Lester Land Holdings Pty Ltd v The Development Assessment Commission (No 2) - [2020] SASC 214

SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application for Judicial Review)
LESTER LAND HOLDINGS PTY LTD & ORS v THE DEVELOPMENT ASSESSMENT COMMISSION & ANOR (No 2)
[2020] SASC 214
Judgment of The Honourable Justice Parker
3 November 2020
ADMINISTRATIVE LAW - JUDICIAL REVIEW - PROCEDURE AND EVIDENCE - COSTS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS
PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - COSTS - GENERAL RULE: COSTS FOLLOW EVENT - PARTIAL SUCCESS
Application for costs.
The applicant succeeded in an application for judicial review of a decision made by the first respondent on 21 January 2016 to grant development plan consent in favour of the second respondent for the proposed development of land located at the south-east corner of the junction of North Terrace and West Terrace. The applicants were granted an order in the nature of certiorari quashing the decision of the first respondent.
At trial, the applicants challenged the decision of the first respondent to grant development plan consent on five grounds. Ultimately, the applicants only succeeded on one of those grounds.
The applicants seek an order that they be awarded their costs in accordance with the ordinary principle that costs follow the event. An order for costs is opposed by the respondents. The first and second respondents both submit that each party should bear their own costs. Further, in the event that an order for costs is made, the first respondent submits that it should not bear the costs of the other parties.
Held, per Parker J:
1. The applicants were successful in having the decision of the first respondent quashed, however they failed on several significant matters. It is appropriate to depart to some extent from the general rule that costs follow the event by ordering that the second respondent pay 60 percent of the costs of the first, second and third applicants on a party/party basis.
2. No order for costs is made against the first respondent on the basis that it did not add in any significant way to the costs incurred by the other parties and did not become an adversary in the proceedings. The first respondent’s role in the proceedings was restricted to providing assistance to the Court on matters of law, fact and administrative procedure.
Development Regulations 2008 (SA), referred to.
A, DC v Prince Alfred College Inc (No 2) [2016] SASCFC 27, applied.
Fernando v Medical Complaints Tribunal (2007) 16 Tas R 237; R (Davies) v Birmingham Deputy Coroner [2004] 3 All ER 543; Southern Cross Pipelines Australia Pty Ltd v Kenneth Comninos Michael Western Australian Independent Gas Pipelines Access Regulator [2002] WASC 316, discussed.
McFadzean v CFMEU (2007) 20 VR 250; Playford Vineyard Pty Ltd v Wishford Nominees Pty Ltd (No 4) [2020] SASC 204; R v Australian Broadcasting Tribunal; Ex parte Hardiman (1980) 144 CLR 13, considered.

LESTER LAND HOLDINGS PTY LTD & ORS v THE DEVELOPMENT ASSESSMENT COMMISSION & ANOR (No 2)
[2020] SASC 214
Civil

PARKER J: The applicants in these judicial review proceedings sought and were granted an order in the nature of certiorari quashing a decision to grant development plan consent for a proposed apartment complex in the City of Adelaide. The source of contention in relation to the award of costs is that the applicants only succeeded on one of the multiple grounds advanced by them. However, their success on that ground was sufficient for the Court to quash the decision made by the Development Assessment Commission (DAC).
Each of the parties acknowledges that the Court has a broad judicial discretion as to the award of costs and may depart from the general rule that costs follow the event in an appropriate case. They differ as to the application of those principles to the facts of this case. They have each lodged a detailed written submission in support of their respective positions.
The applicants seek an order for costs in their favour in accordance with the ordinary principle that costs follow the event. The first respondent, DAC, submits that the parties should bear their own costs. DAC also submits that it should not be ordered to meet any portion of the costs incurred by the other parties. The second respondent also submits that there should be no order as to costs. Alternatively, it submits that any costs order in favour of the applicants should be for only a small percentage of their overall costs. In that event, both respondents should be jointly and equally liable for the costs awarded.
Before referring in more detail to the submissions advanced by the parties, it is necessary to state briefly the issues that arose in the proceedings and the outcome.
