Pittwater Council v Granger

[2006] NSWLEC 80

Land and Environment Court

of New South Wales

CITATION:	Pittwater Council v Granger [2006] NSWLEC 80 This decision has been amended. Please see the end of the judgment for a list of the amendments.
PARTIES:	APPLICANT Pittwater Council RESPONDENT James Granger
FILE NUMBER(S):	40778 of 2003
CORAM:	Cowdroy J
KEY ISSUES:	Costs :- legal costs incurred by council seeking compliance with consent orders - no proceedings on foot at the time costs incurred - whether costs were "costs of and incidental to proceedings" - whether costs should be awarded in respect of conduct subsequent to final orders in proceedings
LEGISLATION CITED:	Land and Environment Court Act 1979 s 69(2) Land and Environment Court Rules 1996 Pt 15 r 7 Local Government Act 1993 s 124
CASES CITED:	Latoudis v Casey (1990) 170 CLR 534; Oshlack v Richmond River Council (1998) 193 CLR 72; Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622
DATES OF HEARING:	09/02/2006
EX TEMPORE JUDGMENT DATE:	02/09/2006
LEGAL REPRESENTATIVES:	APPLICANT G B Furness SOLICITORS Mallesons Stephen Jaques RESPONDENT In person

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Cowdroy J

9 February 2006

40778 of 2003

PITTWATER COUNCIL
Applicant

JAMES GRANGER
Respondent

JUDGMENT

1 Cowdroy J: Before the Court is a notice of motion filed on 21 December 2005. Pursuant to the motion the applicant (“the Council”) seeks an order that the respondent pay the Council’s costs of the proceedings incurred from 17 December 2003. The motion is supported by an affidavit of Deborah Jean Townsend sworn on 18 November 2005.

2 The respondent, Mr Granger, has provided affidavits of 18 January 2006 and 30 January 2006. To comprehend the nature of the application it is necessary to deal with the factual history of these proceedings.

3 On 26 May 1994 Mr Granger and his wife purchased land at 42 Nullaburra Road, Newport. They thereafter sought to erect a dwelling on the land and in due course a building was erected following Council approval given on 13 March 1995. A building certificate issued in respect of the premises on 5 September 2000. On 7 May 2001 a land slip occurred on the subdivision close to the respondent’s dwelling. The land slip was so severe that a nearby property required demolition, and another required repairs. As a result of the instability of the location the Council determined that it was necessary to issue orders requiring the respondent to carry out detailed investigations concerning the stability of his residence. Accordingly on 11 February 2002 Council issued an order pursuant to s 124 of the Local Government Act 1993.

4 Paragraph 4 of such order provided that the respondent was to engage the services of a consultant Geotechnical Engineer to carry out a detailed investigation of the stability of the property and provide to the Council a report within 42 days including:-

An assessment of the stability of the property and the risk level for both the property and persons, particularly addressing whether the risk is greater than a low risk as defined in the guidelines set out in the Australian Geomechanics Journal, Volume 35 No 1 dated March 2000 (“the required stability standard”). Should the current condition of the property not satisfy the required stability standard, provide details of the remedial works to be undertaken, together with property management options and a schedule of dates for work completion which will serve to reduce the risk to not greater than “low”.

5 To comply with the notice the respondent duly obtained details of the costs of necessary investigation and expended an amount of approximately $15,857 in consultants fees. He also obtained a quotation to carry out the work required to rectify potential defects in the drainage system. The initial quote from Trentwood Building Services indicated the remedial work would cost in the order of $68,200.

6 The Council, however, was concerned that stabilising work proceed as soon as possible, no doubt motivated by interests of public safety. Accordingly on 29 July 2003 it commenced these proceedings (“the proceedings”) seeking a declaration that the respondent had not complied with para 4 of the order and was thereby in breach of the Environmental Planning and Assessment Act 1979, and consequential orders. The application also sought an order that the respondent pay the Council’s costs.

7 An amended application was filed on 16 December 2003. It sought similar relief but the dates by which compliance was required was postponed until 30 January 2004.

8 The proceedings were opposed when the matter came before the Court on 16 December 2003. The respondent was not and has not since been legally represented. On that day, the Court made the declarations and orders sought (“the orders”) which provided, inter alia, that the respondent would, by 30 January 2004 comply with para 4 of Council’s order by:

(a) preparing designs and specifications for the works;

(b) proposing a timetable for the completion of the works within six months; and
(c) supply the detailed design, specifications and timetable to the Applicant for its approval.

9 The orders included order no.3 which provided:

The respondent pay the applicant’s costs of these proceedings.

10 Accordingly the first stage of the proceedings (“stage 1”) was concluded.

11 The respondent did not comply with the orders by 30 January 2004 and despite letters from the Council no satisfaction was achieved. The Council wrote to the respondent on 9 February 2004, indicating that it considered the failure to comply by 30 January 2004 with the preparation of a design and specification as required by the orders constituted a potential contempt of Court. The letter warned that if compliance was not obtained a notice of motion charging the respondent with contempt would be filed. The letter further indicated that the Council would be seeking an order for its costs. The Council invited the respondent’s co-operation.

