Saunders and Ward Pty Ltd v Resource Management - [2015] TASSC 28

[2015] TASSC 28

COURT: SUPREME COURT OF TASMANIA

CITATION: Saunders & Ward Pty Ltd v Resource Management

and Planning Appeal Tribunal [2015] TASSC 28

PARTIES:  SAUNDERS & WARD PTY LTD
  v
  RESOURCE MANAGEMENT

AND PLANNING APPEAL TRIBUNAL

FILE NO: 534/2014
DECISION

APPEALED FROM: Saunders & Ward Pty Ltd v Kingborough Council

and On Horizons Pty Ltd [2014] TASRMPAT 50B

DELIVERED ON:  30 June 2015
DELIVERED AT:  Launceston
HEARING DATE:  20 October 2014
JUDGMENT OF:  Blow CJ

CATCHWORDS:

Environment and Planning – Courts and tribunals with environment jurisdiction – Tasmania - Resource Management and Planning Appeal Tribunal and its predecessors – Costs – Costs application determined by single tribunal member after three determined appeal – Whether tribunal properly constituted – Whether duty to invite submissions as to constitution of tribunal.
Resource Management and Planning Appeal Tribunal Act 1993 (Tas), ss 9, 10.

Aust Dig Environment and Planning [599]

REPRESENTATION:

Counsel:
             Appellant:  S B McElwaine SC
             On Horizons Pty Ltd:  A Spence
Solicitors:
             Appellant:  Tremayne Fay & Rheinberger
             On Horizons Pty Ltd:  Page Seager

Judgment Number: [2015] TASSC 28
Number of paragraphs: 38

Serial No 28/2015
File No 534/2014

SAUNDERS & WARD PTY LTD v RESOURCE MANAGEMENT
AND PLANNING APPEAL TRIBUNAL

REASONS FOR JUDGMENT BLOW CJ

30 June 2015

This is an appeal from a decision of the respondent, the Resource Management and Planning Appeal Tribunal, in relation to an order for costs. The tribunal proceedings concerned a subdivision proposal by a developer named On Horizons Pty Ltd. Conditional approval for a subdivision was granted by the Kingborough Council. The appellant in the present proceedings, Saunders & Ward Pty Ltd, was aggrieved by the decision of the council. It appealed to the tribunal. Its appeal was unsuccessful: On Horizons Pty Ltd v Kingborough Council; Saunders & Ward Pty Ltd v Kingborough Council and On Horizons Pty Ltd [2014] TASRMPAT 8. The developer applied for an order that the appellant pay its costs of and incidental to the appeal. On 16 June 2014 the Chairperson of the tribunal, Mr G P Geason, made an order that the appellant pay the developer's costs of and incidental to the appeal as from 2 December 2013: Saunders & Ward Pty Ltd v Kingborough Council and On Horizons Pty Ltd [2014] TASRMPAT 50B. This is an appeal from that order by the same appellant. The developer, not the tribunal, should have been named as the respondent to this appeal, but nothing turns on that.
The appellant's contentions in this appeal are essentially as follows:
·     That the learned Chairperson did not have the power to make an order for costs on his own because the tribunal had been constituted by three members when it determined the planning appeal, and was legally required to be similarly constituted in order to determine the costs application.
·     That the learned Chairperson did not afford the appellant procedural fairness in the costs proceedings, in that he made a decision to deal with the costs application alone without first giving the appellant an opportunity to make submissions as to who should determine the costs application.
·     That the reasoning of the learned Chairperson in the costs decision contained errors of law.

