MAINORE PTY LTD & ACT PLANNING and LAND AUTHORITY & CIC AUSTRALIA PTY LTD (Administrative Review)
[2011] ACAT 24
•17 March 2011
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
MAINORE PTY LTD & ACT PLANNING AND LAND AUTHORITY & CIC AUSTRALIA PTY LTD (Administrative Review) [2011] ACAT 24
AT 90 of 2010
Catchwords: ADMINISTRATIVE REVIEW – surrender of development approval by the Party Joined on the commencement day of hearing – the subject matter of the proceeding ceased to exist – dismissal of application under section 56(d) of the ACT Civil and Administrative Tribunal Act 2008 – could the Applicant claim costs of the application that was dismissed because of the Party Joined’s surrender of development approval? – Tribunal’s discretion to award costs under section 48(1) of the ACT Civil and Administrative Tribunal Act 2008- general application of costs orders – presumptive rule about costs orders and departure from the rule – inference that the decision to surrender the development approval was a commercial decision – could “surrender” be taken to be “supervening event”? – did the Party Joined act unreasonably in surrendering the development approval long after the hearing dates were fixed?
List of legislation: ACT Civil and Administrative Tribunal Act 2008 (ACT), ss.32, 48, 49, and 56.
Leases (Commercial and Retail) Act 2001 (ACT), s.154.
Planning and Development Act 2007 (ACT), s.184.
Tenancy Tribunal Act 1994 (ACT), s.52.Victorian Civil and Administrative Tribunal Act 1998 (VIC), s.109.
List of cases: Arthur McWitton Pty Ltd v Perpetual Trustee Co Ltd
(Magistrates Court, 9 March 2005)
Australians for Sustainable Development Inc v Minister for Planning [2011] NSWLEC 33
B & B S Pty Ltd v Law Society of the ACT and Anor
[2010] ACAT 43Digwood and ACT Planning and Land Authority ACTAAT 15
Halliday v Filmlock Ltd [2007] NSWLEC 477
Kiama Council v Grant (2006) 143 LGRA 441
Kingsley’s Chicken Pty Ltd v Queensland Investment Corporation and Canberra Centre Investments Pty Ltd
(Magistrates Court, 11 November 2005)Ku-ring-gai Council v Minister for Planning (No 2)
[2008] NSWLEC 276Latoudis v Casey (1990) 170 CLR 534
Liangis v IPEX ITG Pty Ltd [2005] ACTCA 28
McCullouch and ACT Planning and Land Authority
[2004] ACTAAT 9 (17 March 2004)
Ohn v Walton (1995) 36 NSWLR 77One Tel Ltd v Commissioner for Taxation (2000) 101 FCR 548
Oshlack v Richmond River Council (1997) 193 CLR 72
Port Stephens v Sansom [2007] 156 LGERA 125
Re Alcan Australia Ltd; Ex parte Federation of Industrial Manufacturing and Engineering Employees
(1994) 181 CLR 96
Re Minister for Immigration and Ethnic Affairs: Ex Parte Lai Qin (1997) 186 CLR 622
Save the Ridge Inc and ACT Planning and Land Authority [2004] ACTAAT 16
Transport Accident Commission v O’Reilly and Ors
[1999] 2 VR 436Vero Insurance Ltd v the Gombac Group [2007] VSC 117
Tribunal: Ms L. Donohoe SC, Presiding Member
Mr J. Ashe, Senior Member
Date of Orders: 17 March 2011
Date of Reasons for Decision: 17 March 2011
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) AT 90 of 2010
BETWEEN:
MAINORE PTY LTD
Applicant
AND:
ACT PLANNING AND LAND AUTHORITY
Respondent
CIC AUSTRALIA PTY LTD
Party Joined
TRIBUNAL: Ms L Donohoe SC, Member
Mr J. Ashe, Senior Member
DATE: 17 March 2011
ORDER
1. The party Joined pay the Applicant’s costs of the Application as agreed or taxed at the ACT Supreme Court Scale by a taxing officer appointed by the Registrar of the Tribunal.
2. The application is otherwise dismissed.
3. The applicant and the Party Joined have liberty to apply in relation the implementation of Order 1.
………………………………..
Ms L. Donohoe SC
Presiding Member
REASONS FOR DECISION
On 14 October 2010, the Applicant filed an application for review of a decision of the Respondent made on 17 September 2010 to approve the development application made by CIC Australia Pty Ltd (“CIC”), subject to conditions (the “proceedings”).
On 15 October 2010, the Tribunal directed that the Respondent serve on each interested party a copy of the review application and that any party that wished to be joined make an application within 14 days.
On 29 October 2010, CIC made application to be joined as a party and, on 4 November 2010, the Tribunal made an order joining CIC (the “Party Joined”).
The Proceedings were listed before the Tribunal for directions on 5 and 10 December 2010. On 10 December 2010, the Tribunal made the following directions:
(1)The Applicant is to give a Statement of Facts and Contentions to parties and the Tribunal, by 8 December 2010;
(2)The Respondent (each party joined supporting the Respondent’s position) is to give its Statement of Facts and Contentions to parties and the Tribunal, by 17 January 2011;
(3)Preliminary conference is fixed for 24 January 2011;
(4)The Applicant is to file reply, by 7 February 2011;
(5)Further directions are to be given on 16 February 2011;
(6)The hearing is to start on 21 February 2011; and
(7)The parties are to give of a list of authorities two days prior to the hearing.
The Applicant’s hearing for review was listed for ten hearing days.
On 8 December 2010, the Applicant sought and was granted an extension of time until 10 December 2010 in which to file the remainder of its evidence and material. On 10 January 2011, the proceedings were listed for return of subpoena. On 17 January 2011, the Respondent sought and was granted an extension of time until 18 January 2011 in which to file its evidence and materials.