Issues and outcome
The applicants challenged the decision of the first respondent to grant development plan consent on five grounds. Those grounds were:
·Ground 1 – DAC erred by failing to take into account the set-back from the eastern boundary of the subject land as required by the Development Plan;
·Ground 2 – DAC wrongly characterised the development as Category 1 rather than Category 3;
·Ground 3 – DAC failed to refer the proposal back to the relevant agency as required by the Development Regulations 2008 (SA);
·Ground 4 – DAC invalidly imposed conditions and reserved a matter; and
·Ground 5 – DAC’s decision was legally unreasonable.
The applicants only succeeded on Ground 1.
Submissions of the applicants
The effect of the submissions advanced on behalf of the applicants is that the Court should not depart from the ordinary principle that costs follow the event. They submit that the fact that a party has failed in some claims and not others is not decisive. Justice may not be served if a party is dissuaded by the risk of costs from canvassing all relevant issues.
The applicants submit that a range of factors must be considered. These include whether the party achieved the primary aim of the action, whether their decision to include multiple claims was reasonable, whether some claims were devoid of merit, whether there was an overlap between claims, whether a party was guilty of misconduct in the litigation and whether all claims were denied by the unsuccessful party.
Against that background, the applicants submit that their primary aim was to obtain a court order setting aside the decision of DAC to grant development plan consent. They succeeded and the Court quashed DAC’s decision.
The applicants also submit that the proceedings involved a single cause of action arising out of the same underlying facts and circumstances. Their claims were not independent causes of action that could have been taken in separate proceedings. Their claims were directed at a single decision and were expressed in the alternative rather than independently of each other. There was a considerable degree of overlap of facts and circumstances that informed the impugned decision.
The applicants further submit that their decision to advance each of the claims was reasonable because the reasons for the impugned decision were solely within the knowledge of DAC. Thus, the applicants were faced with the difficult task of inferring the reasons for the decision and framing their claims without the benefit of knowing those reasons. Furthermore, the respondents denied all liability and DAC did not disclose the reasons for the decision and also contested the power of the Court to infer its reasons.
Finally, the applicants submit that there was no finding by the Court, nor have the respondents suggested, that the grounds they had advanced were unmeritorious. While a number of grounds failed, that was due to their relative weight or significance to the decision, rather than due to a lack of relevance.
Submissions of DAC
DAC submits that the issues upon which the applicants failed were distinct and severable from the one issue upon which they succeeded. The additional issues significantly lengthened the trial and it is not clear that they had prima facie strength. For those reasons, DAC submits that the appropriate course is to treat the discrete issues that were litigated as separate events.
DAC submits that the most appropriate course is for the parties to bear their own costs. DAC also submits that, irrespective of the position between the applicants and the second respondent, no portion of the costs incurred by the other parties should be borne by DAC.
The basis for that submission is that DAC had made clear from the outset that it would abide the decision of the Court. That reflected the position stated by the High Court in R v Australian Broadcasting Tribunal; Ex parte Hardiman.[1] Costs are not ordinarily ordered against a respondent decision making body that has abided the event. However, DAC acknowledges that a different approach may be adopted if the decision maker has taken an active or adversarial role in proceedings.
[1] (1980) 144 CLR 13 at 35-36.
While DAC had abided the event, and sought to remain neutral between the parties, it also sought to provide such assistance to the Court as it could. To that end, DAC’s solicitor had filed a brief affidavit from Mr Wells that corrected matters of fact deposed to by Mr Hegarty, a witness called by the second respondent. Ultimately, Mr Hegarty accepted the correctness of the facts stated by Mr Wells. That approach did not suggest a lack of neutrality but rather assistance with the administration of justice.
DAC observes that its written submissions were confined to three matters. First, it stated broad legal propositions as to the circumstances in which the Court may infer that erroneous advice had informed an impugned decision. Those submissions were generally adopted by the second respondent and accepted by the Court.
In relation to the second matter, DAC effectively declined to make any submission as to whether future development in the locality was a relevant consideration when deciding whether to grant development plan consent. The Court rejected the contention of the applicants that future developments were an irrelevant consideration.
The third matter dealt with by DAC in its submissions was that the Court could infer whether or not the development principle relating to the set‑back had been considered by DAC. While the Court found that DAC had not considered the set‑back requirement, it accepted the force of the submissions made by DAC on this issue.
