Kinder Investments Pty Ltd v Sydney City Council

[2005] NSWLEC 737

Reported Decision: 143 LGERA 237

Land and Environment Court

of New South Wales

CITATION:

Kinder Investments Pty Limited v Sydney City Council [2005] NSWLEC 737

PARTIES:

APPLICANT
Kinder Investments Pty Limited

RESPONDENT
Sydney City Council

FILE NUMBER(S):

11423 of 2005

CORAM:

Preston CJ

KEY ISSUES:

Question of Law :- whether lapse of consent can be prevented by modification under s 96.

Development Consent:- lapse under s 95 - whether lapse of consent can be prevented by modification under s 96.

Costs:- planning appeal - question of law as central issue - order for costs.

LEGISLATION CITED:

Environmental Planning and Assessment Act 1979 s 95, s 95(1),
s 95(2), s 95(3), s 95(4), s 95(5), s 95A, s 95A(4), s 96, s 96(1),
s 96(1A), s 96(2), s 96(4)
Freedom of Information Act 1982(Cth)
Land and Environment Court Act 1979 s 69
Land and Environment Court Rules 1996 Pt 16 r 4, Pt 16 r 4(2)

CASES CITED:

Aldi Foods Pty Limited v Holroyd City Council (2004) 139 LGERA 259;
Arnold (on behalf of Australians for Animals) v Queensland and Another (1987) 73 ALR 607;
Broadwater Action Group Inc v Richmond Valley Council [No.2] (2003) 129 LGERA 401;
Cachia v Hanes (1994) 179 CLR 403;
Engadine Area Traffic Action Group Inc v Sutherland Shire Council [No.2] (2004) 136 LGERA 365;
Evans v Maclean Shire Council (2004) 133 LGERA 270;
Gee v Port Stephens Council (2003) 131 LGERA 325;
Gibson v Mosman Municipal Council (2001) 116 LGERA 397;
Latoudis v Casey (1990) 170 CLR 534;
Marvan Properties Pty Ltd v Randwick City Council (2005) 138 LGERA 1;
Morris v Gosford City Council [1996] NSWLEC 254;
Oshlack v Richmond River Council (1998) 193 CLR 72;
Pancho Properties Pty Ltd v Wingecarribee Shire Council [2004] NSWLEC 620;
Plumb v Penrith City Council (2003) 126 LGERA 109;
R v Wallis; Ex parte Employer’s Association of Wool Selling Brokers (1949) 78 CLR 529;
Shaynd v Ku-Ring-Gai Council (2005) 138 LGERA 395;
Statewide Developments Pty v Minister for Infrastructure and Planning [2005] NSWLEC 353;
Teller Properties Pty Ltd v Randwick City Council (1994) 84 LGERA 369;
Wyong Shire Council v Smith (1992) NSWLEC 134;

DATES OF HEARING:

09/12/2005

EX TEMPORE JUDGMENT DATE:

12/09/2005

LEGAL REPRESENTATIVES:

APPLICANT
Mr J Ayling SC
SOLICITORS
Susan Hill & Associates

RESPONDENT
Mr J Griffiths SC
SOLICITORS
Maddocks

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

PRESTON CJ

FRIDAY 9 DECEMBER

05/11423

KINDER INVESTMENTS PTY LIMITED V SYDNEY CITY COUNCIL

JUDGMENT

1 HIS HONOUR: The prospect of a development consent granted under the Environmental Planning and Assessment Act 1979 (“the Act”) lapsing causes consternation. A development consent is a valuable asset. It is a statutory permission that authorises the carrying out of development on land, mostly for economic gain. It does this by relaxing the statutory prohibition on development of land that would otherwise apply. The consent attaches to the land and enures for the benefit of subsequent land owners and occupiers. It adds value to the land. Hence the prospect of a consent lapsing is apt to engender dismay in the holder of the consent.

2 The lapsing of a development consent is caused by statutory provisions, in s 95, in the same Act that empowers the grant of the consent. Those statutory provisions fix a period of time, at the expiry of which the consent will lapse.

