his written submissions, he candidly acknowledged that there were, in the context of the present costs application, potential jurisdictional issues arising concerning the proposal that I should alter the costs’ outcome of that amendment process.

  2. In addition, during the course the hearing, I raised with Mr Robertson my concern that the Company would require an extension of time in order to permit me to address and contemplate altering the costs outcome of that hearing before the Acting Registrar.

  3. I raised with Mr McEwen the question of whether his client would object to me granting an extension of time to the Neighbouring Owner for the purposes of permitting me to address this aspect of the costs Motion (should an extension of time be necessary). Mr McEwen indicated that the Company would not oppose me granting such an extension of time. I therefore granted, to the extent necessary, an extension of time to permit me to address this issue.

The general scope of matters arising from r 3.7 of the Court Rules

  1. Before turning to address the various elements of the Neighbouring Owner’s claim to be awarded costs, it is appropriate to make some general observations concerning the scope of what might arise for consideration as being “fair and reasonable” for the purposes of r 3.7 of the Court Rules.

  2. First, it is to be observed that the examples in the Court Rules of circumstances which might give rise to consideration of the making of a costs order in Class 1 proceedings (see the earlier reproduced provision at [17]) is an inclusive list and is not to be regarded as an exhaustive one.

  3. Other circumstances which might give rise to a costs order in merit appeals were collected by Preston CJ in Grant v Kiama Municipal Council [2006] NSWLEC 70 (Grant v Kiama) at [15] as follows (citations omitted):

(a)   where the proceedings cease to have the character of merits review, such as where a central issue is whether there is power to grant the approval sought at all;

(b)   where the matter the subject of the costs application involves only a preliminary question of law;

(c)   where a party fails to provide or delays unreasonably in providing information or documents required as part of the application for approval, including statements required by the relevant statute (such as an environmental impact statement or species impact statement required by s 78A(8) of the EPA Act, or statement of environmental effects required by para 2(1)(c) in Part 1 of Schedule 1 and cl 50(1)(a) of the Environmental Planning and Assessment Regulation 2000) or statements or information required by an environmental planning instrument, or information or documents centrally relevant to the development the subject of the application and necessary to enable a consent authority to gain a proper understanding of and to give proper consideration to the application;

(d)   where a party has acted unreasonably in the conduct of the proceedings such as:

(i)   delaying unreasonably in taking action or making proper concessions or agreeing to proper amendments to originating process, pleadings, evidence or interlocutory directions and orders; or

(ii)   unnecessarily protracting the proceedings, either during the interlocutory phase in preparation for the hearing (such as by failing to comply with court directions and orders in relation to pleadings, evidence or production of documents or failing to attend or being ill-prepared when attending callovers or directions hearings) or at the hearing (such as by prolix argument, protracted examination or cross examination of witnesses, repetition of evidence from experts or other witnesses, adduction of irrelevant evidence, innumerable or baseless objections to evidence, adopting a scattergun approach by raising every conceivable objection to a proposed development or elevating matters of minutiae and trivia to issues to major significance);

(e)   where a party has acted unreasonably in circumstances leading up to the proceedings, such as effectively inviting the litigation;

(f)   where the proceedings or the defence of the proceedings has been commenced or continued in circumstances where the applicant or Respondent respectively, properly advised, should have known that it had no chance or very poor prospects of success; and

(g)   where a party conducts its case in the proceedings for extraneous purposes, such as where a consent authority contests an appeal against its decision not to grant an approval for reasons unassociated with the proceedings, not in good faith, in dereliction of duty or not on a rational basis.

  1. The list in Grant v Kiama is also not exhaustive.

The Neighbouring Owner’s general costs’ claim

Introduction

  1. The Neighbouring Owner has sought its costs of the entire proceedings. This claim was advanced as based upon two factors: the conduct of the proceedings by the Company and the ultimate outcome of the proceedings.

The Neighbouring Owner's position

  1. Mr Robertson acknowledged that, in Class 1 proceedings, there should be no order for costs unless the Court considers such an order to be “fair and reasonable in the circumstances”, pursuant to r 3.7 of the Court Rules. Underpinning such an order is the “no discouragement principle”: Port Stephens Council v Sansom (2007) 156 LGERA 125; [2007] NSWCA 299 (Sansom) at [22]-[23]. Mr Robertson submitted that this principle was exhausted as a relevant consideration by the presumption and did not otherwise affect the consideration of whether the making of a costs order is “fair and reasonable”: Sansom at [76], [92].

  2. He put that the exception focuses upon the circumstances of each case. The “unreasonableness” in r 3.7 of the Court Rules relates to the unreasonableness of conduct related to the proceedings: Community Association DP270253 v Woollahra Municipal Council (2015) 207 LGERA 268; [2015] NSWCA 80 (Community Association DP270253) at [53]. Finally, the criteria for fairness is “a relatively low hurdle for a Company seeking an order” whereby the “criterion of ‘fairness’ will take into account the compensatory purpose of an award of costs, which will generally favour the successful party”: AT v Commissioner of Police, NSW [2010] NSWCA 131 at [33].

  3. The central question thus posed was whether it was appropriate for the Neighbouring Owner to be awarded costs in circumstances where the appeal was incompetent, with that incompetence demonstrated by the failure of the Company’s case on multiple jurisdictional points.

  4. Mr Robertson then proposed eight factors he submitted should be taken into account. These were that:

  1. the proceedings were commercial;

  2. the Company was well advised;

  3. the Company was put on notice that jurisdictional issues would be pursued;

  4. it must have been obvious that jurisdictional barriers relating to access and height would require meticulous attention;

  5. the Company must have been aware that it needed to prepare an effective cl 4.6 request to seek dispensation from complying with the otherwise mandatory height limit applicable to the site;

  6. the criteria for a successful cl 4.6 request were well known at the time of the appeal and therefore it was inexcusable that they were not (or were not adequately) addressed;

  7. the Neighbouring Owner had an interest in the proceedings and fulfilled valuable role in the resolution of outstanding issues; and

  8. the fact that the Council was not seeking costs does not bear on the assessment of whether costs should be awarded to the Neighbouring Owner.

    1. The primary thrust of the submissions addressed the Company’s cl 4.6 objection that was addressed in the merit decision. Although the Neighbouring Owner also proposed, as an element of its segmented fall-back position, that a specific costs element should flow from this element of my merit decision, in this context the submission was made in the broad as support for the overall costs order sought.

