Hunter v Central Coast Council

[2017] NSWLEC 154

Land and Environment Court

New South Wales

Medium Neutral Citation:	Hunter v Central Coast Council [2017] NSWLEC 154
Hearing dates:	20 September 2017, 20 November 2017
Date of orders:	23 November 2017
Decision date:	23 November 2017
Jurisdiction:	Class 1
Before:	Pain J
Decision:	(1) The Applicants’ Amended Notice of Motion dated 5 September 2017 is dismissed. (2) The Applicants are to pay the Council’s costs of the Amended Notice of Motion dated 5 September 2017. (3) The exhibits be returned.
Catchwords:	COSTS – not fair and reasonable to award partial costs in Class 1 proceedings – no extraneous purpose in challenge to voluntary planning agreement established – no failure to produce documents in timely fashion in circumstances - no failure to unreasonably pursue various contentions
Legislation Cited:	Civil Procedure Act 2005 s 56 Environmental Planning and Assessment Act 1979 ss 79C, 82A, 93F, 93H, 94, 94A, 97, 97B Gosford Planning Scheme Ordinance cl 49DN Heritage Act 1977 s 24 Land and Environment Court Act 1979 s 34 Land and Environment Court Rules 2007 r 3.7 State Environmental Planning Policy No 71 – Coastal Protection Uniform Civil Procedure Rules 2005 rr 1.9, 15.1
Cases Cited:	ACM Landmark Pty Limited v Cessnock City Council [2006] NSWLEC 256 Arden Anglican School v Hornsby Shire Council [2008] NSWLEC 103 Boensch v Parramatta City Council (No 3) [2014] NSWLEC 15 Coolah Holdings Pty Ltd v Eurobodalla Shire Council (No 2) [2012] NSWLEC 84 Community Association DP270253 v Woollahra Municipal Council [2015] NSWCA 80; 207 LGERA 268 Dunford v Gosford City Council (No 3) [2015] NSWLEC 96 Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 Norman McDonald & Anor v Central Coast Council [2017] NSWLEC 1207 Port Stephens Council v Sansom (2007) 156 LGERA 125; [2007] NSWCA 299
Category:	Costs
Parties:	Norman Augustus McDonald Hunter (First Applicant) Beth Janine Hunter (Second Applicant) Central Coast Council (Respondent)
Representation:	COUNSEL: P Tomasetti SC and A Hemmings (Applicants) A Galasso and M Staunton (Respondent)   SOLICITORS: Conditsis Lawyers (Applicants) Marsdens (Respondent)
File Number(s):	16/155633

Judgment

Costs in class 1 appeal

1. The Applicants Mr and Mrs Hunter were successful in a Class 1 appeal in gaining development consent for alterations and additions to the existing Avoca Beach Theatre for mixed-use development, Norman McDonald & Anor v Central Coast Council [2017] NSWLEC 1207 (the Commissioner’s judgment). The Applicants seek part of their costs of that appeal pursuant to r 3.7 of the Land and Environment Court Rules 2007 (Court Rules) together with the costs of their Amended Notice of Motion dated 5 September 2017. The costs application is opposed by the Respondent Central Coast Council which seeks its costs of the Motion. The costs hearing was set down for one day but required two days. The Applicants’ Motion seeks all the costs of the proceedings. The Applicants’ senior counsel advised on the second day of hearing that the costs sought were as identified in the affidavit of Ms Huscroft solicitor affirmed on 11 July 2017 namely 50% of the costs of the Class 1 appeal and partial costs of four expert witnesses.

Land and Environment Court Rules 2007

2. Part 3 of the Court Rules considers costs.

Rule 3.7 Proceedings in Class 1, 2 or 3 of the Court’s jurisdiction

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,

…

(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:

…

(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.

Environmental Planning and Assessment Act 1979

3. Relevant provisions in the Environmental Planning and Assessment Act 1979 (EPA Act) include:

Part 4 Development Assessment

…

Division 2 The procedures for development that needs consent

79C Evaluation

(1)   Matters for consideration—general In determining a development application, a consent authority is to take into consideration such of the following matters as are of relevance to the development the subject of the development application:

(a)   the provisions of:

(i)   any environmental planning instrument, and

…

(iii)   any development control plan, and

(iiia) any planning agreement that has been entered into under section 93F, or any draft planning agreement that a developer has offered to enter into under section 93F, and

(iv)   the regulations (to the extent that they prescribe matters for the purposes of this paragraph), and

(v) any coastal zone management plan (within the meaning of the Coastal Protection Act 1979),

that apply to the land to which the development application relates,

(b)   the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality,

(c)   the suitability of the site for the development,

(d)   any submissions made in accordance with this Act or the regulations,

(e)   the public interest.

…

Division 6 Development contributions

…

Subdivision 2 Planning agreements

93F Planning agreements

(1)   A planning agreement is a voluntary agreement or other arrangement under this Division between a planning authority (or 2 or more planning authorities) and a person (the developer):

(a)   who has sought a change to an environmental planning instrument, or

(b)   who has made, or proposes to make, a development application, or

(c)   who has entered into an agreement with, or is otherwise associated with, a person to whom paragraph (a) or (b) applies,

under which the developer is required to dedicate land free of cost, pay a monetary contribution, or provide any other material public benefit, or any combination of them, to be used for or applied towards a public purpose.

(2)   A public purpose includes (without limitation) any of the following:

(a)   the provision of (or the recoupment of the cost of providing) public amenities or public services,

…

(3)   A planning agreement must provide for the following:

(a)   a description of the land to which the agreement applies,

(b)   a description of:

(i)   the change to the environmental planning instrument to which the agreement applies, or

(ii)   the development to which the agreement applies,

(c)   the nature and extent of the provision to be made by the developer under the agreement, the time or times by which the provision is to be made and the manner by which the provision is to be made,

(d) in the case of development, whether the agreement excludes (wholly or in part) or does not exclude the application of section 94, 94A or 94EF to the development,

(e) if the agreement does not exclude the application of section 94 to the development, whether benefits under the agreement are or are not to be taken into consideration in determining a development contribution under section 94,

(f)   a mechanism for the resolution of disputes under the agreement,

(g)   the enforcement of the agreement by a suitable means, such as the provision of a bond or guarantee, in the event of a breach of the agreement by the developer.

(3A) A planning agreement cannot exclude the application of section 94 or 94A in respect of development unless the consent authority for the development or the Minister is a party to the agreement.

(4)   A provision of a planning agreement in respect of development is not invalid by reason only that there is no connection between the development and the object of expenditure of any money required to be paid by the provision.

(5) If a planning agreement excludes the application of section 94 or 94A to particular development, a consent authority cannot impose a condition of development consent in respect of that development under either of those sections (except in respect of the application of any part of those sections that is not excluded by the agreement).

…

(6) If a planning agreement excludes benefits under a planning agreement from being taken into consideration under section 94 in its application to development, section 94 (6) does not apply to any such benefit.

…

(9)   A planning agreement cannot impose an obligation on a planning authority:

(a)   to grant development consent, or

(b)   to exercise any function under this Act in relation to a change to an environmental planning instrument.

…

Norman McDonald & Anor v Central Coast Council [2017] NSWLEC 1207

4. The Commissioner considered the following issues in the judgment: the impact of the proposal on the heritage qualities of the Avoca Beach Theatre, parking requirements, flooding and whether weight should be given to the voluntary planning agreement (VPA).

5. The following paragraphs from the Commissioner’s judgment are usefully extracted:

4   The Council’s contentions can be summarised as:

•   The development application should be refused because the proposal will have an adverse impact on the heritage character and qualities of the Avoca Beach Theatre.

•   The development application should be refused because the proposal provides inadequate car parking on-site.

•   The terms of the Voluntary Planning Agreement between the Applicant and the Respondent dated 15 September 2006 as varied by Deed of Agreement dated 22 January 2007 (collectively ‘the VPA’) regarding the provision of 29 car spaces to be sealed and marked in the South End car park be given no weight in determining the contention that the proposal provides inadequate car parking.

•   The development application should be refused because the proposal is not satisfactory when assessed against the matters for consideration in clause 8 of State Environmental Planning Policy No 71 — Coastal Protection (“SEPP 71”).

5   Council’s contentions regarding flooding were addressed by the agreement of the flooding engineering experts (exhibit 8) to Council’s satisfaction.

…

16   The site is zoned 2(f) Residential (Beach Frontage) pursuant to the Gosford Planning Scheme Ordinance (GPSO). The proposal is not permissible in the zone, however, it is permissible pursuant to an enabling clause in the GPSO at cl 49DN, inserted by the making of Gosford Local Environment Plan No 456 (LEP 456) on 12 October 2007. Clause 49DN is as follows:

49DN

Avoca Beach Theatre

(1)   This clause applies to Lot 140, DP 9359 and Lot 651, DP 16791, Avoca Drive, Avoca Beach, as shown edged heavy black on the map marked “Gosford Local Environmental Plan No 456” deposited in the office of the Council.

(2)   Development may, with development consent, be carried out on land to which this clause applies for the purpose of a residential flat building, a place of assembly, an art gallery or a restaurant.

(3)   The maximum floor space ratio for the land to which this clause applies is 1:1.

(4)   The maximum height for a building erected on the land to which this clause applies is 10 metres, except as provided by subclause (5).

(5)   The consent authority may consent to development that exceeds the maximum height specified in subclause (4) if it is satisfied that any part of a building that is to exceed the maximum height:

(a)   is to be used for cinema or theatre purposes, and

(b)   is an integral part of the design of the building.

(6)   Strata subdivision is permissible, with development consent, on the land to which this clause applies.

(7)   The consent authority must not grant development consent to development on land to which this plan applies:

(a)   unless the development application has been referred for assessment to an Independent Design Review Panel appointed in consultation with the Director-General of the Department of Planning, and

(b)   except with the concurrence of the Director-General.

(8)   The consent authority must not grant development consent to development on land to which this plan applies unless it has taken into consideration the following:

(a)   the assessment of the Independent Design Review Panel of the development application,

(b)   whether the proposed development retains the existing theatre building,

(c)   whether the design of the proposed development complements the heritage qualities of the existing theatre building,

(d)   whether the proposed development provides a high standard of urban design and architectural quality, including the interface between the development and the adjoining public park,

(e)   whether the design of the proposed development is appropriate for the location of the land in the coastal zone,

(f)   whether adequate car parking is provided,

(g)   whether the proposed development provides measures to conserve water usage and to increase water efficiency.