In addition to DAC’s submission that its participation remained entirely neutral and assisted the efficient administration of justice, DAC also submits that its participation in the proceedings did not add to the costs incurred by the other parties.
Submissions of the second respondent
Although the second respondent contends that it would be entitled to seek an order for costs in its favour on the basis of its success on multiple grounds and issues, it nevertheless submits that the appropriate order should be that there be no order as to costs, i.e. all parties should bear their own costs. Alternatively, if the Court is persuaded to make a costs order in favour of the applicants, that should be for only a small percentage of their overall costs. In that event, the second respondent submits that both respondents should be jointly and equally liable for the costs awarded.
The second respondent submits that the five grounds pursued by the applicants covered eight issues. Those issues were truly discrete, and not different ways of advancing the same contention. They involved different factual aspects of its planning application, different aspects of the statutory scheme and common law principles and, most importantly, would have had different consequences if its contentions had succeeded.
In that respect, the second respondent points to the fact that the only consequence of the applicants’ success on ground 1 is that the development application may be remitted back to DAC for reconsideration, taking into account the set-back issue. If consent is refused by DAC, the second respondent may amend its proposal or appeal against the refusal.
However, the second respondent notes that its failure on ground 2 would have had very different consequences. If there had been a finding that the application was a non‑complying Category 3 development, a refusal by DAC to grant consent would not have been appealable and the proposal would be at an end. Alternatively, if the application was approved, the second respondent would face a real threat of third party appeals (including by the present applicants) in the Environment, Resources and Development Court.
The second respondent submits that it was entitled to defend the proceedings to avoid these potential consequences regardless of the merit or otherwise of ground 1. Furthermore, the successful defence of ground 2 involved the expense of calling expert evidence in response to the heritage issues upon which the applicants relied.
The second respondent also submits that a loss on ground 3 would also have had significant consequences. If the Court had found that a further referral to the Minister was required, it could not be foreseen what might be the response to such a referral and what effect that might have on the ultimate decision as to whether or not to grant consent. Accordingly, it was reasonable to defend the position of the second respondent on ground 3 regardless of the merits of ground 1.
The second respondent makes a similar observation in relation to ground 4. If the impugned conditions had been struck down by the Court it is not foreseeable what might have been the response of DAC upon the remittal of the development application. Accordingly, it was reasonable for the second defendant to defend the validity of the conditions regardless of the merit or otherwise of ground 1.
Finally, the second respondent submits that it was reasonable and necessary for it to resist ground 5. This ground was largely based on other grounds that it was reasonably entitled to resist. Additionally, the asserted ground of unreasonableness had been amended to include a complaint about the height of the proposed development. That complaint was rejected by the Court. It was important for the second respondent to oppose the contentions about height regardless of the merit of ground 1. An adverse determination on this issue may have significantly affected reconsideration by DAC on remittal of the development application.
In this light, the second respondent submits that it would not be just to award the applicants the costs of their entire action when they had raised so many discrete and separate grounds and issues upon which they failed. Authorities such as McFadzean v CFMEU would support an award of costs as between the applicants and the second respondent by reference to the grounds and issues upon which they had respectively succeeded.[2] The second respondent submits that the likely result of this approach is that the applicants would be required to pay them a component of their costs by reference to the number of grounds and issues upon which they succeeded. However, the second respondent acknowledges that such an approach would likely to cause great difficulties in the adjudication of costs and would result in more costs being incurred. While a broad axe approach could be adopted with the second respondent being awarded a percentage of its costs, this approach is also not free from difficulty. Thus, the preferable approach, if there is to be any setoff, is for one party to be awarded a percentage of its costs. However, in all the circumstances, the second respondent submits that the most appropriate order is that no order for costs be made.
[2] (2007) 20 VR 250 at [158].
The alternative position advanced by the second respondent is as follows. First, any award of costs in favour of the applicants should be for a small percentage of their overall costs, that reflects the number of issues and grounds upon which they failed. Secondly, any costs order should be made against DAC and the second respondent jointly and equally.
