Newcastle City Council v Wescombe
[2009] NSWCA 265
•24 July 2009
New South Wales
Court of Appeal
CITATION: Newcastle City Council v Wescombe [2009] NSWCA 265 HEARING DATE(S): 24/07/09 JUDGMENT OF: McColl JA at [19] and [27]; Campbell JA at [20]-[26]; Young JA at [1]-[18] EX TEMPORE JUDGMENT DATE: 24 July 2009 DECISION: Leave to appeal refused with costs. CATCHWORDS: PROCEDURE - costs- appeals as to costs- leave required- applicant Council sought to reverse costs orders made against it in Land and Environment Court- Class 4 proceedings in Land and Environment Court brought by Council had been partly settled and otherwise dismissed- application of UCPR- Calderbank letter- leave to appeal refused. - PROCEDURE - costs- jurisdiction- courts of limited jurisdiction. LEGISLATION CITED: Environmental Planning and Assessment Act 1979, ss 123, 124
Land and Environment Court Act 1979, s 58(3)(c)
Supreme Court Act 1970
Uniform Civil Procedure Rules 2005, r42.1, r42.20CASES CITED: Kiama Council v Grant (2006) 143 LGERA 441
Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6; 186 CLR 622
Thomson Australian Holdings Pty Limited v Trade Practices Commission [1981] HCA 48; 148 CLR 150PARTIES: Newcastle City Council (Applicant)
Rebecca Alice Wescombe (Respondent)FILE NUMBER(S): CA 40079/09 COUNSEL: T F Robertson SC and M Hall (Applicant)
G Carolan (Respondent)SOLICITORS: Sparke Helmore, Newcastle (Applicant)
Bilbie Dan, Newcastle (Respondent)LOWER COURT JURISDICTION: Land & Environment Court LOWER COURT FILE NUMBER(S): 40471/07 LOWER COURT JUDICIAL OFFICER: Pain J LOWER COURT DATE OF DECISION: 19 January 2009 LOWER COURT MEDIUM NEUTRAL CITATION: [2008] NSWLEC 301; [2008] NSWLEC 324
CA 40079/09
Friday 24 July 2009McCOLL JA
CAMPBELL JA
YOUNG JANEWCASTLE CITY COUNCIL v REBECCA ALICE WESCOMBE
1 YOUNG JA: This is the concurrent hearing of an application for leave to appeal and, if leave is granted, the hearing of an appeal by the applicant against a decision of her Honour Justice Pain in the Land and Environment Court of New South Wales on a question of costs. Leave is required because only a question of costs is involved.
2 The basal facts are that the applicant commenced class 4 proceedings in the Land and Environment Court seeking, (1) a declaration that the respondent had breached the Environmental Planning and Assessment Act 1979 (the “EP & A Act”) with respect to works carried out in Nesca Parade, The Hill (in the Newcastle Local Government Area) without development consent; and (2) orders for remediation.
3 The respondent’s case was that she was not in breach and in all the circumstances did not require development consent, and indeed that what needed to be done required co-operation between herself, neighbouring owners and the Hunter Water Board.
4 I am not in a position to discuss fully the underlying facts or the extent of the dispute between the parties, but it would appear that there had been a landslide in the area in question, how that was caused was a matter of debate, and what was necessary restorative work and who should do it were also matters of debate. It would seem fairly clear that the remedial works were needed not only on the respondent’s land but also on the land of the third parties and to be done by the Hunter Water Board. Indeed some of the remedial work on the respondent’s land could not be fully performed unless prior work was done on other persons’ land. There have been a number of attempts to settle the dispute and indeed there has been a joint conference of the experts which had produced a joint report.
5 The proceedings came on for hearing before Justice Pain on 22 October 2008. They were listed to take three days. However, the parties settled their dispute during the luncheon adjournment on the first day. The settlement of the dispute was sanctioned by court order and was that without any admission of breach the respondent was to carry out specified remedial work. The proceedings were otherwise dismissed subject to the issue of costs.
