Lithgow City Council v Newera Defendo Pty Ltd

[2020] NSWLEC 34

Land and Environment Court

New South Wales

Medium Neutral Citation:	Lithgow City Council v Newera Defendo Pty Ltd [2020] NSWLEC 34
Hearing dates:	On the papers
Date of orders:	24 April 2020
Decision date:	24 April 2020
Jurisdiction:	Class 4
Before:	Moore J
Decision:	See orders at [56]
Catchwords:	EVIDENCE - affidavit material evidence from both parties relied upon for the purposes of costs application - affidavit material not read during substantive hearing - application for restriction on use pursuant to s 136 of the Evidence Act 1995 - restriction appropriate as affidavit material not tested in substantive hearing - restriction ordered (see [10]) COSTS - First Respondent successful in substantive proceedings - First Respondent now seeks costs on the indemnity basis - First Respondent succeeded on different basis to that initially advanced for it - not appropriate to exercise discretion to depart from the position that costs follow the event as agreed or assessed COSTS - First Respondent’s indemnity costs application unsuccessful - costs of costs applications follow the event - First Respondent to pay the Applicant’s costs of the costs application as agreed or assessed
Legislation Cited:	Civil Procedure Act 2005, s 98 Evidence Act 1995, s 136 Lithgow Local Environmental Plan 2014 State Environmental Planning Policy (Infrastructure) 2007, cl 20B(2)(b Uniform Civil Procedure Rules 2005, r 42.1
Cases Cited:	Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359 Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (No 2) [2009] NSWCA 12 Colgate Palmolive Pty Ltd v Cussons (1993) 46 FCR 225 Coroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) (2010) 173 LGERA 280 Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 Engadine Area Traffic Action Group Inc v Sutherland Shire Council [2004] NSWLCE 434 Kovacevic v Abouharb [2008] NSWDC 58 Mead v Watson as Liquidator for Hypec Electronics (2005) 23 ACLC 718 Lithgow City Council v Newera Defendo Pty Ltd [2019] NSWLEC 188 Packer v Meagher [1984] 3 NSWLR 486 Palmer v Gold Coast Newspapers Pty Ltd [2013] QSC 352 Rouse v Shepherd (No 2) (1994) 35 NSWLR 277 Sze Tu v Lowe (No 2) [2015] NSWCA 91 Westfield Management Limited v Direct Factory Outlets Homebush Pty Ltd [No 4] [2005] NSWLEC 168
Category:	Costs
Parties:	Lithgow City Council (Applicant) Newera Defendo Pty Ltd (Respondent)
Representation:	Counsel: Ms J Walker, barrister (Applicants) Mr S Nash, barrister (Respondent)   Solicitors: Pikes & Verekers (Applicant) Holding Redlich (First Respondent)
File Number(s):	250279 of 2019
Publication restriction:	No

TABLE OF CONTENTS

The evidence for this costs application

The Company’s submissions in support of an indemnity costs order

Introduction

Hopeless Case

Abuse of Process

Unreasonable Conduct or “Relevant Delinquency” in the Proceedings

The Council’s submissions opposing an indemnity costs order

Introduction

The need for a cautious approach to indemnity costs claims

Council’s Claim was arguable

Council’s conduct was reasonable

New Evidence filed by Company

Costs of this Motion

The Company’s reply submissions

Consideration

Costs of the costs application

Orders

JUDGMENT

1. HIS HONOUR: In the principal contest in these proceedings, I gave my decision in favour of Newera Defendo Pty Ltd (the Company) (see Lithgow City Council v Newera Defendo Pty Ltd [2019] NSWLEC 188 - my substantive decision). In Order (2) at [68], I proposed that the costs outcome should be:

Unless a party advises my Associate by close of business on 15 January 2020 that that party wishes to be heard to propose some alternative costs order, the Applicant is to pay the First Respondent's costs as agreed or assessed;

2. On 15 January 2020, the Company’s legal representatives notified my Associate that the Company did wish to seek an alternative costs’ outcome to that which I had proposed. The alternative costs’ outcome seeks that Lithgow City Council (the Council) pay the Company's costs on the indemnity basis.

