Muli Muli Local Aboriginal Land Council v Kyogle Shire Council

[2005] NSWLEC 268

Land and Environment Court

of New South Wales

CITATION:	Muli Muli Local Aboriginal Land Council v Kyogle Shire Council [2005] NSWLEC 268
PARTIES:	Muli Muli Local Aboriginal Land Council Kyogle Shire Council
FILE NUMBER(S):	31053 of 2003
CORAM:	Cowdroy J
KEY ISSUES:	Costs :- preliminary question of law - decision of trial judge overturned on appeal - proceedings dismissed - costs of motion before trial judge - application of Practice Direction - whether costs should follow the event
LEGISLATION CITED:	Land and Environment Court Act s 69(2) Local Government Act 1993 s 574(3) Supreme Court Act 1970 s 76 Land and Environment Court Rules 1996 Pt 16 r 4 Supreme Court Rules 1970 Pt 51 r 4D Practice Direction 1993 cl 10A Practice Direction 1996
CASES CITED:	Gee v Port Stephens Council (2003) 131 LGERA 325; Gibson v Mosman Municipal Council (2001) 116 LGERA 397; Latoudis v Casey (1990) 170 CLR 534; Maurici v Chief Commissioner of State Revenue (2001) 51 NSWLR 673; Maurici v Chief Commissioner of State Revenue [No 5] [2001] NSWLEC 287; Outdoor Australia Pty Ltd v Auburn Council (1996) 89 LGERA 365; Teller Properties Pty Ltd v Randwick City Council (1994) 84 LGERA 369
DATES OF HEARING:	12/04/2005
EX TEMPORE JUDGMENT DATE:	04/12/2005
LEGAL REPRESENTATIVES:	APPLICANT A McAvoy SOLICITOR Zabow & Wise RESPONDENT L Byrne SOLICITOR McInnes Legal

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Cowdroy J

12 April 2005

31053 of 2003

MULI MULI LOCAL ABORIGINAL LAND COUNCIL
Applicant

KYOGLE SHIRE COUNCIL
Respondent

JUDGMENT

1 Cowdroy J: By notice of motion dated 16 February 2005 Kyogle Shire Council (“the Council”) seeks an order that Muli Muli Local Aboriginal Land Council (“the applicant”) pay the Council’s costs of these proceedings and of this notice of motion.

2 The applicant appealed against the levying of the Muli Muli Water Supply Special Water Rate by the Council (“the application”) and commenced these proceedings on 3 September 2003.

3 By notice of motion filed on 20 November 2003 (“the motion”) the Council sought an order that the application be dismissed on the ground that the application was filed outside the 30 day period prescribed by s 574(3) of the Local Government Act 1993 (“the LG Act”) and that accordingly no reasonable cause of action was disclosed.

4 The motion was heard on 16 December 2003 and judgment was delivered on 6 February 2004. This Court determined that the application had been instituted within the prescribed time and was accordingly valid. The Court dismissed the Council’s motion and reserved costs.

5 The Council appealed this Court’s decision. On 6 July 2004 the New South Wales Court of Appeal granted leave for the appeal to be filed pursuant to Pt 51 r 4D of the Supreme Court Rules (“the appeal”). As a condition of the grant of leave, the Council was ordered to pay the applicant’s costs of the summons and of the appeal irrespective of the result of the appeal.

6 A notice of appeal was filed in the Court of Appeal on 16 July 2004 seeking orders that the appeal be allowed and that this Court’s determination be set aside. A costs order was sought as follows:-

3. An order that the Respondent pay the Appellant’s costs of the appeal and costs of the proceedings in the Land and Environment Court.

7 The hearing of the appeal took place on 19 January 2005 and judgment was delivered on 16 February 2005. The Court of Appeal allowed the appeal and ordered that this Court’s judgment of 6 February 2004 be set aside. After making a declaration that the application had been filed out of time, the Court made the following orders:

(4) Order that the Application filed on 3 September 2003 be dismissed;
(5) Order the appellant pay the respondent’s costs of the summons for leave to appeal and of the appeal.

No order was made by the Court of Appeal with respect of the reserved costs of the hearing which had taken place in this Court.

Council’s submissions

8 The Council acknowledges that during the appeal it did not seek costs of the proceedings in this Court. A reference was made to costs when Senior Counsel for the Council acknowledged that the Council could not seek costs of the appeal if it were successful. The Council says that it filed its motion for costs in this Court on the day that the Court of Appeal delivered its judgment since the finalisation of such costs was the only issue which remained unresolved.

9 Practice Direction 1996 inserted clause 10A into Practice Direction 1993 (“the Practice Direction”). Such clause provided:-

The practice of the Court is that no order for costs is made in valuation appeals, farmland rating appeals (and other rating appeals), and subdivision appeals in class 3 of the Court’s jurisdiction, unless the circumstances are exceptional.

10 On 19 December 2003, namely after the hearing in this Court but before delivery of judgment, a new rule of the Land and Environment Court Rules 1996 (“the LEC Rules”) was published in the New South Wales Government Gazette, namely Pt 16 r 4. The new rule superseded cl 10A of the Practice Direction. Part 16 r 4 provides:-

(1) This rule applies to the following proceedings in classes 1, 2 and 3 of the Court’s jurisdiction:
(a) proceedings under Sections 95A, 96, 97, 98, 109K, 121ZK, 121ZM and 149F of the Environmental Planning and Assessment Act 1979,
(b) proceedings under sections 176, 177, 178, 182 and 611 of the Local Government Act 1993,
(c) proceedings under s 37 of the Valuation of Land Act 1916,
(d) proceedings under s 38A of the Land Tax Management Act 1956, and
(e) proceedings under s 96 of the Taxation Administration Act 1996.
(2) No order for 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.