Constitution of the tribunal

The appeal from the council's decision was heard by the learned Chairperson and two other tribunal members. On 26 March 2014 they delivered a decision in which they said that the appeal was "dismissed". Strictly speaking, when the tribunal makes a decision on the merits to the effect that a planning appeal should fail, it does not have the power to dismiss the appeal, but should make a decision "affirming the decision appealed against": Resource Management and Planning Appeal Tribunal Act 1993 ("the Act"), s 23(2)(a). That decision of the tribunal should therefore be regarded, in law, as a decision affirming the council's decision. At the end of its written decision, the tribunal said, at [78]-[80]:
"The Tribunal will consider any application for an order for costs in this appeal, 140/13S, if made to the Tribunal in writing with supporting submissions within 14 days of the publication of this decision;
Upon application being made, the operation of Section 28(1) of the Resource Management & Planning Appeal Tribunal Act 1993 will be stayed. If an application for an order for costs is not made, Section 28(1) of the Act applies and each party bears its own costs; and
If requested, the Tribunal will reconvene to hear any evidence in respect of any matter bearing upon an order for costs."
The developer's solicitors made an application for costs by letter dated 8 April 2014. Both sides made written submissions as to that application. No request was made for the tribunal to reconvene to hear any evidence relating to costs, or to receive oral submissions. The learned Chairperson gave a written decision in relation to the costs application on 16 June 2014, without first having notified either party that he proposed to make that decision alone.
The Chairperson of the tribunal is empowered by s 9 of the Act to give directions as to which members of the tribunal are to constitute it for the purposes of particular proceedings. That section reads as follows:
"(1) Subject to section 10, the chairperson may give directions as to the arrangement of the business of the Appeal Tribunal and as to the members who are to constitute the Appeal Tribunal for the purposes of particular proceedings.
(2) If the chairperson gives a direction as to the members who are to constitute the Appeal Tribunal for the purposes of a particular proceeding, the chairperson may —
(a)   at any time after giving the direction and before the start of the hearing of the appeal; or
(b)   if, in the case of an appeal before the Appeal Tribunal constituted by more than 2 members, one of those members ceases to be a member, or ceases to be available for the purposes of the appeal, during the hearing of the appeal or after the completion of the hearing but before the matter to which the appeal relates is determined, at any time after the member ceases to be a member or to be available —
revoke the direction and give a further direction under subsection (1) as to the persons who are to constitute the Appeal Tribunal for the purposes of the appeal.
(3) In giving a direction under this section as to the members who are to constitute the Appeal Tribunal for the purposes of a particular proceeding, the chairperson must have regard to —
(a)   the nature of the issues likely to be involved in the appeal; and
(b)   the particular expertise of each proposed member; and
(c)   the degree of public importance or complexity of the matters to which the appeal relates; and
(d)   the need for the Appeal Tribunal's affairs to be conducted expeditiously and efficiently."
The appellant contends that a planning appeal and application for an order as to the costs of that planning appeal constitute a single proceeding for the purposes of s 9. The developer contends that they do not. That is, it contends that an application for the costs of a planning appeal is not a part of the same proceeding for the purposes of s 9.
Section 10 of the Act provides that the tribunal may be constituted in various ways for various purposes. It reads as follows:
"(1) Subject to section 12, the Appeal Tribunal is to be constituted for the purposes of the hearing and determination of an appeal by —
(a) the chairperson; or
(b) a member other than the chairperson; or
(c) subject to subsection (2), the chairperson and not more than 4 other members.
(2) The Appeal Tribunal may be constituted for the exercise of powers in relation to the hearing and determination of an appeal, or for purposes other than the hearing and determination of an appeal, by the chairperson or any other member."
It should be noted that that section refers to three different types of activity undertaken by the tribunal:
· The "hearing and determination of an appeal": s 10(1).
· The "exercise of powers in relation to the hearing and determination of an appeal": s 10(2).
· The "exercise of powers … for purposes other than the hearing and determination of an appeal": s 10(2).
The appellant contends that the determination of a costs application falls within the first of these categories. That is, it contends that the determination of a costs application is part of "the hearing and determination of an appeal". I disagree.
When there is an appeal before the tribunal, s 16(1)(f) of the Act requires the tribunal to "hear and determine the appeal within 90 days after it is instituted". The Minister has the power to extend the period of 90 days under s 16(5). There is no reason why a costs application should be regarded as part of the hearing and determination of an appeal, required to be completed within 90 days after the appeal is instituted, for the purposes of s 16(1)(f). And there is no reason why the words "the hearing and determination of an appeal" should have a different meaning when they are used in s 10(1).
By virtue of s 38 of the Act, the Chairperson may delegate any of his functions or powers to "another presiding member or another person performing duties on behalf of the Appeal Tribunal". The practical effect of s 10(1) is therefore that an appeal may be heard or determined either by a single member of the tribunal, or by a group of five or fewer presided over by either the Chairperson or a delegate of the Chairperson.
The effect of s 10(2) is much harder to deduce. However a strong indication of its intended effect is given by the fact that s 10(1)(c) commences with the words, "subject to subsection (2)". Section 10(1)(c) enables the tribunal to be constituted by multiple members "for the purposes of the hearing and determination of an appeal", subject to subs (2) allowing a single member to exercise the tribunal's powers "in relation to the hearing and determination of an appeal, or for purposes other than the hearing and determination of an appeal".
When the tribunal hears and determines an appeal, s 23(2) requires it to make a decision in writing either affirming the decision appealed against, varying it, setting it aside and making a substituted decision, or setting it aside and remitting the matter for reconsideration. It follows that the conducting of a hearing and the making of such a decision must constitute "the hearing and determination of an appeal". But the tribunal has other powers that relate to the hearing and determination of an appeal, including the following:
·     It may make a person whose interests are affected by the decision appealed against a party to the appeal: s 14(2).
·     It may direct the parties to an appeal to mediation: s 16A(1)(b).
·     It may stay the proceedings on an appeal until mediation has been completed: s 16(2).
·     It may make a decision by consent: s 17(2).
·     It may direct that a person who fails to appear is to cease to be a party to an appeal: s 21(b).
·     It may make an order amending an application that has been made by one party to a decision-maker that is also a party: s 22(3).
·     Under certain circumstances it may correct a clerical mistake or an error, or it may correct an evident material mistake in the description of any person, thing or property referred to in a s 23(2) decision: s 23(5).
·     Under certain circumstances it may amend a s 23(2) decision: s 23(6).
·     It may make an order for costs: s 28(2). Such an order may be made "before the end of any proceedings": s 28(5).
The hearing and determination of an appeal are concluded with a s 23(2) decision. Prior to the making of such a decision, the relevant statutory powers in the list above are powers that can be exercised "in relation to the hearing and determination of an appeal" within the meaning of s 10(2). When an order for costs is made after the making of a s 23(2) decision, the tribunal exercises its power under s 28(2) for a purpose "other than the hearing and determination of an appeal" within the meaning of s 10(2). That is because the hearing and the determination of the appeal are in the past.
In this case, the tribunal was constituted by the Chairperson and two other members "for the purposes of the hearing and determination of an appeal", in accordance with s 10(1)(c). But that provision is subject to s 10(2), which permitted the tribunal to be constituted by the Chairperson alone for "purposes other than the hearing and determination of an appeal", including the determination of a costs application following the determination of the appeal.
For these reasons I reject the appellant's contention that the learned Chairperson did not have the power to make an order for costs on his own.