3. The active parties agreed that determination of this costs’ element of the proceedings would be dealt with on the basis of written submissions, with no hearing being required.

The evidence for this costs application

4. Each party provided a Costs Evidence Book for the purposes of this costs application. The Costs Evidence Book filed on behalf of the Company contained a range of material, including affidavit material not read in the course of the substantive hearing. A similar position, broadly, applied with respect to the Costs Evidence Book filed for the Council.

5. It is to be noted that, on the second of the index pages to the Council's Costs Evidence Book, the notation appears:

*In respect to all parts of the affidavits tendered on the costs application, the applicant seeks a direction under s 136 of the Evidence Act 1995 that they are not to be used as evidence of the truth of the matters stated therein. See paragraph [3] of the Applicant's Written Submissions on Indemnity Costs.

6. The relevant portion of the written costs submissions on behalf of the Council on this point was in the following terms:

(3) Evidence relied on in these submissions is contained in the Applicant's Evidence Book (AEB). This evidence book includes two affidavits filed, but largely not read, by the first respondent in the substantive proceedings. It has been necessary to rely on these affidavits to rebut the first respondent's argument that the applicant acted improperly by filing irrelevant evidence or issuing irrelevant notices to produce. The applicant tenders these materials on the costs application solely for the purpose of demonstrating the context in which it took these steps. However, some of the facts stated in these documents are disputed by the applicant. Accordingly, the applicant seeks a direction under s 136 of the Evidence Act 1995 that this material is not to be used as evidence of the truth of the matters stated therein. The basis for this order is to avoid the risk of unfair prejudice if facts stated in these affidavits are admitted into evidence without any opportunity to cross­ examine the deponent.

7. The terms of s 136 of the Evidence Act 1995 are:

136   General discretion to limit use of evidence

The court may limit the use to be made of evidence if there is a danger that a particular use of the evidence might—

(a)   be unfairly prejudicial to a party, or

(b)   be misleading or confusing.

8. It is to be observed that, in the written reply submissions on behalf of the Company filed on 9 April 2020, no opposition was expressed to this submission made on behalf of the Council.

9. Although this direction was sought by the Council with respect to affidavit material contained in the Company’s Costs Evidence Book, I am satisfied that, if such a direction is to be given (as I am satisfied it should be), I am also satisfied that doing so is equally appropriate for affidavit material contained in the Council’s Costs Evidence Book.

10. Having read all of the affidavit material before me in each of the Costs Evidence Books, I am satisfied that it is appropriate to direct (and I so direct) that any affidavit material in either Costs Evidence Book is limited to its use for the purposes of determining this application for indemnity costs and is not to be used for the purposes of establishing the truth of what is asserted therein.

11. This is appropriate as none of this affidavit material was tested by cross‑examination during the substantive hearing.

12. In this context, I note that this is, to some extent, a two-edged sword for the Council - in that this ruling applies, relevantly, to [29] of the affidavit of Mr Andrew Muir of 9 August 2019, the paragraph asserting that the Council had received advice from the Department of Planning that the Council's interpretation of the relevant State Environmental Planning Policy provision was correct in the Department’s view. I therefore disregard this assertion as a proposition potentially capable of supporting the Council’s decision to commence or maintain these proceedings.

13. I also note that no objection was taken by either party to any of the correspondence between the legal representatives contained in either Costs Evidence Book.

14. Although the position noted in [12] above was also adverted to in correspondence (Company’s Costs Evidence Book at Tab 2, Annexure J), this is merely collateral repetition of that which is contained in Mr Muir's affidavit at [29], and is also to be disregarded.