(9)   Before granting concurrence under this clause, the Director-General must consider the assessment of the Independent Design Review Panel in relation to the following:

(a)   whether the proposed development retains the existing theatre building,

(b)   whether the design of the proposed development complements the heritage qualities of the existing theatre building,

(c)   whether the proposed development provides a high standard of urban design and architectural quality, including the interface between the development and the adjoining public park,

(d)   whether the design of the proposed development is appropriate for the location of the land in the coastal zone.

(10)   The consent authority is not required to comply with subclauses (7) and (8) (a) if the Director-General certifies in writing that the development is of minor significance.

(11)   This clause has effect despite any other provisions of this Ordinance.

(12)   In this clause:

coastal zone has the same meaning as in the Coastal Protection Act 1979.

17   The Director-General’s concurrence to the development application was given on 22 January 2014 (exhibit E, volume 2, ff 299–300). Notwithstanding this, the parties agreed that the Court has power to grant consent pursuant to s 39(2) of the LEC Act.

18   The following relevant definitions are included in the GPSO:

“Place of assembly” means a public hall, theatre, cinema, music hall, concert hall, dance hall, drive in theatre, open air theatre, music bowl or any other building of a like character used as such and whether used for the purposes of gain or not, but does not include a place of public worship, an institution or an educational establishment.

“Shop” means a building or place used for the purpose of selling, exposing or offering for sale by retail, goods, merchandise or materials, but does not include a building or place elsewhere specifically defined in this clause or a building or place used for a purpose elsewhere defined in this clause.

19   The following mandatory considerations are included in the GPSO, at cl 10(3):

(3) The Council must not grant consent for development on land within a zone unless it has taken into consideration the objectives of the zone and the consistency of that development within those objectives as well as the objectives of the Local Government Act 1993 relating to ecologically sustainable development.

(4)   The Council must not grant consent for development unless it has taken into consideration the character of the development site and the surrounding area, where, for the purpose of this provision, character means the qualities that distinguish each area and the individual properties located within that area.

6. Public submissions were referred to in [30], as required by s 79C(1)(d), heritage issues were considered at length at [36]-[49], parking at [50]-[59], and whether the VPA should be given any weight at [60]-65].

Chronology

7. The VPA was negotiated by the parties in 2006 and publicly exhibited and entered into on 15 September 2006. It was amended on 22 January 2007 and registered on 3 October 2008 on the Applicants’ title pursuant to s 93H of the EPA Act. The Gosford Planning Scheme Ordinance (GPSO) was amended with the insertion of cl 49DN set out in full in [16] of the Commissioner’s judgment above to give effect to the VPA allowing a change of use on the theatre site on 12 October 2007.

8. The Applicants’ Development Application (DA) was lodged on 20 August 2012. The Applicants were notified of the Council’s refusal of the DA on 17 June 2015. The reasons for refusal related to concerns about flooding, inadequate car parking, overdevelopment of the site including breaches of cl 49DN(4) of the GPSO, character, view loss and insufficient information regarding heritage impact. The proposal was deemed not to be in the public interest pursuant to s 79C(1)(e) of the EPA Act.

9. Key dates in relation to the appeal are:

1. the Class 1 appeal was lodged in December 2015;

2. the Council’s Statement of Facts and Contentions (SOFAC) was filed on 24 February 2016;

3. the proceedings were listed for a conciliation conference pursuant to s 34 of the Land and Environment Court Act 1979 which occurred on 19 June 2016;

4. the conciliation conference was terminated on 22 July 2016;

5. the Court granted leave to the Applicants to amend their DA on 16 September 2016;

6. the Council’s Amended SOFAC was filed and served on 13 October 2016;

7. the Applicants’ SOFAC in Reply was filed and served on 5 December 2016;

8. the appeal was heard on 21-24 February 2017.

Voluntary Planning Agreement

10. The Council entered into the VPA with the First Applicant Mr Hunter and a company of which the Second Applicant Ms Hunter was the sole director on 15 September 2006 pursuant to s 93F of the EPA Act. The VPA recorded the Applicants’ application to the Council to effect a spot rezoning that would allow particular development at the theatre site which was otherwise prohibited under the GPSO. A draft local environmental plan that would give effect to this application subject to the consent of the Minister for Planning was attached to the VPA. The development proposed consisted of two new cinemas, a gallery, restaurant, residential units, basement parking for 15 cars, a loading dock and associated works.

11. Under the VPA, prior to any development being carried out on the theatre site the Applicants were to pay $500,000 to the Council, pay a further $10,296 for the provision of public amenities and dedicate a strip of land 1.2 m wide along the Vine Street frontage to the Council. These contributions were in lieu of any contributions under ss 94 or 94A of the EPA Act which were said to be “wholly exclude[d]” under the VPA.

Amended Statement of Facts and Contentions

12. Following the amendment of the Applicants’ DA in September 2016 with amended plans and additional information provided on matters such as flooding a number of changes were made to the SOFAC. Several grounds were deleted, namely height, floor space ratio, bulk and scale, character, view loss and much of heritage. Amended contentions concerned the VPA (Contention 1A), car parking, flooding, State Environmental Planning Policy No 71 – Coastal Protection and heritage remained. The Amended SOFAC provided as follows:

Deed of Agreement

1A. To the extent that the applicant seeks to rely upon the Deed of Agreement between the Applicant and the Respondent dated 15 September 2006 as varied by Deed of Agreement dated 22 January 2007, (collectively “the VPA”) the Respondent asserts that in taking into consideration the provision of the VPA in the determination of the development application in accordance with s79C(1)(a)(iiia) of the Environmental Planning and Assessment Act 1979 the Court should give the VPA no weight.

Particulars

(a)   The terms of the VPA provide for the payment of a monetary contribution in the amount of $500,000 (“Contribution”) for the public purpose of the provision of public amenities, namely, the construction and enhancement of carparking facilities near the development in South End Park Avoca (“Carpark Works”) and the embellishment and beautification of the adjoining public open space known as Hunter Park (“Embellishment Works”) (Recital E and clause 2 of the VPA);

(b)   The VPA provides for the payment of the Contribution to the Respondent prior to the issue of a construction certificate for any development approved under the DLEP (clause 4);

(c)   The VPA further provides that if the Contribution or any portion of it is not expended within 3 years of the date of payment then the Contribution or unspent portion is to be returned to the applicant whereupon the outstanding obligations of the parties to the VPA are at the end;

(d)   The Carpark Works involves the sealing and line marking of existing carparking spaces in South End Park and does not provide for any new or additional carparking;

(e)   There is already a shortfall in carparking for the proposed development and the VPA does nothing to reduce that shortfall;

(f)   There is no certainty and it is unlikely that the Carpark Works will be carried out because:

(i)   the South End Carpark is a Crown Reserve and the Crown does not support the provision of carparking in the South End Carpark for private use by patrons of an expanded Avoca Cinema;

(ii)   the South End Carpark is subject to flooding which requires major works to mitigate those flooding impacts;

(iii)   it would not be orderly or economic for the Council to carry out the Carpark Works until such time as the flood mitigation works are completed;

(iv)   The Respondent has not programmed the funding or the carrying out of the flood mitigation works and it is unlikely that those works will be carried out in the near or medium term and in the circumstances there is no certainty that the Carpark Works will be carried out at all particularly as the Contribution is to be refunded if the Carpark Works are not carried out within the specified time.

(v)   If the Carpark Works are not carried out then the Contribution so far as it relates to the Carpark Works is to be refunded with the result that no public benefit will result from the Carpark Works.

(g)   There is no certainty and it is unlikely that the Embellishment Works will be carried out because:

(i)   Since the date of the VPA the Respondent has adopted a foreshore master plan (“FMP”);

(ii)   The FMP provides for the embellishment of Hunter Park which is inconsistent with the Embellishment Works;

(iii)   It would not be orderly or economic for the Council to carry out the Embellishment Works in circumstances where those Embellishment Works are inconsistent with the FMP and if carried out would become redundant and need to be redone in accordance with the FMP;

(iv)   If the Embellishment Works are not carried out then the Contribution so far as it relates to the Embellishment Works is to be returned with the result that no public benefit will result from the Embellishment Works.

(h)   To the extent that the VPA provides any public benefit at all, that public benefit does not outweigh the environmental impacts of the development and in particular the shortfall in the provision of on site parking.

Car Parking

1.   The development application should be refused because inadequate car parking is provided for the proposed development.

Particulars

(a)   Clause 49DN(8) of GPSO provides as follows:

“The consent authority must not grant development consent to

development on land to which this clause applies unless it has taken into consideration the following:

…

(f) whether adequate car parking is provided.

…”

(b)   Clause 2.3 of Development Control Plan 111 - Car Parking (Amendment No. 1) (“DCP 111”) provides as follows:

“2.3 Existing Development

2.3.1 Where an existing building is to be replaced by a new building which has a floor area not exceeding the floor area of the existing building and no change of use is proposed, no additional parking is required to be provided. Any existing parking on the site, up to the number of spaces required under this plan for the existing development, or any requirement of the consent for the existing development, must be maintained on the site.

2.3.2 Where an existing building is to be replaced by a new building,

i   having a floor area greater than the existing building and / or

ii   which will have a different use, car parking is to be provided as calculated under this policy for the new building area and use.”

(c)   The Table in clause 3.2 in DCP 111 provides the following car parking requirements:

Element	Category	Parking Rate	Element Area/Number	Req Spaces	Proposed
Cinemas	Place of Assembly	1 sp/10 seats	317 new seats	32	5
Gallery	Community Facility	Ancillary use	0	0
Cafe/Terrace	Restaurant	1 sp/16m²	90m2	6	0
Residential Units	Residential Flat	1.5 sp/unit	5 Units	8	8
Res Visitors	Residential Flat Building	0.2 sp/unit	5 Units	1	1
TOTAL	47	14

*The Gallery is considered to be an ancillary use to the Cinema and would not require separate individual parking spaces on the basis that a condition of consent is imposed to prevent the Gallery from operating independently of the cinema.