12 In response the respondent forwarded by facsimile a copy of a letter which he had forwarded to Mr Brian Samuel of Brian Samuel & Associates, solicitors. That firm was the solicitors for the respondent’s estranged wife. It is not disputed that Brian Samuel and Associated held funds from a matured life policy which by order of another Court were to be applied to the necessary remediation works. The letter which the respondent sent to Mr Brian Samuel referred to the costs incurred of a surveyor which had been nominated by Mr Samuels, namely Pells Sullivan Meynink. The costs included eleven hours of consultation spent with Dr Ambrosis, the Council’s geotechnical engineer. The letter indicated the cost of the remedial works and of the quotations. The letter requested that Mr Samuel obtain co-operation to ensure compliance with the orders. The letter stated, inter alia:

I am on the verge of bankruptcy with debts presently totalling over $650,000 and am in no position to enter into an “open” contract with anyone. Your client has a caveat against my property prohibiting me from selling it (not that it is saleable!) or borrowing further against it (not that any mortgagor would lend any monies against it!)

I am therefore financially unable to comply with the Land and Environment Court order of 16 December 2003 .

13 The letter offered the respondent’s full co-operation with the inspections that might be necessary by the experts retained to investigate the potential defects of a geotechnical nature.

14 By letter dated 18 February 2004 the Council’s solicitors acknowledged receipt of the copy of the letter sent to Brian Samuel & Associates on 12 February 2004, responded stating, inter alia:

It appears to us from your letter to Brian Samuel & Associates that you do not intend to comply with the Court Order dated 16 December 2003. Moreover, it also appears to us that you consider the Court Order dated 16 December 2003 places a joint obligation on Theresa Granger in addition to yourself .

15 The letter suggested that the respondent seek legal advice, and indicated that if no response were received by 20 February 2004 further steps would be taken by way of a notice of motion. The letter also stated that Council would be seeking the costs of the proceedings.

16 On 12 March 2004 a notice of motion was filed by the Council seeking a declaration that the respondent was guilty of contempt of Court because of his failure to comply with the orders. By letter dated 16 March 2004 the Council solicitors wrote to the respondent referred to the filing of the notice of motion. The letter states inter alia:—

In addition to having the matter brought back before his Honour Cowdroy J for the purpose of dealing with the contempt matter we are instructed to also seek to resolve all other outstanding matters between the parties. In this regard, the council agree not to enforce the order for costs made against you in the Court order on the following terms. One, you enter into consent orders in similar terms to those previously provided to you, and two, you comply strictly with the terms of any such consent order. Accordingly we enclose for your consideration draft consent order.

17 The offer was not accepted and the matter came before the Court on 19 March. However, following discussions between the parties on that day, orders were made by consent (“the consent orders”). The consent orders made some slight variation to the orders and further provided by order 2 thereof that the respondent would carry out all necessary works by 30 September 2004. Significantly no order was made for costs. However, para 6 of the consent orders provide:

THE COURT NOTES:
1 The applicant agrees with the respondent that it will not enforce order No. 3 of the Court order dated 16 December 2003 in the event that the respondent complies with the terms of Order 2 above.

18 So concluded the second stage of the proceedings (“stage 2”).

19 Thereafter there appears to have been no communication between the parties until September 2004. Between 19 March 2004 and September 2004 the respondent was active in endeavouring to comply with the orders. He obtained a quotation from another firm to carry out the works, namely Gubler & Associates, at a cost of $67,650. Gubler & Associates were retained by Mr Granger on the basis that the costs of the works were to be met from the funds held by Brian Samuels & Associates. The respondent was frequently in communication by letter with Mr Brian Samuels & Associates, urging the release of funds, or at least an appropriate undertaking that the costs payable to Gubler & Associates Pty Limited would be met.

20 Gubler & Associates Pty Limited had undertaken to commence the works on 1 September 2004. However, as the respondent had been unable to secure promise of payment from Brian Samuels & Associates, they were advised in late August 2004 by the respondent that the arranged start date would have to be postponed.

21 In early September 2004 the respondent contacted Gubler & Associates to inform them that although he had still not received the undertaking from Brian Samuels & Associates it was necessary to have the work started in order to comply with the consent orders. The respondent requested Gubler & Associates to commence work as soon as possible.

22 On 23 September 2004 Gubler & Associates Pty Limited notified Brian Samuels that works were scheduled to commence on 28 September 2004. Works in fact commenced on the property on 29 September 2004 and were completed on 3 November 2004.

23 By letter dated 27 September 2004 the Council’s solicitors enquired of the state of works. By facsimile dated 28 September the respondent replied. The reply was unhelpful but nevertheless it referred to the quotation of Gubler & Associates.

24 On 30 September 2004 the Council’s solicitors again wrote to the respondent stating inter alia as follows:

Since 19 March 2004, we have not received any correspondence or other communication from you in relation to the remedial works until your facsimile dated 28 September 2004. Based on your facsimile, it appears to us that the works will not even have been commenced by 30 September 2004.

