Manly Warringah Rugby Leagues Club Pty Ltd v Warringah Council

Case •

[2006] NSWLEC 88

•

03/01/2006

No judgment structure available for this case.

Land and Environment Court


of New South Wales


CITATION: Manly Warringah Rugby Leagues Club Pty Ltd v Warringah Council [2006] NSWLEC 88
PARTIES:

APPLICANT
Manly Warringah Rugby Leagues Club Pty Ltd

RESPONDENT
Warringah Council
FILE NUMBER(S): 10642 of 2005
CORAM: Preston CJ
KEY ISSUES: Costs :- planning appeal - discontinuance by applicant without respondent's consent - principles governing making an order for costs where discontinuance of proceedings - discontinuance a circumstance making an order for costs fair and reasonable - discontinuance not based on conduct of respondent or supervening event - order for costs made
LEGISLATION CITED: Environmental Planning and Assessment Act 1979 s 79C(1)(e), s 97
Land and Environment Court Act 1979 (NSW) s 69
Land and Environment Court Rules 1996 (NSW) Pt 11 r 5, Pt 16 r 4
CASES CITED: Aldi Foods Pty Limited v Holroyd City Council [2005] NSWLEC 338 (27 June 2005);
Centro Properties Ltd v Warringah Council (2003) 128 LGERA 17;
David Crane & Associates Pty Limited v Kogarah Council [1998] NSWLEC 121 (10 June 1998);
Gales Holdings Pty Limited v Tweed Shire Council (No. 2) (2004) 133 LGERA 429;
Gillespies Pty Ltd v Warringah Council (2002) 124 LGERA 147;
Grant v Kiama Municipal Council [2006] NSWLEC 70 ;
Hunter Development and Brokerage Pty Limited v Cessnock City Council [2005] NSWLEC 727 (16 December 2005) ;
Menangle Sand & Soil Pty Limited v Wingecarribee Shire Council (2000) 108 LGERA 209;
Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622;
Statewide Developments Pty Limited v Minister for Infrastructure and Planning [2005] NSWLEC 353 (1 July 2005)
DATES OF HEARING: 24/02/2006
 
DATE OF JUDGMENT: 
03/01/2006
LEGAL REPRESENTATIVES: APPLICANT
C J Leggat SC (barrister)
SOLICITORS
Shaw Reynolds Lawyers

RESPONDENT
J E Hewitt (solicitor)
SOLCITORS
Home Wilkinson Lowry


JUDGMENT:

        THE LAND AND
        ENVIRONMENT COURT
        OF NEW SOUTH WALES

        PRESTON CJ

        1 MARCH 2006

        10642 OF 2005

        MANLY WARRINGAH LEAGUES CLUB PTY LIMITED V WARRINGAH COUNCIL

        JUDGMENT

1 HIS HONOUR: The respondent, Warringah Council (“the Council”), has applied for costs of Class 1 proceedings discontinued unilaterally by the applicant, Manly Warringah Rugby Leagues Club Pty Limited.

2 The Class 1 proceedings were an appeal by the applicant under s 97 of the Environmental Planning and Assessment Act 1979 (“the EPA Act”) against the deemed refusal of the applicant’s development application for the demolition of an existing carpark and dwelling and the erection of four mixed use buildings containing residential apartments and associated commercial and retail uses, including basement car-parking, landscaping works and strata subdivision, at 2-4 Federal Parade, Brookvale.

3 The proceedings were discontinued by the applicant filing a notice of discontinuance in Court on 17 January 2006. The Council did not consent to the discontinuance.

4 On 30 January 2006, the Council filed its notice of motion seeking an order that the applicant pay the respondent’s costs of these proceedings as agreed or assessed.

Principles governing making order for costs where discontinuance of Class 1-3 proceedings

5 Section 69 of the Land and Environment Court Act 1979 (NSW) provides relevantly:

            “(2) Subject to the rules and subject to any other Act:

            (a) costs are in the discretion of the Court;

            (b) the Court may determine by whom, and to what extent costs are to be paid…”

6 The Land and Environment Court Rules 1996 (NSW) also deal with the issue of costs. For Class 1 proceedings which are discontinued, two rules are of relevance.

7 First, Part 11 r 5 applies to all proceedings in the Court, regardless of the class of jurisdiction to which the proceedings are assigned. Part 11 r 5 provides:

            “(1) If a party to any proceedings discontinues them in whole or in part, the Court may, on the application of another party, order the discontinuing party to pay the costs of any party against whom the discontinued claim was brought and who does not consent to the discontinuance.
            (2) The costs payable to a party under any order made under this rule are to be the costs of the party occasioned by the discontinued claim and reasonably incurred before service on the party of notice of the discontinuance.
            (3) Nothing in this rule limits the Court’s power to order costs if proceedings are withdrawn under rule 2.”

8 Secondly, Part 16 r 4 applies in those proceedings in classes 1, 2 and 3 of the Court’s jurisdiction as is specified in Pt 16 r 4(1). Part 16 r 4(2) provides:

            “(2) No order for the payment of costs will be made in proceedings to which this Rule applies unless the Court considers the making of a costs order is, in the circumstances of the particular case, fair and reasonable.”