On 17 January 2011, the Party Joined filed its Statement of Facts and Contentions. On 19 January 2011, the Respondent filed its Statement of Facts and Contentions. A preliminary conference took place between the parties on 24 January 2011.
On 3 February 2011, the Applicant sought an extension of three days in which to file its evidence and material. The Respondent did not oppose the application. The Party Joined did not consent to the extension of time sought. On 9 February 2011, the Applicant was granted an extension of time for the filing of its remaining evidence and materials until 10 February 2011.
On 10 February 2011, the Tribunal made an order for the issue of a subpoena on the Applicant’s application. On 11 February 2011, the Applicant filed its Statement of Facts and Contentions.
On 16 and 17 February 2011, the Applicant filed further evidence and materials. It is relevant to set out the nature and extent of the evidence and material filed by the Applicant, the Respondent and the Party Joined.
The Applicant:
·Notice of Application for Review;
·Statement of Facts and Contentions;
·Statement of Facts and Contentions in reply;
·Bundle of documents;
·Bundle of documents in reply; and
·Bundle of documents obtained under Freedom of Information Act 1989;
Experts:
·Two statements of Mr Shoobridge with attachments, Civil Engineer;
·Two statements of Mr Adams, Town Planner;
·Statement of Mr Scholtens with attachments, Landscape Architect;
·Statement of Mr Millman with attachments, Architect;
·Statement of Mr Lowe, Town Planner; and
·Statement of Mr Dickson.
The Party Joined:
·Statement of Facts and Contentions;
·Bundle of documents;
Experts:
·Statement of Mr Brimson; Traffic Engineer
·Statement of Mr Lowe, Town Planner;
·Statement of Mr Hobbs, Landscape Architect;
·Statement of Mr Allpress, Surveyor; and
·Statement of Mr Tait, Architect.
The Respondent:
·Statement of Facts and Contentions;
·Notice of Decision;
·Statement of Findings;
·Various copies of relevant correspondence (letters and emails);
·Maps and plans; and
·Statement of Rumana Jamaly (ACTPLA).
At or about 16 or 17 February, the Party Joined and the Applicant filed comprehensive lists of authorities on the question of the standing of the Applicant to seek review of the Respondent’s decision. This was a discrete threshold question of law. The Respondent made no submissions and nor did it file any authorities or argument on the question of law.
In contrast to the extent and nature of the evidence relied upon by the Applicant and the Party Joined, the only expert evidence relied upon by the Respondent was the evidence of one of it’s officers whose comments were based upon the supporting documents to the development application lodged by the Party Joined and the T documents filed. Moreover, the officer, in her evidence, expressly adopted and incorporated the Respondent’s Decision and Findings of Fact. That was the extent of the Respondent’s defence of the Decision. Its position might reasonably be described as “neutral” in the sense that it did not take an adversarial stance by filing any independent expert evidence to support the Decision. Nor did the Respondent file any authorities on the question of law. In those circumstances, it is reasonable to assume that the Respondent’s position regarding the legal question of standing might have been similarly “neutral”. The substantial contest was therefore between the Applicant and the Party Joined. It is a trite observation that both these parties were property developers with competing commercial interests.
The tenor of the evidence and the materials relied upon by both the Applicant and the Party Joined was adversarial. Although there is no question that these proceedings were an administrative review and were not curial in nature, they did however, as is evident from the foregoing observations, have some of the features of an inter partes commercial dispute.
On 21 February 2011, the matter was called on for hearing. The Party Joined, through its counsel, advised the Tribunal that it had, on that day, given formal notice to Respondent of its intention to surrender its development approval pursuant to s 184 (2) (d) of the Planning and Development Act 2007, giving as its reason the intention of the Party Joined to lodge a new development application. This, of course, was a course of action that was always open to the Party Joined. Indeed, it was a course of action that was always open to the Party Joined at any time after notification of the granting of its development approval.
Section 184 (2) (d) of the Planning and Development Act 2007 provides:
End of development approvals other than lease variations
(2) A development approval to which this section applies ends
if—
(d) the approval holder surrenders the approval to the
planning and land authority;
Through its counsel, the Party Joined contended that, once evidence of lodgement and acknowledgement of the s 184 (2) (d) surrender notice was before the Tribunal, the Tribunal should, on the application of the Party Joined, dismiss the proceedings pursuant to its power to do so provided for in s 32 (2) (b) of the ACT Civil and Administrative Tribunal Act 2008 (the “Act”). Section 32 provides:
Frivolous and vexatious applications
(1) This section applies if—
(a)the tribunal considers an application is frivolous or
vexatious; or
(b)a person who has made an application to the
tribunal has been dealt with as frivolous or vexatious by a court or tribunal in Australia.
(2) The tribunal may, by order, do 1 or more of the
following:
(a) refuse to hear the application;
(b) dismiss the application;(c)direct that the person who made the application not
make a subsequent application to the tribunal of the kind stated in the direction—
(i) within a stated period of time; or
(ii) without the leave of the tribunal.(3) The tribunal may make an order under subsection (2) on
its own initiative or on application by a party.
(4) The tribunal may vary or revoke a direction given under
subsection (2) (c)—
(a) on its own initiative; or
(b) on application by the person who is the subject ofthe order.
Note The tribunal must observe natural justice and procedural fairness (see s 7). (emphasis added)
That was so, it was submitted by counsel for the Party Joined, because the proceedings for review of the decision to grant the development application had been rendered futile by the surrender. Counsel provided authorities to support that contention.[1]
In the meantime, the Tribunal heard oral submissions from counsel for all parties in relation to the application made by the Party Joined that the proceedings should be dismissed, pursuant to s 32 (2) (b) of the Act because the development approval, following surrender, had come to an end and that consequently, the proceedings for review of it were futile.