(d)   The proposed development requires a total of 47 car parking spaces to be provided. The proposed development provides 14 car parking spaces which results in a shortfall of 33 spaces.

(e)   Notwithstanding the Applicant’s assertion, the Deed of Agreement dated 15 September 2006 and amended 22 January 2007 cannot be relied upon to apply a credit of 29 car parking spaces towards the proposed development. The Respondent repeats the particulars in Contention 1 in this regard.

(f)   The Traffic and Parking Assessments submitted by the Applicant are inadequate in terms of discounts applied and surveys undertaken among other things. The following is noted:

i.   The parking assessment for the development should include an allowance for the café. The Respondent notes that the Gallery is considered to be an ancillary use to the Cinema and would not require separate individual parking spaces on the basis that a condition of consent is imposed to prevent the Gallery from operating independently of the Cinema. If the Applicant does not agree to a condition of consent of this nature, then the Respondent notes that an allowance of parking for the Gallery would be required.

ii.   It is not appropriate to discount the cinema parking demands by 24% due to multipurpose trips. It is agreed that people undertaking multiple activities in one visit would reduce the rate of traffic generation of all uses in the area. However, it is not agreed that the parking demands would similarly reduce. Multiple activities would result in people staying longer than if they were there only to watch a film. This means, while people are watching a film, the parking demand is generated entirely by the cinemas. Before or after the film, when they are at the beach or drinking coffee, the parking demand is entirely generated by the other uses.

iii.   The surveys and data presented in the Bradley Traffic and Parking Report are inadequate as they do not cover appropriate periods (10am to 7pm Saturday/Sunday). Furthermore they were not undertaken during school holidays when cinema attendances are typically higher. Parking surveys of Evidence surrounding streets and interview surveys of cinema patrons to determine travel characteristics should be undertaken during school holidays.

iv.   The use of a 13% average occupancy is questioned in assessing parking demands. A significant increase in seat numbers would not appear to be necessary based on this relatively low occupancy rate. The Report does not discuss why smaller cinemas, with little or no increase in seat numbers, would not be more appropriate.

v.   The report does not include an assessment of other functions at the existing cinema or how these would operate in the future. Future patronage levels over the week and by time of year need to be justified.

(g)   Updated parking surveys are required (covering appropriate periods 10am to 7pm on Saturday/Sunday) as the parking surveys undertaken are incomplete, irrelevant or ambiguous.

(h)   The carpark adjacent to the subject site, along Vine Street, which is subject to floodwaters, is likely to be used for car parking as a result of inadequate car parking on the subject site.

Height

2.   Deleted.

Floor Space Ratio

3.   Deleted.

Bulk, Scale and Overdevelopment

4.   Deleted.

Character

5.   Deleted.

View Loss

6.   Deleted.

SEPP 71 – Coastal Protection

7.   The development application should be refused because the proposed development is not satisfactory when assessed against the matters for consideration in clause 8 of State Environmental Planning Policy No 71 – Coastal Protection (“SEPP 71”).

Particulars

a)   The proposed development (in terms of its bulk and scale and impact on heritage significance) is not compatible with the heritage character of the area and is not appropriate in the proposed location for this reason and also due to the flood prone nature of the site and the insufficient car parking spaces.

b)   The proposed development is therefore not satisfactory in terms of:

a.   Clause 2(1)(k) - to ensure that the type, bulk, scale and size of development is appropriate for the location and protects and improves the natural scenic quality of the surrounding area;

b.   Clause 8(d) - the suitability of development given its type, location, and design and its relationship with the surrounding area; and

c.   Clause 8(f) – the scenic qualities of the New South Wales coast, and means to protect and improve these qualities.

Heritage

8.   Deleted.

Heritage

9.   The development application should be refused because the proposed development will have an adverse impact on the heritage character and qualities of the Avoca Beach Theatre.

Particulars

(a)   Clause 10(4) of GPSO provides as follows:

“(4) The Council must not grant consent for development unless it has taken into consideration the character of the development site and the surrounding area, where, for the purpose of this provision, character means the qualities that distinguish each area and the individual properties located within that area.”

(b)   Clause 49DN(8) of GPSO provides as follows:

“(8) The consent authority must not grant development consent to development on land to which this plan applies unless it has taken into consideration the following:

…

(b) Whether the design of the proposed development complements the heritage qualities of the existing theatre building.

…”

(c)   Clause 1 of Schedule 1 of the Gosford Local Environmental Plan 2014 (GLEP 2014) states:

“1 Use of certain land at Avoca Drive, Avoca Beach

(1) This clause applies to land at Avoca Drive, Avoca Beach, being Lot 140, DP 9359, and Lot 651, DP 16791, identified as “Avoca Beach Theatre” on the Additional Permitted Uses Map.

(2) Development for the purposes of a residential flat building, an entertainment facility, an information and education facility and a restaurant or cafe is permitted with development consent.

..

(5) Before granting development consent to development on land to which this clause applies, the consent authority must take the following into consideration:

(a) whether the development retains the existing theatre building,

(b) whether the design of the development complements the heritage character of the existing theatre building,…

(d)   The proposed development, while adjacent to the Avoca Beach Theatre, overwhelms it by its bulk in terms of height and building footprint and in this regard, is not complementary to the heritage character or qualities of the theatre.

(e)   The proposed development does not respond to the simple character of the Avoca Beach Theatre, which is characterised by a simple building from.

(f)   The location of the two storey foyer conceals views of the Avoca Beach Theatre from the open park.

(g)   Having regard to the above, the design of the development does not complement the heritage character or the heritage qualities of the existing theatre and therefore does not comply with clause 49DN(8)(b) of the GPSO or Clause 1(5)(b) of Schedule 1 of the GLEP 2014

Flooding

10.   The development application should be refused because insufficient information has been submitted with the development application in relation to site flood affectation to enable a proper assessment of the application (as amended)

Particulars

(a)   An adequate flood risk management plan, including any evacuation requirements, has not been prepared for the development. In this regard, further assessment and information is required on the evacuation timeline modelling in the southern public carpark based on the completed flood modelling results.

(b)   The car park adjacent to the subject site, along Vine Street, is subject to floodwaters, and is likely to be used for car parking as a result of inadequate car parking on the subject site. The flood report submitted with the Applicant’s amended development application (prepared by Bewsher Consulting dated 7 September 2016) (the September 2016 flood report) is based on an incorrect assumption that “seven” additional car spaces will be required off-site to accommodate the proposed development. The flood report states:

“During my visits to the site, parking availability has often been limited and I have observed that Vine Street, Burns Street and the south end car park are heavily used. The small change in parking demand and the associated change in vehicle movements is so minimal that in my opinion the overall flood risk to drivers and occupants and the risk of damage to parked cars does not change with the development.”

(c)   The Respondent remains concerned that the additional parking, which is in excess of the “seven” spaces relied on by the Applicant’s flood engineer, that will take place in Vine Street and Burns Street including the south end car park as a result of the proposed development will cause increased flood risks in flood prone areas.

(d)   The flood emergency risk management plan proposed by the Applicant incorporates signs and warning systems, which include a flashing light configuration triggered by a water level sensor within public land (not owned by the Applicant) in Vale Street and Burns Street. These measures are required to ensure that existing and proposed theatre patrons and residents are not exposed to unacceptable risk from flooding. No information has been submitted with the development application in relation to the construction and maintenance of the flood warning systems. In the absence of such information, the Respondent is not able to properly consider and determine whether the warning systems on public land are practical and appropriate.

Referral to Independent Design Review Panel and Concurrence from Director-General

11.   The development application should be refused pursuant to clause 49DN(7) of GPSO because the application in its current form (as amended pursuant to leave granted by the Court) has not been referred for assessment to an Independent Design Review Panel nor has concurrence been granted by the Director-General in respect of the development application in its current form.

Particulars

(a)   Clause 49DN(7) of GPSO provide as follows:

“(7) The consent authority must not grant development consent to development on land to which this plan applies:

(a)   unless the development application has been referred for assessment to an Independent Design Review Panel appointed in consultation with the Director-General of the Department of Planning, and

(b)   except with the concurrence of the Director-General.”

(b)   The SEPP 65 committee identified a number of design issues and these were ratified by the Independent Design Review Panel. A response from either the Design Review Panel or the Director-General has not been obtained in relation to the current amended application.

Public Interest

12.   The development application should be refused because approval of the proposed development is not in the public interest having regard to the above contentions and the nature and number of submissions received in relation to the development application in its original and current form.

CONDITIONS OF CONSENT

13. If the development application is approved by the Court, a condition requiring the payment of a monetary contribution under section 94 or 94A of the environmental Planning and Assessment Act 1979 of a kind allowed by, and determined in accordance with, Contribution Plan 48A – Avoca Beach Medium Density Area would be required to be imposed on the development. Notwithstanding the applicant’s assertion, the Respondent contends that the Deed of Agreement should be given no weight in relation to the proposed development, and in this regard, it would not operate to exclude the application of section 94 and section 94A of the Environmental Planning and Assessment Act 1979 to the subject development.

Failure to particularise

13. The Applicants referred to the Uniform Civil Procedure Rules 2005 (UCPR) and the Court’s Practice Direction as being contravened by the Council in its failure to particularise the Amended SOFAC. The UCPR relevantly provides at r 15.1 that a pleading must give such particulars of any claim, defence or other matter pleaded by the party as are necessary to enable the opposite party to identify the case that the pleading requires him or her to meet.

14. The Applicants did not provide a reference to what they referred to as the Court’s Practice Direction. The Practice Note – Class 1 Residential Development Appeals cited by Ms Huscroft solicitor in a letter seeking further particulars from the Council (see par 16 below) provides generally at [6] of Sch B:

In Part B Contentions, the respondent consent authority is to identify each fact, matter and circumstance that the respondent contends require or should cause the Court, in exercising the functions of the consent authority, to refuse the application or impose certain conditions.

15. This Practice Note does not apply to the present proceedings which were commenced by Class 1 application under s 97 of the EPA Act. The practice note applicable to these proceedings is Practice Note – Class 1 Development Appeals which does not stipulate any requirements for particulars. In any event a council must adequately particularise its contentions in order to properly inform an applicant of the case he or she must meet. Whether r 15.1 of the UCPR which are directed to pleadings strictly apply in Class 1 proceedings need not be determined.

