Shoalhaven City Council v South Coast Concrete Crushing & Recycling Pty Ltd - [2010] NSWLEC 80

No judgment structure available for this case.

Reported Decision: 174 LGERA 184

Land and Environment Court

of New South Wales

CITATION: Shoalhaven City Council v South Coast Concrete Crushing & Recycling Pty Ltd [2010] NSWLEC 80

PARTIES:
APPLICANT
Shoalhaven City Council
FIRST RESPONDENT
South Coast Concrete Crushing & Recycling Pty Ltd
SECOND RESPONDENT
Abib Pty Ltd

FILE NUMBER(S): 40630 of 2008

CORAM: Pepper J

KEY ISSUES: PRACTICE AND PROCEDURE :- costs where there has been a supervening event - whether a hearing on the merits where findings made but no relief ordered - whether disentitling conduct - whether one party wholly 'successful' - respondent to pay applicant's costs

LEGISLATION CITED: Civil Procedure Act 2005 s 98
Environmental Planning and Assessment Act 1979 Pt 3A
Uniform Civil Procedure Rules 2005 rr 28.2 and 42.1

CASES CITED: F & D Bonaccorso Pty Ltd v City of Canada Bay Council (No 5) [2008] NSWLEC 235
Kiama v Grant (2006) 143 LGERA 441
Latoudis v Casey (1990) 170 CLR 534
Normans Plant Hire Pty Limited v South Coast Concrete Crushing & Recycling Pty Limited [2006] NSWLEC 390
Normans Plant Hire Pty Limited v South Coast Concrete Crushing & Recycling Pty Limited (No 2) [2006] NSWLEC 734
Oshlack v Richmond River Council (1988) 193 CLR 72
Pittwater Council v Bolitho [2007] NSWLEC 355
Re The Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622
Shoalhaven City Council v South Coast Concrete Crushing & Recycling Pty Ltd [2009] NSWLEC 197
Warringah Shire Council v Sedevcic (1986) 57 LGERA 335

DATES OF HEARING: 6 May 2010

DATE OF JUDGMENT:
26 May 2010

LEGAL REPRESENTATIVES:
APPLICANT
Mr A Galasso SC
SOLICITORS
Morton & Harris
FIRST RESPONDENT
Mr I Hemmings
SOLICITORS
Access Law Group
SECOND RESPONDENT
No Appearance

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

PEPPER J

26 May 2010

40630 of 2008 Shoalhaven City Council -v- South Coast Concrete Crushing & Recycling Pty Ltd & Anor

JUDGMENT

Introduction

1 HER HONOUR: These proceedings concern the costs payable by parties in circumstances where final orders have not been made by the Court because of a supervening event.

2 On 14 December 2009, Lloyd J delivered judgment, which included making various findings of fact, on the substantive issues concerning the operation of extractive activities involving brick clay and clay shale material by the first respondent, South Coast Concrete Crushing & Recycling Pty Ltd (“SCCCR”) (Shoalhaven City Council v South Coast Concrete Crushing & Recycling Pty Ltd [2009] NSWLEC 197).

3 No final orders were made by his Honour primarily on the basis of, first, a request by SCCCR to allow the extent of any existing use rights to be determined as a separate question pursuant to r 28.2 of the Uniform Civil Procedure Rules 2005 (“UCPR”). And second, a request by SCCCR to address matters of discretion concerning the making of the final orders, after the determination of the substantive issues.

4 No evidence or submissions on the question of the exercise of the Court’s discretion were made because subsequent to Lloyd J handing down his decision on 14 December 2009, SCCCR was given Pt 3A approval under the Environmental Planning and Assessment Act 1979 (“EPAA”) to engage in the extractive activities the subject of the proceedings before his Honour. The parties agreed that, as a consequence, there was no utility in seeking final orders by way of declaratory relief from the Court.

5 Both parties now seek their costs of the proceedings.

Issues

6 By reason of both parties seeking costs, the following issues arise for determination:

(a) whether there has been an ‘event’, that is to say, a hearing on the merits, thereby engaging the normal rule that costs follow the event given that no final orders were made by Lloyd J and given that there was no hearing as to whether, as a matter of discretion, relief ought to be granted;

(b) whether the Pt 3A approval under the EPAA constitutes a supervening event with the result that there ought to be no order as to costs;

(c) whether in light of the findings made by Lloyd J either party ought to be awarded their costs on the basis that they were the ‘successful’ party; and

Disposition of the Application

7 In my opinion, the appropriate order consequential upon the decision of Lloyd J on 14 December 2009, is that the council, having been substantially successful with respect to the findings made by Lloyd J pursuant to the issues framed by him, are entitled to their costs.

