SDA Australia Pty Ltd v Ashfield Municipal Council

[2009] NSWLEC 123

Land and Environment Court

of New South Wales

CITATION:

SDA Australia Pty Ltd v Ashfield Municipal Council [2009] NSWLEC 123

PARTIES:

SDA Australia Pty Ltd (Applicant)
Ashfield Municipal Council (Respondent)

FILE NUMBER(S):

10635 of 2008

CORAM:

Lloyd J

KEY ISSUES:

COSTS :- Class 1 proceedings - adjournment necessary by reason of amended plans - power to award a specified gross sum instead of assessed costs - inappropriate in the circumstances

LEGISLATION CITED:

Civil Procedure Act 2005 s 98
Land and Environment Court Rules 2007 r 3.7

CASES CITED:

Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23
Sherborne Estate (No 2): Vanvalen v Neaves [2005] NSWSC 1003; (2005) 65 NSWLR 268

DATES OF HEARING:

7 July 2009

EX TEMPORE JUDGMENT DATE:

7 July 2009

LEGAL REPRESENTATIVES:

Applicant:
P R Clay (barrister)
Solicitors:
McKees Legal Solutions

Respondent:
S Kondilios (solicitor)
Solicitors:
Maddocks Lawyers

JUDGMENT:

- 5 -

IN THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Lloyd J

Tuesday, 7 July 2009

LEC No. 10635 of 2008

SDA AUSTRALIA PTY LIMITED v ASHFIELD MUNICIPAL COUNCIL

EX TEMPORE JUDGMENT

1 HIS HONOUR: This is an application for costs by the respondent, Ashfield Municipal Council, in Class 1 proceedings of the Court’s jurisdiction heard by Commissioner Bly.

2 Section 98(1) of the Civil Procedure Act 2005 states:

“ Subject to the rules of court, and to this or any other Act:
(a) costs are in the discretion of the court, and
(b) the court has full power to determine by whom, to whom and to what extent costs are to be paid, and
(c) the court may order that costs are to be awarded on the ordinary basis or on an indemnity basis .”

3 Rule 3.7 of the Land and Environment Court Rules 2007 applies to proceedings in Class 1 of the Court’s jurisdiction. Rule 3.7 relevantly states:

“(2) The Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances.

(3) Circumstances in which the Court might consider the making of a costs order to be fair and reasonable include (without limitation) the following:
....
(b) that a party has failed to provide, or has unreasonably delayed in providing, information or documents:
(i) that are required by law to be provided in relation to any application the subject of the proceedings, or
(ii) that are necessary to enable a consent authority to gain a proper understanding of, and give proper consideration to, the application,
...."

4 The provisions of rule 3.7 of the Land and Environment Court Rules embody the non-discouragement principle, namely that a party can come to the Court in Class 1 of the Court’s jurisdiction without a fetter on that right by having to face an adverse costs order in the event that the party is unsuccessful. The rule does, however, provide an exception where not all the information is available to the consent authority at the outset.

5 In the present case the Council seeks an order that the applicant, SDA Australia Pty Limited, pay its costs occasioned by amendments to the development application plans made in November 2008.

6 It is necessary to briefly refer to the relevant facts. The hearing was fixed to commence on 13 November 2008 for two days. The hearing did in fact commence on 13 November 2008 on the site. A number of residents from the local area attended and, as I understand it, 11 gave evidence and a site inspection was undertaken. The parties reconvened at the Court at 2:00 pm on that day when relevant documents were tendered and the Council’s case was opened.

7 On 14 November 2008, the hearing recommenced in court at 11.30 am. It transpired that overnight the applicant had generated amended plans, apparently in line with suggestions made in the joint experts’ report and an adjournment was necessary for those plans to be prepared. It seems that the applicant wanted to prepare plans giving effect to the amendment which were not available on that day. Accordingly, an additional hearing date was allocated, namely 18 February 2009, for a further two days. What then happened was that the case was stood over for further hearing on 18 February 2009.