16. The evidence on this topic consisted of the Amended SOFAC filed on 13 October 2016, extracted at par 12 above, and subsequent correspondence between the parties’ solicitors. The Applicants’ solicitor Ms Huscroft wrote a letter dated 15 November 2016 to the Council’s solicitor Ms Hudson requesting further and better particulars. The letter indicated contentions within the Amended SOFAC for which further particulars were sought and asserted various facts to which the Council was required to respond in its reply.

17. In a letter dated 25 November 2016 Ms Hudson responded to each question of Ms Huscroft’s letter requesting further particulars. By reply letter dated 28 November 2016 Ms Huscroft asserted that “certain of the answers are unsatisfactory” and requested more information concerning three contentions. Ms Hudson replied on 29 November 2016 answering the questions posed in the previous correspondence including that Contention 11 is no longer pressed. The letter added that “[o]ur client is concerned about the increasingly haranguing tone of the correspondence received from your office and invites you to reflect on whether it is appropriate to continue that going forward”.

18. A further letter was sent by Ms Huscroft on 30 November 2016 asserting that elements of Ms Hudson’s letter of the previous day was unsatisfactory and requesting further information be provided. Ms Hudson responded on 5 December 2016 attaching two documents which she said could be found within the USB provided to the Applicants’ solicitors on 2 November 2016. Ms Huscroft responded on 6 December 2016 commenting that Ms Hudson’s reply of the previous day only responded to one issue raised in the letter of 30 November 2016 and requesting a response to the remainder of the letter. Ms Hudson provided this response by email on 7 December 2016 which substantially repeated the comments contained within the letter of 29 November 2016.

Affidavits

19. Ms Huscroft affirmed an affidavit dated 15 May 2017 in which she provided a background to these proceedings, a chronology and a summarised assessment of the costs claimed by the Applicants. These costs, which included solicitors’, barristers’ and consultants’ fees and disbursements, totalled $853,284.35.

20. Exhibited to Ms Huscroft’s affidavit of 15 May 2017 was a folder of documents. The folder contained documents related to the VPA, the Council’s reasons for refusal of the DA, the SOFAC and Amended SOFAC, correspondence between the parties’ solicitors concerning particulars, referred to at par 16 above, the Applicants’ SOFAC in Reply, and records of the numerous listings of this matter before the Court.

21. Ms Huscroft affirmed an affidavit dated 11 July 2017 of 20 pages in length accompanied by a folder of exhibited documents. Ms Huscroft provided details of the notice to produce served on the Council on 30 March 2016. Ms Huscroft alleged non-compliance with the notice. Production was ad hoc and often required prompting from the Applicants’ solicitors. Numerous documents that were in the possession of the Council at the time of the notice were not produced until many months after the due date. Many documents were produced twice and were often not categorised in accordance with the categories in the notice. Correspondence between the parties’ solicitors on this issue was lengthy and showed the Council did not use reasonable endeavours to answer the notice. The documents produced on 10 May 2016 were accompanied by a 585 page index listing 7,170 documents. The Applicants incurred substantial additional costs as a consequence of the Council’s failure to comply with the notice.

22. Ms Huscroft attested to details about the informal discovery requested on 15 December 2015 and agreed to by the Council. The initial production by the Council’s former solicitors Maddocks in January 2016 was insufficient and it was not until 10 May 2016 that physical access to the Council’s files was provided after Court orders were made to that effect. The physical file relating to the Applicants’ DA was not made available until 27 October 2016. Legal professional privilege was improperly claimed over many documents which was not corrected until 8 April 2016.

23. Ms Huscroft asserted in her affidavit that the Council failed to properly particularise the Amended SOFAC which required four separate requests for further and better particulars. The Council also caused additional slippages in the timetable for hearing and did not comply with orders and directions of the Court. The Amended SOFAC was due on 7 October but filed on 13 October 2016. The Council’s draft conditions of consent were due on 6 February but served on the Applicants in incomplete form on 10 February 2017.

24. Ms Huscroft attested that the Council raised heritage in its SOFAC despite not having engaged a heritage expert and the Council having removed the Avoca Beach Theatre from its draft list of local heritage items in 2002 and resolved not to consider the matter for another 25 years. The Council failed to advise the Applicants of its position concerning heritage despite its requests to do so throughout the interlocutory proceedings until 30 August 2016. This resulted in numerous adjournments of the s 34 conciliation conference.

25. In addition to heritage, Ms Huscroft was of the opinion that the Council raised contentions which were later withdrawn and ought never to have been raised. These related to SEPP 71, flooding, referral to the Independent Design Review Panel and concurrence of the Director-General, ss 94 and 94A contributions and view loss (about which Ms Huscroft said that “[t]he fact that the development did not unreasonably impact on views was always objectively obvious”). Ms Huscroft also objected to the Council’s contention concerning the VPA (Contention 1A). Ms Huscroft clarified the costs order sought being that the Council pay 50% of the Applicants’ legal costs including disbursements and a proportion of certain experts’ fees.

26. Exhibited to Ms Huscroft’s affidavit of 11 July 2017 was a folder of documents. The folder included the notice to produce of 30 March 2016, approximately 70 pages of correspondence between the parties’ solicitors concerning the Council’s response to the notice, a table summarising correspondence between 15 December 2015 and 3 January 2017 concerning the informal production of documents, examples of this correspondence and further correspondence concerning the participation of heritage experts, SEPP 71, flooding issues and the VPA.

27. The First Applicant Mr Hunter swore an affidavit dated 22 June 2017 which was read subject to relevance. Mr Hunter gave his view of how the VPA was negotiated in 2006 and 2007, his understanding of discussions on heritage matters from 2001 to 2014 and his account of conversations with Council staff concerning flooding in 2013.

28. Ms McCullen solicitor for the Council affirmed a six page affidavit dated 10 August 2017 in response to the affidavits of Ms Huscroft. Concerning informal discovery and claims for legal professional privilege Ms McCullen identified the process for the transfer of files from Maddocks, the previous solicitors instructed in this matter by the Council. The SOFAC was drafted between 10 and 23 February 2016 and filed the following day. Ms McCullen contacted Maddocks in relation to the documents produced to the Applicants and documents not produced over which legal professional privilege was claimed. A review of those documents was undertaken on 5 April 2016 and those considered not appropriately the subject of legal professional privilege were sent to the Applicants’ solicitors under cover of a letter dated 8 April 2016. A revised list of documents over which legal professional privilege was claimed was also sent.

29. Mr Ball Assistant General Counsel at the Council swore an affidavit dated 2 November 2016. The affidavit was produced in response to an order made by the Registrar of the Court on 28 October 2016 to “set out the steps that have been taken by Council staff to comply with the Notice to Produce”. Mr Ball outlined the Council’s extensive efforts in response to the informal and formal production of documents processes. Several staff committed many hours to the production processes including a seconded employee who was mostly engaged on this task while working three days a week at the Council between about April and 30 June 2016. He described the Council’s electronic record management system and how it was used to search for and locate documents sought by the Applicants including the search terms entered. Mr Ball deposed that the inboxes of Council staff are purged 30 days after the cessation of their employment. This may explain the absence of some emails sought by the Applicants. The physical file concerning the development application the subject of these proceedings was produced to the Applicants for inspection in late September 2016.

30. Ms Hudson swore a 26 page affidavit on 11 August 2017. Exhibited to Ms Hudson’s affidavit was a folder of documents. Ms Hudson identified the actions taken by the Council and herself to respond to a notice to produce dated 30 March 2016. She identified additional correspondence between her firm and the Applicants’ solicitors not exhibited to Ms Huscroft’s affidavits – see par 36 below. USBs containing documents in answer to the notice to produce were provided as agreed by the parties in April 2016. Ms Hudson observed that in her view the Council’s officers sought to comply with the notice to produce as fast as was feasible where documents existed. Documents did not exist in relation to all the Applicants’ claims. During April and May 2016 the Council facilitated access to documents informally as well as responding to the notice. Ms Hudson noted that a challenge to the claim for legal professional privilege was never made before the Court. From about mid May to the end of August 2016 discussions about the notice generally ceased as the parties were preparing for the conciliation conference. The notice was stood over on several occasions by e-Court attendance by consent. The sheer volume of documents requested (over 7,000) meant it was not possible or reasonable for the Council’s officers to verify whether documents had been produced twice. Ms Hudson deposed that the length of time taken to produce documents was a result of the documents requested, the issues before the Court, the Council’s electronic record management system, the existence of documents dated after the notice date and the change of staff as a result of local Council amalgamations in May 2016.

31. In relation to informal discovery Ms Hudson deposed to over 7,000 documents being produced in electronic form. Ms Hudson was instructed that Council officers spent many hours facilitating access which is excessive given the nature of the appeal and the usual time spent responding to notices to produce in Class 1 proceedings. Ms Hudson did not consider there was an unreasonable failure to properly particularise the Amended SOFAC.

32. At the time the SOFAC was drafted to include Contention 8 the site was the subject of an interim heritage order (IHO) made under s 24 of the Heritage Act 1977. The IHO lapsed on 9 March 2016 and that contention was not pressed by the Council. The Council resolution determining not to include the Avoca Beach Theatre on the draft list of heritage items also required that its heritage value be taken into consideration as part of the DA process. No heritage impact assessment had been provided by the Applicants at the time Contention 9 was drafted. On 10 June 2016 a draft statement of heritage impact prepared by Mr Staas heritage consultant was received on the basis it was without prejudice for the s 34 conference on 17 June 2016. There was insufficient time for Council officers to respond properly to the Stass report before the s 34 conference. Ms Hill heritage consultant was retained by the Council as soon as possible after the conciliation conference to review the report. The Council told the Applicants that if they sought to rely on the amended plans and statement of heritage impact the Council would press a heritage contention in the proceedings. Ms Hudson responded in detail to comments made in Ms Huscroft’s July affidavit concerning heritage. It is unnecessary to summarise all Ms Hudson’s responses which provide an alternative view of events.

