Morgan and Griffin Pty Ltd v Fraser Coast Regional Council (No. 2)
[2013] QPEC 12
•17 April 2013
PLANNING & ENVIRONMENT COURT
OF QUEENSLAND
CITATION:
Morgan & Griffin Pty Ltd v Fraser Coast Regional Council and Anor (No. 2) [2013] QPEC 12
PARTIES:
MORGAN AND GRIFFIN PTY LTD ACN 004 263 076
(Applicant/Respondent)
And
FRASER COAST REGIONAL COUNCIL
(First Respondent/applicant)
And
PARMAC INVESTMENT PTY LTD ACN 106 378 205
(Second Respondent/applicant)
FILE NO/S:
3589 / 2012
DIVISION:
Planning and Environment Court
PROCEEDING:
Hearing of an application
ORIGINATING COURT:
Planning and Environment Court of Queensland, Brisbane
DELIVERED ON:
Wednesday, 17 April 2013
DELIVERED AT:
Brisbane
HEARING DATE:
Dealt with on the papers
JUDGE:
R S Jones DCJ
ORDER:
1. Morgan and Griffin Pty Ltd is to pay the first respondent’s and the second respondent’s costs of an incidental to that part o the proceeding concerned with the public notification ground;
2. Such costs, if not agreed, are to be assessed on the standard basis; and
3. Otherwise the application for costs by the second respondent, Parmac Investments Pty Ltd, is dismissed.
CATCHWORDS:
APPLICATION FOR COSTS – where applicant bought proceeding seeking declaratory relief – where applicant relied on three separate grounds for relief – where applicant failed on all grounds – section 457 Sustainable Planning Act 2009 – whether the whole (or part thereof) of the substantive application were instituted to delay or obstruct and/or were otherwise frivolous or vexatious.
Environmental Protection Act 1994
Sustainable Planning Act 2009
Local Government (Planning and Environment) Act 1990
Mudie v Gainriver Pty Ltd (2) [2003] 2 QDR 271
Oshlack v Richmond River Council [1998] 193 CLR 72
Ebis Enterprises Pty Ltd v Sunshine Coast Regional Council [2011] QCA 15
Stevenson Group Investments Pty Ltd v Nunn [2012] QCA 351
McIlrath v Scenic Rim Regional Council [2012] QPELR 149
Morgan Griffin Pty Ltd v Fraser Coast Regional Council and Parmac Investment Pty Ltd [2013] QPEC 2
COUNSEL:
Mr M Hensen SC for the applicant/respondent
Mr M Johnston for the second respondent/applicant
Mr M Williamson for the first respondent/applicant
SOLICITORS:
Thomsons Lawyers for the applicant/respondent
Hopgood Ganham solicitors for the second respondent/applicant
Connor O’mere solicitors for the first respondent/applicant
This proceeding is concerned with an application for costs orders against the applicant (Morgan and Griffin) brought by the first respondent (the council) and the second respondent (Parmac). For the reasons set out below the orders of the Court are:
1. Morgan and Griffin Pty Ltd is to pay the first respondent’s and the second respondent’s costs of an incidental to that part of the original application concerned with the “public notification” ground;
2. Costs if not agreed to be assessed on a standard basis;
3. Otherwise the applications for costs by the second respondent, Parmac Investments Pty Ltd, is dismissed.
Background
On or about 13 July 2011, Parmac made a development application for a preliminary approval for a material change of use of land for “commercial uses”. The application also sought to vary the effect of the Councils planning scheme as it then was. In February 2012, the Council issued a decision notice approving the application. Following that approval, Parmac made a development application for a development permit for a material change of use of the land for a shopping centre. On 11 September 2012, prior to the Council approving the application for a development permit, Morgan and Griffin, a commercial competitor of Parmac, commenced proceedings in this Court seeking declaratory relief. On 14 December 2012, the Council gave a decision notice approving the development application.
The substantive application brought by Morgan and Griffin raised three separate issues concerning the application for the preliminary approval and two associated issues concerning the development application. In respect of the preliminary approval, the three issues raised were:
1. Whether the Council had the power to approve the application given the failure on the part of Parmac to refer the application to the then relevant administering authority under the Environmental Protection Act 1994;
2. Whether the preliminary approval exceeded the scope of the application by approving a shopping centre in circumstances where, on the face of the application, approval was sought for “commercial uses”; and
3. Whether there was a failure on the part of the second respondent to provide sufficient public notification of the application.
In respect of the development application, the two issues raised were:
i. Whether the application lapsed because of a failure to refer the application to the Department of Environment and Heritage Protection (DEHP), being the relevant administering authority under the Environmental Protection Act 1994; and
ii. The level of assessment required for the application. (i.e. should it be impact assessable or code assessable).
On 27 February 2013, after a two day hearing which was effectively limited to legal argument, I handed down my reasons for refusing to grant the relief sought by Morgan and Griffin[1].
[1]Morgan and Griffin Pty Ltd v Fraser Coast Regional Council and Parmac Investment Pty Ltd [2013] QPEC 2.
Parmac now seeks its costs of an incidental to the whole of the substantive proceedings. The council seeks costs limited to only those costs associated with the public notification ground raised by Parmac.