In due course, such evidence of lodgement and acknowledgement of the notice was made available to the Tribunal and the Tribunal was satisfied that the development approval, the subject of the proceedings, had been surrendered.
After considering the submissions made on behalf of all the parties, the Tribunal was satisfied that development approval did not need to have taken effect before it could be validly surrendered. The development application of the Party Joined had been approved by the Respondent on 17 September 2010 and it remained in force until the Tribunal confirmed, varied the respondent’s decision or made a substitute decision.[2] No orders of that nature would be made, as the subject matter of the proceedings had ceased to exit.
[2] s 178 (1) (a) and (b) Planning and Development Act 2007
The Applicant foreshadowed an application to formally discontinue the proceedings, presumably by withdrawing its Application for Review, following the Tribunal’s consideration of the question of costs, which counsel for Applicant, foreshadowed would be made.[3] The Tribunal has power to dismiss the Application pursuant to either section 32 (2) (b), the frivolous and vexatious ground or section 56 (d) of the Act, where, for example, the Application for Review is withdrawn.
[3] T (transcript) 15.13 – T15.23.
Section 56 (d) of the Act provides:
Other actions by tribunal
The tribunal may, by order—
(d) take any other action in relation to an application—
(i) that the tribunal considers appropriate; and
(ii) that is consistent with this Act or an authorising law.
Examples
1 an order dismissing a proceeding on the withdrawal of the
applicant.
2 an order dismissing a proceeding for want of prosecution.
It is the view of the Tribunal that the appropriate statutory mechanism for
dismissing the Application in these circumstances is to be found in section 56(d) of the Act.
On 22 February 2011, the proceedings were again before the Tribunal. The Applicant sought costs from the Party Joined. The Applicant sought a costs order in the following terms:
The party Joined pay the Applicant’s costs of the Application as agreed or taxed at the ACT Supreme Court Scale by a taxing officer appointed by the Registrar of the Tribunal.
The applicant and the Party Joined have liberty to apply in relation the implementation of Order 1.
Counsel for the Applicant submitted that orders in similar terms had been made by the Tribunal in B & B S Pty Ltd v Law Society of the ACT and Anor. [4] He is correct.
[4] [2010] ACAT 43
The Party Joined opposed the application. On that day, the Tribunal heard oral submissions from both the Applicant and the Party Joined on the question of costs. The Respondent did not, apparently, wish to be heard. The Tribunal also received written submissions from counsel on behalf of the Applicant. Before adjourning the proceedings, the Tribunal made directions in relation to the filing of further written submissions by both parties regarding the question of costs. In accordance with the directions, the Party Joined filed written submissions, supplementing oral submissions made on its behalf and the Applicant filed further written submissions in reply supplementing oral submissions made on its behalf.
Before dealing with the relevant statutory power to make an order for costs in these circumstances and the principles to be applied, it is helpful to deal with the some oral submissions relating to the surrender by the Party Joined of its development approval and the timing of the decision of the Party joined to do so.
It was submitted by counsel for the Applicant that the surrender of the development approval had been made with no notice of it to anyone until the morning of the first day of a ten day hearing and that no explanation, proper or otherwise, had been given for why that course had been adopted why it had been adopted so late. [5]
[5] T20.20.14 – T21.30
It was further submitted by counsel for the Applicant that the conduct of the Party Joined had rendered nugatory the whole of the substantial expense incurred by the Applicant in preparing its case for hearing, an amount, said by counsel for the Applicant, to be in the order of at least $150,000.[6] There was no evidence tendered to support this quantum of costs. However, the Party Joined did not cavil with that estimate of quantum in either oral or written submissions.
[6] T21.12 – T21.15
The precise or otherwise quantum of the costs incurred by the Applicant in respect of its preparation for the hearing of the proceedings is not a matter, of itself, in respect of which the Tribunal is concerned. Suffice to say however, that the Tribunal accepts that a substantial amount of money was expended by the Applicant in preparing for a ten-day hearing in these proceedings. The fact that a substantial amount of the Applicant’s money has been realistically and effectively wasted or thrown away by the conduct of the Party Joined may, however be a factor or circumstance that the Tribunal considers, if it comes to the view that it is empowered to make a costs order as sought by the Applicant.
In relation to the decision by the Party Joined to surrender its development approval and an explanation as to why that course was adopted and, more importantly, why it was adopted so late, the following was said on behalf of the Party Joined:
MR TOPFER: Thank you. As I said, the application is opposed. The application’s put pursuant solely to subsection (1) of section 48 of the ACAT Act. And as I understand it, it’s not suggested, nor could it be suggested in my submission, that subparagraph (2) might apply. It’s clear, in my submission, that the prima facie or default position which is created by section 48 subsection (1) is that this is a no costs jurisdiction. Previous cases have used expressions such as default position. And in my submission, the circumstances in which the tribunal would exercise the discretion which it has under subsection (1) to make an order for costs would only be in the most extreme cases.
MEMBER DONOHOE: Why isn’t this one?
MR TOPFER: Well, this is not one because the course of action which has been taken by the party joined to surrender the approval which it had is a course of action which was open to it and which it was entitled to take. In effect - - -
MEMBER DONOHOE: Indeed, why couldn’t it have taken it earlier?
MR TOPFER: It could have, had it decided to do it earlier.
MEMBER DONOHOE: Well, why didn’t it?