Procedural fairness

The appellant contends that the decision as to how the tribunal was to be constituted for the purposes of the costs application was the sort of decision that required the Chairperson to give it an opportunity to make submissions. Section 16(1)(d) of the Act requires that, "In an appeal before the Appeal Tribunal", the tribunal must observe the rules of natural justice. Even if a costs application is something subsequent to, and distinct from, an appeal to the tribunal, the common law rules of natural justice or procedural fairness must apply since there is nothing in the Act to indicate any intention to exclude them: Annetts v McCann (1990) 170 CLR 596 at 598. The question is whether those rules required not only that the appellant was to be given an opportunity to make submissions as to the merits of the costs application, but also an opportunity to make submissions as to how the tribunal was to be constituted when it determined the costs application.
The applicable principle was stated by Mason CJ, Deane and McHugh JJ in Annetts v McCann (above) at 598 in the following passage:
"It can now be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person's rights, interests or legitimate expectations, the rules of natural justice regulate the exercise of that power unless they are excluded by plain words of necessary intendment".
An order for costs under s 28 involves an exercise of power by one or more public officials that prejudices a person's rights or interests. But, in the absence of any bias or any reasonable apprehension of bias, a decision as to how a decision-making tribunal is to be constituted for the purpose of the exercise of a statutory power is not one that can "destroy, defeat or prejudice a person's rights, interests or legitimate expectations".
There was no suggestion of bias or any reasonable apprehension of bias in relation to the learned Chairperson. He was one of the tribunal members who had participated in the hearing of the appeal and the making of the tribunal's s 23(2) decision. In those circumstances, the rules of natural justice did not require him or the tribunal to give the appellant an opportunity to be heard as to whether he alone should constitute the tribunal for the purposes of determining the costs application.