The parties respective positions
The councils position is relatively straight forward and precisely articulated in the written submissions of Mr Williamson, counsel for the council:[2]
[2]First Respondent’s Submissions with Respect to Costs at paragraphs 12 to 15.
“There was however evidence before the Court which suggested that the public had not been misled. That evidence comprised the submissions actually made in response to the development application. Those submissions did not reveal any confusion on the part of the public as to what was proposed.
In the circumstances, the public notification point lacked substance and there was no reasonable basis for arguing that the public had been misled.
As a consequence, the public notification issue lacked substance, lacked merit and caused unjustified trouble to the Council.
It is therefore submitted that costs ought be awarded to the Council with respect to the public notification point to be assessed on the standard basis.”
Parmac essentially relied on the following grounds to justify cost orders in its favour:
1. Morgan and Griffin’s construction of the operation of the Sustainable Planning Act 2009 (SPA) was contrary to recent Court of Appeal authority;[3] and
[3]Stevenson Group Investments Pty Ltd v Nunn and Ors [2012] QCA 351.
2. Even if the applicant was able to mount a reasonable argument about the proper construction of SPA (which was not conceded) it still faced an insurmountable hurdle with respect to the discretionary powers of this Court to excuse non-compliance with the SPA and any associated legislation; and
3. The application lacked any utility and the public notification and the gross floor area points raised were entirely devoid of merit; and
4. Morgan and Griffin continued with its application notwithstanding the fact that it had been put on notice by Parmac’s solicitors that cost orders would be sought in the event of its application failing.
Morgan and Griffin identified, correctly in my respectful opinion, that the central issue in the substantive application was the consequences of the failure on the part of Parmac to refer the application for a preliminary approval to the DEHP as a concurrence agency. Morgan and Griffins central arguments were to the effect that, in circumstances where such referral was required, the application for a preliminary approval, pursuant to the relevant previsions of SPA, had lapsed and, as a consequence thereof, the council had no power to decide the application. And, accordingly its decision concerning the application was void. It was also argued that, in the circumstances of the case, the court would not exercise its discretion to excuse non-compliance pursuant to the excusatory powers under SPA.
According to Morgan and Griffin, its case was legitimately arguable. In support of its position, it was submitted that:
i. Contrary to the argument advanced by Parmac, the application for preliminary approval had in fact lapsed;
Far from ignoring Parmac’s solicitors letter of 12 November 2012, Morgan and Griffin in fact abandoned that part of its case relating to the development permit application;
Public interest issues were involved and, in particular, but for the proceedings commenced by Morgan and Griffin the proposed development would probably not have come to the attention of the DEHP;
Contrary to the councils position, it was found that the preliminary approval application was required to be referred to the DEHP;
Whilst not determinative, it is relevant that the council does not contend that the more substantive arguments raised were frivolous and/or vexatious;
The gross floor area issue revealed another flaw in the decision making process, which was resolved in an expeditious manner during the hearing of the proceeding;
The Court of Appeal decision in Stevenson had a number of distinguishing features that meant that the arguments run by Morgan and Griffin were still open;
Some general principles
The basic principle espoused under s 457 of SPA (as it then was) was, that each party to a proceeding must bare its own costs. However, pursuant to s 457(2) the Court may order costs for the proceeding where appropriate in prescribed circumstances. In this application both Parmac and the council rely on s 457(2)(b) contending that the application (or in the case of the council, part of the application) was frivolous or vexatious.
It is important to bear in mind that, generally speaking, cost orders are not meant to punish, but to compensate. In Oshlack v Richmond River Council[4], McHugh J relevantly said:
“… Costs are not awarded to punish an unsuccessful party. The primary purpose of an award of cost is to indemnify the successful party. If the litigation had not been brought, or defended, by the unsuccessful party, the successful party would not have incurred the expense which it did. As between the parties, fairness dictates that the unsuccessful party typically bears the liability for the cost of the unsuccessful litigation.” (footnotes deleted)
[4][1998] 193 CLR 72 per McKew J at para 67.
Section 457 of SPA provides, on public policy grounds, a statutory exception to the general rule that costs ordinarily follow the event.
In Mudie v Gainriver Pty Ltd (No. 2)[5], Mcmurdo P and Atkinson J when considering a similar statutory provision in the now repealed Local Government (Planning and Environment) Act 1990 relevantly said:
“… The words ‘frivolous or vexatious’ are not defined in the Act and should be given their ordinary meaning, unfretted by their meaning in the very different context of striking out or staying proceedings for an abuse of process. By the time an application for costs is made, the Court knows the issues which have been litigated whilst in interlocutory applications, the Court must so some extent speculate and must necessarily be cautious to ensure a deserving claim that is not unjustly deprived of the opportunity of a trail of the action. The Macquarie Dictionary defines ‘frivolous’ as ‘of little or no weight, worth or importance; not worthy of serious notice…characterised by lack of seriousness or sense’ and ‘vexatious’ as ‘causing vexation; vexing, annoying…’
Unquestionably, something much more than a lack of success needs to be shown before a parties proceedings are frivolous or vexatious. Although in a different context, some assistance can be gained form the discussion of the meaning of these words in Oceanic Sun Line Special Shipping Co Inc v Fay, where Dean J states that ‘oppressive’ means seriously and unfairly burdensome, prejudicial or damaging and ‘vexatious’ means productive of serious and unjustifiable trouble and harassment…those meanings are apposite here.