3 There is an express statutory means of postponing the lapse by extending the lapsing period under s 95A of the Act. If a development consent is granted for less than the statutory maximum period of five years, an extension of the lapsing period for one year can be obtained. This means of extending the lapsing period is subject to procedural requirements and is a one-off extension. It does not, of course, prevent the lapsing of a consent; it just postpones the date on which the consent will lapse.

4 The only means to prevent the lapsing is to take action, in accordance with the development consent, of the kind specified in the statutory provisions on lapsing in s 95(4) of the Act. This involves:
(a) for development involving the erection of a building, the subdivision of land or the carrying out of a work, the commencement of building, engineering or construction work, or
(b) for other development, the actual commencement of use of the land, building or work, the subject of the consent, before the date on which the consent would lapse.

5 So, in most situations, the holder of the consent endeavours to take such action before the lapsing period expires. Questions can and do arise as to whether the action taken is of sufficient substance as to constitute work or use at all, can properly be characterised as work or use that falls within the statutory descriptions, or is work or use in accordance with the consent granted. These questions give rise to the bulk of the litigation in relation to lapsing of a consent.

6 This case, however, is different. The date of expiry of the lapsing period has already been extended pursuant to the statutory power under s 95A(2) of the Act. No further extension under that provision is possible. No action of the kind required by the statutory provisions in s 95(4) has been undertaken nor, in the few days left before the expiry of the lapsing period, is likely to be undertaken. The lapsing of the consent, therefore, seems inevitable. Yet the holder of the consent, the applicant in this appeal, has conceived a novel idea to stave off the seeming inevitability of the lapsing of the consent.

7 The holder of the consent has applied to modify the consent pursuant to another statutory provision, s 96 of the Act, to change the term of the lapsing period specified in the consent. The consent authority, the respondent in this appeal, refused this modification application on the basis that it had no power. The applicant has appealed to this Court. The question that is therefore raised is: can a consent be prevented from lapsing by modifying it under s 96 of the Act?

Statutory provisions on lapsing
8 Section 95 of the Act provides:
“(1) A development consent lapses:
(a) 5 years after the date from which it operates, except as provided by paragraph (b), or
(b) in the case of a development consent that is subject to a condition under s 80(5), 5 years after the date from which the initial development consent operates, or 2 years after the date from which a later or the latest development consent granted in accordance with the condition operates, whichever is the longer.
(2) A consent authority, in granting development consent, may reduce either or both of the periods referred to in subsection (1), despite that subsection.
(3) Such a reduction may not be made so as to ensure:
(a) a development consent to erect or demolish a building or to subdivide land to lapse within 2 years after the date from which the consent operates, or
(b) a development consent of a kind prescribed by the regulations to lapse within the period prescribed by the regulations in relation to the consent.
(4) Development consent for:
(a) the erection of a building, or
(b) the subdivision of land, or
(c) the carrying out of a work, does not lapse if building, engineering or construction work relating to the building, subdivision or work is phyiscally commenced on the land to which the consent applies before the date on which the consent would otherwise lapse under this section.
(5) Development consent for development other than that referred to in subsection (4) does not lapse if the use of any land, building or work the subject of that consent is actually commenced before the date on which the consent would otherwise lapse.”
9 Section 95A of the Act provides:
“(1) If, in granting a development consent, the consent authority reduces the period after which the consent lapses to less than 5 years, the applicant or any person entitled to act on the consent may apply to the consent authority, before the period expires, for extension of 1 year.
(2) The consent authority may grant the extension if satisfied that the applicant has shown good cause.
(3) A person making an application under subsection (1) who is dissatisfied with the determination of the application or the failure of the consent authority to determine the application within 40 days after it is made, may appeal to the Court, and the Court may determine the appeal.
(4) An extension of 1 year granted under this section commences to run from the later of the following:
(a) the date on which the consent would have lapsed but for the extension,
(b) the date on which the consent authority granted the extension or, if the Court has allowed the extension in determining appeal, the date on which the Court determined the appeal.
(5) This section does not apply to complying development.”

10 Section 96 permits the modification of consents. Section 96(1) permits modifications involving minor error, misdescription or miscalculation. Section 96(1A) permits modifications involving minimal environmental impact. Section 96(2) permits other modifications.