In support of the latter submission, the second respondent notes that although DAC purported to abide the event it did in fact put submissions to the Court that went beyond matters of “… jurisdiction, procedure, specialist case law and such like”.[3] The submissions of DAC covered factual matters, including the inferences that may be drawn. Thus, the second respondent submits that the role adopted by DAC at trial was more akin to that adopted by the relevant tribunal in Fernando v Medical Complaints Tribunal[4] rather than the position adopted by the regulator in Southern Cross Pipelines Australia Pty Ltd v Kenneth Comninos Michael Western Australian Independent Gas Pipelines Access Regulator.[5] In the former case the respondent tribunal sought to have appeals against its decisions dismissed on their merits. The Full Court of the Supreme Court of Tasmania held that by adopting that approach the tribunal had exposed itself to a liability for costs in the event of defeat. In contrast, in the latter case, Em Heenan J observed that the decision maker:[6]
… does not appear to me to be adopting an adversarial role in the sense referred to in the authorities which I have cited. Rather, it is my impression that the first defendant has set out to identify what it was that he has considered and why he considered himself to be entitled to take that view and I do not regard that as trespassing beyond the province recognised for a public official in like circumstances.
[3] R (Davies) v Birmingham Deputy Coroner [2004] 3 All ER 543 at [47] (Brooke LJ).
[4] (2007) 16 Tas R 237.
[5] [2002] WASC 316.
[6] Ibid at [12].
The second respondent submits that there was no basis to relieve DAC from the obligation to make an equal contribution to any costs awarded to the applicants should its primary submissions not be accepted.
Consideration
The Full Court in A, DC v Prince Alfred College Inc (No 2) provided a comprehensive statement of the principles governing the award of costs in cases where a successful party has failed on some issues:[7]
[7] [2016] SASCFC 27 at [5]-[13]. These principles were recently applied by Stanley J in Playford Vineyard Pty Ltd v Wishford Nominees Pty Ltd (No 4) [2020] SASC 204.
[5]The principles governing the exercise of the costs discretion are well established. The Court exercises a judicial discretion with respect to costs in which the general rule is that costs ordinarily follow the event unless there are special circumstances justifying another order. In more recent times, courts more readily modify the general rule recognising that the interests of justice sometimes require a reduction in the costs that would otherwise have been awarded to a successful party when that party has failed on particular disputed questions of fact or law. In Ruddock v Vardalis (No 2), Black CJ and French J summarised the principles as follows:
Within the general discretion of the courts to award costs it is accepted by decisions in both Australian and English jurisdictions that:
•Ordinarily costs follow the event and a successful litigant receives costs in the absence of special circumstances justifying some other order.
•Where a litigant has succeeded only upon a portion of the claim, the circumstances may make it reasonable that the litigant bear the expense of litigating that portion upon which he or she has failed.
•A successful party who has failed on certain issues may not only be deprived of the costs of those issues but may be ordered as well to pay the other parties' costs of them. In this sense “issue” does not mean a precise issue in the technical pleading sense but any disputed question of fact or law.
[6]The modification of the ordinary rule to reflect the way in which particular issues in the litigation are determined is a response to those ‘cases in which issues are raised which unduly extend the time and expense of litigation’.
[7]In Victoria and Master Builders Association of Victoria Ormiston JA explained that in an era of high cost litigation it had become necessary to more often allocate costs according to success on particular issue[s] because ‘regrettably there are many cases in which issues are raised which unduly extend the time and expense of litigation’. Those observations were echoed in Mickelberg v Western Australia by Newens J who referred also to ‘the burdens imposed on the public resources of the Court’ by parties pursuing claims on which they are ultimately not successful.
[8]Just as parties must make a cost benefit and risk analysis decision on whether to bring an action at all, so too must decisions be made about which claims to include within an action. Parties should not be encouraged to add to a claim which has sufficient prospects, in itself, to justify the bringing of an action other claims, of doubtful merit, on the assumption that the costs of pursuing the latter claims will be recovered because of success on the good claim.
[9]In adversarial litigation the parties and their legal advisors carry the primary responsibility for ensuring the cost-effectiveness of litigation because they have a particular knowledge and understanding of the controversy, and the available evidence, which the court cannot know because of legal professional privilege.