8 In making this order I have found that although no final orders were made by his Honour and that the question of the exercise of the Court’s discretion with respect to the declaratory relief sought by the council remains unanswered, there was nevertheless a hearing on the merits sufficient to enliven an award of costs.

9 It also follows that I do not accept that the Pt 3A approval constitutes a supervening event sufficient to warrant an order that each party must bear their own costs.

10 Finally, I reject the contentions of SCCCR that the council, by pursuing the proceedings notwithstanding its knowledge that an application for Pt 3A approval had been made and could be granted, constituted disentitling conduct which obviated its entitlement to costs.

Factual Background

11 The factual background giving rise to the proceedings before Lloyd J and the present application is found in his Honour’s decision (at [2]-[7]).

12 As stated in that judgment, by its amended summons, the council sought declarations that the extraction of material not used for brick-making was an “extractive industry” for which there was no development consent, that the process of importing materials for blending with materials extracted from the land was an “industry” which was a prohibited use, and alternatively, that a significant increase in the rate of extraction comprised an unlawful intensification of the existing use.

13 The council contended that there had been a fundamental and significant change in the use of the land in or about 2000 when brick-making ceased. That is to say, the use of the land for the core purpose of brick-making had been abandoned and the present activities on the land amounted to an unlawful change and intensification of use.

14 SCCCR asserted that the activities were protected by existing use rights and by a consent granted on 14 July 2003, for the “crushing and recycling of waste products”.

History of the Proceedings

15 Because of the issues for determination, in particular, whether the council engaged in any disentitling conduct, it is necessary to set out in some detail the procedural history of the matter before Lloyd J. In addition to the decision of his Honour, this history is contained in the affidavits of Mr Grant Gleeson, the solicitor for the council, sworn 24 August 2009 and 30 April 2010, and the affidavits of Mr William Ellicott, the solicitor for SCCCR, sworn 20 August 2009 and 27 April 2010.

16 It is revealed that:

Normans Plant Hire Pty Limited v South Coast Concrete Crushing & Recycling

Pty Limited

Normans Plant Hire Pty Limited v South Coast Concrete Crushing & Recycling Pty Limited

(No 2)

Mining Act

(e) on 10 April 2008, the solicitors for the council wrote to SCCCR stating that the position was unclear as to whether or not there was any authority for SCCCR to conduct the current operations on the site, and if there was, what the lawful extent of the operation was. The council stated that this lack of clarity could ultimately require declaratory relief from the Court. Accordingly, given the history of concerns raised in relation to the subject site and given its role in the proper administration of its local environmental plan, the council invited further information and submissions from SCCCR;

(f) on 21 April 2008, solicitors for SCCCR respondend stating that it saw little purpose in addressing the matters raised by the council;

(g) on 18 June 2008, the council, by an instrument of refusal, determined DA07/2723;

(h) on 27 June 2008, the current proceedings were commenced by the council by way of application. The application claimed the following relief:

1. A declaration that the carrying out of development by the respondent on land at South Nowra being the land identified as Lot 464 Deposited Plan 1058778 known as Mineral Lease 5087 (ML1) comprising the extraction of clay/shale constitutes an “extractive industry” for the purposes of the Shoalhaven Local Environmental Plan 1985 (LEP).

2. A declaration that the use the subject of declaration 1 above is a use the subject of s 109(1) of the Environmental Planning & Assessment Act 1979 (EPA Act).

3. A declaration that the relevant date for the purposes of s 109(1) of the EPA Act with respect to the use the subject of declaration 1 above is 16 December 2007.

4. A declaration that the quantum of clay/shale that may be extracted by the respondent with respect to the use the subject of declaration 1 above is 64,555 tonnes per annum, or such other quantum as this Court determines appropriate in the circumstances.

Exportation of Material

6 A declaration that the use the subject of declaration 1 above does not incorporate the exportation of material from ML 1.

Blending

7 A declaration that the process of the importation of material for blending with material extracted from ML 1 comprises an “industry” for the purposes of the LEP.

8 A declaration that the Blending is a prohibited use for the purposes of the LEP.

9 A declaration that the Blending is not an existing use for the purposes of s 106 of the EPA Act.

10 A declaration that the Blending is not a use ancillary for the purpose of an extractive industry.

11 In the alternative to declarations 9 and 10, a declaration that the quantum of output of combined material in consequence of the Blending is 64,555 tonnes per annum, or such other quantum as this Court determines appropriate in the circumstances.