11 In this case, the modification sought is under s 96(1A) which provides:
“A consent authority may, on application being made by the applicant or any other person entitled to act on the consent granted by the consent authority and subject to and in accordance with the regulations, modify the consent if:
(a) it is satisfied that the proposed modification is of minimal environmental impact, and
(b) be satisfied that the development to which the consent as modified relates is substantially the same development as the development for which the consent was originally granted and before that consent was originally granted was modified (if at all), and
(c) it has notified the application in accordance with:
(i) the regulations, if the regulations so require,
(ii) a development control plan, if the consent authority is a council that has made a development control plan under s.72 requires the notification or advertising of applications for modification of development consent,

(d) it is considered any submissions made concerning the proposed modification within any period prescribed by the regulations or provided by the development control plan, as the case may be.
Subs (1), (2) and (5) do not apply to such modifications.”

12 Section 96(4) provides that:
“The modification of development consent in accordance with this section is taken not to be the granting of development consent under this Part but a reference in this or any other Act to a development consent includes a reference to a development consent so modified.”

Consent is granted with a reduced lapsing period
13 By notice of determination dated 13 December 2002 the respondent, the Council of the City of Sydney (“the Council”), granted development consent for a Stage 1 development application to extend the existing twelve level commercial office building situated upon the property at 110 Goulburn Street, Sydney by eight floors, including ground level works and facade upgrade (“the consent”).

14 The date from which the consent operates is stated to be 13 December 2002. This is stated on the first page of the notice of determination.

15 The date upon which the consent is stated to lapse is 13 December 2004. This also is stated on the first page of the notice of determination. In addition, although strictly not necessary, condition 2 of the consent states:
“(2) This approval will be valid for a period of two years from the date of the approval.”

16 The specification by the consent authority in granting consent for a period less than the statutory maximum period of five years was an exercise by the respondent, as consent authority, of the power in s 95(2) of the Act to reduce the period specified in s 95(1) of five years after the date on which the consent operates.

Extension of lapsing period
17 By letter dated 29 September 2004, the applicant sought an extension of the period of the consent pursuant to s 95A of the Act.

18 By letter dated 8 October 2004, the Council granted an extension of the period of the consent for one year.

19 Pursuant to the extension to the consent granted by the Council under s 95A of the Act, the consent would now lapse on 13 December 2005.

Modification of consent
20 On 28 October 2005, the applicant lodged with the Council an application to modify the development consent pursuant to s 96(1A) of the Act. It is this application which ultimately is the subject of this appeal.

21 Of relevance, the s 96(1A) application sought to modify the consent by amending condition 2 of the consent to substitute for the specification in that condition of a period of two years, a period of five years.

22 By letter dated 25 November 2005, the Council refused to grant approval to the s 96(1A) application. The reasons for refusal given by the Council were that:
“Changes to the duration of development consents cannot be made under s 96 of the Environmental Planning and Assessment Act 1979.”

Appeal to the court
23 On 1 December 2005, the applicant appealed against the Council’s refusal of the s 96(1A) application to modify the consent.

24 On the same day, by notice of motion, the applicant sought that the hearing be expedited, the hearing be listed for 9 December 2005 and that a question of law be determined at the hearing. In fact, this question is the only issue in the proceedings.

25 On 2 December 2005, the Registrar made the orders sought.

Question of law
26 The question which arises for determination in these proceedings is:
“Whether pursuant to s 96 of the Environmental Planning and Assessment Act 1979 a development consent may be modified to vary the time period of the development consent in circumstances where the development consent has previously been extended pursuant to s 95A.”
Applicant’s submissions
27 Mr J Ayling SC, counsel for the applicant, made the following submissions:

(a) The terms of s 96 of the Act do not preclude its application to a modification which varies the lapsing period of a consent;
(b) The period in question in this case is specified in a condition of consent, namely condition 2. A variation or deletion of a condition of consent is a matter which falls within the ambit of s 96. Further, the variation of the specification of the date on which the consent would lapse on the first page of the consent is also a matter which falls within the ambit of s 96.
(c) Section 95A does not preclude the application of s 96 in relation to the modification of the terms of a consent with regard to a lapsing period.
(d) Section 95A does not operate as a code but as an exception to the general scheme. Section 95A has been inserted so as to allow, in the limited circumstances stated in s 95A, a consent authority, first, to exercise a separate power unrelated to the general modification power under s 96, and secondly, to exercise that power in a way which has a different result from the result achieved by the exercise of the general power.
(e) The procedures governing the exercise under the power under s 95A are limited. There is no need for the consent authority in dealing with an application under s 95A to undertake any public participation procedures or to consider any submissions made by persons other than the applicant. The obligation to be satisfied that the applicant has shown good cause does not involve a reconsideration of the s 79C(1) merit matters or whether consent ought to have been granted originally. The consent authority is not authorised to impose additional conditions on the consent.
(f) In contrast, the power under s 96 of the Act is hedged with constraints. Unless the modification is one aimed at correcting errors or other mistakes pursuant to s 96(1), even an application made in circumstances where the proposal effects “minimal environmental impact” under s 96(1A) requires, first, the attainment of a state of satisfaction that the consent as modified will be substantially the same as that for which consent was originally granted, and secondly, the taking into consideration of all the matters identified in s 79C which are of relevance to the development which is the subject of the application: s 96(1A)(b) and s 96(3) of the Act. In addition, public notification procedures may apply, and if they do, the consideration of the application must include the consideration of any submissions made as a result of those procedures: ss 96(1A)(c) and (d) of the Act.
(g) The effect of the exercise of the respective powers under s 95A and s 96 are also different. Mr Ayling submits that the consequence of the exercise of the power under s 95A is such as not to affect in any way the operation of the consent. In contrast, the exercise of the power under s 96 of the Act of modification effects a fundamental change to the consent itself.
(h) The decisions of Talbot J in Aldi Foods Pty Limited v Holroyd City Council (2004) NSWLEC 418 (30 July 2004) at [16], of Commissioner Hoffman in Sansone v The Waverley Council [2005] NSWLEC 450 (11 August 2005) and of Pearlman CJ in Peter Dallow v Wagga Wagga City Council [1997] NSWLEC 10 (6 February 1997) are supportive of the above propositions.
(i) Sections 95 and 95A differ from their predecessor, the former s 99 of the Act. The current scheme is to specify in ss 95(1),(2) and (3), that a development consent lapses five years or such reduced period as the consent authority specifies in granting the development consent (but not less than 2 years) after the date on which the consent operates. A limited extension of the lapsing period is permitted by s 95A but only where the statutory lapsing period of five years has been varied downwards at the time consent is granted. Under the scheme under the former s 99, a statutory maximum period of two years was stated and could be altered by the consent authority, after the consent had been granted, to three years. The contrast is said to be that the current scheme does not necessitate the vesting in the consent authority of a specific statutory power to vary the duration of the life of the consent.

Council’s submissions
28 Mr J Griffiths SC, counsel for the respondent Council, made the following submissions:
(a) Section 95A constitutes an exhaustive code for extending the duration of a development consent and s 96 does not provide an alternative power or procedure of extending that period.
(b) Section 95A constitutes a specific regime for extending the period of a development consent, whereas s 96 provides a more general regime for the modification of development consents.
(c) There is no express reference in s 96 to such a modification involving an extension of the period of the consent.
(d) The conditions to the exercise of the respective powers under s 95A and s 96 are notably different.
(e) The power in s 95A to grant an extension is subject to various specified conditions and qualifications. It is only available if the consent authority, in granting the development consent, reduces the statutory period of 5 years. It only authorises one extension for a fixed period of one year. It does not authorise multiple extensions or extensions for a period of other than one year. Application for an extension must be made before the reduced period expires.
(f) The power under s 96(1A) is subject to completely different conditions and qualifications.
(g) The maxim of statutory construction expressum facit cessare tacitum is relevant. An illustration of the maxim is to be found in the High Court’s decision in R v Wallis ; Ex parteEmployer’s Association of Wool Selling Brokers (1949) 78 CLR 529 at 550. In the present case, the Act confers a specific power in s 95A with respect to the limited subject of the extension of the lapsing period of a consent. It specifies the manner of dealing with it. By the Act specifying in s 95A, in affirmative words, the course to be followed for extending the lapsing period, the Act is to be understood as importing a negative, namely that the same matter is not to be done according to some other course, including pursuant to the power of modification under s 96 of the Act.