9 Part 16 r 4 replaced an earlier Practice Direction of the Court that stated that “no order is made in planning and building appeals, unless the circumstances are exceptional.”

10 In Menangle Sand & Soil Pty Limited v Wingecarribee Shire Council (2000) 108 LGERA 209 at 213 [10], Lloyd J dealt with the relationship between Part 11 r 5(1) and the Court Practice Direction and enumerated the following general principles governing the exercise of the discretion to order costs in planning and building appeals that have been discontinued:

            “10. The question of costs has been considered in a number of cases where a planning or building appeal has been discontinued without the consent of the other party to the litigation. The following general principles emerge from those cases:
                (a) in planning and building appeals it is first necessary to look for some exceptional circumstance so as to found an order for costs. This is a direct consequence of the Practice Direction to which I have referred;
                (b) ordinarily, the filing of a notice of discontinuance without the consent of the other party to the litigation will satisfy the exceptional circumstance test. This is because the discontinuance usually represents an abandonment of the applicant’s claim, so that costs incurred by the other party are necessarily wasted or thrown away;
                (c) a relevant consideration in every case is whether the discontinuance was reasonable conduct on the part of the discontinuing party in the circumstances of the case, such as to negate the ordinary costs consequences of a discontinuance of the proceedings. Such conduct may be based on some action by the other party to the litigation or some supervening event beyond the parties’ control.
                    (See: Bryant v Lismore City Council [1997] NSWLEC 91; Manly Wharf Pty Ltd v Manly Council (1997) 98 LGERA 245; Chris Lonergan & Associates v Byron Shire Council [1998] NSWLEC 78; Gilling v Hawkesbury City Council [1998] NSWLEC 142; David Crane & Associates Pty Limited v Kogarah Council [1998] NSWLEC 121; Kentgreen Dural Pty Ltd v Hornsby Shire Council (1999) 103 LGERA 219; Tabaquero v Campbelltown City Council [2000] NSWLEC 68).”

11 In Gales Holdings Pty Limited v Tweed Shire Council (No. 2) (2004) 133 LGERA 429, Bignold J considered the relationship between Part 11 r 5(1) and Part 16 r 4 which had by that time replaced the Court Practice Direction. Bignold J held that, notwithstanding the replacement of the Practice Direction by Part 16 r 4, the general principles enunciated by Lloyd J in Menangle Sand & Soil Pty Limited v Wingecarribee Shire Council (2000) 108 LGERA 209 at 213 [10] remained applicable. Bignold J stated at 436 [24] and [25]:

            “24. In my opinion, those general principles remain applicable, mutatis mutandis, now that the Court’s Practice Direction has been replaced by the new Rule of Court contained in Pt 16 r 4 because it is clear that that new Rule was intended to (a) wholly replace the Practice Direction; (b) control the costs discretion conferred by s 69(2) of the Land and Environment Court Act (“Subject to the rules and subject to any other Act – (a) costs are in the discretion of the Court”); and (c) to maintain the general principle that costs are not awarded in planning appeals and the like unless it is fair and reasonable in the circumstances of a particular case, to make an order for the payment of costs.
            25. Accordingly, I would hold that the relationship between the Rules of Court Pt 11 r 5 and Pt 16 r 4 is to similar effect as has been held in respect of the previous relationship between Pt 11 r 5 and the Court’s Practice Direction subject to the obvious and necessary textual substitution in the formulation of the general principles enunciated in Menangle Sand and Soil of the words “fair and reasonable” appearing in Pt 16 r 4 for the words ”exceptional circumstances” appearing in the Court’s Practice Direction.”

12 The approach embodied in Part 16 r 4(2) of the Land and Environment Court Rules is that an order for costs will not be made in Class 1 proceedings, unless the Court considers the making of a costs order is, in the circumstances of a particular case, fair and reasonable: see Statewide Developments Pty Limited v Minister for Infrastructure and Planning [2005] NSWLEC 353 (1 July 2005) at [4]; Aldi Foods Pty Limited v Holroyd City Council [2005] NSWLEC 338 (27 June 2005) at [5]; Hunter Development and Brokerage Pty Limited v Cessnock City Council [2005] NSWLEC 727 (16 December 2005) at [11]; and Grant v Kiama Municipal Council [2006] NSWLEC 70 at [12] – [14].

13 A synthesis of these decisions results in the following reformulated principles:


        (a) In the specified proceedings in Classes 1, 2 and 3 to which Part 16 r 4 applies, there is a presumption that there will not ordinarily be any order for costs in the proceedings unless there is some circumstance which would make it fair and reasonable that there should be an order for costs;

        (b) Ordinarily, the filing of a notice of discontinuance without the consent of the other party to the litigation will be a circumstance which would make it fair and reasonable that there be an order for costs. This is because the discontinuance usually represents an abandonment of the applicant’s claim, so that costs incurred by the other party are necessarily wasted or thrown away.

        (c) A relevant consideration in every case is whether the discontinuance was reasonable conduct on the part of the discontinuing party in the circumstances of the case, such as to negate the ordinary costs consequences of a discontinuance of the proceedings. Such conduct may be based on some action by the other party to the litigation or some supervening event beyond the parties’ control.