The Company’s submissions in support of an indemnity costs order

Introduction

15. The Company now submits that the costs order should be made on the indemnity basis for three principal reasons. The reasons why the Company says that indemnity costs ought to be ordered are:

1. The substantive case was a “hopeless case”;

2. The substantive case was an abuse of process; and

3. There was unreasonable conduct or “relevant delinquency” in the proceedings.

Hopeless Case

16. The thrust of the reason advanced is that Council’s interpretation of cl 20B(2)(b) of the State Environmental Planning Policy (Infrastructure) 2007 (Infrastructure SEPP) was wrong. This provision deals with the requirements of validity for a complying development certificate (CDC), specifically that they be permissible with consent under an environmental planning instrument. Ms Walker, counsel for the Council, had argued that the provision should be read as if the words “other than this policy” appear after the word “instrument”. Since the solar array was permissible under the Infrastructure SEPP, but not the Lithgow Local Environmental Plan 2014 (LLEP), this interpretation would have the effect of invalidating the impugned CDC. The Company had advanced the plain and ordinary interpretation of cl 20B(2)(b), which would deem the solar array as being permissible under the Infrastructure SEPP. The Company’s interpretation was “undoubtedly correct”, per the substantive judgment (at [37]). Therefore, the Council’s case was hopeless and indemnity costs should follow.

17. The Company relied on the following cases as authority for indemnity costs being ordered for hopeless cases - Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd (No 2) [2009] NSWCA 12 at [4]; Mead v Watson as Liquidator for Hypec Electronics (2005) 23 ACLC 718 at [8]; and Kovacevic v Abouharb [2008] NSWDC 58 at [4].

Abuse of Process

18. The Company contends that the proceedings represented an abuse of process. This claim rests on the assertion that the Council desired to have the matter litigated, so that the operation of cl 20B(2)(b) could be clarified by the Court. The Company cites the Council’s submissions in the substantive proceedings, where they repeatedly highlighted that clarification of the clause through litigation would be in the public interest, as evidence of this claim. This assertion implies that the Council never actually sought to settle the proceedings.

19. The Company put that, ultimately, there was nothing that it could do to extract itself from the proceedings. Through the course of communicating with the Company, the Council made it clear that the only way it could avoid litigation was to lodge a development application or surrender the CDC. This action would represent a full capitulation to the Council, despite there being no merit in the Council’s claim. The Company submits that the Council deliberately did this, so as to use the Company as a test vehicle to have judicial consideration of cl 20B(2)(b). The refusal of the Council to clarify their claim when ambiguity was highlighted supports this conclusion.

20. The Company submits that indemnity costs should be awarded on this separate basis. Litigation was brought for the ulterior purpose either to induce the Company to lodge a development application for a development which did not require one and/or to use the Company as a vehicle for the clarification of the interpretation of cl 20B(2)(b). The Company cites the following cases as authority for indemnity costs being awarded in cases that represent an abuse of process - Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359 at 362-3; Palmer v Gold Coast Newspapers Pty Ltd [2013] QSC 352; and Packer v Meagher [1984] 3 NSWLR 486 at 500.

Unreasonable conduct or “relevant delinquency” in the proceedings

21. The Council widened the scope of the proceedings unnecessarily, and then declined to adduce relevant material in support at the hearing. The only matter dealt with in the substantive proceedings was the construction of cl 20B(2)(b). Notwithstanding the loss sustained by the Council in the substantive proceedings, the Council has continued to place the Company at expense by resisting the costs application. This is allegedly a sound basis for an indemnity costs order, as they are unable or unwilling to admit that their position was incorrect: Rouse v Shepherd (No 2) (1994) 35 NSWLR 277 at 282.

22. The assertion of unreasonable conduct or “relevant delinquency” builds upon all the propositions thus advanced. The fact that the case was hopeless and an abuse of process supports a conclusion that the Council’s opposition was unreasonable in its conduct. Accordingly, the Company’s claim for indemnity costs for the proceedings, should be granted, citing the following cases - Michael Wilson & Partners Ltd v Nicholls [2009] NSWSC 669 at [14]-[21]; and Rouse v Shepherd (No 2) (1994) 35 NSWLR 277 at 282.