    2. Mr Robertson highlighted the history of the cl 4.6 request within the merit proceedings, noting that it had been amended multiple times at the request of the Company. It was admitted by Dr Shiels, the Company’s planning expert, that significant parts of the proposed (and rejected) amendments had not been drafted by him but, rather, workshopped by him with the Company’s architect and legal team.

    3. Dr Shiels admitted to reading the Initial Action case, which canvassed the criteria required to be met by a well-founded cl 4.6 request: Initial Action Pty Ltd v Woollahra Municipal Council (2018) 236 LGERA 256.

    4. Since the legal team and architect were under the directions of the Company, the errors inherent with the rejected objection must be “sheeted home” to the Company: Neighbouring Owner’s written submissions at [17].

    5. Since the Company failed to address issues in a fashion mandated by the clause, the proceedings were “doomed to fail”. Mr Robertson submitted that it was therefore fair and reasonable that the Neighbouring Owner be compensated for needing to defend an “entirely unnecessary suit”: Neighbouring Owner’s written submissions at [18].

    6. The failure to adopt alternative designs amounted to a failure of the Company to tailor their development to the applicable planning controls. Such amendments as would have been necessary to achieve this, whilst potentially expensive, could have saved the proceedings from failing on jurisdictional grounds. No attention was given to the substance of the complaints raised by both Respondents. The Company’s refusal to amend their application to render it compliant was therefore unreasonable.

    7. There were also two further (but unsatisfied) jurisdictional requirements arising out of cl 101 of the Infrastructure SEPP. The first was within the control of the Company. The practicability of alternative access must always be considered in cases of traffic-generating developments on main roads: Modern Motels Pty Ltd v Fairfield City Council [2013] NSWLEC 138. The Company did not exhaust alternatives potentially available to it. The Company did not request access across the Neighbouring Owner’s land nor did it take steps to test the availability of easements or public road access. The second of these matters was not pressed as a basis for seeking costs.

    8. Failing to consider alternatives in this case amounted to a jurisdictional error. The Company could not have been unaware of this barrier, as it was the basis of the Court of Appeal proceedings in the Al Maha Court of Appeal decision. On this separate basis it was also fair and reasonable that the Neighbouring Owner be compensated with its complete costs incurred in contesting these proceedings.

The Company’s position

  1. Mr McEwen noted that it was the Company’s position that it should not pay any of the Neighbouring Owner’s costs in respect of the whole proceedings or any of the severable claims advanced by the Neighbouring Owner in its Motion filed 13 September 2019.

  2. The Neighbouring Owner chose to apply to be joined in the substantive Class 1 proceedings and "thereby to enter an arena to which Rule 3.7 applied": Community Association DP 270253 at [55]. It is therefore for the Neighbouring Owner to prove that departure from the position in r 3.7(2) of the Court Rules is warranted, such that the Company should pay the Neighbouring Owner's costs. Any departure from an ordinary costs order must be both "fair and reasonable in the circumstances": r 3.7.

  3. It is conduct, and not outcome, that should be the focus of the Court's consideration pursuant to r 3.7(2).

  4. Whether the aspect or contention in issue is jurisdictional or requires a merit assessment should not be determinative of whether a costs order ought to be granted. All matters in dispute should be considered to be on equal footing so far as costs are concerned. Unreasonable conduct is not evidenced by a party failing to persuade the Court on a jurisdictional matter.

  5. Rule 3.7(3)(a) is not applicable where a full hearing is conducted, as was the case here.

  6. The strength of jurisdictional cases should not be determinative of the costs’ question, because r 3.7 is underpinned by the "no discouragement" principle.

  7. Costs will generally not be payable in Class 1 proceedings unless the Court considers it fair and reasonable in the circumstances: Owners - Strata Plan No 20226 v North Sydney Council [2012] NSWLEC 148 at [36]. The "no discouragement" principle underpins this proposition, such that it seeks to prevent persons from being discouraged from exercising their rights of appeal due to an adverse costs order: Arden Anglican School v Hornsby Shire Council [2008] NSWLEC 103 at [10]; Sansom at [22]-[23].

  8. Mr McEwen summarised Sheahan J's acceptance of the key principles to be applied in questions of costs in substantive Class 1 proceedings under r 3.7 in Dunford v Gosford City Council (No 3) [2015] NSWLEC 96 at [30].

  9. Rule 3.7(2) creates a basic rule where there is a presumption against the making of an order for costs: Sansom at [48].

  10. The effect of the basic rule in r 3.7(2) is that, in the ordinary course, costs will lie where they fall: Agonic Holdings Pty Ltd v Lithgow City Council [2009] NSWLEC 34 at [5] per Biscoe J.

  11. The question, then, is whether, despite the basic rule, it is "fair and reasonable" that a party should be reimbursed for the costs it incurred: Sansom at [50].

  12. The formulation - "fair and reasonable" - calls for a judgement to be made, rather than as a discretion to be exercised, but in any event the evaluative process can be accurately described as conferring a wide discretion: Sansom at [51].

  13. Rule 3.7(3) identifies, without limitation, some circumstances in which the Court might consider the making of a costs order to be fair and reasonable: Pet Carriers International Pty Ltd v Botany Bay [City] Council (No 2) [2013] NSWLEC 150 at [4].

  14. The circumstances identified in r 3.7(3) may rebut the presumption in r 3.7(2) and may inform the Court's discretion but are neither prescriptive nor exhaustive: Pepperwood Ridge Pty Ltd v Newcastle City Council (2008) 160 LGERA 164; [2008] NSWLEC 196 at [73]; Hillsong Church Limited v Council of the City of Sydney (No 2) [2012] NSWLEC 118 at [55].

  15. The "unreasonableness" with which r 3.7 is concerned is unreasonableness of the conduct of the proceedings and is distinct from the unreasonableness affecting the decision challenged in the proceedings: Community Association DP 170253 at [52]. The Court will examine the history of the project and the proceedings to determine fairness and reasonableness, as both must take into account individual facts and circumstances: Moss Vale Projects Pty Ltd v Wingecarribee Shire Council [2018] NSWLEC 180 at [25]. However, the Court must not engage in a hypothetical trial of the substantive case when doing so: Re Minister for Immigration & Ethnic Affairs of the Commonwealth of Australia; Ex Parte Lai Qin (1997) 186 CLR 622 at 626.