14 These principles ought provide guidance in the exercise of the discretion to order costs in cases to which the principles are applicable, however, they do not fetter the discretion. As Lloyd J said in David Crane & Associates Pty Limited v Kogarah Council [1998] NSWLEC 121 (10 June 1998) at [4]:

            “Whilst these principles generally govern the making of an order for costs in cases such as this, they are not hard and fast rules. If they were, then that would be contrary to the provisions of s 69(2) of the Land and Environment Court Act 1979, which gives the Court an unfettered discretion as to costs. They are merely principles which the Court has adopted as a guide to the exercise of the discretion which exists under that section. Moreover, the facts in each case are seldom the same. There may be special facts or circumstances which might justify departure from these principles in any particular case.”

Relevant events leading up to and during litigation

15 The development site, the subject of the applicant’s development application, is subject to Warringah Local Environmental Plan 2000 (“the WLEP”). The site is located in Locality F2, within the Brookvale Service Centre. The development the subject of the development application is classified as Category Three Development under WLEP. Clause 12(3)(b) of WLEP provides:

            “(3) In addition, before granting consent for development classified as:

        …
                (b) Category Two or Three, the consent authority must be satisfied that the development is consistent with the desired future character described in the relevant Locality Statement,
            but nothing in the description of the desired future character creates a prohibition on carrying out of development.”

16 The desired future character is described in the Locality Statement for Locality F2 Brookvale Service Centre as:

            “The Brookvale Service Centre Locality will be characterised by light industries, warehouses and bulky goods retailing.
            The land Lot 11 DP100998, 7-9 Federal Parade, Brookvale, may be occupied by an office building.
            The locality will be characterised by generous setbacks and wide frontages to Pittwater Road.
            The Brookvale Park frontage to Pittwater Road is characterised by mature, predominately Poplar Trees which are to be retained.”

17 Prior to the applicant lodging the development application in this case, the applicant met with the Council. According to a report to the Independent Hearing & Assessment Panel (“IHAP”) meeting on 13 July 2005:

            “The advice offered by Council to the applicant during these previous meetings has been consistent in recommending that an application of this nature, due to its conflicts with the Desired Future Character Statement, General Principles and Built Form controls within the F2 Locality as contained in WLEP 2000 should not be submitted until a rezoning of the site can occur. In this regard, Council is unable to proceed with any rezonings until DIPNR release the new LEP template which is, to date, scheduled for late 2005.”

18 On 14 February 2005, the applicant lodged its development application proposing, at that time, to erect four mixed use buildings containing 100 residential apartments and commercial uses including basement parking for 694 vehicles, landscape works, strata subdivision and the demolition of an existing dwelling and carpark.

19 Subsequent to lodgement of the development application, the Council continued to advise the applicant on the conflict of the proposed development with the Desired Future Character Statement and the prematurity of the development application until a rezoning of the site could occur. The report to the IHAP meeting on 13 July 2005 summarises this advice as follows:

            “Subsequently, the applicant has been consistently advised that the processing of a development application of this nature prior to the rezoning of the site occurring would be considered to be premature and could not be supported.
            Following lodgement of the development application on 14 February 2005, Council has continued to reiterate this position to the applicant and has encouraged the applicant to withdraw the proposal on three (3) separate occasions.”

20 The first occasion was by letter dated 25 February 2005. That letter noted that the property’s location in the F2 Brookvale Service Centre Locality and that the Desired Future Character Statement of the Locality states that ”the Brookvale Service Centre Locality will be characterised by light industries, warehouses and bulky goods retailing”. The letter then continued:

            “As raised in a previous meeting on 15 October 2004, concern was raised by Council’s officers that the F2 locality does not envisage in its Desired Future Character Statement and Built Form Controls either residential development nor development of the height proposed. As such, it was concluded during the course of that meeting that the proposal would most likely fail the test of the Desired Future Character Statement and that, for the proposal to be considered in the form of a development application, a formal application to rezone the area would be required to be submitted and approved in the first instance.
            Unless and until such time as a rezoning of the area has been approved you are advised that the development application cannot be considered and request that the application be withdrawn within 21 days from the date of this letter to avoid Council determining the application based upon the information provided and subsequently issuing a refusal.”

21 The second occasion was a letter dated 7 March 2005 from the Council to the applicant. That letter provides:

            “I refer to your letter of 20 January 2005 relating to the proposed rezoning of land and seeking to provide additional residential development and retail opportunities in Brookvale.
            As you indicate in your letter, the development of a Metropolitan Strategy for the Greater Metropolitan Region by the Department of Infrastructure, Planning and Natural Resources (DIPNR) is presently underway. The Brookvale area is shown in the Strategy discussion papers as a major employment growth area. As the Strategy will guide future housing and employment growth we are dependant on DIPNR to provide guidance on future zonings and major land use changes.
            Whilst the Strategy papers show Warringah’s population growth is remaining constant we expect DIPNR to continue to encourage employment growth in the region to reduce the need for travel to work outside the region. When the content and targets for population and employment growth are known for Warringah we will be in a better position to know whether DIPNR will approve a change of commercial zones to residential.
            A formal rezoning application would need to be lodged for a full assessment to be made of your proposal. However, given progress with the Metropolitan Strategy it would be difficult to form an opinion at this stage as to consistency with future planning provisions. It may well be useful to await the release of the DIPNR planning template in April and then review the situation.”