[10]It is therefore the responsibility of the legal profession to actively consider the affect of adding doubtful claims, or mounting defences to good claims without any foundation for doing so, on the efficient resolution of the proceedings. In accordance with that duty legal practitioners must give advice on the relative merits of the possible claims and defences and on the cost and time implications of pursuing those claims so that the litigant is in a position to give informed instructions on how to conduct the proceedings.
[11]The authorities to which we have referred make it clear that the rule does not only apply to a ‘precise issue in the technical pleading sense’ but extends to any substantial disputed question of fact or law. There is of course a limit to the dissection of an action which is practicably possible.
[12]On the other hand, the court should not be overly parsimonious in the award of costs to a plaintiff who has won a judgment against a wrongdoer who has denied liability on all of the grounds of the plaintiff’s claim.
[13]There can be no precision in the balancing of the tension between the ordinary rule and its qualification. Much will depend on the extent to which the costs of the litigation of the separate issues can easily be separated out and on the reasonableness of the forensic decision of the successful party to pursue, not only the claims on which he or she succeeded, but also those claims on which he or she failed.
(Citations omitted)

I must apply the principles stated by the Full Court in the Prince Alfred College case in determining the costs question.
The key issue is that the applicants succeeded in persuading the Court that DAC erred by failing to take into account that the eastern boundary of the proposed development did not satisfy the set-back requirement under the Development Plan. Thus, DAC’s decision was quashed. The evidence and submissions in relation to that question covered two broad fields. They were, first, detailed consideration of the plans and related documents. Secondly, whether an inference could be drawn as to what material DAC had considered in arriving at its decision to grant development plan consent.
Grounds 2 to 5 were primarily concerned with a range of issues arising from the State heritage listing of the Newmarket Hotel, the site of the proposed development. The inclusion of the heritage related issues significantly broadened the scope and length of the trial. Moreover, the applicants could have pursued ground 1 in isolation and achieved the same outcome.
Nevertheless, I consider that the applicants did not act unreasonably in pursuing grounds 2 to 5. The various issues raised in those grounds were arguable, albeit that some of the contentions had greater force than others. I also note that there was an absence of judicial authority on important questions raised by the applicants. I refer to the contention relating to the partial demolition of a State Heritage Place and also the submission that proposed future development in the locality was not a relevant consideration in considering contextual issues under a development plan. In contrast, the suggestion that DAC had acted unlawfully by treating permission to intrude into the protected airspace of Adelaide airport as a reserved matter had little merit. However, that was an insignificant part of the overall proceedings.
On balance, and applying a broad brush, having taken into account that the applicants were successful in having the DAC decision quashed but also recognising that they failed on several significant matters, I consider that they should be awarded 60 percent of their costs on a party/party basis.
The further question is whether DAC should be required to pay any part of the costs incurred by the applicants. I have reviewed the oral and written submissions made by counsel for DAC and also note that DAC had stated at the outset that it would abide the event save as to costs. The issue is whether DAC closely adhered to that undertaking. In other words, did DAC stray into becoming an active participant in the proceedings and go beyond the mere provision of assistance to the Court?
Counsel for DAC did provide substantial assistance to the Court on the question of whether inferences could be drawn as to the matters taken into account by DAC, given that it was not obliged to publish reasons for its decision and had not done so. The detailed submissions made by counsel for DAC about that issue were substantially adopted by the second respondent. DAC’s legal team also obtained relevant evidence in the form of an affidavit from Mr Wells, the Principal Conservation Architect with the State Government. While that evidence contradicted in important respects the affidavit of Mr Hegarty, the applicants’ architect, he ultimately accepted the correctness of the factual position as stated by Mr Wells. This relieved the second respondent of the need to obtain that evidence.
I am satisfied that the role taken by DAC in these proceedings did not add in any significant way to the costs incurred by the other parties. I am also satisfied that DAC did not become an adversary in the proceedings (other than in the formal sense). Its role was restricted to providing assistance to the Court on matters of law, fact and administrative procedure. Accordingly, I decline to make any order for costs against DAC.
I will order that the second respondent is to pay 60 percent of the costs incurred by the first, second and third applicants in these proceedings.