  16. The Neighbouring Owner has asserted that the Company's failure to satisfy two jurisdictional tests as bases for costs being awarded for the whole of the proceedings. These two jurisdictional points may be summarised as:

  1. The cl 4.6 request; and

  2. The inability of the Company to persuade the trial judge that he could be satisfied that vehicular access to the subject land via a road other than a classified road was not practicable pursuant to cl 101(2)(a) of the Infrastructure SEPP.

The Company submits that it had an arguable case on both points and therefore its conduct cannot be considered unreasonable. The fact that the Company failed to persuade the trial judge is not evidence of unreasonable conduct.

  1. With regard to the second jurisdictional point mentioned above, the Company contends that this point was raised only during the substantive hearing, and so it was prejudiced by the Neighbouring Owner by not allowing the Company to adequately prepare to address it.

  2. The party seeking costs bears the onus of establishing that the usual rule that no costs orders be made in Class 1 proceedings ought not to apply: Hunter v Central Coast Council [2017] NSWLEC 154 at [96]; Coolah Holdings Pty Ltd v Eurobodalla Shire Council (No 2) [2012] NSWLEC 84 at [43]. The Company asserts that whilst the Neighbouring Owner has alleged carelessness on the part of the Company with regard to the cl 4.6 variation request, the Neighbouring Owner has not demonstrated how this was the case. With regard to the cl 101 of the Infrastructure SEPP point, the solution proffered by the Neighbouring Owner was arguably impermissible in any case.

  3. The Neighbouring Owner conceded that a central aim of its participation in the proceedings was its concern about the way the City of Canada Bay Council (the First Respondent) would have conducted the proceedings. Under these circumstances, it is not reasonable or fair that the Company pay the Neighbouring Owner’s costs. The actions of the First Respondent cannot be attributed to the Applicant.

  4. The Neighbouring Owner’s assertions that it joined the proceedings to protect its rights against compulsory acquisition are irrelevant in the context of a Class 1 application and are therefore irrelevant for the question of costs.

  5. The Neighbouring Owner’s Motion should be dismissed with the costs of the Motion awarded to the Company in the costs’ proceedings.

Consideration of the Neighbouring Owner’s costs application

Summary of the costs’ outcome

  1. I have concluded that the Neighbouring Owner has established a proper case as to why it is fair and reasonable that I order that the Company should pay the Neighbouring Owner's costs of these Class 1 proceedings. I now propose to explain why I have reached this conclusion.

The earliest intimation of a jurisdictional barrier to approval

  1. The necessity for the Company to succeed in a request for dispensation from compliance with cl 4.3 (the height limit provision) of the LEP had been known to the Company since 24 May 2017 - some 16 months before the topic was raised in the Court of Appeal and almost 20 months before the commencement of the Class 1 hearings before me. This can be seen from [93](3) of my merit decision, an element relevantly in the following terms:

Third, the question of the adequacy of the cl 4.6 request had been in play since the first Statement of Facts and Contentions filed by the Council on 24 May 2017. Although the pleadings did not expressly engage with what were said to be the inadequacies of the document in the fashion proposed to be addressed by the revised request, nonetheless, the adequacy of the document had been in contention for the whole of that period.

The relevant matters to be drawn from the Court of Appeal proceedings

  1. In the opening paragraph of this decision, I noted that these Class 1 merit proceedings came to be heard by me as a consequence of the remitter following the Al Maha Court of Appeal decision.

  2. To provide an appropriate contextual framework to understand my later reasoning leading to my costs’ conclusion, it is appropriate to set out relevant elements of the Al Maha Court of Appeal decision and of matters set out, subsequently, in my merit decision.

  3. In the Court of Appeal, the Neighbouring Owner pressed a number of grounds, complaining that the process undertaken by the Commissioner who had initially proposed to grant consent following the reaching of an agreement during the course of a conciliation conference conducted pursuant to s 34 of the Court Act (together with the subsequent procedural attempts to rectify defects in that process).

  4. At [52] of the Al Maha Court of Appeal decision, Preston CJ set out the four bases upon which the Neighbouring Owner challenged the decision to grant the Company development consent. The third of these grounds was described by his Honour as being:

  1. the failure of the Commissioner to form the requisite opinions of satisfaction under cl 4.6 of Canada Bay Local Environmental Plan 2013 (“the LEP”) justifying the contraventions of the development standards in the LEP (“the cl 4.6 ground”);

    1. In separate but generally concurring reasons, Basten JA dealt with this topic at [20] to [23]. It is to be observed, with respect to the Al Maha Court of Appeal decision, that Leeming JA agreed with Preston CJ's reasons together with the additional remarks of Basten JA.

    2. It is unnecessary to address, for the purposes of this decision, the reasons given by Preston CJ for explaining why the Commissioner’s process concerning the request to depart from the development standard set by cl 4.3 of the LEP should be permitted to be breached. His Honour addressed those matters at [176] to [206] in his judgment.

    3. For my purposes, it is sufficient to note that, from the hearing in the Court of Appeal on 5 and 6 September 2018 (with the judgment being given on 26 October 2018), the Company was on notice that the question of the necessity to provide a valid and properly structured request for exemption from compliance with cl 4.3 of the LEP was clearly and expressly known to the Company, and to those representing and/or advising it. It was also clear that the Neighbouring Owner had put the Company on notice that it proposed to raise the inadequacy of the request utilising the beneficial and facultative provisions of cl 4.6 of the LEP.

    4. Granting such a request, necessary in light of the height limit breach of the proposed development, was a jurisdictional prerequisite to the granting of consent for the Company's proposed development on the site.

    5. The second matter of relevance to be noted arising out of the Al Maha Court of Appeal decision is that the question of access from Leicester Avenue, and the potential jurisdictional barrier arising from cl 101(2) of the Infrastructure SEPP, was also clearly a matter about which the Company was on notice since the September 2018 hearing in the Court of Appeal. This was certainly reinforced in the judgment of Preston CJ in the Al Maha Court of Appeal decision between [102] and [141].