MR [TOPFER]: Well, because - I don’t know that there’s an answer to that question, and I don’t wish to sound disrespectful. But the position is that it made the decision that it did not wish to proceed with the development application that it had the day before the hearing, over the weekend, and notified the tribunal and the parties accordingly……[7]
[7] T22.14 – T22.43
MEMBER DONOHOE: …….And the thing that I am troubled by, Mr Topfer, is the lateness of your client’s surrender, rendering their proceedings futile. It’s the very lateness of it and the fact that a great deal of money has been expended in preparing the case. There seems to me to have been really no explanation, or no reasonable explanation, beyond the fact that your client woke up one day and decided to surrender [the development approval]. That presents us with some difficulties and that’s really what I’d like you to address.
MR TOPFER: Well, I think the response to that is to put it this way. As I said before, the party joined is entitled to surrender its development approval. Surrender doesn’t amount to an acknowledgement that the development approval was wrongly granted. It does nothing more than reflect the fact, as is stated in the surrender form, that a decision has been taken that the party joined wishes to submit a fresh development application.
Now, it could have said - I withdraw that. And with respect, the party joined doesn’t - ought not be put in a position where there seems to be a view that it needs to provide some other explanation other than that it has made a decision that this is a course of action that it wants to take and that it’s implemented that decision.
MEMBER DONOHOE: It’s the timing of the decision really that troubles us, Mr Topfer.
MR TOPFER: It would undoubtedly have been - undoubtedly? It would have been preferable for all parties had the decision been taken three months ago. I don’t dispute that but the reality is that it wasn’t. But the fact that it wasn’t taken earlier than it was taken is not, in my submission, a matter which would amount to or lead to a penalty by the tribunal by the imposition of some costs order.
MEMBER DONOHOE: But why is it a penalty when the Act clearly contemplates a discretion to do precisely that? Why is that a penalty?
MR TOPFER: It’s a penalty because - perhaps it’s an unfortunate word but in my view it’s a penalty because it is a power which, in my submission, the tribunal has a discretion to exercise in extreme circumstances and in my submission this isn’t such a circumstance. Those are my submissions.[8]
(emphasis added)
COSTS – STATUTORY POWER
[8] T25.25 – T26.19
Sections 48 and 49 of the Act provide:
48 Costs of proceedings
(1)The parties to an application must bear their own costs unless this Act otherwise provides or the tribunal otherwise orders.
(2) However—
(a)if the tribunal decides an application in favour of the applicant—the tribunal may order the other party to pay the applicant the filing fee for the application; or
(b)if the tribunal considers that a party to an application caused unreasonable delay or obstruction before or while the tribunal was dealing with the application—the tribunal may order the party to pay the reasonable costs of the other party arising from the delay or obstruction; or
(c)subject to section 49, if a party to the application contravenes an order of the tribunal—the tribunal may order the party to pay the costs or part of the costs of the application to the other party; or
(d)if the application is an application for review of a decision under the Heritage Act 2004, the Planning and Development Act 2007 or the Tree Protection Act 2005, and the tribunal makes an order under section 32 (2) (Frivolous and vexatious applications)—the tribunal may order the applicant to pay the reasonable costs of the other party arising from the application.
(3)For subsection (2) (d), reasonable costs of the other party arising from the application include reasonable legal costs but do not include holding costs.
49Costs for contravening an order
(1) The tribunal may award costs against a party for contravening
an order under section 48 (2) (c) only if satisfied that it is in the
interests of justice to do so.
(2)In deciding whether it is in the interests of justice to award costs, the tribunal must consider the following:
(a)whether the contravention was deliberate or could easily have been avoided;
(b)whether (and if so, the extent to which) the contravention has affected the tribunal’s ability to hear the application promptly;
(c)the importance to the community of people being able
to afford to bring applications to the tribunal.
(3)The tribunal may consider any other relevant matter.
(4)Costs are payable in accordance with the scale of costs in the rules under the Court Procedures Act 2004 applying in relation to the Supreme Court.
(emphasis added)
CONSTRUCTION OF SECTION 48 (1) OF THE ACT
Counsel for the Party Joined submits that the Tribunal does not have the power to make the costs order sought by the Applicant.
The Tribunal regards the language of sections 48 and 49 as being patently clear. The opening words of section 48 recite the general rule for proceedings in these jurisdictions, namely, the prima facie or presumptive rule that the costs will lie where they fall. The section then goes on to provide particular and limited instances in subsection (2) where departure from the prima facie or presumptive rule may be permitted. The concluding words of section 48 (1) then provide for a general power to “otherwise order” costs.
Counsel for the Party Joined argues that the Act does not otherwise provide
for an award of costs for the purposes of section 48 (1). The Tribunal is not
persuaded by that submission. The words otherwise provides are plainly a reference to section 48 (2) and 49. If they were not, then those words would be referable to nothing.
As to the power to otherwise order costs, counsel for the Party Joined submits that section 48 (1) should be given a narrow construction. That is so, she submits because to construe the section otherwise would give the Tribunal a general power to make costs orders leaving the opening words of section 48 (1) and 48 (2) with no work to do. The Tribunal is not persuaded by that submission.
The opening words of section 48 (1).. the parties to an application must bear their own costs… are the starting point or presumptive rule. It is in that context that the power to ..otherwise order.. is conferred. There are no additional words of limitation or qualification.
Section 48 (2) provides limited circumstances in which the presumptive rule might be departed from. The Tribunal accepts the submission made by counsel for the Applicant that the relationship between section 48 (2) and the concluding words of section 48 (1), otherwise order, is that where one of the circumstances provided for in section 48 (2) applies then the power to otherwise order could not be exercised inconsistently with the circumstances specified in section 48 (2). However, besides those circumstances specified in section 48 (2), the Tribunal regards the discretion to make a costs order as otherwise unfettered.
Outside those matters specified in sections 48 (2) and 49, the Legislature has seen fit to confer a wide discretion on the Tribunal to make a costs order in circumstances where the Tribunal determines that it is appropriate to depart from the prima facie or presumptive rule.