22 The third occasion was a letter dated 27 April 2005 from the Council to the applicant. That letter dealt with a “Masterplan” submitted by the applicant. The letter stated:

            “It should be noted that a Masterplan is not a substitute for the rezoning of land. Rather, a Masterplan serves only as an operative ‘guide’ as to the future development of property. With this in mind, and in conjunction with our previous written advice sent to your office on 25 February 2005 (copy attached) and verbal and written advice offered to you in previous meetings (see minutes attached) and correspondence, Council is also not in a position to consider the development application favourably prior to the formal rezoning of the land.
            It is noted that WLEP 2000 is subject to the release of the proposed LEP template by DIPNR (a revised draft being due for release for public exhibition in mid 2005). Therefore, and reiterating advice provided to your office previously, the submission of the development application prior to rezoning occurring is premature and cannot be supported regardless of whether a Masterplan has been submitted in support of the application.
            As pointed out in our previous correspondence dated 25 February 2005, until such time that a rezoning of the site has been approved you are advised that the current development application cannot be considered favourably. Again, I offer you the opportunity to withdraw the application within 21 days from the date of this letter to avoid Council determining the application based upon the information provided and subsequently issuing a refusal.”

23 On 11 May 2005, the Council wrote to the applicant noting the applicant’s request that the development application be assessed separately to the Masterplan. The Council noted that the development application and the Masterplan would be referred to an IHAP meeting.

24 On 1 June 2005, the Department of Infrastructure, Planning and Natural Resources wrote to the Council concerning a range of planning matters within Warringah. In relation to Warringah Local Environmental Plan 2000, the Department stated that “any significant rezonings of lands should be considered within a broader strategic context, consistent within an agreed local planning strategy and informed by the Metropolitan Strategy”. In relation to the Brookvale/Dee Why Strategic Centre, the Department made special reference to the applicant’s land stating:

            “Recent correspondence about a prospective rezoning of a large urban area on and surrounding Pittwater Road, Brookvale, raises the issue of appropriate growth options for this area and it is essential that any major rezoning be carefully considered in terms of the Metropolitan Strategy and sub-regional strategic planning.”

25 On 28 June 2005, the applicant commenced these Class 1 proceedings, appealing against the Council’s deemed refusal of its development application.

26 On 13 July 2005, the IHAP held its meeting. The report to the IHAP meeting stated:

            “It is considered that the proposal is not consistent with the Desired Future Character Statement for the following reason:
            The residential character of the development is not consistent nor compatible with the light industrial, warehouse & bulky goods retailing of the locality.”

27 At the IHAP meeting, the solicitor for the applicant addressed the IHAP in relation to the consistency of the proposed development with the Desired Future Character Statement for the Locality. The IHAP resolved that:

            “The panel agreed with the Council Assessment Report…
            The panel agreed that the central issue is the consistency of the proposed development with the Desired Future Character Statement for the Locality. This being Category Three Development, the Council must be satisfied that the proposed development is consistent. The F2 Locality Statement is to the effect that the Locality will be characterised by light industry, warehouses and bulky goods retailing. The proposal, being a large residential and commercial development, would not in the panel’s assessment be consistent with the Desired Future Character Statement. The application must therefore be refused.”

28 On 15 July 2005, the applicant’s solicitors wrote to the Council’s solicitor referring to the Council report to the IHAP meeting on 13 July 2005 and stating:

            “We note that a number of issues have been raised which were not raised in meetings our clients have previously had with Council. Accordingly, our clients would like the opportunity to meet with the relevant Council officers and/or experts to discuss these issues as soon as possible.
            These discussions may lead to the applicant filing amended plans.”

29 On 20 July 2005, the Council’s solicitor responded to the applicant’s solicitors noting the request of the applicant to meet with relevant Council officers to discuss further issues in this matter and stating:

            “We are instructed that further negotiation in relation to issues such as height, setback, etc are futile in this matter as there is a fundamental issue of non-compliance with the Desired Future Character Statement for the locality. This non-compliance is a threshold issue. It is the Council’s view that the development is unable to proceed until there is a rezoning of the land and this has been previously advised to your client on many occasions.
            We are instructed to request that your client withdraw the appeal. If the matter proceeds and our client is successful in the proceedings, we are instructed to seek costs of the proceedings given that your client has been aware of Council’s position in relation to this matter for some considerable time.”

30 The Council considered the applicant’s development application at its meeting on 26 July 2005. In the report to the Council meeting, the Director Planning and Assessment Services recommended:

            “2. The applicant be informed that the appropriate mechanism to instigate such profound land use planning changes is through a rezoning application as previously discussed with the applicant.”

31 On 2 August 2005, the applicant’s solicitor forwarded to the Council’s solicitor indicative plans for an amended development proposal.

