Sansom v Port Stephens Council (No 2)

[2006] NSWLEC 504

Land and Environment Court

of New South Wales

CITATION:	Sansom v Port Stephens Council (No 2) [2006] NSWLEC 504
PARTIES:	APPLICANT Jeffrey Joseph Sansom RESPONDENT Port Stephens Council
FILE NUMBER(S):	10155 of 2006
CORAM:	Pain J
KEY ISSUES:	Costs :- Whether costs should follow the event in preliminary question of law in Class 1 proceedings
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979 s 97, Land and Environment Court Rules 1996 Pt 16 r 4
CASES CITED:	Broadwater Action Group Inc v Richmond Valley Council (No 2) (2003) 129 LGERA 401 ; Gee v Port Stephens Council (2003) 131 LGERA 325 ; Gibson v Mosman Municipal Council (2001) 116 LGERA 397 ; Grant v Kiama Municipal Council [2006] NSWLEC 70 ; Hunter Development and Brokerage Pty Ltd v Cessnock City Council [2005] NSWLEC 727 (16 December 2005) ; Kinder Investments Pty Ltd v Sydney City Council [2005] NSWLEC 737 (9 December 2005) ; Outdoor Australia Pty Ltd v Auburn Council [1996] NSWLEC 71
DATES OF HEARING:	01/08/2006
DATE OF JUDGMENT:	08/18/2006
LEGAL REPRESENTATIVES:	APPLICANT Mr J Kildea (Barrister) SOLICITORS Thompson Norrie Solicitors RESPONDENT Mr J Maston (Barrister) SOLICITORS Sparke Helmore

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Pain J

18 August 2006

10155 of 2006 Jeffrey Joseph Sansom v Port Stephens Council (No 2)

JUDGMENT ON COSTS

1 Her Honour: I determined a preliminary question of law in these Class 1 proceedings being a s 97 appeal under the Environmental Planning and Assessment Act 1979 (“the EP&A Act”) on 1 August 2006. The Council was successful on the question of law. As a result the Class 1 appeal in this matter cannot proceed.

2 The issue arises now as to whether I should award costs in the Council’s favour as it was successful on the preliminary question of law. Part 16 r 4 of the Land and Environment Court Rules 1996 (“the Rules”) 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,
…

(2) No order for the 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.

3 The Council relied on Grantv Kiama Municipal Council [2006] NSWLEC 70 and Gee v Port Stephens Council (2003) 131 LGERA 325 to argue that costs should be awarded in its favour.

4 The Applicant argued that despite the decision in Grant v Kiama and Gee I should not award costs. The cases suggest a difference in view on the issue of whether costs ought be payable in relation to a preliminary question of law in Class 1 proceedings and I should not award costs. The Applicant relied on Broadwater Action Group Inc v Richmond Valley Council and Anor (No 2) (2003) 129 LGERA 401 and Outdoor Australia Pty Ltd v Auburn Council (1996) 89 LGERA 365 to argue that the same analysis which applied to the previous costs provision in Class 1, that costs would only be awarded in exceptional circumstances, should apply under the current costs provision of “fair and reasonable” in Pt 16 r 4(2). These cases supported a finding that costs should not follow the event.

Finding

5 Grantv Kiama considers a number of decisions where costs have been considered under the previous costs provision (exceptional circumstances) and the current costs rule set out above. Paragraph 15 sets out various circumstances where costs provisions have been considered in the context of Class 1 proceedings as follows:

An examination of the cases reveals a variety of circumstances where courts have considered that it would be fair and reasonable to make an order for costs. These include the following circumstances, although these do not exhaust the circumstances:

(a) where the proceedings cease to have the character of merits review, such as where a central issue is whether there is power to grant the approval sought at all: Teller Properties Pty Limited v Randwick City Council (1994) 84 LGERA 369 at 371; Gee v Port Stephens Council (2003) 131 LGERA 325 at 339 [56] and 340 [60]; Pancho Properties Pty Limited v Wingecarribee Shire Council [2004] NSWLEC 620 (9 November 2004) at [19]; Shaynd v Ku-ring-gai Municipal Council (2005) 138 LGERA 395 at 400, [21]-[22]; and Kinder Investments Pty Ltd v Sydney City Council [2005] NSWLEC 737 (9 December 2005) at [52]; but there may be exceptions where no order is appropriate: Broadwater Action Group Inc v Richmond Valley Council (No. 2) (2003) 129 LGERA 401 at 405 [7] – 407 [12] and Hunter Development and Brokerage Pty Ltd v Cessnock City Council [2005] NSWLEC 727 (16 December 2005) at [15]-[19];

(b) where the matter the subject of the costs application involves only a preliminary question of law: Teller Properties Pty Limited v Randwick City Council (1994) 84 LGERA 369 at 371; Gibson v Mosman Municipal Council (2001) 116 LGERA 397 at 400; Gee v Port Stephens Council (2003) 131 LGERA 325 at 339 [56] and 340 [60]; Shaynd v Ku-ring-gai Municipal Council (2005) 138 LGERA 395 at 400 [21]-[22]; but, again there may be exceptions where no order is appropriate : Broadwater Action Group Inc v Richmond Valley Council (No. 2) (2003) 129 LGERA 401 at 405 [7] – 407 [12] and Hunter Development and Brokerage Pty Ltd v Cessnock City Council [2005] NSWLEC 727 (16 December 2005) at [15]-[19];

6 As indicated in [15(b)] of Grant v Kiama it is more likely that an award of costs will be made in favour of the successful party on a preliminary question of law as an exception to the usual rule that each party pay its own costs. An award of costs to the successful party should not be assumed, however. The issue of whether costs are payable in relation to a preliminary question of law is determined in part by the nature of the question of law raised and whether it is truly separate from the merit review. The question of law raised here was how the development the subject of the development application ought be characterised under the relevant LEP. If characterised as commercial premises it was prohibited development and I so held. The question of law while distinct from the merit issues in the case involved a consideration of the development proposal and its manner of operation. In these circumstances there was some overlap with issues that could be considered in a merit hearing.

7 I am mindful of comments in Broadwater Action Group at 406 and Outdoor Australia at 369-370 of the importance of applicants in Class 1 proceedings not being discouraged from commencing those proceedings or raising preliminary questions of law for fear of adverse costs orders, a view I share. These comments apply as equally under the “fair and reasonable” test for costs (Broadwater Action Group) as for the previous “exceptional” circumstances test (Outdoor Australia).

8 Taking these considerations into account and in the circumstances of this case, I consider each party should pay their own costs on the preliminary question of law.

Order

9 The Court orders that each party is to pay its costs of the hearing of the preliminary question of law.