Your failure to comply with the Court Orders is a contempt of Court. We are currently seeking instructions from our client as to whether we should immediately file a Notice of Motion for contempt and have the matter brought back before Cowdroy J for further orders. Nevertheless, we request that you inform us as to what steps you intend to take to have the remedial works caused to be carried out, and by what date you anticipate that the works will be completed.

We request that you provide a response by 4pm on 5 October 2004.

25 On the same day a letter was written by the Council’s solicitors to Brian Samuel & Associates. The letter states, inter alia:

We are instructed that based upon the documentation you provided to us (including the quote from Gubler & Associates Pty Limited dated 10 May 2004) the Council has no concerns in relation to the works proposed by James Granger, subject to those works being carried out under the supervision of, or at the direction of, either Gary Mostyn or Phillips Pells of Pells Sullivan Meynink Pty Limited (as stipulated in the Court Order dated 19 March 2004).

The Council is concerned, however, that the works do not appear to have been commenced, yet the Court Orders require completion of the works by today.

26 By letter dated 10 December 2004 the Council’s solicitors again wrote to the respondent. The letter states, inter alia:

As you are aware the Court ordered the remedial works, as defined in the Court orders, to be completed by 30 September 2004. Although such works are not finished as required by the orders, we understand that they are currently being carried out.

27 The letter thereafter sought a timetable for the completion of the works and requested a response. The respondent replied by letter which was again unhelpful. On 15 December 2004 the Council wrote to the respondent again requesting particulars of the completion dates by 17 December 2004. Thereafter further correspondence took place between the parties and between the respondent and Mr Samuel which is of no direct relevance to the current issues. The Council accepts that its requirements have been satisfied.

28 It is against that factual background that the application for costs is now made. The Council relies upon the provisions of Pt 15 r 7 of the Land and Environment Court Rules 1996 which provides:

The Court may order the respondent to pay the costs of the proceedings where a respondent satisfies or causes to be satisfied the claim of the applicant after the proceedings have been commenced.

29 The Council submits that it is in fact the successful party since its claim against the respondent has been satisfied. It refers to the principle that usually a successful party is entitled to an award of costs in its favour, and relies upon Latoudis v Casey (1990) 170 CLR 534 and Oshlack v Richmond River Council (1998) 193 CLR 72.

30 The Council further submits that costs should be awarded even though there has been no hearing on the merits and in this respect the observations of McHugh J in Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; Ex parte Lai Qin (1997) 186 CLR 622 at 624 are inapplicable. The Council submits that the conduct of the respondent has been unreasonable and the conduct of the Council has been more than reasonable.

31 The Court is empowered with a broad discretion concerning the award of costs as provided by s 69(2) of the Land and Environment Court Act 1979. That discretion must however be exercised judicially.

32 An order for costs was made in the proceedings when the orders were made on 16 December 2003. When the contempt proceedings were settled by the consent orders on 19 March 2004 the Council did not seek costs, despite the fact that in two letters it had foreshadowed that it would seek such costs. The Court noted on that occasion the agreement between the parties concerning the costs order already made on 16 December 2003.

33 The respondent had no knowledge that any application for further costs would be made until 8 December 2005 namely long after completion of the works required by the consent orders. On that day the Council’s solicitors wrote confirming that the proceedings were complete. The letter stated:

We refer to the above proceedings which are now complete subject to the resolution of the issue of costs.

Firstly, we note that the Council has a costs Order dated 16 December 2003 in its favour for the costs incurred up to that date. As you are aware, the Council agreed not to pursue you in regard to that order if you complied with the Consent Order dated 16 March 2004. The Consent Order required you to complete certain remedial works by 30 September 2004. However, you did not in fact commence works until after that date. Accordingly, the Council is not bound by the agreement, and has instructed us to pursue you for the outstanding cost.

Secondly, we are instructed to seek a costs Order against you for all costs incurred by the Council from 16 December 2003 to date. However, rather than incur further unnecessary costs in Court attendances, we propose to come to an agreement with you in relation to the quantum of costs (and time for payment) which can be the subject of Consent Orders .

The letter then set out the proposal for the payment of the Council’s costs.

34 The notice of motion seeks costs from the 17 December 2003. The costs incurred between 17 December 2003 and 19 March 2004 were not provided for in the consent orders. The consent orders were entered into on the basis that they finally resolved the differences between the parties and no provision was made for payment of any further costs, nor were costs reserved. The Court does not consider these costs are now recoverable in view of the resolution reflected in the consent orders.

35 The costs which have been incurred since 19 March 2004 are costs subsequent to the proceedings. The Court does not consider those costs are costs of or incidental to the proceedings since there were no proceedings before the Court at the time costs were incurred.

36 Further the Court accepts that the respondent was attempting to comply with the orders in difficult circumstances and that the contrary to the letter of the Council’s solicitor dated 8 December 2005 work had in fact commenced prior to 30 September 2004.

37 For these reasons the Court considers that in the exercise of its discretion no order for costs should be made.

38 Accordingly, the Court makes the following orders:

1. No order for costs is made in proceedings number 40778 of 2003 from 17 December 2003.

2. The exhibits be returned.

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24/02/2006 - Incorrect party name - Paragraph(s) Coversheet