32 On 9 August 2005, the Council filed a statement of issues in Court. Issue 1 was:

            “1. Inconsistency with the Desired Future Character of the Brookvale Service Centre Locality.
                The proposal does not comply with Section 79C(1)(a)(i) of the Environmental Planning and Assessment Act 1979 (“the EP&A Act”) and Clause 12(3) Warringah Local Environmental Plan 2000 (“the WLEP”).
            Particulars:
                The proposal is not consistent with the desired future character of the F2 - Brookvale Service Centre Locality. The residential character of the development is not consistent, nor compatible with the industrial, warehouse, bulky goods, shop and motor showroom character of the Brookvale Service Centre Locality.”

33 Also on 9 August 2005, the parties, by consent, sought that a question be referred by the Court for neutral evaluation. The question for neutral evaluation was:

            “Is the proposed development consistent with the Desired Future Character described in the F2 Brookvale Service Centre Locality as set out in Warringah LEP 2000?”

34 On 19 August 2005, the Council’s solicitor responded to the applicant’s letter of 2 August 2005, stating that they had sent the indicative plans to the Council and calling on a full set of amended plans if the applicant intends to amend the development application. In addition, the Council’s solicitor stated:

            “We note that the indicative plans still exceed the height control and still fail to satisfy the fundamental issue of consistency with the desired future character of the Brookvale Service Centre Locality.”

35 On 1 September 2005, the applicant filed amended plans with the Court. The Council consented to the applicant relying on the amended plans at the hearing. The amended plans reduced the height of the development.

36 On 6 September 2005, the Council sought by notice of motion to vacate the neutral evaluation. By consent, the neutral evaluation was vacated and the matter was relisted for call over.

37 On 13 September 2005, the Council formally refused the development application. One of the reasons for refusal was the inconsistency of the proposed development with the Desired Future Character Statement.

38 On 29 September 2005, the Council revised its statement of issues. However, inconsistency of the proposed development with the Desired Future Character remained as issue 1.

39 On 30 September 2005, at a call over, the parties consented to the appointment of and the Court appointed Gary Shiels as the court appointed expert on matters of town planning and urban design. The court also fixed the matter for hearing on 7-9 December 2005.

40 On 14 October 2005, the parties met on site with Mr Shiels, the court appointed expert. On 24 October 2005, Mr Shiels delivered his oral report. Ms Hewitt, the Council’s solicitor records in her affidavit of 10 February 2006, Mr Shiels as stating:

            “In relation to issue 1, I generally agree with the conclusion reached by IHAP that the application was not consistent with the Desired Future Character and must be refused. It would displace employment and undermine the Desired Future Character Statement for F2. It would be difficult to conclude that a residential commercial retail development would satisfy the character statement.”

41 Mr Shiels summarised his oral comments in his subsequent written report as involving:

            “Issue 1 – Inconsistency with Desired Future Character
            As other parties have previously observed, I suggested that this was the key issue in the proceedings…
            After discussing the various matters contained in the above clauses, my conclusion was that the provision was not consistent with the Character Statement for Locality F2 Brookvale Service Centre.”

42 On 8 November 2005, the Council advised that the building height of the amended development was satisfactory and was no longer an issue in the proceedings following the provision of further detailed plans by the applicant.

43 On 11 November 2005, the Council filed a further amended statement of issues which deleted issue 2 concerning building height.

44 On 22 November 2005, Mr Shiels gave his written report. In that written report, Mr Shiels stated in relation to Issue 1, Inconsistency with the Desired Future Character of the Brookvale Service Centre Locality:

            “I cannot form the opinion that the proposal is consistent with the Desired Future Character Statement for Locality F2.
            …
            In summary, my opinion is that the proposal is not consistent with the Desired Future Character Statement for the Brookvale Service Centre for the reasons I have identified above and elsewhere in this statement.”

45 In his conclusion, Mr Shiels again stated:

            “My own assessment is that the proposal is inconsistent with the existing surrounding uses and, in particular, the Locality F2 Brookvale Service Centre Statement. On my assessment and in light of the assessment by the IHAP, my opinion is that the application should be refused.”

46 On 25 November 2005, the applicant filed a notice of motion to vacate the hearing dates. In the affidavit in support of the notice of motion Ms Ridge, a solicitor for the applicant stated:

            “4. On 25 November 2005, I was instructed by my client, that in light of the additional concerns expressed by the Court Appointed Expert, they would obtain further expert advice and make possible amendments to the proposed development which meet the concerns raised by the Court Appointed Expert.”

47 On 28 November 2005, the applicants held an internal conference with its solicitor and planning and development advisors. According to Mr P R Spray, the general manager of the applicant in his affidavit of 13 February 2006, the internal conference noted that the applicant would be seeking vacation of the hearing dates. This would allow further options to be considered by the applicant in respect of the property. Three options were discussed in relation to the property. These are set out in the applicant’s solicitor’s letter to the applicant dated 29 November 2005 as follows:

            “Option 1 – Respond to issues raised in court appointed expert’s report (CAE report) and amend plans appropriately. Requires clarification of the issues as most are not clarified in CAE Report.
            Option 2 – Redesign proposed development on the Property to obtain additional height and yield.
            Option 3 – Take to the Club members a broader proposed development that encompasses the property and the current clubs site. Requires preparation of a masterplan."