(h) The maxim generalia specialibus non derogant (where there is a conflict between general and specific provisions, the specific provisions prevail) is also applicable. Illustrations of the application of this maxim include Leon Fink Holdings Pty Limited v Australian Film Commission (1979) 24 ALR 513 at 518: Downey v Trans Waste Pty Limited (1991) 172 CLR 167 at 171-172 and 181-182, and David Grant & Co Pty Limited v Westpac Banking Corporation (1995) 184 CLR 265 at 275-275. In this case, s 95A is clearly a specific provision, while s 96 is a general provision. The conditions and restrictions in s 95A cannot be circumvented by resort to the more general power in s 96. If s 96 did apply to authorise a modification to the lapsing period, that could potentially undermine three important and separate limitations imposed by s 95A, namely:
(i) that any extension can only be for a fixed period of one year, and only one such extension is available;
(ii) the substitution of the various conditions set out in s 96 for a central limitation imposed by s 95A, namely that the consent authority has the power to extend for one year if it is satisfied that the applicant has shown good cause. That is a very different criterion to those imposed under s 96; and
(iii) the establishment of a maximum period of five years for the duration of any consent. Under s 95(2) where the reduced period is substantially less than five years, an extension of one year would still produce a lapsing period which is much less than five years.

(i) There is nothing in the legislative history of ss 95 and 95A which is inconsistent with the above submitted construction of ss 95 and s 95A of the Act.
(j) The applicant’s citation of the decisions in Aldi Foods Pty Limited v The Holroyd City Council [2004] NSWLEC 418 (30 July 2004) and Sansone v Waverley Council [2005] NSWLEC 450 (11 August 2005) are of no relevance. The issue in those cases was not the lapsing of a consent under s 95, but rather the specification of a time frame for the duration of the consent once the consent had commenced under s 95(4) (that is to say, had been prevented from lapsing).

Resolution of the question
29 Implicit in the question to be determined in these proceedings is an assumption that the power in s 96 of the Act to modify a consent can, if exercised to vary the period specified in a consent (with such extension under s 95A as might be granted), prevent a consent from lapsing. Both parties submissions have proceeded on this assumption. The point of difference between the respective submissions has, therefore, been whether s 95A as a specific and express power to extend the lapsing period is exhaustive, and precludes the same course from being pursued under the general power of modification in s 96.

30 The assumption, however, needs to be questioned. The power under s 96 of the Act to modify a consent, even if available, and even if exercised to modify a lapsing period specified by a consent authority in granting the consent, with such extension as might have been granted subsequently, cannot operate to prevent the effect of lapsing that results from the operation of the statutory provision in s 95(1) of the Act.

31 In order to explain this point, it will be necessary to refer to the statutory scheme for fixing the lapsing period and the way in which the lapsing of a development consent is caused.

32 The statutory scheme embodied in s 95 is that the statute itself, ultimately s 95(1), and not the development consent, causes a development consent to lapse. It does this by causing a development consent to lapse upon the occurrence of an event. The event is the expiry of a period of time from a date. The date is the day from which the development consent operates. The period of time is the period fixed at the time of, and in the granting of, the development consent.

33 The fixing of the period is a one off exercise. It can only be done at the time of and in granting development consent. The period can either be the five year maximum period specified by s 95(1) as the maximum period, or such reduced period (but not less than two years: s 95(3)) as the consent authority may specify in granting the development consent pursuant to s 95(2).

34 There is a power under s 95A to extend the period fixed in the granting of the development consent. But any such extension does not involve fixing the lapsing period. It involves an alteration of the period that has already been fixed by the consent authority in granting the development consent.

35 The extension operates, by dint of s 95A(4), to prevent the development consent lapsing in accordance with s 95(1), until the later of the two days specified in s 95A(4) of the Act.

36 The upshot is that the statutory scheme exhaustively prescribes the means by which a development consent will lapse, and the timing of the lapsing, dependent upon the period fixed in the granting of the consent and any subsequent extension of that period under s 95A.