33. Concerning SEPP 71 Ms Hudson identified emails to the Applicants’ solicitors confirming that no urban design evidence would be relied on in relation to Contention 7. No evidence was needed to address the contention as drafted. The Applicants sought to tender at the hearing the expert report of Ms Morrish addressing urban design although the Court did not allow it to be relied on. The Council incurred legal and expert costs in reviewing that material.

34. Ms Hudson also addressed Contention 10 flooding and identified that this was based on advice from the Council’s flood engineer Mr Martens and Council engineering staff following further information from the Applicants received as part of their amended DA which included a supplementary report on flooding dated September 2016, a flood emergency response plan for the theatre dated September 2016 and a flood emergency response plan for the residential component of the proposed development dated September 2016. Ms Hudson identified the experts’ responses to the particulars within the flooding contention. The experts essentially agreed how the Council’s issues could be dealt with in their joint report. Concerning signs and flood warning systems proposed by the Applicants, Ms Hudson observed that despite the agreement that a flashing light warning system was required to be part of the proposal the location of that on public land remained a concern of the Council. That the warning system would be located on private land was clarified on the first day of the hearing and the Council did not therefore need to press this contention.

35. Ms Hudson identified steps taken in the proceedings in relation to Contention 1A VPA and other matters identified by Ms Huscroft as a basis for criticising the Council’s behaviour. Ms Hudson denies any unreasonableness in relation to the particularisation of Contention 1A.

36. Exhibited to Ms Hudson’s affidavit was a folder of documents which included over 100 pages of correspondence between the parties’ solicitors concerning the notice to produce. The remaining documents in the folder related to the Council’s draft conditions of consent which it proposed before the substantive hearing of the Class 1 appeal.

37. The Applicants made extremely detailed submissions about issues, contentions and evidence which was difficult to summarise and has therefore been quoted at length. The Council’s necessarily detailed responses have also been set out in full in relation to some issues for the same reason.

Applicants’ submissions

38. The Applicants rely on a summary of principles in Dunford v Gosford City Council (No 3) [2015] NSWLEC 96 at [30]. In addition, despite the presumptive rule in r 3.7 of the Court Act, a comparison of the interests of the parties in planning appeals suggests that an unsuccessful consent authority should be more likely to suffer an adverse costs order than an unsuccessful applicant (Port Stephens Council v Sansom (2007) 156 LGERA 125; [2007] NSWCA 299 at [74], cited in Arden Anglican School v Hornsby Shire Council [2008] NSWLEC 103 at [1] and more recently in Community Association DP270253 v Woollahra Municipal Council (2015) 207 LGERA 268; [2015] NSWCA 80 at [34] and Dunford at [35]).

39. Whilst in Class 1 proceedings a consent authority is at liberty to raise any ground available to it at the time of the appeal, the fact that a particular ground had not previously been identified does give rise to the need for any new ground to be framed with care, having regard to the “overriding purpose” (s 56 of the Civil Procedure Act 2005) in the conduct of proceedings before the Court (Boensch v Parramatta City Council (No 3) [2014] NSWLEC 15 at [62]).

40. It is unreasonable conduct for a consent authority to raise contentions without reasonable grounds or an evidentiary basis (ACM Landmark Pty Limited v Cessnock City Council [2006] NSWLEC 256 at [94]). The Court may have regard to circumstances such as whether the contentions were framed at a point when there was not any professional or expert evidence which would support the articulation of issues in the exercise of its discretion under r 3.7 (ACM Landmark at [42]).

41. If contentions are raised that an applicant needed to meet, it is no answer to say that the consent authority did not ultimately press these issues at the hearing. The primary focus must be on its justification for raising the contention in the first place (ACM Landmark at [41]; Boensch at [64]).

42. The Applicants submitted that the conduct of the Council in these proceedings caused the Applicants to incur unnecessary costs in the appeal and in responding to the Council’s contentions.

Ground 1

43. Relevant to rr 3.7(3)(d) and (e), the proceedings were defended for an extraneous purpose concerning the VPA. The Council properly advised should have known that it had no chance or very poor prospects of success in light of the statutory scheme and the available evidence, having regard to the circumstances set out in the Applicants’ evidence. The merit issues of parking and heritage had no real prospects of success and the real purpose was that the Council wished to resile from the terms of the VPA but could not avoid complying with it if development consent was granted.

44. Throughout the assessment of the DA and prior to commencing proceedings the Council had not raised that the VPA could not be relied upon or that it should or would be given little weight. The Council did not seek to amend the VPA to address the issues raised in Contention 1A.

45. The original Contention 1(e) filed was hopeless and bound to fail given the express terms of the VPA and s 79C(1)(a)(iiia) of the EPA Act. Contention 1A raised completely new issues about the VPA which did not arise from any amendments to the plans made by the Applicants. It raised that the VPA should not have any weight under s 79C. Further the particulars provided in support of Contention 1A mirror some of the issues raised in public submissions which the Council had itself previously assessed and rejected following public exhibition of the draft VPA. The turnaround by the Council in adopting reasons it had earlier itself considered and rejected is itself unreasonable. The Council did not rely on the VPA issue when it refused the DA. The contention was irrelevant as the VPA was binding and the Council cannot use Class 1 proceedings to revisit its binding nature. Had the Council taken this position prior to the commencement of this appeal then the Applicants would have had the opportunity to consider alternative designs and seek to engage in negotiations to vary the terms of the VPA.

Ground 2

Production of documents

46. Relevant to r 3.7(3)(d) the Council failed to comply with numerous Court orders and unnecessarily protracted proceedings during the interlocutory phase in preparation for hearing. The Applicants incurred substantial unnecessary costs due to the Council’s conduct in the production of documents. The Council failed to produce documents in a timely manner in accordance with the Court's Practice Note (which required the production of documents by a consent authority within 14 days of a request and the Applicants’ notice to produce dated 30 March 2016. Between May and November 2016 multiple appearances before the Court were required to obtain further directions for the production of documents by the Council. Substantial documents were still being produced on 3 January 2017, more than 12 months after the time specified in the Practice Note.

47. The Council failed to produce documents in an orderly manner which caused unnecessary costs for the Applicants. The production of documents was ad hoc, incomplete and uncollated and not separated into categories in response to the notice (except that the documents produced on USB on 12 April 2016 were separated into categories). A large volume of documents were produced following the initial production on 12 April 2016 on a USB stick with no index so that every document had to be opened to be inspected and many documents were produced twice which unnecessarily duplicated costs. The inadequacy of the production left the Applicants with little confidence that the notice had been complied with and caused unnecessary costs in corresponding with the Council regarding the non-compliances and attending Council's offices for personal inspection of files.

48. Both of these failures were so substantial that the Registrar took the relatively rare step in Class 1 proceedings in ordering that the Council file and serve an affidavit setting out the steps taken to comply with the notice. However, despite this extraordinary order, the Council still did not comply with the Court's order and failed to prepare the affidavit as directed and further directions to the same effect were required. The affidavit of the Council's solicitor Mr Ball confirmed the concerns of the Applicants’ solicitor as to the inadequacy of the production of documents and corroborates the fact that large volumes of documents were produced in an ad hoc manner, un-indexed or collated and without any cross-reference to determine whether or not there was duplication.

Legal professional privilege

49. The Applicants incurred unnecessary costs due to the manner and extent to which the Council claimed legal privilege over documents produced:

50. The Council claimed privilege over a large number of documents in a schedule with only a brief description of the document and without a reason or basis for the non-disclosure. A short perusal of the list prepared by the Council reveals that the claim for legal privilege seemed spurious on the basis of the description provided. Substantial costs were wasted by the Applicants' lawyers in repeatedly requesting that the Council's solicitors provide further details as to the basis.

49. The affidavit of the Council's solicitor Ms McCullen who provided the schedule to the Applicants' solicitors confirms that she did not review the privileged documents to ascertain whether there was a reasonable basis for the claim for legal privilege. Rather, she relied upon the schedule prepared by other lawyers. Then, when she eventually did review the documents on 5 April 2016, nearly four months after the request for production of documents was made in accordance with the Practice Note, her review identified “a number of documents” (approximately 60) that were not in her opinion the subject of legal privilege. It was only then on 11 April 2016 that she prepared an affidavit with respect to the claim for legal privilege as required by rr 1.9(3) and (5) of the UCPR.

50. The conduct of the Council's solicitors in making a claim for legal privilege over documents without being satisfied as to the reasonable basis of the claim is unreasonable. So too was the timing and manner in which the claim was made, which did not comply with the UCPR and resulted in unnecessary costs for the Applicants.

Failure to particularise

53. The Applicants incurred unnecessary costs due to the Council's failure to particularise its contentions as required by the UCPR and the Court's Practice Note.

54. The Council's Amended SOFAC failed to comply with the Court's Practice Direction in relation to particulars in material respects with respect to numerous contentions. For example, Contention 1(g) contended that the parking surveys undertaken by the Applicants were “incomplete, irrelevant or ambiguous” but did not identify any fact, manner or circumstances on which the Council relied to make that contention. When particulars were provided on 25 November 2016, it turned out that the Council had very specific complaints as to matters such as the timing or location of the surveys which could be readily addressed by way of further surveys.

55. Remarkably, Contention 11 was in fact not pressed as a consequence of the request for particulars indicating that there was no reasonable justification for the contention to be raised in the first place.

56. The failure to comply with the Practice Note, coupled with the failure of the Council to provide an adequate and timely response to the requests, required the Applicants to incur the expense of four separate requests for particulars and caused unnecessary delay.

Ground 3

57. Relevant to r 3.7(3)(d), the Council acted unreasonably in the conduct of proceedings by raising contentions without reasonable justification, and delaying in making proper concessions or withdrawing contentions. The defence of the proceedings continued where if properly advised the Council should have known that it had no chance or very poor prospects of success.

58. The DA process was lengthy. The three issues ultimately litigated at the hearing were not the reasons for refusal of the DA. The Council’s contentions sought information from the Applicants which had not previously been requested. This necessitated amendments to plans and the preparation of supplementary reports.

Contention 1 car parking

59. Contention 1 was unreasonably maintained. On 23 December 2016 the traffic experts agreed issues in dispute. Notwithstanding this agreement, the Council maintained inadequate car parking was provided in its closing submissions on 24 February 2017. The Commissioner’s judgment at [58]-[59] found that the contention was not made out as the Court accepted the agreement between the traffic experts that the shortfall in parking could be accommodated within the public domain with certain conditions imposed.