48 The letter also noted that the Premier had announced the release of Metropolitan Strategy of Sydney on 11 December 2005, which could change the planning considerations for the property. The letter then noted:

            “Given the delays in releasing the Metropolitan Strategy to date, it was decided that the preparation of Option 1 should not be delayed until after the release of the Strategy. However it was expected that some amendments to the amended plans may be necessary in light of the Metropolitan Strategy, should it be released in the intervening period.”

49 On 29 November 2005, Talbot J vacated the hearing dates of 7-9 December 2005 and made the following directions:

            “2. No more than two (2) representatives of each party confer with the court appointed expert, Mr Gary Shiels, to clarify the issues raised by the Court Appointed Expert by 9 December 2005.
            3. Listed for mention and directions 14 December 2005 at 9am before the Registrar.
            4. Costs in relation to the Notice of Motion dated 29 November 2005 and vacation of the hearing dates reserved. Each party has liberty to apply at 2 days notice in relation to those costs.”

50 On 4 December 2005, the NSW Government released the Metropolitan Strategy: City of Cities, A Plan for Sydney’s Future. That Strategy identified Brookvale/Dee Why as a strategic, major centre. It was stated that Brookvale/Dee Why would have an employment capacity target in 2031 of 12,000 persons, an increase from 2001 of 24.1% (p. 95). The Strategy stated that strategic centres will accommodate residential development compatible with the employment capacity targets. State led planning in strategic centres will establish compatible housing targets in the centres (p. 96). The strategy stated:

            “Local Government will reflect these housing targets and provide a mix of housing types and densities based on a sound analysis of housing capacity and housing needs, including for the aging population. These targets will be incorporated in local planning instruments”: at p. 96.

51 The Strategy also noted the need to identify, protect and promote sites for large scale development in strategic centres:

            “In many centres development of key sites can act as a catalyst for additional development. Developers may be risk adverse when it comes to being the first to undertake a significant development in a relatively untested market. As part of the Stronger Centres Initiative, sites which might have development potential will be identified.
            The State Government can then encourage Councils and owners to facilitate development on particular sites by, for example, preparing appropriate site development controls, assisting with architecture and design, preparing site development prospectus material, marketing to key property brokers or development interests and ‘fast tracking’ approval”: at p. 103.

52 On 5 December 2005, the applicant instructed urban designers and planners and the applicant’s solicitor to confer and discuss the impact of the Metropolitan Strategy on the proposed development and the development potential of the development site.

53 On 7 December 2005, the conference was held. The three options earlier discussed were again reviewed in light of the newly released Metropolitan Strategy. As set out in the applicant’s solicitor’s letter to the applicant dated 8 December 2005, the consultants:

            “were of the view that the Metropolitan Strategy which identifies Brookvale/Dee Why as a Major Centre increased the prospects of having a larger development encompassing the property and the current club site approved.”

54 The conference recommended a strategy to “revisit some of the data prepared for the Masterplan, carry out an initial impact analysis, prepare a rough diagram of uses, and develop the natural progression story…The outcome is the discussion draft which, once reviewed by the Club, can be taken to an initial meeting with DIPNR.”

55 Also on 7 December 2005, the applicant’s representatives attended a further conference with the court appointed expert to clarify the additional issues raised in the expert report. This included the issues of consistency with the desired future character and excavation.

56 On 13 December 2005, the applicant held a board meeting. The minutes of the board meeting record:

            “ Metropolitan Strategy released by State Government on 5 December 2005. Brookvale/Dee Why nominated as major centre in metropolitan Sydney and Council are expected to re-draft LEP.
            The Club’s expert advisor, Gabriel Morrish recommended that due to Metropolitan Strategy, the Club review the Land and Environment Court appeal and consider submitting a new DA taking advantage of a new Metropolitan Strategy. Mr Morrish believes there is a potential for a 10-12 storey building.
            IT WAS RESOLVED that the Club’s legal representatives seek an adjournment of the Land and Environment Court appeal until 17 January 2006 to allow time for our consultants to properly evaluate the new Metropolitan Strategy.”

57 On 13 December 2005, the applicant’s solicitor applied by eCallover request that the proceedings be stood over for further callover on 17 January 2006. The applicant’s solicitor noted the reason as being:

            “The Applicant is currently considering amendments to the plans based on the CAE Report and the extent to which, if any, the recently released metro strategy should be reflected in the proposed development.”

58 Also on 13 December 2005, the applicant sought the advice of town planner, Mr Charles Hill on the impact, if any, of the Metropolitan Strategy on the development potential of the applicant’s land.

59 On 11 January 2006, Mr Hill provided written advice to the applicant. That advice stated:

            “Having regard to the above it is my opinion as a town planner that the State Government’s introduction of the Metropolitan Strategy, subject to the detail being formally adopted into a State Environmental Planning Policy or other planning instrument which deems the Dee Why/Brookvale area (including the subject premises) as a major centre which will subject the site to new planning controls. Further, it is my opinion that until such time as the detail is formally adopted into a new Local Environmental Plan, the Metropolitan Strategy contains mechanisms for assessing strategic sites in a manner consistent with a Metropolitan Strategy.
            In my opinion the Metro Strategy contains specific provisions, that have changed, in a fundamental manner, the planning controls relevant to the future development of the site, and as such the applicants should be given the opportunity to take full advantage of the provisions for the proposed new planning instruments proposed to apply to the site.”