6 On the next day, 23 October 2008, Justice Pain heard the parties as to costs, and on 27 October 2008 her Honour ordered that there be no order as to costs on what she called the second issue, that is the remediation issue, but that the applicant must pay the respondent’s costs of the first issue, the alleged breach of the EP & A Act. Her judgment is coded [2008] NSWLEC 301. The applicant asked her Honour to recall that order. Her Honour did reconsider it but on 18 December 2008 confirmed it and she made formal orders on 19 January 2009. Today the applicant seeks leave to appeal to reverse the order. It says there should have been no order as to costs up to 4 June 2008 and thereafter the respondent should pay its costs on the indemnity basis because of a Calderbank letter.
7 Mr T F Robertson SC and Mr M Hall appeared for the applicant, and Mr G Carolan appeared for the respondent. The applicant says in its written submissions that it acknowledges that the judge had a discretion to exercise when considering the order for costs and that Uniform Civil Procedure Rule 42.1 provides that the court should order that costs follow the event unless other factors outweigh that course. Also relevant is rule 42.20 that ordinarily dismissal of proceedings results in the plaintiff paying the defendant’s costs. The Uniform Civil Procedure Rules 2005 apply to Class 4 proceedings in the Land and Environment Court.
8 Her Honour noted in her judgment that she had in evidence a bundle of correspondence which showed that the parties had been involved in extensive “without prejudice” settlement discussions. She noted that there was a Calderbank letter sent by the applicant on 4 June 2008 (a copy of which is in the amended white book at p 165) and that that was renewed in more formal form on 1 July 2008, offering to compromise the proceedings on the basis that the proceedings would be withdrawn with each party to bear its or her own costs if the respondent were to enter into a deed to perform certain works. It was this Calderbank letter that was the basis of the applicant saying that it should get its costs on an indemnity basis after 4 June 2008.
9 The arguments put before the primary judge were, as one would expect, that the respondent had acted unreasonably in continuing with the proceedings instead of accepting reasonable settlement offers and should pay costs on the one side. On the other side, that the respondent was the successful party and the proceedings had been dismissed. The primary judge was strongly influenced by the fact that the applicant had amended its claim in the course of opening its case and the judge considered that only then did it reasonably appear to the respondent that she could agree to do what the applicant now required.
10 There was a dispute as to just how far the seeking of a declaration of breach was necessary in order to found any remedial order. The judge considered that she could make a consent order for remediation in the circumstances of this case without having to determine whether there had been a breach of the EP & A Act.
11 The applicant says that the primary judge made two significant errors. First, she did not appreciate the significance of the Calderbank letter. It is put that, although her Honour did deal with it, her consideration shows that she did not fully appreciate its significance in the context. Secondly, that by dividing up the case into two parts, her Honour clearly failed to appreciate that what she called the second part was dependent on the first part. Putting it more simply, that the order for remediation had to follow a determination of breach because of the way in which the jurisdiction of the Land and Environment Court is moulded by s 124(1) of the EP & A Act.
12 Before us Mr Robertson clearly put that this was not being advanced as a jurisdictional issue, but that her Honour’s failure to recognise the connection means that she failed to appreciate the submissions that were put before her. However, her Honour’s first judgment does set out the submissions of both parties on costs and there is nothing to indicate that this was a mere ticking the boxes exercise. Her Honour appears to have heard and evaluated the respective submissions. At [8] of her first judgment, her Honour said,
- “The Council relied on Kiama Council v Grant (2006) 143 LGERA 441 at [80] to argue the circumstances of this case came within the category identified of one party surrendering to another where a party consents to orders substantially in the terms sought by the other party. In such cases the usual presumption is that each party pay its own costs. The Council submitted however that there had been unreasonable conduct by the Respondent in failing to respond properly to or accept reasonable settlement offers. Relying on Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 ... it was argued the Court would be able to conclude that one of the parties has acted so unreasonably the other party should obtain the costs of the action.”
13 Mr Robertson says that the Council never put to her Honour that this was a case of surrender, rather it was a situation that an external event brought about the fact that the litigation became pointless. However, it seems to me that the two scenarios are in like plight.