The Council’s submissions opposing an indemnity costs order

Introduction

23. The Council advances three bases why costs should only be paid by it on an ordinary basis - these are discussed below. It also opposes the Company seeking to rely on a post facto conversation that took place in conjunction with a meeting of the Council and the Council seeks its costs of this costs application.

The need for a cautious approach to indemnity costs claims

24. The Court should exercise caution when departing from an ordinary costs order: Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359 at 362. The Council concedes that indemnity costs may be awarded in cases where there was no chance of success. This rule is connected with abuse of process principles, such that the proceedings were commenced for an ulterior motive: Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401. The Council contends that the threshold for indemnity costs is higher than that for summary dismissal, as evidenced by the approach of Pain J in Westfield Management Limited v Direct Factory Outlets Homebush Pty Ltd [No 4] [2005] NSWLEC 168. A party does not incur indemnity costs simply because they turned out to be unsuccessful: Colgate Palmolive Pty Ltd v Cussons (1993) 46 FCR 225 at 233.

Council’s claim was arguable

25. The Council contends that the language of the Infrastructure SEPP was not clear. The Council asserts that cl 20B(2)(b) did not unambiguously refer to the Infrastructure SEPP as being included within the phrase “environmental planning instruments”. In cases where there is uncertainty, the Court may adopt purposive considerations to elicit a less than literal construction of the clause. Accordingly, since there was ambiguity, the matter was arguable and it cannot be said that there was no chance of success. Furthermore, the Council was, to some degree, successful. It successfully applied for leave and successfully challenged the invalidity of the first CDC.

Council’s conduct was reasonable

26. The Council also advances four reasons why its conduct ought to be considered reasonable.

27. First, neither party was able to convince the other of their construction of cl 20B(2)(b) prior to hearing. It was therefore necessary to have the matter determined by the Court.

28. Second, litigation cannot be said to be illegitimate or commenced for a collateral purpose because the Council offered the Company a chance to regularise the allegedly unlawful development by way of lodging a development application. The Council believed that a development application was necessary and that the Council needed to act in the public interest to uphold planning laws. The Council conceded that it did not make an offer that fell short of the Company fully capitulating to the Council’s construction of cl 20B(2)(b). However, neither did the Company. It was therefore necessary to engage in litigation.

29. Third, the running of “test cases” is not inherently unreasonable. The authorities show that where there is public interest in a clause being clarified, if clarification contributes in a material way to the proper understanding of the law then costs orders may be declined: Coroona Coal Action Group Inc v Coal Mines Australia Pty Ltd (No 3) (2010) 173 LGERA 280 at [60]; Engadine Area Traffic Action Group Inc v Sutherland Shire Council [2004] NSWLEC 434 at [20]-[24]. This was an appropriate case to be litigated, as its effects were not de minimus and the solar array was subject to complaints by members of the public. The allegation of impliedly bad faith has not been proved and should not be accepted.

30. Fourth, the allegation by the Company that the Council was involved in unreasonable conduct by way of filing unnecessary evidence, issuing unnecessary notices to produce and making an unnecessary request for inspection is without merit. Much of the evidence filed was prepared for the purposes of the question of leave to appeal out of time. The notices to produce were filed to test assertions about notice and delay, with regard to the timing of construction of the solar array. This issue was conceded on the first day of hearing and thus the evidence rendered irrelevant. The request for an inspection was issued when substantial ambiguity arose in regard to the evidence filed by the Company about the distance of the subject development from a neighbouring dwelling. The site inspection was requested to clarify this issue.

New evidence filed by Company

31. This evidence, being the minutes of a Council meeting on 24 February 2020, is irrelevant. Even if it is relevant, it does not assist the Company because it postdates the judgment and the claims are unsubstantiated.