PRINCIPLES
In determining how the Tribunal will approach the question of the operation of s 48 (1) of the Act, it is helpful to examine recent cases in which analogous or similar costs provisions have been dealt with. However, before turning to those cases some observations of general application to costs orders are made.
In Latoudis v Casey (1990), Mason CJ said:[9]
[9] 170 CLR 534 at 542-543
If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings…”
In Ohn v Walton, Gleeson CJ said:[10]
….. When legislation confers a power to order costs it is, in the absence of any contrary indication, to be understood as a power to be exercised for that purpose.
…
…The usual rationale of making a costs order is that it is just and reasonable that the successful party should be reimbursed for costs incurred…
[10] (1995) 36 NSWLR 77 at 79
Latoudis was a case in which summary criminal proceedings were terminated in favour of a defendant who ordinarily might have expected to receive compensation for costs. In that that case, the High Court resolved a conflict of legal authority in that respect.
40. In Ohn, the New South Wales Court of Appeal considered the question of whether, upon dismissal of a complaint against a medical practitioner following an inquiry pursuant to the Medical Practitioners Act 1938 (NSW), the Medical Tribunal had erred in declining to award costs against the complainant. The Tribunal in that case had unfettered power to award costs.
In Ohn, an analogy was made between the Medical Tribunal and a court where it was suggested by Powell JA that the Medical Tribunal was… strongly analogous to a court in the conventional sense and that …the principles which are to guide the Tribunal in the exercise of its discretion to award costs should be akin to those applied by [a] court in similar cases…(at 81).
However, those general principles in Latoudis and the observations in Ohn require some qualification. It is, as Tadgell JA in Transport Accident Commission v O’Reilly and Ors[11]said, less evident that those principles are necessarily of general application to any and all proceedings. He said:
It is one thing to say that the principles enunciated in Latoudis v Casey are of general application to analogous cases, but it is another altogether to say that all cases requiring the exercise of a discretionary power to award costs are analogous to that case. Manifestly, they are not…
[11] [1999] 2 VR 436 at 442
Oshlack v Richmond River Council[12]was a case involving an appeal from the New South Wales Court of Appeal which upheld an appeal from a decision of the New South Wales Land and Environment Court where that court had refused to order the unsuccessful applicant objector to pay the costs of the developers and the council.
[12] (1997) 193 CLR 72
In that case, the majority, Gaudron and Gummow JJ (jointly) and Kirby J distinguished Latoudis confining and circumscribing its application to cases of its own kind. More generally, Gaudron and Gummow JJ denied any absolute rule with respect to the exercise of a wide statutory power as to costs to the effect that, in the absence of disentitling conduct, costs will follow the event.[13]
[13] at paragraph [40]
Their Honours also denied any rule that there was no jurisdiction to order a successful party to bear the costs of the unsuccessful party.[14] There was, they said, no absolute proposition that the sole purpose of a costs order was to compensate one party at the expense of the other. Their Honours authorized a construction of a wide statutory discretion as to costs by reference to the species of litigation.[15]They said: “..the discretion it confers is to be exercised so as to allow for the varied interests at stake in such litigation.” Gaudron and Gummow considered the nature of that litigation which were proceedings brought by an objector against the authorizing council and the developer.
[14] at paragraph[43]
[15] at paragraph[45]
Similarly, in Oshlack, Kirby J said[16] that the compensatory principle in awarding costs could not be regarded as an absolute rule, otherwise the discretion conferred in unqualified terms would be shackled and confined. To do so would be incompatible with the statutory language. He said:
Therefore, although there are "rules” or ordinary principles which will guide the donee of power in the exercise of the discretion, they cannot extinguish the element of discretion. They must not be allowed to harden into rigid or inflexible requirements.
[16] at paragraph [134]
A consideration of the circumstances of this case therefore must start with the presumptive rule that each party must bear their own costs. It is in that context that the power to make an order for costs is conferred in the broadest of terms namely, where the Tribunal otherwise orders. In Port Stephens v Sansom[17] Spigelman CJ was considering Part 16, rule 4 (2) of the Land and Environment Court Rules which provided:
[17] [2007] 156 LGERA 125 at [48]
(2) 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.
His Honour said: [18]
[18] at paragraph [48] – [52]
There is no restriction other than rationality, on the scope of the considerations relevant to the formulation of that judgement. However, those considerations must be, in the opinion of the first instance judge, of sufficient weight to overcome the presumptive rule.
The question is whether, despite the basic rule, in the particular circumstances of the case, it would be fair and reasonable that a party should be reimbursed for the costs it incurred….
Although it would be more accurate to describe the formulation - “fair and reasonable” – as calling for a judgement to be made, rather than as a discretion to be exercised, the evaluative process can be accurately described as conferring a wide discretion….
When Parliament confers such a broad discretion on a court it intends that the process of evaluation is in fact undertaken by the repository of the power. However, the intention of Parliament particularly when conferring such a power on a court, is to ensure that the power will be exercised judicially and consistently, so that the result does not depend on idiosyncratic views. Although a judicial officer exercising a merits review jurisdiction stands in the shoes of a primary decision maker, s/he cannot behave in the same way as an administrator. A court is required to manifest a high level of impartiality, independence and consistency in decision-making.
