O Martin and Anor. v J Meyer

[2006] NSWLEC 22

Land and Environment Court

of New South Wales

CITATION:

O Martin and Anor. v J Meyer and Anor. [2006] NSWLEC 22

PARTIES:

APPLICANTS:
O Martin and Anor.

RESPONDENTS:
J Meyer and Anor.

FILE NUMBER(S):

40754 of 2004

CORAM:

Bignold J

KEY ISSUES:

Costs :- class 4 proceedings—consent orders (save on the disputed question of costs)—liability of costs of submitting party (the Council)

LEGISLATION CITED:

Land and Environment Court Act 1979, s 69

CASES CITED:

Re The Minister for Immigration Ex parte Lai Qin (1997) 186 CLR 622

DATES OF HEARING:

25/07/2005, 02/08/2005

 
DATE OF JUDGMENT: 

01/20/2006

LEGAL REPRESENTATIVES:

APPLICANTS:
Mr G Newport, Barrister
SOLICITORS
Staunton Beattie

FIRST RESPONDENT:
Mr C McEwan SC
SECOND RESPONDENT:
Mr A Hudson, Solicitor

SOLICITORS:

FIRST RESPONDENT:
McIntosh McPhillamy
SECOND RESPONDENT:
Wilshire Webb

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

BIGNOLD J

20 January 2006

40754 of 2004 O AND D MARTIN v J MEYER; COOTAMUNDRA COUNCIL

JUDGMENT

HIS HONOUR:

A. INTRODUCTION

1 On 2 August 2005 I made consent orders in class 4 proceedings which had been commenced on 7 June 2004 claiming declaratory relief in respect of a development consent (claimed to be void and of no effect) and in respect of a garage/carport/shed building complex (claimed not to comply with that purported development consent) and injunctive relief (requiring the demolition and removal of that building complex).

2 According to the Points of Claim which accompanied the originating process, one of the grounds for the asserted invalidity of the development consent (which had been granted on 12 December 2002) was the failure of the second Respondent (the Council) to publicly notify the receipt of the relevant development application as required by its Notifications Policy. According to his Points of Defence, the first Respondent initially, either did not admit or denied, the allegations of failure by the Council to publicly notify the development application. The Points of Defence also raised the question of the Court’s discretion to withhold relief.

3 The Council did not file any Points of Defence. Instead, having originally filed an appearance, it filed a submitting appearance (save as to costs) on 20 October 2004.

4 Following the filing of the Council’s submitting appearance, the parties sought to settle the proceedings. Settlement negotiations initially failed, but in consequence of that process the first Respondent’s Solicitor on 24 May 2005 formally conceded that the Council had not publicly notified the development application as required and that in consequence the development consent was “legally flawed” and that the sole issue raised for trial was whether the Court in the exercise of its judicial discretion would refuse to grant a mandatory injunction claimed by the Applicants.

5 The consent orders were made in the course of the hearing which did not have to embark upon a consideration of the merits after the Applicants and first Respondent informed me that they were confident that they could settle the case, although the question of costs was likely to remain in dispute, but in respect of that question, both parties would seek an order against the Council (either directly or indirectly). The proceedings were briefly adjourned to give the Council the opportunity to argue the question of costs.

6 Immediately following argument on costs, I made the following consent orders—

By Consent the Court declares that:
1. Development Consent no. 02/1592 for the construction of a garage/carport/shed (“Structure”) on the property at 2A Barnes Street, Cootamundra (“Property”) granted by the Second Respondent on 12 December 2002 is void and of no force or effect.

By Consent the Court Orders that:
2. The First Respondent is to demolish the Structure.
3. Order 2 is suspended for a period of 6 months from the date of these Orders to enable the First Respondent to regularise the breach of the Environmental Planning and Assessment Act 1979 by applying to the Second Respondent for development consent for use of the Structure (“Use DA”).
4. If at the expiry of the 6 month suspension period referred to in Order 3 the First Respondent has complied with his undertaking the subject of paragraph 6 and the Use DA has not been finally determined by the Second Respondent or (if applicable) this Court on appeal from a determination (or deemed determination) of the Second Respondent then Order 2 shall be suspended for a further period of 3 months or such longer period agreed in writing by the Applicant and the First Respondent and communicated to this Court in writing to enable the Use DA to be finally determined and for any conditions which may be imposed to be complied with.
5. Liberty is granted to the parties to restore this matter to the list upon 72 hours notice for further Orders or Directions including for an Order setting aside Order 2 in the event that the Use DA is determined by the grant of development consent and any conditions imposed on that consent have been complied with.