37 Hence:
(a) If in granting the development consent, the consent authority fixes the statutory maximum period of five years, the consent will lapse five years after the day from which it operates (unless development is commenced pursuant to s 95(4) or (5) of the Act);
(b) If in granting the development consent, the consent authority fixes a reduced period (being less than the statutory maximum period of five years, but more than the statutory minimum of two years) and no extension is granted under s 95A, the consent will lapse upon the expiry, after the day from which the consent operates, of that reduced period; or
(c) If in granting the development consent, the consent authority fixes a reduced period (being less than the statutory maximum period of five years, but more than the statutory minimum period of two years), and an extension of one year is granted under s 95A, the consent will lapse upon the expiry, after the date from which the consent operates, of a period being the sum of the reduced period plus the extension.

38 These are the only possible means and timings of lapsing of a development consent permitted by the statutory scheme.

39 No modification of a development consent under s 96 can alter these means or timings of lapsing. The modification of a consent is not the grant of a consent: see s 96(4) of the Act. Hence, even if s 96 could be used to alter any reduced period that was specified pursuant to s 95(2) by the consent authority in granting the development consent, such modified period could never answer the description of being a period specified under s 95(2) of the Act “in granting development consent.”

40 The consequence is that, notwithstanding any modification of the consent that might be made, s 95(1) would still operate so as to cause the development consent to lapse on the expiry of the period that was fixed in granting the development consent together with any extension granted under s 95A.

41 In the present case, this means that even if the development consent were to be modified by changing the period stated in the consent to five years, as sought by the applicant, s 95(1) would continue to operate so as to cause the consent to lapse upon the expiry of the period of three years (two years fixed in granting the development consent plus the one year extension) after the date from which the consent operates, namely 13 December 2005. Any modification would be legally ineffectual to prevent this statutory consequence of lapsing.

42 For these reasons, the assumption in the question posed for determination is incorrect. Even if the power to modify a consent under s 96 of the Act were to be available, an exercise of that power would not prevent a consent from lapsing in accordance with the statutory means and timings which operate in relation to the unmodified consent.

43 Accordingly, although the question is not perhaps aptly drafted to capture this reasoning, the answer to the question would be in the negative.

44 I will also address directly the argument put by the parties as to the availability of s 96 of the Act to modify a development consent to vary the lapsing period.

45 In this regard, the terms of s 95 and s 95A on the one hand, and of s 96 on the other, as well as the statutory scheme embodied in these respective provisions, support the conclusion that s 95A does provide an exhaustive means for extending the lapsing period and that s 96 does not provide an alternative power. The reasons for so concluding are essentially those stated by the Council and summarised above. In particular, s 95A constitutes a deliberate and specific regime for extending the lapsing period of a consent. It would be inconsistent for the same result, namely an extension of the lapsing period, to be able to be achieved by an exercise of the general power of modification under s 96 of the Act. The specific limitations and conditions that the legislature chose to provide in ss 95 and 95A would be circumvented.

46 It is not to the point, in construing the statutory scheme, that on one policy view it might be desirable for there to be flexibility to extend the lapsing period of a consent in circumstances and at times and on conditions different to those that the legislature specifically stated in s 95A.

47 For these reasons, which incorporate the reasons submitted by the Council and set out above, the question posed for determination should also be answered in the negative.

48 As the question that has been determined is the only issue in the proceedings, the inevitable consequence is that the whole proceedings should be dismissed. Accordingly, I order that the appeal is dismissed.

Costs
49 The Council makes application for an order that the applicant pay its costs of these proceedings. The Court, of course, has power to order costs under s 69 of the Land and Environment Court Act 1979. That general discretion under s 69 of the Act is supplemented by Pt 16 r 4 of the Land and Environment Court Rules 1996. In particular, Pt 16 r 4(2) provides that:
“No order for the payment of costs will be made in proceedings to which this Rule applies, unless the Court considers that the making of a costs order is, in the circumstances of the particular case, fair and reasonable.”

50 There is a line of authority in this Court that in class 1 appeals, where the issues involve matters of merit, and not law, ordinarily no order for costs will be made: see the conspectus of the authorities in Gee v Port Stephens Council (2003) 131 LGERA 325 at 330 [22]-332 [28], 334 [40] and 339 [56] and Statewide Developments Pty v Minister for Infrastructure and Planning [2005] NSWLEC 353 (1 July 2005) at [4].