11 The Council submits that the Practice Direction has no application because of the Court of Appeal’s decision in Mauriciv Chief Commissioner of State Revenue (2001) 51 NSWLR 673. Further Council submits that Pt 16 r 4 of the LEC Rules has no application because s 574 of the LG Act is not referred to in such rule. Accordingly Council submits that the usual rule applies namely that costs should follow the event.

12 Even if Pt 16 r 4 or the Practice Direction did apply, the Council submits that the question raised by the motion concerned a discrete legal issue and that in respect of such questions the Court has determined that the normal rules concerning the award of costs should apply: see Gibson v Mosman Municipal Council (2001) 116 LGERA 397 at 400.

Applicant’s submissions

13 The applicant submits that the Council could have sought an order for costs of the proceedings in this Court during the hearing of the appeal. The fact that no costs order was made indicates that the Court of Appeal did not consider it appropriate to make such order.

14 Alternatively, the applicant submits that the proceedings were commenced and argued prior to the introduction of Pt 16 r 4 of the LEC Rules and accordingly since cl 10A of the Practice Direction was current, the Council must demonstrate exceptional circumstances before the Court would consider making an order for costs in its favour. The applicant relies upon the observations of Pearlman J in Outdoor Australia Pty Ltd v Auburn Council (1996) 89 LGERA 365 wherein her Honour determined that costs in a class 1 appeal do not necessarily follow the event but are governed by the Practice Direction.

15 The applicant submits that no exceptional circumstances exist to support a costs order. It relies upon the observations of Lloyd J in Maurici v Chief Commissioner of State Revenue[No 5] [2001] NSWLEC 287 who held that costs are not normally in administrative appeals in this Court.

Findings

16 The Court of Appeal did not consider whether any order should be made for the reserved costs of the proceedings in this Court. Its judgment makes no reference to such costs and the parties agreed that no submissions were made during the course of the appeal. Even though the Court of Appeal was seised of jurisdiction to make an order for such costs (see s 76 of the Supreme Court Act 1970), it was not exercised. Accordingly, it remains for this Court to determine such costs.

17 Pursuant to s 69(2) of the Land and Environment Court Act 1979 the Court is invested with a broad discretion in respect of the award of costs. That discretion was, in respect of certain appeals in class 1, class 2 and class 3 of the Court’s jurisdiction, guided by the Practice Direction. The decision of the New South Wales Court of Appeal in Maurici cautioned the use of clause 10 of the Practice Direction (which is in similar terms to clause 10A) on the basis that it could be seen as fettering the Court’s discretion to award costs. As a result, Pt 16 r 4 of the LEC Rules was promulgated.

18 Since proceedings were instituted and heard whilst cl 10A of the Practice Direction prevailed, it is appropriate that the Court should apply its provisions so far as they are relevant.

19 The purpose of cl 10A was to express the practice of the Court that in appeals in classes 1, 2 and 3, no order for costs would normally be made except in exceptional circumstances. Several decisions of the Court made it apparent that the rule was made so as not to dissuade a litigant from undertaking merits review: see Outdoor Australia at 368. In that decision, Pearlman J referred to the determination of a pure question of law, noting at 369 that it “may or may not be determinative of the issues between the parties”. Her Honour considered that the raising of a question of law “has the consequence only that it is a factor to be taken into account in considering whether there are exceptional circumstances” (at 370).

20 In Gibson v Mosman Municipal Council Talbot J, following the decision in Maurici but before the introduction of Pt 16 r 4 of the LEC Rules, said (at 400):-

Alternatively, the raising of the issue of jurisdiction of the Court to determine a vital issue in the appeal goes beyond the resolution of merit issues which underlie the original basis for the adoption of the principle that there should be no order for costs in planning and building appeals except in exceptional circumstances ( McDonald Industries Ltd v Sydney City Council (1980) 43 LGRA 428 ) .

21 In Teller Properties Pty Ltd v Randwick City Council (1994) 84 LGERA 369 Talbot J (at 371) said of the determination of a preliminary question of law:-

Such a dispute is not confined to the mere exercise of discretion based on merit. It is a determination of the legal rights between the parties. There is no reason, in my opinion, why, in those circumstances, the question of costs should not be decided by the exercise of the Court’s discretion in the normal way.

22 In Gee v Port Stephens Council (2003) 131 LGERA 325, McClellan J reviewed numerous authorities, including Outdoor Australia and Teller. His Honour questioned whether, in view of Maurici, the decision in Outdoor Australia remained appropriate. His Honour adopted the observations of Talbot J in Gibson and ordered costs of a preliminary question of law. His Honour’s decision was made prior to the introduction of Pt 16 r 4 of the LEC Rules.

23 The question raised by the motion did not require consideration of merit issues but rather required determination of a pure question of law. The issue was solely one of legal principle and is completely removed from determination of merit issues which was the foundation for the Practice Direction.

24 In these circumstances, the Court concludes that neither the Practice Direction nor Pt 16 r 4 of the LEC Rules has application. The Court has an unfettered discretion concerning the award of costs and it adopts the observations of McHugh J in Latoudis v Casey (1990) 170 CLR 534 at 567 namely that it is just and reasonable for a successful party in litigation to be awarded costs.

25 Since the Council was the successful party, the costs of the hearing in this Court are to be borne by the applicant.

Orders

26 The Court orders:

1. That the Muli Muli Local Aboriginal Land Council pay the costs of Kyogle Shire Council of these proceedings including the costs of this motion.

2. The exhibits be returned.