The Court notes that:
6. The First Respondent undertakes to the Court to lodge a development application for the use of the Structure within one month of the date of these Orders.
7. All questions of costs are reserved.

B. THE DISPUTED COSTS QUESTION

7 On the hearing for costs, the only non-contentious issue was the Council’s willingness to suffer a costs order against it that it pay each of the other parties’ costs up to the date upon which the Council filed its submitting appearance (ie on 20 October 2004).

8 The Applicants claimed all of their costs against either of both Respondents. The first Respondent’s principal submission was that there should be no order as to costs as between the Applicants and the first Respondent but that if the Applicants were successful in obtaining a costs order against the first Respondent the Council should indemnify the first Respondent in respect of that liability and in addition the Council should pay the first Respondent’s costs.

9 The basis for the Council’s case that it should pay each of the other parties’ costs but only up to the date when the Council filed a submitting appearance is that from that point of time the dispute was only between the other parties and they chose to continue with the litigation after settlement negotiations initially failed and in the ultimate event the consent orders made could and should have been readily agreed to between the disputing parties shortly after the Council had filed its submitting appearance.

10 The Applicants’ case for costs was founded upon their claim that the consent orders vindicated them in the proceedings and that the declaratory and injunctive relief granted substantially delivered them the relief they had claimed in the proceedings.

11 The first Respondent’s case on costs was that it was the innocent party inasmuch as the failure to publicly notify the development application was entirely the fault of the Council and that after the Council had filed its submitting appearance, the first Respondent was in effect compelled to defend the proceedings and that although ultimately its defence was confined to the raising of the single issue of whether the Court in the exercise of its judicial discretion should withhold injunctive relief, it cannot be said that the consent orders meant that he was unsuccessful on that issue. Rather, the result of the consent orders was that both the Applicants and the first Respondent had obtained some success in the proceedings on the only issue ultimately in dispute, namely the exercise of the Court’s discretion to grant or to withhold injunctive relief. The Applicants’ success was at best provisional since the injunction granted by Order 2 was suspended to provide the first Respondent with the opportunity to regularise the planning breach with the possibility of the injunction being ultimately discharged (vide Order 5).

12 In my judgment, neither of the active parties to these proceedings can claim to have obtained clear-cut success in the proceedings. Rather, the proceedings were settled between them without requiring an adjudication on the merits of the case in circumstances where the usual exercise of the costs discretion will be in accordance with the following statement of principle in the judgment of McHugh J in Re The Minister for Immigration Ex parte Lai Qin (1997) 186 CLR 622 at 625

If it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. This approach has been adopted in a large number of cases.

13 In applying that well settled approach to the active parties to the proceedings I have put momentarily aside the Council’s contention that the consent orders reflect a result that could and should have been adopted by the active participants far earlier than the hearing date.

14 This contention is obviously relevant to any question of the Council’s liability to costs of the active parties (beyond the limited quantum already conceded by the Council ie their costs incurred up to the date of the Council filing its submitting appearance).

15 Having concluded that there is no justification for ordering one of the active parties to pay the costs of the other active party, the only additional consideration is whether the Council which was wholly at fault in failing to publicly notify the development application and thereby legally tainted the development consent, should be made to pay all of the costs of the litigation.

16 It is at this point that the Council’s contention that the parties could and should have resolved their dispute along the lines that so obviously commended itself in the making of the consent orders, is in my judgment unanswerable and determinative of the question whether the Council’s liability in costs should embrace the whole of the proceedings.

17 Just because the Council was wholly responsible for unintentionally legally tainting the development consent that it granted provides no warrant for the active parties to proceed with the litigation in the manner that they did after the Council had filed its submitting appearance, with some expectation that they would be indemnified by the Council in so pursuing the litigation, whatever the outcome, including the outcome that was ultimately achieved, namely the consent orders. This is especially so in the present where the outcome so achieved was so obviously and readily capable of being achieved far earlier in the litigation history.

18 In my judgment, the only reasonable liability for costs that should be borne by the Council in these proceedings having regard to the litigation history and the litigation outcome is that the Council should pay each of the parties’ costs up to the filing on 20 October 2004 of the Council’s submitting appearance.

19 For all of the foregoing reasons, I make the following orders—

1. The second Respondent pay the costs of the Applicants and of the first Respondent in the proceedings incurred up to the date of the filing on 20 October 2004 of the Council’s submitting appearance in the sum agreed or failing agreement, as assessed.
2. Except as provided in Order 1, each party bear its own costs.
3. The exhibits be returned.