Costs of this motion

32. The Council seeks its costs for this costs application. There are no grounds for indemnity costs being awarded to the Company. Therefore, this application is unreasonable and the Council ought to be compensated for defending it.

The Company’s reply submissions

33. On 9 April 2020, short reply submissions were filed on behalf of the Company. It is fair to observe that these submissions can be characterised as being in two parts. The first part addressed some general elements of the proceedings and my substantive decision and it is appropriate to reproduce them in their entirety:

2   AS[8] - [18] seek to re-litigate the arguments at the hearing. The only question for the Court on this indemnity costs application is whether, in all of the circumstances, it would be appropriate in the exercise of discretion, to award the First Respondent its costs on an indemnity basis. To that end, it is inappropriate, as the Applicant seeks to do, to compartmentalise the arguability of the claim and the reasonableness of the Applicant’s conduct. The circumstances must be considered as a whole.

3   Accordingly, it is the prospects of the Applicant’s claim, consider together with (rather than independent of) the Applicant’s conduct, that informs whether an order for indemnity costs should be made.

4   The Court summarised the position succinctly at Judgment [37], when it observed that the Applicant’s case was argued as if a matter of ‘considerable complexity’, but ultimately found that the matter was not of such type, and that the First Respondent’s position was ‘undoubtedly correct’. The First Respondent submits that the Applicant never had any chance or prospect of success and therefore the circumstances triggering an indemnity costs order are satisfied.

5   That the Applicant ‘should have known’ that its challenge was hopeless is made clear by the content of the various correspondences sent to the Applicant’s solicitor before and during the proceedings from the First Respondent’s solicitor, in which its lack of prospects were expressly highlighted.

34. The elements in [6] and [7] (each containing a number of subparagraphs) of the reply submissions deal with specific responses to elements of the Council’s submissions on this indemnity costs application. It is unnecessary to reproduce those in full or to summarise them. It is appropriate to note that I later set out one specific element of this material ([7](c)) as this is relevant to the specific basis upon which I am satisfied that the Company's application for indemnity costs is to be rejected.

Consideration

35. The presumption in Class 4 proceedings is that costs will follow the event (s 98 of the Civil Procedure Act 2005 and r 42.1 of the Uniform Civil Procedure Rules 2005). In such circumstances, costs are usually awarded on the ordinary basis - that is, as agreed or assessed.

36. However, as was earlier noted, I made provision in my substantive decision in these proceedings for a party to submit that there should be some departure from that rule. As also earlier noted, the Company has now sought that its costs be paid on the indemnity basis.

37. The reasons advanced on behalf of the Company in support of that proposition, and those put on behalf of the Council in opposition to it, have earlier been set out. The matters pressed by the Company, and responded to for the Council, involve a complex array of competing propositions. As I now explain, it is unnecessary to address and resolve virtually all of those competing propositions. Further, it is also unnecessary to address the Council’s objection to the 24 February 2020 transcript.

38. In Sze Tu v Lowe (No 2) [2015] NSWCA 91, Gleeson JA (Meagher and Barrett JJA concurring) said, at [39]:

39   How “the event” should be defined will depend upon the nature of the litigation. Generally the “event” refers to the event of the claim and may be understood as referring to the practical result of a particular claim.

39. The outcome sought by the Company was, functionally, reflected in the orders in my substantive decision. In broad terms, “the event” in these proceedings was that the Company successfully resisted the overall outcome sought by the Council (that there was no valid basis to propose that the Company’s solar array was not able to be approved by way of a CDC and that a development application to the Council was necessary). However, a closer examination of “the event” is necessary for the purposes of triggering consideration of costs’ outcomes in favour of the Company - particularly of the route by which the Company achieved this outcome.