In the interests of consistency in decision-making in respect of statutory
powers to award costs, it permissible to develop principles or guidelines, without which completely unfettered exercises of discretion might lead to inconsistent results; Latoudis v Casey.[19]
[19] Per Mason CJ at 541
However, it is not permissible to adopt a guideline or principle that is entitled to presumptive or determinative weight, such as, on the one hand, the discouragement principle which is the underlying rationale for the “default” position or rule in section 48 (1) of the Act and, on the other hand, where proceedings in an administrative review setting resemble a conventional commercial adversarial dispute. As Spigelman CJ said in Port Stephens v Sansom:[20]
The adoption of either approach in a rigid way would constitute an impermissible restraint on the formation of the broadly based evaluative judgment for which the rule provides. Principles or guidelines for the process of formulating such a statutory judgment may be developed, particularly in order to promote consistency in decision-making, so long as those principles and guidelines are not treated as rules and accepted to be indicative only.
[20] at paragraph [55]
Analogous issues have recently been considered in a costs case concerning
similar provisions relating to costs in the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (the “VCAT Act”) is Vero Insurance Ltd v the Gombac Group.[21]
[21] [2007] VSC 117
In Vero, the Victorian Supreme Court was considering section 109 of the
VCAT Act. The issue in Vero considered by Gillard J turned upon a VCAT precedent as to costs which suggested that a costs order should not be made in a case that was an administrative review, but was more likely to be made if the proceedings were an “inter partes commercial dispute”.
While the two provisions are similar, section, 48 (1) of the Act may differ
slightly from section 109 of the VCAT Act. If there is a difference, nothing turns upon it for present purposes. Section 109 of the VCAT Act, like section 48(1) of the Act established a basic or “default” rule that each party pay its own costs of a hearing before VCAT, subject to the Tribunal’s power to make an order for costs if it was satisfied that it was fair to do so having regard to a number of matters culminating in any other matter that the Tribunal considers relevant.
Similarly, section 48 (1) of the Act provides the Tribunal with a starting point
or presumptive rule that each party must bear their own costs. That presumptive rule is qualified by the proviso, unless this Act otherwise provides. The Act, as we have said above does otherwise provide in section 48, subsection 2 and section 49. The departure from the presumptive rule permitted in subsection (2) and section 49 is prescribed, limited and, for the most part, generally speaking, relates to the conduct of a party to the proceedings. Subsection (2) of section 48 and section 49 are not dissimilar to section 109 (3) and (4) of the VCAT Act.
However, the concluding words of section 48 (1), or the Tribunal otherwise orders, then confers upon the Tribunal a discretion which may be exercised in addition to but not inconsistently with those set out in section 48 (2) and section 49 of the Act. The closing words of the provision confer upon the Tribunal a very wide discretion granted by the Legislature of the kind to which Spigelman CJ referred in Port Stephens v Sansom.
What is important in the Tribunal’s view is that, in considering what guidelines are to be applicable to the wide discretion provided for in the concluding words of section 48 (1), no particular focus, such as the nature of the proceedings is to be necessarily of determinative or presumptive weight.
Relevantly, in Vero, Gillard J said:[22]
Section 109 of the VCAT Act gives jurisdiction to the Tribunal to order costs in certain circumstances. Whether or not it does so is a matter of discretion and the result is a discretionary order. When a decision making body is exercising authority to reach a discretionary decision, it is open to the body to establish or rely upon an established guideline with respect to the exercise of the discretion. However, it must be emphasised that the rule is a guideline and only a guideline. This means that it must give way if circumstances dictate. It is sometimes said, especially by appellate courts, that the application of some preconceived principle is a fetter on the discretionary jurisdiction and is not lawful. Sometimes that is the case. But the law permits the application of a guideline or a policy decision to resolve a dispute, provided it is recognised that the application of the guideline or policy may have to give way where the circumstances dictate so.
A guideline is often laid down in respect to particular proceedings based upon previous applications and leading to particular results. In other words, if a similar application is made, then based upon experience in previous similar matters, one would expect the same result. The advantage and benefit of such a guideline is that it provides a degree of certainty as to the outcome of a proceeding, and importantly, provides guidance to the parties concerned and their advisers. However, any such guideline is subject to different circumstances and it is important that the decision-making body concerned bears in mind that the guideline is nothing more than a guideline, and must give way if circumstances dictate. In other words, it does not shut out any party arguing that the guideline should not be applied.
[22] at paragraph [28] and [29]
The Tribunal concludes that it has a power to award costs pursuant to section 48 (1) of the Act. In applying the wide discretion conferred upon the Tribunal in the concluding words of section 48 (1), the Tribunal must first, while having regard to the guidelines, not apply them slavishly, as if they were hard and fast rules and, secondly must be satisfied that there are circumstances or matters of sufficient weight which justify a departure from or overcome the presumptive rule and that it is fair, reasonable and or just to do so.
Finally, the Tribunal does not accept the oral submission made on behalf of the Party Joined that the Tribunal should place a significant qualification on the power to award costs provided for in the closing words of section 48 (1) of the Act. It was variously submitted that the Tribunal would only make such an order, departing from the presumptive rule in the most extreme case; [23]and, again only in very severe and very extreme cases.[24]The potential to exercise the discretion was variously described as a penalty[25] and as a severe sanction.[26] In short, the tenor of the submission was that costs should only be awarded in exceptional circumstances.
[23] T22.24
[24] T24.38
[25] T23.38
[26] T24.40
A test of exceptional circumstances would be an unacceptable fetter on the discretion. It is not justified. It would create a higher hurdle for departure from the presumptive rule. Again and for emphasis, as Spigleman CJ said in Port Stephens v Sansom,[27] there is no restriction, other than rationality, on the scope of considerations relevant to the formulation of the judgement on whether or not to exercise the discretion. Those considerations must be of sufficient weight to overcome the presumptive rule.