Contention 10 flooding

60. Contention 10 flooding was unreasonably maintained. The Council’s own flooding engineer found the DA was acceptable on the basis of amended plans and supplementary documents. The SOFAC raised flooding issues on the basis of lack of information despite an extensive three and a half year assessment process. Additional flooding information was provided as part of providing amended plans after leave was granted by the Court on 16 September 2016 yet the Council maintained the flooding contention in the Amended SOFAC. The flood experts prepared a joint report on 23 December 2016 and reached agreement on Contention 10 subject to conditions.

61. There was no evidentiary basis to maintain this contention at the hearing. Despite this, the Council did not notify the Applicants until 5.08pm on Monday 20 February 2017 (some two months after the flooding joint report was filed and after close of business on the day prior to the hearing) that the Applicants' flooding engineer was not required for cross-examination. By this time, the Applicants had already incurred the expense of preparing the matter for hearing on Contention 10.

62. At the opening of the hearing on site on Tuesday 21 February 2017, the Council maintained the contention because it opposed the provision of a flood warning system on public land and then proceeded to tender evidence from the Council as to the need for local flood warning systems on public land. The contention was not withdrawn until the second day of the hearing.

Contention 9 heritage

63. Contention 9 was unreasonable in all the circumstances and led to unnecessary costs being incurred by the Applicants. Contrary to the Council's submissions in closing, there is evidence before the Court that Ms Hill, the Council's heritage expert, was not engaged by the Council at the time of preparing its SOFAC which raised two heritage contentions and was not engaged by the Council prior to the parties participating in the on-site s 34 conference.

64. At the time the Council prepared its SOFAC Contention 9 positively asserted that there would be an “impact on the heritage significance of the Avoca Beach Theatre”. All of the evidence the Council had in its possession was the other way (ACM Landmark at [92]):

1. the Avoca Beach Theatre was not heritage listed and the Council has assessed its significance and resolved not to consider relisting the theatre for another 25 years;

2. the Council had before it and had assessed (see below) the Applicants' Suters Architects Heritage Impact Assessment;

3. the concurrence of the Director-General to the DA had been given in which he expressly found that the proposed development would complement the heritage character of the existing theatre;

4. on 11 April 2013, the Council's heritage architect assessed the Suters Architect Heritage Impact Assessment and found that the proposed development complemented the heritage qualities of the existing theatre;

5. the Council did not raise heritage as an issue with the Applicants during the assessment of the DA which was over a four year period.

65. Despite the above, in response to Contention 9, the Applicants engaged Mr Staas to prepare a further Heritage Impact Assessment and to attend the s 34 conference. The Council had no heritage expert for Mr Staas to confer with at the s 34 conference which was a breach of the Court's Practice Direction for s 34 conferences.

66. Multiple adjournments of the s 34 conference occurred as the Council had not engaged a heritage expert to confer with Mr Staas and delayed in complying with the directions given by the Court.

67. The Amended SOFAC at Contention 9 had no reasonable justification as to the “original fabric”. This is repeated from the assessment by the Council's original heritage report and does not assess the Heritage Impact Assessment by Mr Staas. Although this part of the contention was later conceded in the joint report, it caused additional expense for the Applicants to address it.

Contention 11 referral to the Independent Design Review Panel and Director-General’s concurrence

68. Contention 11 was unreasonable as it lacked plausible justification from the outset and was bound to fail. While withdrawn before the hearing unnecessary costs were incurred, the Council should have known it lacked reasonable justification. Contention 11 was amended and raised again in the Amended SOFAC. Contention 11 was only withdrawn after particulars were requested by the Applicants to the Amended SOFAC. Only the Council, not the Applicants, could refer the matter to the relevant bodies for concurrence and so could not found a reason for refusal. Further, the Council's own correspondence confirmed that the Independent Design Review Panel did not presently exist and the Director-General had already provided concurrence as required by the GPSO.

Contention 13 conditions of consent

69. The Council acted unreasonably in maintaining Contention 13 as to s 94 contributions up until the second day of the hearing of these proceedings. The maintenance of this contention in the Amended SOFAC was unreasonable in circumstances where on a plain reading of the VPA the Council ought to have known that this contention was bound to fail. The VPA wholly excludes the application of ss 94 and 94A contributions to the DA. Even if the VPA was given no weight under s 79C as contended by the Council (which is perverse in itself), the terms of the VPA are legally binding and must be given force and effect if the DA was approved by the Court. The Council's conduct on Contention 13 led to unnecessary costs for the Applicants in the preparation of the hearing and were unreasonable in the circumstances.

Contention 7 SEPP 71

70. The Council's conduct in amending and then maintaining Contention 7 as to SEPP 71 throughout the hearing was unreasonable in circumstances including those set out in the second affidavit of Ms Huscroft.

Council’s submissions

71. In relation to Ground 1, consideration of VPAs is a mandatory relevant consideration under s 79C(1)(iiia) of the EPA Act. At issue was the weight that should be accorded it. The Commissioner accepted the Council’s contention that the VPA should be accorded no weight in the assessment of car parking at [65].

72. The Applicants sought to rely upon the provisions of the VPA to justify the provision of only five car parking spaces on site for four additional cinemas with seating for in excess of 500 patrons. The Applicants’ proposal was that the shortfall in parking should be provided on streets which included those affected by flooding. Whilst the traffic experts agreed that subject to conditions limiting operation of the cinemas at certain times car parking could be provided on the street, the Council argued, as it was entitled to do, that car parking should be provided on site in accordance with its Development Control Plan No 111 (DCP). The Court determined on the merits that it was acceptable not to provide for the shortfall in car parking on site for cinema patrons at [59].

73. The Council raised the VPA contention in response to the Applicants’ reliance upon the VPA. No basis exists for a finding of extraneous purpose on the Council’s part. The Council accepted that it was bound by the VPA as the Court accepted at [62]. The VPA by operation on cl 3 was conditional.

74. The purpose of the VPA was to achieve a rezoning of the Applicants’ land to make its proposed development permissible which would otherwise have been prohibited. The Applicants received the benefit of the rezoning as a consequence of entering into the VPA. The Council did not, nor could it seek to resile from the rezoning.

75. The Council is not bound by the reasons for refusal of the DA. A Class 1 appeal is a hearing de novo and the Council is entitled to raise new issues on appeal particularly where those new issues arise from additional or amended information provided by an applicant.

76. The DA at the time of the preparation of the SOFAC sought consent for a development which was significantly different in form to the development identified in the VPA. The Council’s original contention argued that the VPA did not apply because the proposed development was different to the development contemplated by the VPA. That was an argument reasonably available and was neither hopeless or doomed to fail. The Court was obliged to consider the provisions of the VPA which included the development contemplated within its terms. Subsequently the Applicants amended their DA so that the amended development was closer in form to the development contemplated by the VPA. In those circumstances the VPA contention was amended and included as new Contention 1A to put in issue the weight to be attributed to the VPA having regard to the Applicants’ reliance upon the VPA and obligation of the Court to take into consideration its provisions. If the VPA did not apply to the development then the weight to be attributed was irrelevant. If the VPA did apply then the weight to be attributed was a question of fact for the Court. The original and amended VPA contentions were mutually exclusive.

Ground 2

Production of documents

77. It is clear from the affidavits of Ms McCullen and Ms Hudson that the response of the Council to the production of documents must be considered in light of the protracted history of the DA and its review and the quantum of documents produced (over 7,000) by the Council as part of that process.

78. Following the amendment of the GPSO the DA was lodged in its original form on 20 August 2012. The DA was then considered over a period in excess of two years with referrals to internal and external bodies culminating in a recommendation for refusal and a deferral to allow discussions between the parties on 9 December 2014. In March 2015 an IHO was made over the property and between March and June 2015 the Applicants provided several amendments which were assessed by the Council and recommended for refusal in June 2015. The Applicants then lodged an appeal on 2 December 2015 and two days later lodged a review application under s 82A of the EPA Act with further amendments which were subsequently notified and considered by Council. The documentary history of the site and the development extends over 10 years.

79. The affidavits of Ms Hudson and Mr Ball set out in detail the process which they undertook to respond to the Applicants’ requests for production. Those affidavits evidence an orderly and economic approach to production including the development of a computer program to aid the production of the relevant documents. When one has regard to the quantum of relevant material called up by the Applicants and the conduct of the Council in locating and making that material available it cannot be said that the Council’s conduct was unreasonable but rather it was measured with costs being proportional to the matters in issue.

Legal professional privilege

80. Having regard to the volume of material and the way in which data is retained by the Council it was not possible to meet the Practice Note timeframe of 14 days. It is not agreed that multiple appearances were required before the Court with most adjournments of the notice to produce being by consent through e-Court. To the extent that appearances were required they were a consequence of the volume of material. The Council has an ongoing obligation to produce any further documents located and it complied with that obligation and provided an appropriate explanation. There was nothing unreasonable about the Council’s conduct. The sheer volume of material identified by the Council made it impractical for the Council to go through each and every document.

81. After being provided with the documents and the affidavits of Mr Ball and Ms McCullen the Applicants did not contend that production was incomplete. The Applicants’ solicitor Ms Huscroft insisted on physical access to the Council’s electronic files which was facilitated. The Council did not seek its costs in complying with the notice to produce.

82. The affidavit of Ms McCullen explained the process undertaken by Council and its previously engaged solicitors Maddocks in relation to the claim for privilege. It is not unusual for a party to question the scope of privileged documents and for the scope to be narrowed as part of the discovery process. Following such questioning Ms McCullen undertook a further review of the documents, produced an amended schedule and affidavit and provided the documents which she did not consider were subject to privilege to the Applicants. The Applicants did not challenge Ms McCullen’s affidavit. There is no verifiable evidence that the Applicants incurred “substantial” costs in “repeatedly requesting” further details in relation to privilege. The conduct of the Council in dealing with the privileged documents was orderly, economic, proportional to the issues and not unreasonable.