    6. Although this section of the Al Maha Court of Appeal decision dealt with the potential jurisdictional impediment arising from cl 101(2) of the Infrastructure SEPP, the Court of Appeal did not address the topic in that jurisdictional context, but did so through an examination of how those matters impacted on questions of whether or not owner’s consent from the Neighbouring Owner was necessary for the purposes of the Commissioner determining whether she had had jurisdiction to make orders to give effect to the agreement which had been reached between the Company and the Council (as required by s 34(3) of the Court Act).

    7. However, for present purposes, it is sufficient to note that, since those Court of Appeal proceedings, the Company has been on notice that a jurisdictional barrier arising from cl 101(2) of the Infrastructure SEPP was likely to be raised by the Neighbouring Owner as a potentially fatal jurisdictional impediment to the granting of development consent to its proposed development on the site.

The joinder decision

  1. I noted, at [3], that Robson J had joined the Neighbouring Owner to the Class 1 proceedings. His Honour's decision noted, at [16](4), that one of the bases upon which the Neighbouring Owner sought to be joined was that:

Clause 101 of the State Environmental Planning Policy (Infrastructure) 2007 (‘Infrastructure SEPP’) requires that, where practical, vehicular access to the land be provided by a road other than Leicester Avenue (it being a classified road). Al Maha is concerned that the cl 101 issue will not be properly or adequately addressed absent its joinder;

  1. Although His Honour specifically observed, at [48], that the matters pressed by the Neighbouring Owner that warranted joinder did not include that which is set out above, it is nonetheless apposite to note that the Neighbouring Owner continued to press that this was an issue which still required to be addressed. After being joined, the Neighbouring Owner became a party for all purposes.

My merit decision

Introduction

  1. It is necessary, for the purposes of context of my consideration of whether it would be fair and reasonable to award costs of the Class 1 hearing to the Neighbouring Owner, to set out a number of matters as to how the merit hearing before me unfolded.

  2. In doing so, it is appropriate to note that Mr Robertson, who also appeared as counsel for the Neighbouring Owner in the merit hearings, played the primary role in mounting the case why the Company's proposed development should be rejected on the basis of the two jurisdictional grounds earlier noted as arising before the Court of Appeal.

Summary of outcomes

  1. At [3] of my merit decision, I set out a “Summary of Outcomes” which followed from the proceedings which I had heard over eight days in January to March 2019. That summary was in the following terms:

For the reasons which are set out in detail, I am satisfied that, on three separate bases, each of which is sufficient in itself to cause refusal, I do not have jurisdiction to entertain giving approval to the proposed development. However, lest I be wrong in all of these jurisdictional conclusions, I have also concluded that the proposed development does not warrant being granted development consent as a matter of merit assessment. In this regard, whilst I am satisfied that the extremely poor amenity outcome which would be achieved with respect to solar access across the apartments in the proposed development warrants merit refusal, in itself, I am also satisfied that there are other merit matters which would additionally contribute to warranting refusal of the proposed development.

  1. At [29] of my merit decision, I noted that the issues in those Class 1 merit proceedings fell into two distinct categories. The first category concerned jurisdictional issues. My merit decision said:

The issues in the proceedings fall into two distinct categories. First, it is contended by both Respondents that there are jurisdictional impediments that prevent development consent being granted to the Applicant's proposed development. These impediments are said to be:

• The Applicant has not demonstrated that access from Hilts Road for a development on the site is not practicable and, thus, cl 101(2)(a) of State Environmental Planning Policy (Infrastructure) 2007 (the Infrastructure SEPP) acts to prohibit giving consent to the proposed development having access from Leicester Avenue;

• The Applicant has not demonstrated that the design of the vehicular access to the site will not adversely affect the safety, efficiency and ongoing operation of Leicester Avenue (a classified road) and that, as a consequence, cl 101(2)(b)(1) of the Infrastructure SEPP acts to prohibit giving consent to the proposed development having access from Leicester Avenue; and

•   The request for dispensation with compliance of the mandated building height limit set by cl 4.3 of the LEP does not satisfy the necessary requirements of cl 4.6 of the LEP and, thus, the dispensation cannot be granted.

  1. In [30], I expressly noted that:

If any one of these issues is resolved adversely to the Applicant, development consent to the proposed residential flat building must not be granted.

  1. I then noted that there were a number of design merit issues said by the Neighbouring Owner and by the Council to warrant refusal of the Company's proposed development, even if all of the jurisdictional hurdles were overcome. At [31] of my merit decision, I described these as:

The second suite of issues that are pressed by both Respondents are ones where it is said that, on the merits of the proposed development, the design of the proposed development is sufficiently unmeritorious that consent should not be granted on the basis of the present design. There are a range of matters pressed on this basis. Both Respondents submit that, taken together, these merit matters warrant refusal of the application. These merit matters fall into three broad areas:

  1. Access and vehicle servicing;

  2. Solar access; and

  3. Whether or not a sufficient number of apartments in the proposed development would have adequate ventilation.

    1. I observe that these merit matters play no role in my determination of this costs’ dispute. It is clear from the above description of the matters that required to be addressed in those Class 1 proceedings expressly encompassed the two jurisdictional matters which had been discussed before the Court of Appeal and in the Al Maha Court of Appeal decision as earlier outlined.

The revealing of fundamental defects in the Company’s cl 4.6 request

  1. As my merit decision records, Mr Robertson concluded his closing submissions on the afternoon of 6 March 2019, the fifth day of the Class 1 hearing. At [78] of my merit decision, I noted, with respect to Mr Robertson's submissions, that:

During the course of those submissions, he addressed, comprehensively, what he said were fundamental defects in the Applicant’s request pursuant to cl 4.6 of the LEP.

  1. It is unnecessary for me to set out in detail the making of the reopening application on behalf of the Company in an endeavour to seek to rely on a third further revised cl 4.6 request. The full discussion of that was set out in my merit decision at [82] to [95]. It is not necessary to reproduce the entirety of those paragraphs. However, portion of my description of what occurred, and portion of the quoted transcript extract, do require to be set out for present purposes. At [80] and [81] of my merit decision, the following is recorded:

  1. The transcript of the afternoon of 6 March records Mr Tomasetti expressing his concern that the criticism made by Mr Robertson of the cl 4.6 request may have had validity. As these proceedings were to go over to a further day upon which Ms Irish would make her closing submissions, and Mr Tomasetti would reply, Mr Tomasetti foreshadowed that the Applicant might need to contemplate whether or not to seek to rely upon some further revision of the cl 4.6 request. His comments and the subsequent relevant exchange with me on this point warrant being set out. The transcript records (Transcript, 6 March 2019, page 61 line 27 to page 62 line 39):

    TOMASETTI: Your Honour, I want to raise another matter, in Mr Robertson's submissions which could bear upon this question. I've heard Mr Robertson's carefully constructed legal and factual submissions on this cl 4.6 objection. I have looked at the transcript and I've also looked at the contentions that were raised. Much of what he's put going to the important matter of jurisdiction is not in any of the contentions which were raised either by the Council or his own client. As we listened to it, we hear the word jurisdiction, jurisdiction, jurisdiction, coming up continuously. This is really the first time that my learned friend has revealed the arguments that he wished to raise on these matters.