8 On 24 November 2008 the applicant filed its final amended plans with the Court and the Council then proceeded to publicly notify the amended plans. On 22 December 2008 a further joint heritage report was filed and on 9 January 2009 a further joint planning report was filed. The hearing concluded on 19 February 2009 and on 31 March 2009 the commissioner’s judgment was published.

9 As I have said, the Council seeks its costs occasioned by the amendments filed on 24 November 2008.

10 The Council claims what seems to be an unusually large sum, namely $105,400. The applicant contends, however, that an appropriate sum is in the vicinity of $30,000.

11 This Court has consistently held that where an adjournment in Class 1 proceedings is rendered necessary by reason of amended plans, then it is fair and reasonable in those circumstances for the amending party to pay the costs occasioned thereby. In the present case, however, Mr P R Clay, appearing for the applicant, seeks an order that those costs be a specified gross sum instead of assessed costs. The Court has power to do so under s 98(4) of the Civil Procedure Act which states:

“ In particular, at any time before costs are referred for assessment, the court may make an order to the effect that the party to whom costs are to be paid is to be entitled to:

(a) costs up to, or from, a specified stage of the proceedings; or
(b) a specified proportion of the assessed costs; or
(c) a specified gross sum instead of assessed costs; or
(d) such proportion of the assessed costs as does not exceed a specified amount."

12 Mr Clay relies upon a number of authorities, in particular the judgment of Palmer J in Sherborne Estate (No 2): Vanvalen v Neaves [2005] NSWSC 1003; (2005) 65 NSWLR 268 in which his Honour outlined some of the principles that apply when a court is considering whether to exercise its power under s 98(4).

13 Palmer J notes, at [40], that one of the justifications for exercising that power is to give effect to the overriding purpose facilitating the just, quick and cheap resolution of the real issues in dispute as mandated by s 56 of the Civil Procedure Act. His Honour continued to state, at [41], however, that the power under section 98(4) must be exercised judicially. That is, the exercise of the power must have a proper factual foundation and must be explicable according to legal principle.

14 His Honour went on to say, at [42], that the court’s decision under s 98(4) would have to be an informed one; that is, founded on a consideration of the costs actually incurred, the circumstances at the time at which they were incurred, whether they were reasonable in those circumstances and what would have been a reasonable amount to have incurred.

15 In that particular case, Palmer J noted that there was no evidence before the Court sufficient to enable the Court to make any logical, fair and reasonable estimate of what would be an appropriate gross sum to incorporate in the costs order.

16 Mr Clay also refers me to the judgment of Einstein J in Idoport Pty Ltd v National Australia Bank Ltd [2007] NSWSC 23 in which his Honour also set out, at [9], a number of principles relevant to the exercise of the discretion to make an order under s 98(4)(c) of the Civil Procedure Act. Those principles include, inter alia (i) that the court has to be confident that the approach taken to estimate costs is logical, fair and reasonable; and (ii) the courts must have sufficient confidence in arriving at an appropriate sum of materials available.

17 There is before me an affidavit of the applicant’s solicitor, Mr G N McKee, in which he sets out what he regards as being a fair and reasonable estimate of the Council’s costs. However, I was not involved in the case before the commissioner, I do not know the details of the issues, I do not know what is in the various experts’ reports and I do not know what additional costs were incurred as a result of the amended plans that were ultimately relied upon. I am not better placed to assess the merits of the costs claim than a costs assessor. I have no confidence, therefore, that I am in a position to be able to fix a specified gross sum as sought by the applicant.

18 I have nevertheless come to the view, however, that the Council is entitled to all of the costs arising after 14 November 2008 when the case was adjourned so that the amended plans could be prepared, considered and the case continued.

19 As to the costs of the notice of motion, it must follow that the applicant must pay those costs since there is really no reason why the order that I have indicated should not be made. This has been the consistent approach of the Court when cases have had to be adjourned as a consequence of a late amendment to the application.

20 The formal orders therefore are:

1. The applicant must pay the respondent’s costs incurred from 14 November 2008 as agreed or assessed.

2. The applicant must pay the respondent’s costs of the notice of motion for costs as agreed or assessed.

3. The exhibits may be returned.

I hereby certify that the preceding 20 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice D H Lloyd.

Associate

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