Failure to particularise

83. The Council’s contentions were properly particularised. Contention 1(g) was a particular itself to Contention 1 which asserted that inadequate car parking was provided. Particular (g) informed the Applicants specifically of the additional information that the Council required to address the shortcoming in the parking surveys. Contention 11 was jurisdictional and was appropriately raised and appropriately not pressed. The contention if pressed would have been a matter for legal submission at the hearing and did not result in the Applicants incurring unnecessary costs as no hearing on the contention was required.

84. There is no identified breach of the Practice Note. To the contrary the purported breach identified by the Applicants was not a breach. The Council responded to the Applicants’ requests for particulars where appropriate and in a timely manner.

Ground 3

Contention 1 car parking

85. Contention 1 was properly raised and maintained throughout the proceedings given the provision by the DA of only five on-site car parking spaces for an additional four cinemas. The relevant control required 33 spaces. The Applicants’ DA relied on street parking to accommodate the demand of its patrons, contrary to the DCP. That the experts reached agreement on car parking before the hearing is not a complete answer to the issue of whether the DCP requirements had been met or should be varied. The Court determined on the merits that it was appropriate to vary the DCP and require on-site parking for cinema patrons.

Contention 10 flooding

86. Contention 10 was amended following the provision of a large amount of information on flooding by the Applicants in support of the application to amend their DA. The Applicants sought to rely on street parking in locations which flooded giving rise to the issue of how patrons could be warned. The flooding experts prepared a joint report and provided an opinion in relation to their flooding contentions. They recommended a flood warning system but provided no details of that. Ultimately the application was amended to provide the flood warning system on private land which resolved the contention. There was no obligation on the Council to cross-examine the experts. The Council’s disagreement with the proposed flood warning system on public land would have been a matter for legal submission at the hearing, which was ultimately unnecessary. It is unclear what costs of preparation could have been unreasonably incurred as a result of the contention being resolved through the expert process.

Contentions 8/9 heritage

87. The Applicants’ submissions in relation to the conduct of the Council with respect to the heritage contention should not be accepted. At the time of the drafting of the SOFAC the land was subject to an IHO. During the course of the proceedings the IHO lapsed. The history of the DA demonstrates that the Council engaged with the Applicants as to how the IHO might be addressed through amendment of the DA to be integrated development. Despite the existence of the IHO, the GPSO, which made the development permissible, included heritage as a mandatory relevant consideration. The original SOFAC correctly included a jurisdictional contention (Contention 8) having regard to the existence of the IHO and an inadequate information contention (Contention 9) having regard to the mandatory requirement to consider heritage under the GPSO. The Applicants did not provide a Heritage Impact Assessment in response to the contention until seven days prior to the s 34 conference and the document provided was only a draft. The Council could not engage an independent consultant expert at short notice to review the draft statement and attend the s 34 conference and this was communicated to the Applicants. In any event the Council engaged Ms Hill, a qualified and respected consultant, who reviewed the draft statement, conferred with Mr Staas during the s 34 process and recommended some changes to the development to ameliorate its heritage impacts. Ultimately Ms Hill did not agree with the views of Mr Staas and supported the heritage contention raised by the Council in its Amended SOFAC following the amendment by the Applicants of their DA.

87. In the circumstances it was not unreasonable for the Council to raise the original contentions or the amended contention.

88. The Applicants’ submission at par 64 above does not properly reflect the contention. Contention 9 asserted an impact but required further information to enable the assessment of that impact. The Applicants conceded the contention by providing a draft Heritage Impact Assessment which it relied upon in final form in the proceedings. In relation to further submissions made by the Applicants at par 64 above:

1. this submission is selective. It ignores the complete resolution which still required assessment of heritage for properties taken off the draft list at the DA stage;

2. this Assessment related to the form of development proposed as part of the VPA which was not the form of the development the subject of the DA. The Assessment was in 2003. The DA in its final form was lodged 2012 and determined in 2017;

3. the document relied upon was not an expert opinion and provided no reasons to support the opinion;

4. the DA had been amended several times since 2013 when it was assessed by one of Council’s internal officers who was not a heritage expert but rather an architect and urban design expert;

5. consideration of heritage quality was a mandatory relevant consideration. Consent could not be granted unless it was considered. The Applicants failed to provide a heritage impact assessment in respect of its amended DA. The Minister for Planning also made an IHO.

90. It is wrong to assert that the Council breached the Practice Note in circumstances where the Applicants delayed in providing the information flagged as insufficient in the contentions and still only provided it in draft form, being Mr Staas’ draft Heritage Impact Assessment.

91. The Applicants’ assertion at par 66 above is simply not correct. The s 34 process was adjourned by consent to enable the Applicants to discuss amendments to its DA with its own experts and those of the Council. As a result of the adjournments many amendments were made and additional information was provided that resolved contentions and reduced the hearing time.

92. The originality of fabric was a question of fact to be considered by the heritage experts. Once the Applicants’ position was put forward and supported by evidence from Mr Staas it was conceded by Ms Hill on behalf of the Council. There is nothing unreasonable or unusual about experts agreeing on factual matters. It is part of the joint conferencing process.

Contention 11 referral to the Independent Design Review Panel and Director-General’s concurrence

93. Contention 11 was jurisdictional and was appropriately raised and appropriately not pressed. The contention, if pressed, would have been a matter for legal submission at the hearing and did not result in the Applicants incurring unnecessary costs as no hearing on the contention was required.

Contention 13 conditions of consent

94. Contention 13 was a matter for legal submissions. It did not require evidence or extensive preparation. The cost if any in considering Contention 13 pales into insignificance when compared to the cost incurred by the Council in dealing with the affidavit of Mr Hunter and the expert report of Ms Morrish which were filed and served in breach of the Court’s directions and the tender of which were rejected by the Court.

An order for costs of the Class 1 appeal is not fair and reasonable

95. The principles referred to in Dunford at [30] are usefully extracted as follows:

a. Rule 3.7(2) creates a basic rule where there is a presumption against the making of an order for costs [Port Stephens Council v Sansom (“Sansom”) [2007] NSWCA 299; (2007) 156 LGERA 125 at [48]].

b. 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].

c. 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]].

d. The formulation – “fair and reasonable” - calls for a judgment 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]].

e. 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] per Preston CJ].

f. The circumstances identified in r 3.7(3) may rebut the presumption in r3.7(2) and may inform the Court's discretion but are neither prescriptive nor exhaustive [Pepperwood Ridge Pty Ltd v Newcastle City Council [2008] NSWLEC 196; 160 LGERA 164 at [73] per Biscoe J; Hillsong Church Limited v Council of the City of Sydney (No. 2) [2012] NSWLEC 118 at [55] per Pepper J].

96. The Applicants as the moving parties bear the onus of establishing that the usual rule in Class 1 proceedings that there be no order for costs ought not apply. The onus was described in Coolah Holdings Pty Ltd v Eurobodalla Shire Council (No 2) [2012] NSWLEC 84 at [43]:

The presumption is that there will be no order for costs, but costs remain within the discretion of the court, a discretion which must be exercised judicially. The party claiming an order for costs bears the onus of displacing the rule, and convincing the court that an order in its favour is “fair and reasonable”, and “just and equitable”, in all the circumstances of the case.

97. There are a number of difficulties with this application for costs. It has sought to traverse the Council’s original decision to refuse development consent, a matter entirely outside the scope of what is material to whether costs in this Class 1 appeal should be awarded under r 3.7(3). It is a poor use of the Court’s and the other party’s resources to expect such issues to be traversed in this costs decision, see Barrett JA in Community Association DP270253 v Woollahra MunicipalCouncil at [53] cited in Dunford at [36]. The affidavit of Mr Hunter the First Applicant was directed entirely to events that occurred several years before this appeal was filed in 2016. It is not relevant to the issues I should consider in this costs application.

98. As the Council submitted, it is not bound by the reasons for refusal of the Applicants’ DA in drafting its contentions in this appeal. Provided that sufficient care is taken in the drafting of contentions no criticism on this basis can be levelled, as was recognised in Boensch.

99. The Applicants’ submissions did not reflect the whole context of the proceedings to a concerning extent. On a costs application a forensic, one-sided approach to the issues and evidence is not appropriate or helpful to the Court. For example, submissions about the failure to promptly provide documents within the 14 days specified in the notice to produce made no acknowledgment that the amount of documents sought was voluminous to put it mildly or that in fact a large number of documents were provided within or shortly after the 14 days of the notice according to Ms Hudson’s affidavit.

100. The events referred to in the extensive affidavits filed by the parties’ solicitors reflect to my mind the usual processes likely to be engaged in concerning a not particularly complex DA with a long history the subject of numerous amendments before and during a Class 1 appeal.

101. That a commissioner finds in favour of an applicant on several issues alone does not ground a costs application. The Applicants appeared to assert that because they were successful the Council’s position must have been unreasonable but that is simply not made out by the one-sided history provided in the Applicants’ case. As has been said in many judgments, an application for costs must not be taken as an opportunity to re-litigate the original merit case. The Applicants’ case had strong overtones of precisely that occurring.

102. The Council’s submissions usefully included an overview of the litigation as reflected in the Commissioner’s judgment. Contrary to the Applicants’ submission that the judgment other than the section dealing with the VPA provides no assistance in this costs application because the focus is the Council’s conduct, the judgment is useful to consider. It identifies the four topics at issue: heritage, flooding, car parking and whether weight should be given to the VPA. The parties’ expert evidence is considered in relation to all matters where applicable and suggests a reasonable and orthodox approach to these issues by both parties. There is no suggestion for example that the Council’s amended heritage contention lacked substance.

103. The exercise of the costs discretion is generally dependent on the particular circumstances of the matter before the Court. None of the authorities relied on by the Applicants cited above in par 38 are relevant to the circumstances of this costs application. Particular reliance was made on ACM Landmark at [41], [42] and [93]. In that case the council essentially drafted its contentions based on the evidence of resident objectors with no basis provided by expert evidence, indeed were contrary to such evidence, received by the Council. That circumstance has no application in this case. The Council demonstrated in its submissions and evidence and as reflected in the Commissioner’s judgment that it had appropriate expert evidence to address the merit issues it identified.