    I've heard his submissions in relation to that part of the cl 4.6 objection that relates to the abandonment argument. I have to confess and concede that that part of the objection could probably has missed the mark entirely, by addressing earlier planning instruments, but that was never the subject of the contentions that were permitted to be raised. The contention that was raised against us, by Mr Robertson's client was Robson J contemplated and permitted to be advanced is that found in para 3(i) which reads as follows "my client's revised cl .46 objection does not deal with the issue that part of the proposed development has a height of 12.5 metres where the maximum building height at that point is zero metres".

    That was the contention his client was going to advance which were subsequently abandoned.

    ROBERTSON: We're addressing a 4.6 request that wasn't made at that time.

    TOMASETTI: But it doesn't matter Mr Robertson, the contention ‑ you're bound by your contention and by his Honour Robson J orders.

    HIS HONOUR: No. I thought I dealt with on, I think, 15 February. What his Honour limited was the additional contentions Mr Robertson's client was permitted to plead. He did not limit the totality of the contention including the Council's contentions that Mr Robertson's client was permitted to seek to maintain.

    TOMASETTI: Your Honour, with respect, it may have been my fault because I paused, but I was about to add that qualification, and the contention of the Council is relevantly found in para 3 of their statement of contentions. I'm seeking instructions your Honour, but I want to foreshadow, that if it comes down to a question of technical compliance of a written document with the requirements of cl 4.6 I'm going to seek an opportunity to revise that document and put it before your Honour. I can't do these addresses and‑‑

    HIS HONOUR: If that were even remotely to be contemplated, I'm not going to deal with that on the run because cl 4.6 that is the tests that are contained in cl 4.6 at least as I understand it, have been in contention for some time. Even if they are not, they contain jurisdictional tests which, unless I'm satisfied about them, I am unable to go further and I am concerned that saying well we might want to try and rely on a further cl 4.6 request, a recast document, without going to whatever might be in it, it seems to me that there is at least some significant potentiality that Aon type issues might arise. I'm not going to try and deal with that on the fly.

    TOMASETTI: I may have to put on a motion.

    HIS HONOUR: You may, but at the moment, and I hear that you may, and I'm not making any comment about your right to do so or otherwise or what might be said for or against whatever proposition was contained in that motion. At the moment I am anxious to find an additional two hours to permit the present course of these proceedings to be finalised. If between now and then you are instructed to file some motion seeking to do something else, then I'll deal with that the necessary time.

  2. As can be seen from about the mid-point in the above extract that Mr Tomasetti foreshadowed what he described as “an opportunity to revise that document [the cl 4.6 request].

    1. On 21 March 2020, the Company’s legal representatives filed a Notice of Motion seeking to rely on a “further revised” cl 4.6 request. It is not necessary to set out in detail the defects in the process for preparation of this document that were revealed during the cross-examination of Dr Shiels, the Company’s expert town planner. They can be seen at [86] to [93] of my merit decision.

    2. However, I observed, at [94]:

    There are three reasons why I concluded that it was not appropriate to permit the Applicant to substitute what was, in any substantive analysis sense, a virtually fresh cl 4.6 request to that which had been relied upon since the commencement of the hearing.

    1. The first and third of the three reasons noted above are relevant for this costs application. These elements of [94] of my merit decision were in the following terms:

  3. The material came in response to the closing submissions by Mr Robertson for the Neighbouring Owner at a time when all the evidence had closed and, having heard Mr Robertson's submissions, Mr Tomasetti identified the possibility of a significant deficiency in the material upon which the applicant had relied. The proposed development, with its height exceedance, had first come before Smithson C for the purposes of a conciliation conference pursuant to s 34 of the Land and Environment Court Act 1979 in February 2018.

Although the design had changed significantly as a consequence of the Court of Appeal decision, the necessity for a successful cl 4.6 request was not altered by that decision. Acquiescence to permitting non-compliance with the building height mandated by the LEP had been a live matter for the whole of that time. No good reason was advanced as to why the necessity for a fresh document had not been identified at an appropriate earlier time. This delay, in itself, is sufficient to refuse the application for leave (Aon Risk Services Australia Limited v Australian National University (2009) 239 CLR 175; [2009] HCA 27 at [98] - [103] and [113] - [114]);

…

  1. Third, the question of the adequacy of the cl 4.6 request had been in play since the first Statement of Facts and Contentions filed by the Council on 24 May 2017. Although the pleadings did not expressly engage with what were said to be the inadequacies of the document in the fashion proposed to be addressed by the revised request, nonetheless, the adequacy of the document had been in contention for the whole of that period. In addition, although the matters pleaded by the Council and, to a very limited extent, by the Neighbouring Owner did not precisely reflect matters pressed by Mr Robertson in his closing submissions, the position is that the adequacy of the cl 4.6 request had been in play throughout the hearings before me.

It is to be observed that the various tests set out in cl 4.6(4) are jurisdictional and the failure to satisfy any one of them acts to prevent the request from being agreed. The importance of a satisfactory cl 4.6 request is, therefore, of fundamental importance to the granting of development consent for this development proposal. No satisfactory reason was advanced to explain why the deficiencies necessitating the new document had not been identified earlier. This reason would not, in itself, warrant refusal of leave to amend but does reinforce my first reason of the unacceptable lateness of the application seeking to amend.

  1. Although the reasons for rejecting what amounted to a fresh cl 4.6 request play no critical role in this costs’ determination, I reproduce the above extracts because they demonstrate the nature of the matters that continued to remain in contention and the lateness of the application made on behalf of the Company to endeavour to rectify the deficiencies of which it had been on notice for some 18 months, as a general proposition, since the Council had filed and served its first Statement of Facts and Contentions.