60 On 12 January 2006, the applicant’s board met. The minutes of the board meeting record the discussion in relation to the current development application:

            “The Chairman updated the Board on the current status of the Club’s DA for the carpark site. The update included the following information:
            Court appointed expert’s initial report appeared favourable but the final report is not supportive of the Club’s DA. The main issue was the site excavation which was, in his opinion, significant and would impact unfavourably on the local area.
            The Land and Environment Court appeal was deferred until 17 January 2006. The new Metro Strategy Statement released on 4 December 2005 designated Dee Why/Brookvale as a major enterprise area.
            The Chairman and General Manager met with development advisors plus Gabriel Morrish, one of the contributors to Metro Strategy. Gabriel Morrish advised that the Club could achieve a better return with a new approach. This would involve a new DA and the abandonment of the current DA.
            The Chairman tabled advice, based on the above points from Chris Shaw, legal advisors recommending the Club abandon the current DA.
            The Chairman advised that the new Metro Strategy was expected to give the Club a much better opportunity to develop the Club land.
            The Chairman recommended the current DA be abandoned and the Land and Environment Court be advised as soon as possible.
            IT WAS RESOLVED that the Chairman’s recommendation be approved.”

61 On 13 January 2006, the applicant’s solicitors signed a notice of discontinuance. The notice of discontinuance was filed in Court on 17 January 2006.

The Council’s submissions

62 Ms Hewitt, solicitor for the Council, submitted that:


        (a) The proper approach to the exercise of the discretion as to costs is that enunciated by Lloyd J in Menangle Sand & Soil Pty Limited v Wingecarribee Shire Council (2000) 108 LGERA 209 as adopted by Bignold J in Gales Holdings Pty Limited v Tweed Shire Council (No. 2) (2004) 133 LGERA 429.

        (b) The applicant discontinued without the consent of the Council.

        (c) The Council has not been guilty of any misconduct which would disentitle it to an order for costs in its favour.

        (d) The discontinuance by the applicant was not based on any action by the Council.

        (e) There has not been a supervening event beyond the parties’ control. The announcement of the Metropolitan Strategy does not constitute a supervening event. The Metropolitan Strategy has no legal status. It does not alter the applicable environmental planning instruments, including WLEP. It has no relevant impact on the prospects of success of the proceedings and the applicant’s development application.

        (f) In any event, the policy declared in the Metropolitan Strategy had already been foreshadowed to the applicant prior to lodging the development application and subsequently. The applicant elected to commence and continue the appeal notwithstanding that it was on notice of the need for a rezoning and of the forthcoming Metropolitan Strategy.

        (g) In the alternative to its primary submission, the Council should at least be entitled to an order for costs thrown away by reason of the vacation of the hearing dates set for 7-9 December 2005. The vacation was not brought about by any misconduct of the Council or any supervening event.

The applicant’s submissions

63 Mr Leggatt SC, Senior Counsel for the applicant, submitted:


        (a) Ordinarily, the filing of a discontinuance in proceedings without the consent of the other parties is a circumstance in which it is fair and reasonable for the Court to order costs: David Crane & Associates Pty Limited v Kogarah Council [1998] NSWLEC 121 (10 June 1998) and Menangle Sand and Soil Pty Limited v Wingecarribee Shire Council (2000) 108 LGERA 209.

        (b) However, an overriding consideration is whether the discretion was a ”reasonable and justified response to what was happening in the litigation” on the part of the discontinuing party: Gales Holdings Pty Limited v Tweed Shire Council (No. 2) (2004) 133 LGERA 429 at 436-437 [26].

        (c) The applicant’s application to vacate the hearing date was a reasonable response to what was happening in the litigation, namely the raising by the court appointed expert of the issue of excavation at the rear of the property of the proposed development site in circumstances where the Council had not raised excavation as an issue in the proceedings. The applicant was advised by its architect that to address the excavation issue, major changes to the proposed development would be required. It was reasonable for the applicant to adjourn the proceedings to consider the additional issue of excavation raised by the court appointed expert: Aldi Foods Pty Limited v Holroyd City Council [2005] NSWLEC 338 (27 June 2005) at [14].

        (d) The release of the Metropolitan Strategy on 4 December 2005 was a supervening event beyond the applicant’s control: Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622 at 625.

        (e) While the Metropolitan Strategy is not an environmental planning instrument, it is a New South Wales Government policy which has been subject to extensive community consultation and accordingly is a matter for consideration under s 79C(1)(e) of the EPA Act. The Metropolitan Strategy foreshadows the future development of the area, including the site, in a different manner to that currently contemplated under the environmental planning instruments and sets out a new approach to the Department of Planning’s role in approving developments in the identified major centres.

        (f) It was reasonable for the applicant to be afforded the opportunity to take full advantage of the provisions of the Metropolitan Strategy, as Mr Hill had advised the applicant: see David Crane & Associates Pty Limited v Kogarah Council [1998] NSWLEC 121 (10 June 1998) at [9]. It was reasonable for the applicant to discontinue the proceedings where the Metropolitan Strategy may allow a different opportunity for the site to be approved, subject to the merits. Similar to the circumstances in David Crane & Associates Pty Limited v Kogarah Council [1998] NSWLEC 121 (10 June 1998), the applicant is now considering advice on the future development of the site as contemplated under the Metropolitan Strategy.