104. The basis for why the Applicants seek 50% of the legal costs of the whole appeal and some expert costs was not clear to me. The Applicants’ senior counsel submitted that because the contentions sought information from the Applicants for the first time amendments to plans were necessitated. The evidence of Ms Hudson identified the numerous changes made to the DA plans and the additional flood reports prepared in support of the DA, summarised in par 34 above. That the Applicants amended the DA was entirely a matter for them. There is no correspondence suggesting this was done under protest. The DA plans were amended and additional information provided in such a way in September 2016 that several contentions were deleted and all remaining contentions were amended by the Council. An order under s 97B of the EPA Act was made when leave was granted to rely on the amended plans for the Council’s costs thrown away in addressing the unamended plans. How costs can be claimed for the period before the amendment of the DA given these circumstances is not clear.

105. The Applicants’ approach is scattergun and also misses the wood for the trees. Every perceived failure of the Council was included even in circumstances where the costs incurred were likely to be minor for example Contention 11 concerning the referral to the Independent Design Review Panel and the Director-General’s concurrence. There are swings and roundabouts in most litigation and a sense of perspective about costs and when these should appropriately be sought is important particularly where parties were legally represented. As it is the costs argument has taken two days when the hearing of the matter in total was four days. A proportionate approach to costs is essential in the interests of the just, quick and cheap disposal of issues.

106. The Council has shown great forbearance in my opinion in not cross-claiming for some of its costs given the enormous task of complying with the Applicants’ requests for informal discovery and the notice to produce. The Council also incurred unnecessary costs in relation to Ms Morrish’s report which it has not claimed.

107. Before considering the detailed submissions I note that the affidavit evidence and documents exhibited to these was voluminous. In the interest of the just, quick and cheap resolution of the issues I have not attempted to summarise, nor will I refer in detail to every piece of evidence referred to.

Ground 1

108. The Applicants’ submission that the VPA Contention 1 and later 1A should not have been pursued at all by the Council despite the fact that the Council’s argument was accepted by the Commissioner lacks any foundation for that reason alone. The further submission made that the Commissioner incorrectly determined the issue in coming to the conclusion she did and that I should so find is impermissible in a costs application. I cannot consider in this costs application matters that are better suited to a s 56A appeal. The Commissioner determined the VPA issue in the Council’s favour. That essentially addresses the Applicants’ extensive arguments on this matter.

109. Reluctantly engaging with the lengthy and largely irrelevant arguments given my finding in the previous paragraph, the regime under the EPA Act for VPAs as identified by the Council appears correct and does not support the Applicants’ approach that there was no scope at all for raising Contention 1 in the SOFAC or Contention 1A in the Amended SOFAC. The VPA was made in 2006 on the basis that a certain form of development which included two cinemas and 10 on-site car parking places would be pursued, a spot rezoning would occur to enable what was otherwise prohibited and the Applicants once obtaining development consent would be liable to pay $500,000 to the Council. The GPSO was amended accordingly. As identified by the Council and also in the Commissioner’s judgment at [16], s 79C considerations continued to apply including as identified in cl 49DN(8) of the GPSO introduced to implement the VPA. Floor space, height and referral to the Independent Design Review Panel merit issues continued to apply. The provision of adequate car parking remained a relevant consideration.

110. As the Council submitted the DA lodged by the Applicants in August 2012 varied from the development envisaged in the VPA in proposing four cinemas not two and five on-site car parking spaces not 10. Section 79C(1)(a), (iiia), (b), (c), (d) and (e) continued to be mandatory relevant considerations for the Council and then the Court’s assessment in this appeal. When all of the circumstances surrounding the VPA and the regulatory framework under the EPA Act relating to these is considered there was nothing unreasonable about the Council’s Contention 1A. I accept the Council’s submissions set out at par 76 above. No basis for a finding of an impermissible extraneous purpose on the Council’s part of resiling from the VPA is identified. This ground of appeal fails.

Ground 3

111. In relation to the balance of contentions the Applicants complain about (Ground 3), considering heritage firstly, the Applicants’ main submission seemed to be that because the Council had not engaged a heritage expert at the time Contentions 8 and 9 were drafted their behaviour was unreasonable. That is a simplistic argument which fails completely to take into account the circumstances in relation to heritage which was that it was a mandatory relevant consideration under s 79C(1), the Applicants provided a Heritage Impact Assessment for the first time only seven days before the s 34 conference and there was insufficient time to engage a heritage expert before the s 34 conference. Ms Hudson’s affidavit addressed the factual circumstances surrounding the Council’s approach on heritage and these actions appear entirely appropriate. The evidence was not all one way (against heritage considerations being relevant) at the time the contention was first drafted, contrary to the Applicants’ submissions. Ms Hill was appointed very shortly after the s 34 conference. Ms Hudson disputed in her affidavit that adjournments of the s 34 conference were unreasonable, being largely by consent through e-Court. Ms Hill was prepared to support in her expert opinion the Council’s heritage contentions in the appeal. This is set out in the Commissioner’s judgment. Some of Ms Hill’s opinions were accepted. Ultimately the Commissioner did not consider that heritage issues warranted a refusal. There can be no suggestion of unreasonable conduct by the Council in these circumstances.

112. Contention 10 in the Amended SOFAC identified a number of aspects of flooding which remained of concern to the Council. I was frankly not able to determine whose version of events was accurate in relation to flood warning systems on public or private land. The Applicants submitted that they had never proposed a flood warning system on public land, the Council submitted to the contrary and that the Applicants had shortly before the hearing then proposed to change the system to be located on private land allaying the Council’s concerns in that regard. All I can observe is that the joint report of the flood engineers refers to the provision of a flashing light warning system on public land but according to the Applicants that is an error. I do not consider the determination of extremely specific factual disputes between the parties, of which there were several, assists in the exercise of my discretion. What I can conclude is that two experienced flood engineers met and agreed a way forward in the course of the hearing and that ultimately all issues of concern to the Council were resolved by the time of the hearing. There does not appear to have been any unreasonable behaviour on the Council’s part which caused unnecessary costs to be incurred by the Applicants. It was appropriate that the Council advise the Applicants that their engineer was not required for cross-examination close to the hearing if that was the case. The Applicants have not demonstrated there was inordinate delay in doing so.

113. Contention 11 referral to the Independent Design Review Panel and the Director-General’s concurrence was withdrawn before the hearing. Apart from being the subject of a request for particulars after which the contention was withdrawn no basis for finding that legal costs were unreasonably incurred was demonstrated by the Applicants. The Council submitted the contention raised mandatory relevant matters which was withdrawn in a timely manner. No basis for awarding costs is demonstrated.

114. Contention 13 concerning s 94 contributions was said to be unreasonable because it was contrary to the VPA. Under the VPA s 94 was excluded as the Applicant submitted. This contention was tied to Contention 1A concerning the VPA and the provision of car parking. I accept the Council’s submission on this contention, namely it was a matter for legal argument if the issue came up at the hearing. In the end it was not necessary to address it.

115. In relation to Contention 7 – SEPP71 while this was referred to very briefly by the Applicant it was not addressed in oral submissions. The relevant paragraphs of Ms Huscroft’s second affidavit relied on do not address any matter which suggests that this contention was unreasonably identified given the location of the theatre site in a designated coastal area.

116. The Applicants complain of costs unreasonably incurred in relation to the last three contentions not ultimately pressed by the Council. They bear the onus of establishing that any costs they did incur in responding to these was unreasonable and have not done so from my perspective.

117. The Applicants are unsuccessful on this ground.

Ground 2

118. Concerning the alleged failure to comply with document production, Ms Hudson’s affidavit estimates that over 7,000 documents were provided in answer to the notice to produce and the informal discovery process. Mr Ball’s affidavit identifies the extensive steps taken by the Council’s staff to provide the documents. The Council provided an index of documents of over 500 pages. Accepting the difficulties referred to in Ms Huscroft’s July affidavit summarised above about costs being incurred due to double handling and difficulty of identifying what was produced does not mean that there was unreasonable behaviour on the Council’s part in the provision of a large volume of material meeting the description of the broad notice to produce and the informal discovery sought by the Applicants’ solicitors at the same time. Alarm bells should have been ringing for all parties about whether the expense of producing the documents was warranted by the issues in contention. Why the Council was so accommodating of such an oppressive demand for documents is unclear. As already identified earlier in my finding, the resources required by the Council’s staff in meeting the request were substantial and the legal costs incurred would also have been substantial.

118. I accept the Council’s submissions set out in par 79 above in relation to this aspect of the Applicants’ case.

119. In relation to legal professional privilege the affidavit of the Council’s solicitor Ms McCullen sets out the reasonable decision to accept initially the assessment of the claim for legal professional privilege of the Council’s former solicitors and then undertake a review of the claim when this was requested by the Applicants’ solicitors. This resulted in the claim being waived in relation to a number of documents which were then provided in April 2016. No challenge to the claim for privilege was made in Court. I accept the Council’s submissions set out in par 80 and 82 above in relation to this aspect of the Applicants’ case.

120. In relation to the failure to particularise claims, the Amended SOFAC is extracted above in par 12. It is detailed and I consider adequately particularises the issues addressed. That the Applicants sought further particulars on numerous occasions to which the Council’s solicitors promptly responded being the correspondence set out above in pars 16-18 does not necessarily reflect inadequate contentions. I accept the Council’s submissions set out in pars 83-84 in relation to this part of the Applicants’ case.

121. The Applicants are unsuccessful on this ground.

122. I have largely accepted the Council’s submissions as these more accurately reflect the extensive documentary evidence and more appropriately reflect how the appeal proceeded.

123. Exercising my discretion in light of the evidence and submissions before me I do not consider it is fair and reasonable to make a costs order in this appeal. The Applicants’ Amended Notice of Motion dated 5 September 2017 should be dismissed.

Costs of the Notice of Motion

125. The Council seeks its costs of the Amended Notice of Motion. Costs are compensatory not punitive per Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59. The costs incurred by the Council in answering the Motion would be substantial as the affidavit evidence filed is voluminous. As the successful party on the motion the Council should have its costs paid by the Applicants.

Orders

126. The Court makes the following orders:

1. The Applicants’ Amended Notice of Motion dated 5 September 2017 is dismissed.

2. The Applicants are to pay the Council’s costs of the Amended Notice of Motion dated 5 September 2017.

3. The exhibits be returned.

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Decision last updated: 24 November 2017