  2. Given that I had rejected the Company's attempt to rely on what amounted to an entirely new cl 4.6 request, it was necessary, in my merit decision, to address the cl 4.6 request that remained alive in the proceedings. This cl 4.6 request was in evidence as Exhibit C.

  3. I set out the context within which this required to be considered at [174] to [181]. This element of my decision incorporated lengthy extracts from the transcript of the closing submissions made by counsel for the Company then appearing, from Mr Robertson and from Ms Irish.

  4. It is sufficient for present purposes to note that Mr Robertson's submissions were set out at [178] and ran for approximately two-and-a-half pages of my judgment. In the course of her submissions, Ms Irish acknowledged, by implication, the primary role on this issue undertaken by Mr Robertson on behalf of the Neighbouring Owner, saying (as recorded in the final paragraph of the transcript quotation at [179] of my merit decision):

So your Honour, we haven’t gone into the detail that the Second Respondent did for the economy of not repeating unnecessarily but we consider that even on the first of the matters of satisfaction in relation to where the compliance is unreasonable or unsatisfactory, that your Honour would find the 4.6 wanting and we rely in that first opinion of satisfaction and the second opinion of satisfaction on and adopt the Second Respondent’s submissions in order to make the submission that the Court would find it is without power to grant consent to the development application.

  1. In my merit decision, on the point concerning the cl 4.6 request then before me, I said at [183] to [185]:

  1. The dissection by Mr Robertson, in his closing submissions, of the elements in Exhibit C addressing the first of the objectives in cl 4.3(1) of the LEP are to be preferred despite the valiant attempt by Mr Tomasetti on 29 March 2019 to persuade me to set aside Mr Robertson's criticisms in this regard.

  2. In this context, it is appropriate to observe that, as Preston CJ noted in [24] of Initial Action, I must be satisfied that the exceedance (and not the totality of the proposed development) is consistent with, relevantly, this objective for the height of buildings development standard.

  3. I am unable so to conclude for the reasons generally advanced by Mr Robertson in this regard. I summarise, with reference to the relevant portions of Exhibit C dealing with cl 4.3(1)(a) of the LEP, why I have reached this conclusion. It is for the reasons set out in the following paragraphs.

    1. I then set out, between [186] to [198], why I was satisfied that the Company had not got over the jurisdictional hurdle to be granted dispensation from compliance with the height limit established by cl 4.3 of the LEP. It is not necessary to set out any of that detailed analysis in this element of my merit decision, but it is appropriate to set out the final two paragraphs of this portion of my decision. These paragraphs were in the following terms:

  4. As a consequence, I am unable to accept that Exhibit C provides any proper or sufficient basis upon which I could conclude that the Applicant's proposed development is compatible with the desired future character of the Strathfield Triangle, as embodied in the 2013 LEP and the Triangle DCP, a DCP coming into effect consequent on the operation of the 2013 LEP from early August 2013.

Conclusion concerning the cl 4.6 request

  1. As the cl 4.6 request does not demonstrate why I should conclude that the Applicant’s proposed development will be in the public interest because it is compatible with the first of the objectives of the height of buildings development standard, the cl 4.6 request to be permitted not to comply with that development standard must be rejected.

The Infrastructure SEPP jurisdictional issue

  1. It is also sufficient for present purposes to note that jurisdictional issues arising out of cl 101(2) of the Infrastructure SEPP commenced to be discussed in my merit decision at [96].

  2. Mr Robertson proposed that jurisdictional barriers to approval of the Company's proposed development arose for two separate reasons of non-satisfaction of the jurisdictional hurdles in cl 101 of the Infrastructure SEPP. I summarised these at [101] and [102] of my merit decision in the following terms:

  1. The first was that there was no evidence that the Applicant had taken any steps whatsoever to explore legally available options for achieving access from Hilts Road, on the basis of the present configuration of the eastern end of Hilts Road (and setting aside the potentiality for the future acquisition of the Neighbouring Owner’s land to achieve the Triangle DCP’s vision for the future extension of Hilts Road). This meant that, he submitted, the test of practicability set by cl 101(2)(a) of the Infrastructure SEPP could not be satisfied and that, therefore, refusal of the proposal was mandated.

  2. Second, he submitted that I could not be satisfied that the vehicle access from Leicester Avenue as proposed would be safe and that this was a second, independent mandatory requirement that was not able to be satisfied. He proposed that this, separately, raised a jurisdictional barrier to the granting of consent to this proposed development. This test is said to arise from cl 101(2)(b)(i) of the Infrastructure SEPP.

    1. The first of these issues was one that was alive in the proceedings in the Court of Appeal in September 2018 (see [69] earlier).

    2. It can be seen, at [118] of my merit decision, that Ms Irish, counsel for the Council, adopted Mr Robertson’s submissions on these matters and made no additional submissions concerning these issues.

    3. It is also sufficient for the present to note that my consideration of this jurisdictional issue was set out in my merit decision at [124] to [134] with my conclusion.

Merit issues relating to the Company's proposed development

  1. At [199] of my merit decision, I said:

Against the possibility I might be in error on all jurisdictional impediments to this proposed development, I now turn to an assessment of the various merit issues pressed by the Respondents.

  1. For the purposes of consideration of this costs application, it is not necessary to address any of the merit matters upon which I also concluded that it would not be appropriate to grant approval to the Company's proposed development. They play no role in this determination but were purely a “belt and braces” approach to a proper determination of the Class 1 merit appeal.

  2. The overall conclusion I set out in my merit decision made that clear, at [311] and [312], where I said:

  1. There are three separate (and each sufficient) reasons why I am not permitted to approve this proposed development.

  2. However, against the possibility that I might be wrong in so concluding with respect to each of these impediments, I have also undertaken a merit assessment of the proposed development. As a consequence of doing so, I have concluded that the proposed development would not warrant approval as a matter of merit for the reasons earlier set out.

Analysis

  1. I noted, at [58], that Mr McEwen had submitted that the Company had an arguable case on both jurisdictional points and therefore its conduct cannot be considered unreasonable. The fact that the Company failed to persuade the trial judge is not evidence of unreasonable conduct, he said.