        (g) The Court ought not determine the question of whether the proposed development was, in fact, inconsistent with the desired future character statement. It is sufficient that the applicant had an argument based on the evidence it would put before the Court. Furthermore, the question of what is meant by inconsistency is subject to conflicting judicial opinions in relation to WLEP: see Gillespies Pty Ltd v Warringah Council (2002) 124 LGERA 147 and Centro Properties Ltd v Warringah Council (2003) 128 LGERA 17.

Cost order in this case

64 Consistent with the principles enunciated above, the ordinary rule is that the applicant as the discontinuing party should pay the costs of the proceedings of the Council. However, it is necessary to consider whether the discontinuance by the applicant was reasonable conduct in the circumstances. Such conduct may be based on some action by the Council or on some supervening event beyond the parties’ control.

65 There is no conduct or event in the circumstances of this case which would negate the ordinary rule.

66 First, there is no conduct on the part of the Council which could be seen reasonably to have lead the applicant to discontinue the proceedings. The issue of inconsistency with the Desired Future Character Statement was known and the Council’s position in relation to that issue was known from before the applicant lodged its development application. The Council continuously and consistently stated its position on this issue to the applicant. It was supported by the IHAP. On the appointment of the court appointed expert, Mr Shiels, he too provided advice, first orally and subsequently in writing, that the proposed development was inconsistent with the Desired Future Character Statement.

67 Accordingly, insofar as the applicant wished to discontinue in order to deal with the issue of inconsistency of the proposed development with the desired future character statement, that was an issue about which it had always known it had to address in order to succeed in obtaining development consent and on the appeal.

68 Secondly, although there was a supervening event, namely the release of the Metropolitan Strategy, over which neither the applicant nor the Council had any control, the discontinuance of the proceedings cannot reasonably be said to have been caused by the occurrence of that event.

69 The Metropolitan Strategy proposed that the Brookvale/Dee Why centre would be a major centre for employment and for accommodating residential development. The development site, being part of the Brookvale/Dee Why centre, could be one of the large sites used for that purpose.

70 However, development for those purposes would not be compatible with the current controls applying to the site under WLEP. The local planning instrument, WLEP, would have to be amended to incorporate the New South Wales Government’s targets for employment capacity and housing. In short, a rezoning would be required.

71 This position was nothing new. The Council had advised the applicant that its proposed uses of the site for residential and commercial purposes were inconsistent with the Desired Future Character Statement for the Locality and that before such proposed uses could be permitted a rezoning would be required. The Council advised the applicant that it would be premature to pursue its proposed development unless and until that rezoning occurred. The Council also advised that this position would be informed once the Metropolitan Strategy was released. It was known that the Metropolitan Strategy would not be available for some time, and the Council advised that it was premature to pursue the development application until such time as the Metropolitan Strategy had been released. This was most clearly stated in the Council’s letter to the applicant of 7 May 2005. The history and content of these advices of the Council to the applicant have been set out above.

72 The applicant elected not to follow the advices of the Council at any time. The much belated decision of the applicant to discontinue the proceedings in January 2006 cannot be seen to be a response to some new and unheralded position brought about by the release of the Metropolitan Strategy. To the contrary, the position had been heralded by earlier advices as had the necessity for a rezoning to achieve the desired development objectives of the applicant.

73 Furthermore, this is not a case, such as was the situation in David Crane & Associates Pty Limited v Kogarah Council [1998] NSWLEC 121 (10 June 1998), where it is reasonable for the applicant to discontinue the proceedings and start again by lodging a new development application.

74 The Metropolitan Strategy does not change the relevant environmental planning instruments that apply to the land. Unless and until WLEP is amended by a subsequent environmental planning instrument, the fundamental problem always faced by the applicant of the proposed development being potentially inconsistent with the Desired Future Character Statement for the Locality remained.

75 The uses foreshadowed as appropriate in the Metropolitan Strategy for meeting the employment and housing targets are themselves inconsistent with the Desired Future Character Statement for the Locality. Hence, notwithstanding the release of the Metropolitan Strategy, the applicant still is not able to lodge a further development application to take advantage of the Metropolitan Strategy. Instead, the applicant must await a rezoning of the land to permit the uses envisaged in the Metropolitan Strategy for the Brookvale/Dee Why Centre and desired by the applicant.

76 Accordingly, there has been no conduct of the Council or supervening event which would negate the ordinary cost consequences of the discontinuance of the proceedings by the applicant. The ordinary rule that the discontinuing party should pay the costs of the other party therefore applies.

77 Because of the above conclusion, it is not necessary to determine the Council’s alternative basis for seeking some of its costs of the proceedings, namely that the vacation of the hearing date resulted in costs being thrown away.

78 As the Council has been successful on its motion for costs, it should also have its costs of the motion paid by the applicant.

Orders

79 The Court makes the following orders:


        1. The applicant pay the respondent’s costs of the proceedings, as agreed or assessed.

        2. The applicant pay the respondent’s costs of the amended notice of motion for costs dated 30 January 2006, as agreed or assessed.

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