14 In the Kiama case, Preston CJ said 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;
- 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.”
15 His Honour acknowledged that that proposition to a considerable extent relied on what Justice McHugh said in Lai Qin’s case [1997] HCA 6; 186 CLR 622 at 624-625.
16 There is, of course, some validity in what Mr Robertson puts, as is usually the case when he makes submissions to the court. However, these submissions were put to the primary judge when she was asked to reconsider the matter and it seems to me that reading again her Honour’s judgment of 18 December 2008 [2008] NSWLEC 324, she did show an appreciation of the issues involved in her decision.
17 Apart from the difficulty faced by any appellant when challenging a discretionary judgment on a matter of practice and procedure, the applicant needs to surmount the barrier that s 58(3)(c) of the Land and Environment Court Act 1979 imposes, identical to what the Supreme Court Act 1970 imposes, that is that the court should not ordinarily consider appeals dealing only with matters of costs. It may be that there are some misunderstandings in the way in which the primary judge approached it, but it does not seem to me that they are sufficiently serious to cause us to review the matter and thus are not persuaded that this court should intervene in the present case.
18 In my view, leave to appeal should be refused with costs.
19 MCCOLL JA: I agree.
20 CAMPBELL JA: I agree with Young JA and will add only a brief remark on one topic. It may have appeared from the written submissions in the case that the challenge that was being made to the judgment below included an assertion that it was not open to her Honour to make the orders in the nature of a mandatory injunction that she made without there having been a finding that there had been a breach of the Act.
21 The powers of the Land and Environment Court arising out under section 123 and section 124 of the Environmental Planning and Assessment Act are:
- “ 123 Restraint etc of breaches of this Act
- (1) Any person may bring proceedings in the Court for an order to remedy or restrain a breach of this Act, whether or not any right of that person has been or may be infringed by or as a consequence of that breach.
- …
- 124 Orders of the Court
- (1) Where the Court is satisfied that a breach of this Act has been committed or that a breach of this Act will, unless restrained by order of the Court, be committed, it may make such order as it thinks fit to remedy or restrain the breach.”
22 It had been argued, as I understood it, that because the power of the court to make a remedial order under section 124 was contingent upon the court being satisfied that a breach of the Act had been committed, that a finding that there had been a breach was a necessary part of the groundwork for the making of a remedial order.
23 It will be recalled that the relief sought in the proceedings below was that prayer one sought a declaration that there had been a breach of the Environmental Planning and Assessment Act by the carrying out of certain work at the respondent’s premises, while prayer two sought an order that that breach be remedied by the carrying out of specific work.
24 There is clear authority in Thomson Australian Holdings Pty Limited v Trade Practices Commission [1981] HCA 48; (1981) 148 CLR 150 about the limitations that are imposed on a court of limited jurisdiction in accepting an undertaking or making a consent order when proceedings are settled. Such a court cannot accept an undertaking or make an order that imposes a limitation on the conduct of the person giving the undertaking or submitting to the order that is any wider than the power that the court would have had to restrain the conduct of that person in contested proceedings. That principle is not contravened in the present case because the orders that were sought for performance of work were no wider than those that the Council would have been able to obtain had there been a contravention of the Act.
25 Section 123 may arguably confer upon the Land and Environment Court a jurisdiction to hear and determine proceedings in which there is an allegation that there has been a breach of the Act, and it well may be that that brings with it an implied power to make orders of the kind that could be made if there were to be a finding that there had indeed been a breach of the Act, without there being an actual finding. That is a proposition that may have warranted a closer examination. I mention only that if the proposition were not correct, there could be very serious practical difficulties in the settlement of litigation in a court of limited jurisdiction.
26 However, as Young JA has mentioned, Mr Robertson made clear that he was not suggesting that the making of the remedial orders in the present case was a matter that was beyond the jurisdiction of the court. When the connection between the allegation of breach and the making of the orders is not submitted to be a jurisdictional one, then the various considerations already referred to by his Honour Justice Young provide a sufficient reason for refusing to grant leave.
: The orders of the court will be those Justice Young proposed.
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