  2. I am unable to accept these propositions. This is because, as discussed below and to be observed from the material set out above, the Company was long on notice of the jurisdictional impediments and, as my merit decision made clear, it had no valid response to them and had not taken steps open to it to seek to address and potentially resolve them. The “arguable case” defence to the Neighbouring Owner’s costs application is simply not available to the Company on the facts as discussed in my merit decision.

  3. I have earlier set out at [28] the range of matters set out by Preston CJ in Grant v Kiama. For the purposes of consideration in these costs proceedings, (a) and (f) of the matters set out by his Honour are potentially engaged in this consideration. It is to be noted, however, that although His Honour cited a range of decisions in support of the various potential circumstances in which making a costs order might be fair and reasonable, each of the matters turned on the facts and circumstances arising for consideration in the particular proceedings.

  4. As a consequence, it has been necessary, as I have done above, between [75] and [114], to set out in some detail the history of two jurisdictional points pressed on behalf of the Neighbouring Owner in the Class 1 proceedings before me as warranting refusal of the Company's proposed development. As can be seen, each of those jurisdictional impediments was established and each of those jurisdictional impediments was fatal to the possibility of approval of the Company's proposed development.

  5. In the context of all of the above reproduced material, one fundamental conclusion is to be drawn for present purposes.

  6. This is that the Company had had notice for a considerable period of time of the two central jurisdictional issues raised by the Neighbouring Owner - matters which, if established (as they were), would be fatal to the Company’s proposed development. In a Grant v Kiama context, these were:

  1. Whether there was power to grant approval to the Company's proposed development (Grant v Kiama at [15](a)); and

  2. In light of the defects demonstrated in the Company's cl 4.6 request embodied in Exhibit C before me, properly advised, should the Company have known well before the commencement of the Class 1 merit proceedings that that cl 4.6 request to seek dispensation from compliance with the height limit established by cl 4.3 of the LEP was fatally defective (Grant v Kiama at [15](f)).

  1. Mr Robertson clearly enunciated, during the course the hearing before me, the defects in Exhibit C. Counsel then appearing for the Company impliedly admitted the likely validity of those fatal defects. These should have been obvious to the Company (and those representing and advising it) on any proper analysis of the adequacy (or more correctly inadequacy) of that request.

  2. No explanation has ever been properly articulated as to why the barrier of the cl 4.6 request’s obvious and fatal inadequacies had not been addressed and remedied before the commencement of the Class 1 hearing and certainly well prior to the belated “amendment” attempt many days into the hearing of the matter.

  3. In light of all the history I have set out and the fact that the two insurmountable jurisdictional barriers had been known to the Company (and those representing and advising it) for considerable periods of time before the commencement of the Class 1 hearing, I am satisfied that it is fair and reasonable to require the Company to pay the Neighbouring Owner's costs of the Class 1 appeal.

An additional matter

Introduction

  1. I have earlier set out, at [7], the various matters put in contention by the Neighbouring Owner as elements of the relief sought in this costs application. Proposed Order (2) was cast in the alternative. However, in light of the way the proceedings on costs have been conducted before me, I consider it appropriate to explain why there should be a separate costs order in the Neighbouring Owner’s favour concerning the hearing before Acting Registrar Walton.

  2. This is because, in reality, the Neighbouring Owners claim to be paid its costs of the application for leave to rely on amended plans is discrete and freestanding.

  3. The application for leave to rely on amended plans was heard by Acting Registrar Walton on 10 January 2019. It is appropriate that I determine whether or not I should order that the Company pay the Neighbouring Owner's costs thrown away as a result of the amendment to the Company’s amendment to its proposed development arising from those proceedings before the Acting Registrar.

The relevant element of the costs application

  1. Although Order (2) of the orders sought was cast in the alternative, it is, in reality, a separate one not encompassed by my general earlier conclusion. This claim was that:

  1. … the Applicant pay the Second Respondent’s costs thrown away in relation to the leave granted to the Applicant on 10 January 2019 to rely on the amended plans and reports set out in annexure A to the motion filed on 8 January.

The Acting Registrar’s hearing on 10 January 2019

  1. On 10 January 2019, the Acting Registrar heard and determined a Notice of Motion filed for the Company seeking leave to amend its development application to rely on revised plans for its development proposal on the site.

  2. The Council and the Neighbouring Owner were legally represented at that hearing (the Neighbouring Owner being represented by Mr Robertson). The application for leave to amend required to be dealt with pursuant to s 8.15 of the EP&A Act. Although there was a deal of argument before the Acting Registrar (the transcript comprising some 25 pages of the hearing on 10 January 2019 (Exhibit A, Tab 12, folios 435 to 459), it is unnecessary to address any matters of detail concerning the proposed amendments to the development application.

  3. It is, however, appropriate to record that the issue of whether the proposed amendments should be regarded as minor was the subject of submissions to, and determination by, the Acting Registrar. The reason for this arose from the requirement, when permitted amendments were determined not to be minor, that s 8.15(3) of the EP&A Act (earlier set out at [14]) was engaged.

  4. The Acting Registrar determined that the amendments were not minor and made a costs order in favour of the Council, that being the mandated outcome of that statutory provision.

  5. The Acting Registrar did not make any costs order in favour of the Neighbouring Owner for this hearing.

The basis for this aspect of the costs application

  1. The Neighbouring Owner now seeks that I make a costs order in its favour for the hearing before the Acting Registrar on 10 January 2019. The relevant element of the Notice of Motion in (2) was earlier set out.

  2. As earlier explained, I granted an extension of time to the extent necessary to permit the Neighbouring Owner to advance this proposition.

  3. Although Mr Robertson referred to both review and appeal as the possible processes engaged for my consideration of this issue, I am inclined to think that the appropriate approach is to consider this element of the Neighbouring Owner’s costs application as being an application for a review of the Acting Registrar's decision (the decision be an implied one - the omission of a costs order in favour of the Neighbouring Owner).

  4. The power to review such a decision is to be found in r 49.19(1) of the Uniform Civil Procedure Rules 2005 (the UCPR) whilst the power to extend time (as is here needed) to permit such a review is to be found in r 49.20(4).

  5. First, there is an onus on the Neighbouring Owner to make out a case that, in conducting this review, it is in the interests of justice that I should exercise my discretion to do so. Second, it is to be observed that it is unnecessary for the Neighbouring Owner to demonstrate any material error in the decision under review. On review, I may exercise, relevantly, the costs’ powers regardless of error: Tomko v Palasty (No 2) (2007) 71 NSWLR 61; [2007] NSWCA 369 at [7] and [52].