40. I have earlier set out the first five paragraphs of the Company’s reply submissions in these costs proceedings. Although, in [4], these submissions refer to my conclusion in [37] of my substantive judgment, the comments made in that paragraph related to the issue of construction of the relevant provision of the Infrastructure SEPP as the basis for concluding that the second CDC was valid. It is appropriate to reproduce the entirety of [37] of my substantive decision so that this can be understood. It was in the following terms:

Although argued by Ms Walker as if a matter of considerable complexity, I am satisfied that this is not the case and that the position advanced by Mr Nash is undoubtedly correct on a proper contextual analysis of the instrument itself. I set out below why I have reached this conclusion.

41. As can be seen from the context of this paragraph in my substantive decision, it was preambular to my consideration of the interpretation of the relevant, contested provision of the Infrastructure SEPP. The comments in it related entirely to that aspect of the matters in contest and were not general ones relating to the totality of the proceedings.

42. However, for the reasons which follow, the reference to this paragraph in my substantive decision does not provide an adequate explanation of the whole of the way the proceedings unfolded, and how the issues were addressed by each of the parties and resolved by me.

43. Put simply, the Company did not get to the outcome it sought on the basis of the case originally advanced on its behalf concerning the two CDCs that had been issued to it by the private certifier (who was the Second Respondent in the proceedings). This position was summarised in the Council’s written costs submissions by Ms Walker in the following terms:

23   At FRSC [3.3l(r) the first respondent claims that the applicant's rejection of its offer to surrender one of the CDCs shows that there was nothing that (it) could do to extract itself from the proceedings. This discussion is misleading because it fails to mention that the CDC which the first respondent offered to surrender on 20 September 2019 was not the first CDC (which was ultimately found to be invalid) but the second CDC (which was ultimately found to be valid). This offer was based on the assumption that the validity of the first CDC was more readily defensible than the validity of the second CDC. The applicant declined to accept this surrender because, in its view at the time, the surrender was offered on the false premise that there had been two separate CDCs issued, one of which could be surrendered separately from the other.

44. It is to be noted that, by letter dated 20 September 2019, the Company's solicitors wrote to the Council's solicitors. That letter noted that the Company had written direct to the Council on that day and adverted to the fact that a copy of that letter was appended (no copy of that letter appears in the Company’s Costs Evidence Book). However, it is sufficient to quote the second and third paragraphs of that letter. These were in the following terms:

As you can see from our client’s letter, our client does not rely, and has never relied upon the complying development certificate 190024/01 issued on or about 22 April 2019, but also bearing the dates 13 February 2019, referred to as the “Revised CDC” in the Summons filed in the above-mentioned Proceedings (Summons).

To that end, our client voluntarily surrenders the “Revised CDC” pursuant to section 4.63(1) of the Environmental Planning and Assessment Act 1979 (EP&A Act), and clause 97(3) of the Environmental Planning and Assessment Regulation 2000 (EP&A Regulation). This is to narrow the issues outlined in your Summons and will assist with the just, quick and cheap resolution of the real issues in the Proceedings.

45. The Council's solicitors replied by letter dated 30 September 2019. That letter was in the following terms:

We refer to your letter dated 30 [sic] September 2019 and the attached Notice of Surrender of Complying Development Certificate 190024/01.

Council's position, as expressed in the Summons in these proceedings, is that there was no separate CDC issued on 22 April 2019. There was only one, issued on 13 February 2019, which the Second Respondent purported to amend (without any legal basis) on 22 April 2019. Accordingly, the Council cannot accept the surrender of the so-called “revised certificate” without accepting the surrender of the original CDC.

Since we understand the First Respondent has no intention of surrendering that CDC, the Council does not propose to notify the First Respondent on its acceptance of the purported notice of surrender dated 20 September 2019. Instead, it will await the determination of the Court as to the validity of the original CDC.