Where the proceedings are vexatious or oppressive will turn on the circumstances of the case but will include public policy considerations and the interests of justice” (footnotes deleted)
[5][2003] 2 Qd R 271.
In Ebis Enterprises Pty Ltd v Sunshine Coast Regional Council[6], Chesterman JA (with McMurdo P and Philipedes J agreeing) said:
“The notion underlying this elucidation of the section is that a proceeding will be frivolous if it lacks substance, so there was no reasonable basis for starting it so that each prosecution produced unjustified trouble for the other party.”
[6][2011] QCA 15 at para 7.
Consideration
Relying on the passages set out in Mudie and Ebis Enterprises, Parmac contended that the application “was devoid of any substance, lacked sufficient grounds and was always doomed to fail”. Two reasons in particular were given in support of that submission. First, the construction of SPA contended for was contrary to the authority established by the Court of Appeal in Stevenson. Second, even if Morgan and Griffin were capable of mounting a reasonable argument about the legal construction of SPA, it faced and insurmountable hurdle in respect to the excusatory power made available to the Court pursuant to s 440 of SPA.[7]
[7]Parmac’s written submissions at paragraphs 7 to 10.
Parmac’s submissions, in my respectful opinion, failed to recognise that a significant point raised in the proceeding was whether or not the application for preliminary approval had, as a matter of law, lapsed. Morgan and Griffin succeeded in its argument on that point thus leaving Parmac and the council dependent on the exercise of the excusatory powers provided under SPA. Contrary to the submissions made by Parmac, Morgan and Griffin was not only able to mount a reasonable argument about the proper construction of SPA, but succeeded on that significant point.
Parmac’s submissions also failed to recognise that it had initially failed in its statutory obligation to refer the preliminary approval application to the DEHP, the authority charged with protecting the public’s relevant interests.
In respect of the gross floor area issue, Parmac contended that it was unmeritorious and put it to unjustified trouble and expense. That submission failed to recognise two significant facts. First, the point was a valid one revealing yet another error in the application process. Second, it was able to be readily dealt with during oral argument and invovled a concession on the part of Parmac and the council to rectify the error. The point was not a frivolous or vexatious one.
Griffin & Morgan contended that the Court of Appeal decision in Stevenson involved such a different factual background that it was in no way determinative of the subject application.
It was clearly a significant consideration in Stevenson that the declaratory relief sought attacked the legitimacy of a development involving a number of structures, which had been completed many years prior and had been on-sold to innocent third parties. That situation is clearly distinguishable from the situation here where no development works had in fact commenced. In my substantive reasons, I relevantly said:[8]
[8]Morgan & Griffin Pty Ltd v Fraser Coast Regional Council & Parmac Investment Pty Ltd [2013] QPEC 2 at para 87.
“While the facts and circumstances of a particular case may be extremely important in considering whether or not to exercise the discretion to grant or refuse declaratory relief, they need not be determinative. By this I mean, Stevenson cannot be distinguished on the facts alone.”
I also went on to conclude:[9]
“In my opinion the reasoning of the Court in Stevenson, in its consideration of the excusatory power granted pursuant to s 4.1.5A of the IPA, strongly militates against the construction of the SPA contended for by the applicant.”
[9]Ibid, at para 91.
The reasoning of the Court of Appeal in Stevenson militated against the case for Morgan and Griffin, but it was not necessarily determinative. On balance, while I consider Stevenson was always going to be a high hurdle for Morgan and Griffin to clear, its attempt to distinguish Stevenson could not be reasonably described as frivolous or vexatious.
Turning finally then to the public notification issue. Albeit, after a relatively lengthy consideration of the matter, I determined that this part of Morgan and Griffin’s case had “no merit”[10].
[10]Ibid, at para 23.
As Mr Williamson submitted, the public notification issue had at its very core the real possibility that members of the public might have been mislead as to the true nature of the proposed development. No probative evidence was lead to support such a conclusion. Instead, Morgan and Griffin, essentially sought favourable inferences to be drawn from the facts to the effect that the public notification did not adequately identify the nature, scale and density of the development. Those inferences were never really open on the evidence in my view.
In all circumstances, I consider that this part of the application was frivolous in the sense that it lacked substance and merit and there was no reasonable basis for prosecuting the point. However, I feel obliged to put on the record that this point occupied only a very small part of the proceeding before me on 5 and 6 February 2013.
For the reasons given, the orders of the Court are:
1. Morgan and Griffin Pty Ltd is to pay the first respondent’s and the second respondent’s costs of an incidental to that part of the proceeding concerned with the public notification ground;
2. Such costs, if not agreed, are to be assessed on the standard basis; and
3. Otherwise the application for costs by the second respondent, Parmac Investments Pty Ltd, is dismissed.
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