[27] at paragraph [48]
Some concluding observations in relation to the scope of the discretion are made. They are helpful observations. They are not determinative of the question. The predecessor of this Act, the Administrative Tribunals Act 1989, did not generally permit costs orders. The language and indeed the words of
section 48 (1) of the Act therefore represent a departure from the earlier legislative scheme. The drafters, have included in the new legislative scheme a provision which encompasses a broadly based evaluative judgement or, in other words, the exercise of a wide discretion as we have described above.
Similar provisions to section 48 (1) of the Act however, were not unknown in the ACT. Section 52 of the Tenancy Tribunal Act 1994 provided:
The parties to a hearing shall bear their own costs unless the tribunal orders otherwise.
Section 154 of the Leases (Commercial and Retail) Act 2001 which replaced the Tenancy Tribunal Act provided:
The parties in a proceeding under this Act must bear their own costs unless the Magistrates Court or the Supreme Court makes an order about costs.
These provisions had, over the years developed a well-established interpretation in the jurisdiction that mostly dealt with these matters. His Honour, Magistrate Burns, described the discretion provided for in section 154 of the Leases (Commercial and Retail) Act 2001 in determining whether the individual circumstances of a particular case called for an award of costs as broad.[28] Nor, according to Magistrate Burns, was the Court required to identify special or exceptional circumstances in order to make a costs order. The Court must, he said, be satisfied that there were cogent reasons for departing from the usual rule.[29]
[28]Arthur McWitton Pty Ltd v Perpetual Trustee Co Ltd ((Magistrates Court,
9 March 2005) at [3]
However more importantly, the Court of Appeal considered section 154 of the Leases (Commercial and Retail) Act 2001 in Liangis v IPEX ITG Pty Ltd.[30] There the Court, Higgins CJ, Crispin P and Selway J held:[31]
Whilst the discretion implicit in this provision is not constrained by any requirement that special or exceptional circumstances be demonstrated, there must be some identifiable factor or factors sufficient to justify a departure from the normal rule.
[30] [2005] ACTCA 28
[31] at paragraph [5]
The Tribunal notes the observations made by counsel for the Applicant contained in his written submissions that, in small jurisdictions such as the ACT, where questions as to costs in specialist jurisdictions such as this jurisdiction are of considerable political significance, the presumption that where the legislature repeats words which have been the subject of judicial interpretation, it is taken to have intended the words to bear the meaning judicially attributed to them.[32]
Finally, in an oral submission of almost in terrorem character, it was submitted on behalf of the Party Joined that the Tribunal risked setting an unfortunate precedent by making such a costs order as sought, as it would act as a disincentive to matters such as this being resolved.[33] The Tribunal does not share that view. Costs orders in appropriate circumstances would more likely than not act as an incentive for parties, like the Applicant and the Party Joined to resolve matters such as this.
APPLICATION OF SECTION 48(1) IN THIS CASE
[33] T24.7
Counsel for the Party joined submitted that, if the Tribunal has the power to make the costs order as sought by the Applicant, which we have concluded it does, then the proper application of the principles governing the exercise of the power is that no order for costs be made. The Tribunal is not persuaded by that submission.
Had the proceedings gone on to conclusion and the Applicant been successful, then, in the usual course and in the absence of section 48 (2) considerations or additional considerations that may have warranted a departure from the presumptive rule, the presumptive rule would have been applied. But that is not what occurred in this case.
The circumstances of this case are distinguishable from conventional discontinuance cases. It is, as submitted by counsel for the Applicant, far removed from a case where there has been a resolution of the underlying dispute or where the supervening event, the surrender of the development approval was outside the control of the parties. This was a decision by one party to the proceedings to exercise a power that had the effect of extinguishing the subject matter of the proceedings.
In this case the Party Joined surrendered its development approval, not metaphorically speaking, at the eleventh hour, but at the gong of midnight. With no explanation offered in relation to the prejudicial timing of the surrender except that, perhaps in hindsight, it would have been preferable for all parties if the decision to surrender the development approval had been taken three months ago,[34]it is reasonable to infer that the decision to do so and its timing was a commercial decision. It is an unremarkable observation that commercial decisions are not risk free.
[34] T26.5
Counsel for the Party Joined submitted that Halliday v Filmlock Ltd[35] was authority for her contention that the proper order to be made by this Tribunal should be that there be no order as to costs. In that case, an extra curial occurrence namely, the surrender of development consent, after settlement between the parties and the lodgement of a new development application, which addressed the substance of the applicant’s complaint in respect of it, did not amount to “surrender” in relation to the litigation. The surrender of the consent was a supervening event, which extinguished the subject matter of the proceedings. In that case, there was no order as to costs. However, that case is plainly distinguishable from the circumstances of this case.
[35] [2007] NSWLEC 477
In Re Minister for Immigration and Ethnic Affairs: Ex Parte Lai Qin[36]
[36] (1997) 186 CLR 622 at 624 to 625
McHugh J said:
In an appropriate case, a court will make an order for costs even when there has been no hearing on the merits and the moving party no longer wishes to proceed with the action. The court cannot try a hypothetical action between the parties. To do so would burden the parties with the costs of a litigated action which by settlement or extra-curial action they had avoided. In some cases, however, the court may be able to conclude that one of the parties has acted so unreasonably that the other party should obtain the costs of the action.
If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases.
(emphasis added)
In One Tel Ltd v Commissioner for Taxation (2000)[37] Burchett J considered
Lai Qin and said:
In my opinion, it is important to draw a distinction between cases in which one party, after litigating for some time, effectively surrenders to the other, and cases where some supervening event or settlement so removes or modifies the subject of the dispute that, although it could not be said that one side has simply won, no issue remains between the parties except that of costs. In the former type of case, there will commonly be lacking any basis for an exercise of the Court's discretion otherwise than by an award of costs to the successful party. It is the latter type of case which more often creates problems, since there may be difficulty in discerning a clear reason why one party, rather than the other, should bear the costs.