  6. What will be required to make out a case for intervention will vary depending upon the nature of the decision (here omission) under review: Groeneveld v Wollongong City Council (2009) 168 LGERA 260; [2009] NSWLEC 149, per Preston CJ at [12].

  7. Such a review engages my consideration of what was the correct and preferable decision to be reached in the circumstances. It is not an appeal against that decision where error would be needed to be demonstrated.

The Neighbouring Owner's position

  1. The Neighbouring Owner’s position was addressed by Mr Robertson both in his written submissions and in his oral submissions. It is unnecessary to address them in detail; it is sufficient to note that, in summary, the position advanced is that the primary proponent before the Acting Registrar of the proposition that the amendments were not minor was the Neighbouring Owner and not the Council. An examination of the relevant elements of the transcript before the Acting Registrar was said to demonstrate this. As a consequence, the Neighbouring Owner now submits that its role before the Acting Registrar in addressing this position warrants a costs order in its favour, in addition to the costs order in the Council’s favour mandated by s 8.15(3) of the EP&A Act.

The Company's position

  1. The Company rejected the Neighbouring Owner’s argument that the Acting Registrar intended to make a costs order with respect to an application to amend a development application in favour of the Neighbouring Owner. Despite the Company’s former solicitors making an offer to this effect, it was never recorded or ordered. The Company highlighted that the Neighbouring Owner conceded that the s 8.15(3) order-making power extended only to the consent authority.

Consideration

  1. First, it is to be observed that the mandated necessity to make a costs order pursuant to s 8.15(3), when amendments to a development application are not minor, can only arise to benefit the consent authority (in this case, the Council) and does not provide any power to make a costs order in favour of any other Respondent (in this instance, the Neighbouring Owner).

  2. To the extent that the potential did arise before the Acting Registrar to make a costs order for that hearing in favour of the Neighbouring Owner, such an application could only be dealt with pursuant to the general costs’ power for Class 1 merit proceedings contained in r 3.7 of the Court Rules. As earlier discussed, such an order would only be available to be made if it was fair and reasonable to do so. It is through that lens that this aspect of the Neighbouring Owner’s costs application also requires to be considered.

  3. The transcript of the hearing before the Acting Registrar on 10 January 2019 records, at page 7, lines 32 to 37, Ms Edwards, legal representative of the Company, saying:

The motion seeks leave to rely on the amended plans and reports that are set out in annexure A. The applicant is also happy to pay the costs under section 8.15(3) of the first and the Second Respondent’s costs and any other order that this court sees fit.

  1. Submissions then took place addressing, amongst other things, the question of whether or not the proposed amendments to the Company's development were minor or not. An examination of the transcript before the Acting Registrar makes it clear that Mr Robertson, appearing for the Neighbouring Owner, took the lead in advancing the position that the amendments should be regarded as more than minor. This is confirmed by the comments of the Acting Registrar at page 21, lines 25 to 30, where she said:

Mr Robertson, you have convinced me that they are more than minor. They don't have to be significant as such, but they do change the look, the future impact, there is a number of areas of the landscaping that are changed and I think that the cumulative effect is such that I wouldn't class them is minor. That means you will pay the costs under whatever the new section is.

  1. It is clear from what follows that the final sentence of the above quotation was addressed to Ms Edwards, the Company's legal representative.

  2. Following further discussion about matters of timing of the future progression of the matter, the transcript records (at page 23, lines 37 to 39) that the Acting Registrar granted leave to rely on the amended plans and that the Company was to pay the Respondent’s costs pursuant to s 8.15(3). The Acting Registrar did not make any order for the Company to pay the Neighbouring Owner’s costs. However, at lines 43 and 44, the Acting Registrar observed:

I was thinking of the rules in relation to the other costs applications, it is 18 months, Mr Robertson, it has been a while.

  1. The hearing before the Acting Registrar then continued to deal with notification of the amended plans and timetabling for the hearing which was to take place shortly thereafter.

  2. I am satisfied, from my close reading of this transcript (particularly the passages earlier quoted) that:

  1. The Acting Registrar accepted that senior counsel for the Neighbouring Owner had taken the leading role in persuading her that the amendments were more than minor;

  2. She was aware of the offer on behalf of the Company that, if she determined that the amendments were, in fact, more than minor, the Company should pay the costs, not only of the Council (as mandated by s 8.15(3) of the EP&A Act) but also the costs of the Neighbouring Owner;

  3. As the Acting Registrar had not undertaken that role in this Court for some considerable period of time, she did not immediately deal with the question of costs’ liability for the Company to the Neighbouring Owner but did not reject the proposition that such costs should be paid by the Company.

  1. In the present context, this element of the present application was not one seeking to have me order that the Company pay the Neighbouring Owner's costs of the preparation for, and conduct of, the hearing before the Acting Registrar on 10 January 2019.

  2. The express costs outcome that has been sought by this element of the Motion is in the following terms:

  1. … the Applicant pay the Second Respondent’s costs thrown away in relation to the leave granted to the Applicant on 10 January 2019 to rely on the amended plans and reports set out in annexure A to the motion filed on 8 January.

    1. As a consequence, given that I am satisfied for the reasons set out in my earlier analysis of what took place before the Acting Registrar, it is also appropriate to make the order sought by the Neighbouring Owner with respect to this aspect of the substantive proceedings.

Costs

  1. Costs of costs applications ordinarily follow the event. There is no reason here why it should be otherwise. As a consequence, the Company is to pay the Neighbouring Owner's costs of this costs application.

Orders

  1. The orders of the Court are:

  1. The Applicant is to pay the Second Respondent's costs of preparation for, and the conduct of, the Class 1 proceedings before Moore J;

  2. The Applicant is to pay the Second Respondent’s costs thrown away as a consequence of the leave granted to the Applicant on 10 January 2019 to rely on the amended plans and reports set out in Annexure A to the Applicant’s Motion filed on 8 January 2020;

  3. The Applicant is to pay the Second Respondent's costs of the costs application; and

  4. The exhibits are returned.

**********

Decision last updated: 06 August 2020

Actions
Download as PDF Download as Word Document