51 Of course, there are circumstances in particular cases where, having regard to either the conduct of a party leading up to or during the litigation of the merit matters or the utter weakness of the merit matters raised, it may be fair and reasonable to make an order for costs: see as to the former circumstance, Oshlack v Richmond River Council (1998) 193 CLR 72 at 97-98, Evans v Maclean Shire Council (2004) 133 LGERA 270 at 275 [21]-[24] and Statewide Developments Pty v Minister for Infrastructure and Planning [2005] NSWLEC 353 (1 July 2005) at [26]-[27] per Lloyd J; and as to the latter circumstance, Wyong Shire Council v Smith [1992] NSWLEC 134 (24 December 1992), Morris v Gosford City Council [1996] NSWLEC 254 (29 November 1996) and Broadwater Action Group Inc v Richmond Valley Council [No.2] (2003) 129 LGERA 401 at 411[31] – 412 [36].

52 However, where an issue of law is raised as a central issue and the proceedings cease to have the character of merits review, it will be fair and reasonable for an order for the payment of costs to be made in relation to that question of law, the order being that costs follow the event: see Teller Properties Pty Ltd v Randwick City Council (1994) 84 LGERA 369 at 371, Gibson v Mosman Municipal Council (2001) 116 LGERA 397 at 400, Gee v Port Stephens Council (2003) 131 LGERA 325 at 335[41], 336[47], 336[47], 339[56] and 340[60] , Pancho Properties Pty Ltd v Wingecarribee Shire Council [2004] NSWLEC 620 (9 November 2004) per Talbot J and Shaynd v Ku-ring-gai Municipal Council (2005) 138 LGERA 395 at 400.

53 In this case, as I have stated in the substantive judgment, the only question in the class 1 appeal was a question of law, involving the construction of statutory provisions in the Act .

54 The question was a novel one, it not having been raised in the twenty-five years of the Court’s existence. Hence, there was no authority to guide either party. The question is also one of importance. The resolution of the question may be of interest to a wider audience than just the parties. This factor tends to support there being no order for the payment of costs, notwithstanding the question was a question of law.

55 In Arnold (on behalf of Australians for Animals) v Queensland and Another (1987) 73 ALR 607 at 621-622, the applicant had applied for access under the Freedom of Information Act 1982 (Cth) for documents to the Australian National Parks and Wildlife Service. Some of the documents were correspondence between that Commonwealth body and the State of Queensland. The State of Queensland opposed production of the documents relying on a statutory exemption that production would damage relations between the Commonwealth and the State. An important question of statutory interpretation arose, which would have wider ramifications not only for the State of Queensland which had a particular interest in the proper interpretation and application of the Freedom of Information Act 1982 (Cth) , but also for other government bodies. Although the applicant was ultimately unsuccessful in the proceedings, no order for costs was made due to the fact that the question was of public importance. See also Plumb v Penrith City Council (2003) 126 LGERA 109 at 114-115, Engadine Area Traffic Action Group Inc v Sutherland Shire Council [No.2] (2004) 136 LGERA 365 at 372 [30]-373 [21] and Marvan Properties Pty Ltd v Randwick City Council (2005) 138 LGERA 1 at 9 [39].

56 On the other hand, it is established by cases such as Latoudis v Casey (1990) 170 CLR 534 at 543,562-563 and 566-567, that an award of costs is made to compensate a successful party and not to punish an unsuccessful party: see also Cachia v Hanes (1994) 179 CLR 403 at 410 and Oshlack v Richmond River Council (1998) 193 CLR 72 at 96-97, 121 and 122. It is therefore incorrect to ever say that if the Court were to order costs it would be to punish the unsuccessful party, or if the Court were not to order costs, that would be to punish the successful party.

57 I find the matter finely balanced. However, having regard to the fact that this was essentially private litigation involving an application by an applicant to modify a development consent by extending the lapsing period, and did not involve general public interest matters, I consider that the line of authority in this Court that the successful party on a question of law raised in class 1 proceedings should be compensated for the costs that it has incurred, should be followed.

58 Accordingly, I order that the applicant pay the respondent’s costs of these proceedings.