46. In the Company's Outline of Submissions for trial (filed 5 November 2019, one week prior to the hearing), the following was said, under the heading “Original CDC - summary of the First Respondent's position”:

4   The First Respondent concedes that the Codes SEPP is not and was not a source of power for the issue of the Original CDC, but submits as follows:

a   All complying development under any environmental planning instrument (including the Codes SEPP) must satisfy the requirements cl 1.17A(1) of the Codes SEPP;

b   The Second Respondent acknowledged, and the First Respondent accepts, that the reference to that SEPP was an unintentional and inconsequential error;

c   In any event, it was unnecessary, as a condition of validity of the certificate under the Environmental Planning and Assessment Act 1979 (EPA Act), to expressly specify, on the face of the Original CDC, which environmental planning instrument was relied upon for the issue of the said certificate (see cl 134 of the Environmental Planning and Assessment Regulation 2000 (EPA Regulation);

d   The only relevant enquiry is whether, for the purposes of the EPA Act, the Original CDC authorised complying development, such that a certificate could therefore issue for such development;

e   The proper, and intended, environmental planning instrument reference for the purposes of the Original CDC was to the Infrastructure SEPP;

f   The infrastructure SEPP is and was the (alternative) source of power for the issue of the Original CDC; and

g   The Original CDC is and was, therefore, valid.

5   Accordingly, insofar as concerns the Original CDC, the Applicant is not entitled to any relief.

47. It is also to be noted that, at [9] of the Company's submissions for trial, the Company’s offer to surrender the revised CDC was expressly withdrawn.

48. It is clear from the terms of my substantive decision that I accepted the proposition that the second CDC was valid whilst the first was not. It is unnecessary to traverse, in detail, the path which evolved and which resulted in me determining this.

49. In the Company’s reply written submissions on costs, the element relevant to [23] of the Council’s costs submissions was dealt with in [7](c) in the following terms:

The circumstances involving the First Respondent’s offer to surrender one of the CDCs is entirely irrelevant to the indemnity costs application. In substance, this is conceded in AS[26], despite what is said at AS[22] - [25]. The only way the First Respondent could have extricated itself from the litigation would have been to concede that the Applicant’s construction of cl 20B was correct. As the Court has found, the Applicant’s construction was unsustainable and unmeritorious. The Applicant, simply put, continued to believe that the solar array and the CDCs underlying it were ‘unlawful’. The Applicant was wrong, and decisively so;

50. I am unable to accept the Company's position, as outlined above, as constituting a complete answer to the necessity for a form of adjudicated outcome in circumstances where the Company's position was, at the commencement of the hearing, that the first CDC was valid.

51. Although the Council's position was that both were invalid (and it was unsuccessful in this position), nonetheless, I am satisfied that there was sufficient justification of the necessity for the proceedings in order to determine not merely whether there was a valid basis for the Company's construction of its solar array but, also, if there was such a basis, what was the proper legal foundation for it.

52. The consequence of this is that, although the Company succeeded in obtaining its desired outcome, it did not do so on the basis initially advanced by it concerning the two CDCs.

53. Whilst, on the other hand, the Council's initiation of the proceedings was also flawed (for the reasons explained in my substantive decision), the Council's initiation and maintenance of the proceedings is to be weighed against the fact that the Company's success did not flow from the case as advanced by it and outlined in its written submissions filed a week prior to the hearing.

54. As a consequence, I am satisfied that, on fine balance, it is not appropriate to depart from the ordinary basis for the awarding of costs of the substantive hearing to the Company.

Costs of the costs application

55. Costs of interlocutory applications, such as this costs application, also ordinarily follow the event. There is no discernible basis upon which I should depart from that position here. As a consequence, the Company is to pay the Council's costs of this costs application as agreed or assessed.

Orders

56. It follows from the foregoing that the orders the Court are:

1. The application that the Applicant pay the First Respondent's costs on the indemnity basis is refused;

2. The First Respondent is to pay the Applicant's costs of the costs application as agreed or assessed; and

3. The Costs Evidence Books are returned.

**********

Decision last updated: 24 April 2020