The costs discretion and "unnecessary conduct"

The appellant contends that the learned Chairperson erred in law by misdirecting himself as to the statutory criteria that enliven the discretion to make a costs order by proceeding on the basis that that discretion is engaged when "unnecessary conduct" on the part of a party is identified.
Section 28(1) of the Act lays down a general rule that each party to an appeal is to pay its own costs. However s 28(2) empowers the tribunal to make an order for costs if it is "satisfied that it is fair and reasonable to do so". Section 28(3) then goes on to list matters which the tribunal may take into account for the purposes of the costs discretion. That subsection reads as follows:
"(3) For the purposes of subsection (2), the Appeal Tribunal may take into account any of the following matters:
(a) whether the proceedings appear to the Appeal Tribunal to have been instituted merely to delay or obstruct;
(b) whether in the Appeal Tribunal's opinion a party has raised frivolous or vexatious issues;
(c) the relative merits of the claims made by each of the parties;
(d) whether in the Appeal Tribunal's opinion a party has unnecessarily or unreasonably prolonged the proceedings or increased the costs of them;
(e) whether a party has failed to comply with a direction or order of the Appeal Tribunal without reasonable excuse;
(f) whether a party has failed to comply with any relevant law or planning scheme;
(g) the nature, complexity and outcome of the proceedings;
(h) the capacity of the parties to meet an order for costs;
(i) any other matter the Appeal Tribunal considers relevant."
In his decision, the learned Chairperson referred to the principle enshrined in s 28(1) and the discretion conferred by s 28(2). Then, at [26], he said the following:
"The concept 'just and reasonable' connotes a compensatory quality. That is to say it is suggestive of an approach grounded in a principle to the effect that a party should be compensated for costs incurred in connection with the prosecution of an appeal where those costs are the result of what may be broadly described as unnecessary conduct on the part of the other party. 'Unnecessary' is used in very broad terms to pick up each of the considerations identified in Section 28(3) of the Act. Prolonging the appeal and increasing the costs of it, where that result is caused by unnecessary conduct of the appeal, ought to be compensated, subject to a consideration of the whole of the conduct of the parties. The exercise of the discretion is not intended to be punitive. A party is not to be punished merely for running an unsuccessful argument. Nor is a party to be punished for exercising its rights of appeal. It is a party's right to take such steps as are lawful to resist a development application whether the developer likes it or not. That is the statutory scheme and it is not the function of the Tribunal to curtail those rights. Conduct which amounts to unnecessary conduct in the appeal, will typically be conduct which raises issues that are irrelevant, unarguable or unmeritorious, (as opposed to arguable). That excludes asserting a defensible position which is ultimately unsuccessful but includes asserting an indefensible position. A position will be indefensible when on all of the material the argument is unsustainable because it is not supported by relevant evidence or not arguable on the basis of issues, or established principles of statutory construction. 'Relevant evidence' is evidence which relates to the applicable standards or relevant considerations. There must be a nexus between that which is put, and the standard or issue required to be satisfied or addressed by the [planning] Scheme or statute.
Thus it is that great care needs to be taken in balancing the competing considerations urged in this case in respect of costs."
The appellant contends that the learned Chairperson erred in law by focusing his attention on "unnecessary conduct", thereby misinterpreting the statutory scheme, and overlooking matters listed in s 28(3) which have nothing to do with "unnecessary conduct", particularly those referred to in s 28(3)(c), (f), (g), and (h). Those paragraphs refer to the relative merits of the parties' "claims", failure to comply with any relevant law or planning scheme, the nature, complexity and outcome of the appeal, and the capacity of the parties to meet an order for costs.
However the learned Chairperson did take into account the relative merits of the parties' contentions, as well as the nature, complexity and outcome of the appeal. A tribunal does not make a material error of law if, having posed the wrong question to itself, it then deals with the question as though answering the right one: Conway v Repatriation Commission (1988) 9 AAR 397 per French J (as he then was), with whom Lockhart J agreed, at 408-409. It cannot be said that the learned Chairperson erred by failing to take into account the relative merits of the claims made by each of the parties or the nature, complexity and outcome of the proceedings, as required by s 28(3)(c) and (g).