[37] 101 FCR 548 at [6]
The distinction between surrender and supervening event cases was helpfully summarised by Preston CJ in Kiama Council v Grant[38]. He said:
[38] (2006) 143 LGRA 441 at [80]
The principles that emerge from these cases are that in a civil enforcement or judicial review case where there has been no hearing on the merits:
(a) where one party effectively surrenders to the other party by:
(i) discontinuing without the consent of the other party; or
(ii) giving undertakings to the Court or submitting to the
Court making orders against the party substantially in the terms or to the effect claimed by the other party;
the proper exercise of the costs discretion will ordinarily be to make the usual order as to costs, unless there is disentitling conduct on the part of the other party; and
(b) where some supervening event or settlement so removes or modifies the subject of the dispute that no issue remains except that of costs, the proper exercise of the costs discretion will ordinarily be to make no order as to costs unless:
(i) one of the parties has acted so unreasonably that the other party should obtain the costs of the action; or
(ii) even if both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried so that the party should obtain the costs of the action.
(emphasis added)
It is submitted by counsel for the Applicant that the circumstances of this case closely resemble those in Ku-ring-gai Council v Minister for Planning (No 2).[39] In Ku-ring-gai, the Minister had revoked an order that had been challenged by the Council and substituted a new order. The supervening event was one entirely with the control of the Minister. But for an offsetting entitlement to costs, the Minister would have been ordered to pay the costs of the proceedings up to the date of the revocation. Lai Qin and One Tel were reviewed. The court then categorised the case before it as one in which one party had surrendered rather than one where a supervening event or settlement had removed the subject matter of the proceedings. Biscoe J said:[40]
In my opinion, the Minister surrendered in relation to the 2007 Order by repealing it. The Minister did not act unreasonably in repealing the 2007 Order and making the 2008 Order. There may have been pragmatic considerations in the Minister preferring to take that course rather than contesting the validity of the 2007 Order. However, litigants not infrequently surrender to their opponents for pragmatic reasons when settling. Nonetheless, they have surrendered and there is a costs consequence. Consequently, the Minister should be liable to pay the council’s costs to 29 February 2008 (when the 2008 Order was made).
[39] [2008] NSWLEC 276
[40] at paragraph [26]
Counsel for the Party Joined submits that this is a supervening event case and that there should be no order as to costs. Counsel for the Applicant submits that this case is to properly categorised as a surrender case and that a costs order is appropriate.
The Tribunal is persuaded that this case is probably properly to be categorised as a surrender case rather than a supervening event case. The factors favouring such a conclusion are:
(a) The act of surrendering the development approval was a deliberate and
unilateral decision taken by the Party Joined;
(b) The conduct of surrender of the development approval was a course of
action that was entirely within the control of the Party Joined;
(c) There was no consultation with or consent from the Applicant; and
(d) There was no evidence of any resolution of the underlying dispute.
The surrender of the development application rendered the subject matter of the proceedings nugatory. Such conduct, in substance was effectively, discontinuance without consent.
However, even if the Tribunal’s characterisation of the conduct of the Party joined is not properly to be categorised as a surrender and is more properly to be categorised as a supervening event, then it the Tribunal’s view that the Party Joined has acted so unreasonably that the Applicant is entitled to its costs of the proceeding.
In coming to that alternative conclusion, the Tribunal has drawn an inference
from the conduct and the prejudicial timing of the course of action of the Party Joined, namely, that both were done for a commercial reason. This was a course of action that was always available to the Party Joined from the day the approval was granted. However, the longer it delayed the decision, the more prejudicial it became for the Applicant which, with no inkling of the conduct, went about expending time and money in preparing a case that was never to run.
Moreover, the Party Joined proposes to lodge a new development application and there is no evidence that the new application will address any or all of the matters that the Applicant argued were inconsistent with the Territory Plan.
In relation to the reasonableness or otherwise of the conduct of the Party Joined, the Tribunal considered the critical question of the timing of the decision to surrender the development approval and the complete lack of any explanation as to the timing of that decision. Bearing in mind that this was a decision entirely within the control of the Party Joined, it is the finding of the Tribunal that the timing of the decision was unreasonable. Indeed, some support for the finding of the unreasonableness of the timing of the decision is to be gleaned from the concession made on behalf of the Party Joined that it would have been preferable for all the parties had the decision been taken three months earlier.
As the Tribunal has said above, the decision of the Party Joined to surrender its development approval could have been taken at any time. It could have been taken at any time after the commencement of the proceedings, if not, as we have said, before. It is not the role of this Tribunal to pass judgment on the merits of the decision. However, because this decision was not made in a timely way, the Applicant has wasted considerable legal costs and resources. Moreover, the administrative resources of this Tribunal in dealing with the proceedings up to hearing have also been wasted. In these circumstances, whilst it is always open to a party in the position of the Party Joined to make such decisions, that conduct may have costs consequences.[41]For these reasons, it is an appropriate exercise of the discretion conferred upon this Tribunal in section 48 (1) of the Act to make the costs orders sought by the Applicant.
………………………………..
Ms L. Donohoe SC
Presiding Member
[41] See pertinent comments of Biscoe J at [306] in Australians for Sustainable Development Inc v Minister for Planning [2011] NSWLEC 33 (10 March 2011)
McCullouch and ACT Planning and Land Authority [2004] ACTAAT 9 (17 March 2004); Save the Ridge Inc and ACT Planning and Land Authority
[2004] ACTAAT 16; Digwood and ACT Planning and Land Authority ACTAAT 15.
Centre Investments Pty Ltd (Magistrates Court, 11 November 2005) at [6]
Engineering Employees (1994) 181 CLR 96 at 106.
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