The written submissions of the parties relating to costs had nothing to do with any non-compliance with any law or planning scheme. The appellant's solicitors expressly stated that no submission was made in relation to the capacity of the parties to meet an order for costs. It therefore cannot be said that the learned Chairperson made any error of law by failing to take into account the matters referred to in s 28(3)(f) or (h).
Reading the learned Chairperson's decision as a whole, I do not think it can be said that he focused on "unnecessary conduct" to the exclusion of any other relevant consideration, nor that he attached inappropriate weight to any relevant consideration. If he strayed into error in the course of his comments as to "unnecessary conduct", any such error was inconsequential.

Misinterpretation of the reasoning in the principal decision?

The appellant contends that, at [29] of his reasons, the learned Chairperson erred in law by misinterpreting the reasoning in the tribunal's principal decision, and that that led him to erroneously reach a conclusion adverse to the appellant in relation to costs.
To understand this assertion, it is necessary to understand a little about the basis of the appeal. The appellant carries on a metal fabrication and engineering business at premises close to the site of the developer's subdivision. At times the appellant's work is very noisy. The principal issue in the appeal to the tribunal, as I understand it, was whether a subdivision should be permitted so close to premises where such noisy work was undertaken. There also appears to have been some controversy as to what steps could or should be taken to reduce the level of noise. Both sides relied on expert evidence. The appellant's expert came from another State, where there seems to be less tolerance of noise in residential areas. The experts differed as to what level of noise was acceptable. The tribunal preferred the opinion of the developer's expert, who was a Tasmanian.
At [29] of his reasons, the learned Chairperson said this:
"In this case it [the determination of the costs application] is a difficult exercise. The Appellant pursued a case in circumstances where its purpose was a defensive one. That is to say its purpose was intended to protect it from consequences which might potentially damage its business while taking no steps of its own to mitigate the noise it generated. In essence, it advanced a case which was founded upon a nuisance it created (and thus controlled) as a foundation for an argument that the developer ought not be permitted the opportunity to develop its land. In advancing that argument it relied upon a standard which on all of the evidence was not the appropriate standard in this jurisdiction. It was not precluded from arguing that there was a good reason for adopting a different standard, being the standard urged by its sound expert, but the prevailing and applicable standard was a published one and the real position is that the Appellant thereby embellished its argument that there was a potential nuisance which ought cause the Tribunal to refuse the developer's application to develop its land. In effect it shored up that argument through the utilisation of evidence which adopted a standard which assisted its case but which did not reflect the prevailing standard. It did so whilst in possession of a counter argument which adopted the applicable standard."
Under s 25(1) of the Act, a right of appeal from a decision of the tribunal to this Court is available only on questions of law. If, as asserted by the appellant, the learned Chairperson made a mistake as to the line of reasoning that he and his colleagues had adopted when they determined the appeal, that was a mistake of fact, not an error of law.

The letter of 2 December 2013

On 2 December 2013 the solicitors for the developer sent the solicitors for the appellant a very long letter in which they urged the appellant to abandon the appeal to the tribunal, argued at length that the appeal had no merit, threatened to apply for costs if the appeal proceeded and failed, offered to consent to the appeal being dismissed with no order for costs if that were agreed to within 21 days, and said that the developer "would entertain reasonable amendments to the conditions included upon the permit by Council". The letter was headed, "Without prejudice save as to costs".
In his reasons at [30], the learned Chairperson said that all of the matters referred to in the paragraph that I have just quoted, at [30] above, were pointed out to the appellant in the letter of 2 December 2013. The appellant contends that that was not correct. That is to say, it contends that some of the matters mentioned by the learned Chairperson at [29], quoted in full above, were not pointed out to the appellant in the solicitors' long letter. If the conclusion that all of the matters mentioned were pointed out in the letter was an erroneous conclusion, did that amount to an error of law? The appellant contends that the learned Chairperson made an error that should be categorised as the drawing of an inference when no such inference was open on the facts as found. It contends that the impermissible drawing of an inference is an error of law, and relies on Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321. I disagree with that analysis. A mistake as to what points were or were not made in a letter amounts to a mistake of fact, not the drawing of an impermissible inference. If the learned Chairperson made the error asserted, he did not err in law. I therefore need not go through [29] of the reasons with a fine tooth-comb looking for a point that was not made in the solicitors' letter.
The appellant also contends that the learned Chairperson erred in law by regarding the letter of 2 December 2013 as "decisive". That contention relates to [33] of the learned Chairperson's reasons, which reads as follows:
"Notwithstanding the statutory presumption in favour of each party paying its own costs, the Tribunal is satisfied that in all of the circumstances, it is appropriate that the Applicant [the developer] should have an order for costs against the Appellant. But that order should only run from the period after the letter dated the 2^nd December 2013, which recognises the legitimacy of the Appellant's concern with respect to the development, [and] the need to preserve its position ahead of the obtaining of evidence but that the costs incurred by the Applicant after that date were incurred as a result of the Appellant's conduct, and unnecessarily so. Decisive in this case is the very comprehensive nature of that letter, and the very detailed analysis it contained. That it was neither answered, nor causative of a sufficient level of engagement to procure a resolution is relevant. The Appellant must have perceived the attenuation zone [a buffer zone provided for in the relevant planning scheme] to be a 'force field' around its business, impenetrable even in the face of evidence exhibiting enough to enable the coexistence of the Appellant's use and the Applicant's development."
It was open to the tribunal to decide what weight was to be attached to the fact that the letter in question had been written. There was no reason why the tribunal could not conclude that, having regard to all the relevant circumstances, that letter was so significant that the developer should recover its costs of the proceedings as from the date of the letter.
In the written and oral submissions of counsel for the appellant in relation to this contention, it was argued at length that the letter did not amount to a Calderbank offer: Calderbank v Calderbank [1976] Fam 93. That case stands for the proposition that, in civil litigation, when one party makes an offer of settlement on a "without prejudice except as to costs" basis, that offer is unreasonably refused or not accepted, the parties proceed to trial, and the offeree obtains a worse result than what was offered, then ordinarily the offeror should be awarded costs as from the date of the offer. As counsel for the appellant has rightly pointed out, the letter of 2 December 2013 did not contain an offer in the Calderbank sense, but an invitation to the appellant to entirely surrender its case, coupled with a vague invitation to engage in further discussion as to "reasonable amendments" to permit conditions. But the learned Chairperson did not make any error as to the status of the letter. At [21] he said:
"… The proposal in the letter of 2^nd December 2013 was not strictly speaking a Calderbank letter … The point of the letter on the Applicants [sic] case is that [it] represents a turning point in the conduct of the matter, the ignoring of which content, the Appellants [sic] undertook 'at its own risk' and on notice of what might follow."
I am not persuaded that the learned Chairperson erred in law as to the status of the letter in question. The weight that he chose to give that letter was a matter for him. He did not err in law by treating it as "decisive".

Conclusion

I have dealt with all of the grounds of appeal that the appellant pursued. None have succeeded. The appeal is dismissed.