12 Such further or other Orders or Declarations as this Court deems appropriate in the circumstances.

(i) the matter was initially set down for hearing on 9 and 10 March 2009. However, these dates were vacated by Sheahan J on 13 February 2009. While no written reasons were provided by his Honour, a letter from the solicitors for SCCCR dated 29 January 2009, advised the council that it was not in a position to comply with the directions for the filing of evidence and foreshadowed an application to vacate the hearing date in light of the impending Pt 3A approval;

(j) the matter was listed for further directions on 17 April 2009. On that day, the solicitor for SCCCR requested a further adjournment of the proceedings which, by consent, was granted for a period of one month until 15 May 2009;

(k) on 7 May 2009, the solicitors for the council sought an undertaking from SCCCR that: the extraction rate on the site not exceed 64,555 tonnes annually; that there be compliance with all conditions of consent; and that it otherwise conduct its operations subject to the requirements of the mining lease. If such an undertaking were given, the council stated that it would be prepared to consent to a more lengthy adjournment of the matter, if not, then it was likely that when the matter was next before the Court the council would press to have the matter set down for hearing;

(l) on 11 May 2009, SCCCR wrote to the council stating that they would be seeking a further adjournment of the proceedings for a period of one month and that it was not prepared to give the undertaking sought. In particular, SCCCR did not agree to limit its extraction rate to 64,555 tonnes per annum. However, SCCCR invited the council to further negotiate with it in relation to the extraction rate. The letter went on to state that “the essence of the proceedings between our respective clients is to have the court provide a binding ruling which will set a rate by which our clients are required to operate”;

(m) on 15 May 2009, the matter was listed for hearing by Sheahan J, albeit over SCCCR’s objection. The Court made directions for the filing of affidavits and other consequential orders;

(n) SCCCR failed to comply with these directions;

(o) the matter was further mentioned before Sheahan J on 26 June 2009, when the default by SCCCR was noted by the Court and a revised timetable for the filing of affidavits by it was ordered;

(p) further delay followed in the filing of SCCCR’s affidavits;

(r) on 24 July 2009, solicitors for the council responded by way of letter stating that leave would be opposed. It reiterated that if SCCCR was prepared to provisionally submit to limiting the extraction of material to 64,555 tonnes per annum then the council would be prepared to give further instructions to agree to the delayed conduct of the proceedings, however, if not, then it would be “necessary for the matter to be returned to the Court”;

(s) on 19 August 2009, the council wrote to SCCCR foreshadowing that it intended to rely upon an amended summons;

(t) an amended summons was filed in the Court on 25 August 2009. It sought:

not used for brick

commenced on or about 2002 without development consent

Exportation of Material

6 In the alternative, a declaration that any use of the subject site authorised by Division 10 of Part IV of the EP&A Act does not incorporate the exportation of material from ML 1.

Blending

7 A declaration that the process of the importation of materials for blending with material extracted from ML 1 comprises an “industry” for the purposes of the LEP.

8 A declaration that the Blending is a prohibited use for the purposes of the LEP.

9 A declaration that the Blending is not an existing use for the purposes of s.106 of the EPA Act.

10 A declaration that the Blending is not a use ancillary for the purpose of an extractive industry.

11 In the alternative to declarations 2, 6 and 7, a declaration that the quantum of output of combined material in consequence of the Blending is 64,555 tonnes per annum, or such other quantum as this Court determines appropriate in the circumstances.

3. An Order that the Respondent pay the Applicant’s costs of these proceedings.

(u) on 25 August 2009, SCCCR applied to vacate the hearing due to commence on 1 September 2009. Lloyd J dismissed the application. While there was no written reasons provided by his Honour in relation to the refusal, it appears that the vacation was sought on the basis of SCCCR’s confidence that Pt 3A consent would be granted by the Minister. It also appears that the filing of the amended summons and any prejudice that it might have caused SCCCR was considered by his Honour. Also on that day, SCCCR made the following oral offer, namely, that its extraction be limited to 65,000 tonnes per annum and that the proceedings be adjourned for a period of three months. The offer was rejected by the council;

(v) on 27 August 2009, the oral offer made by SCCCR on 25 August 2009 was put again in writing, namely, that it would agree to undertake to limit the rate of extraction to 64,555 tonnes annually. Again this offer was rejected by the council; and

17 In his 2009 affidavit, Mr Ellicott stated that as at the date of that affidavit SCCCR had incurred costs in the amount of $622,000 in pursuing the Pt 3A application.

Statutory Framework

18 The Court’s power to award costs is contained in s 98 of the Civil Procedure Act 2005 (“CPA”) (F & D Bonaccorso Pty Ltd v City of Canada Bay Council (No 5) [2008] NSWLEC 235 at [21]-[26]). It relevantly states:

98 Courts powers as to costs

(2) Subject to rules of court and to this or any other Act, a party to proceedings may not recover costs from any other party otherwise than pursuant to an order of the court.

(3) An order as to costs may be made by the court at any stage of the proceedings or after the conclusion of the proceedings.

19 Importantly, s 98 of the CPA states that costs are in the discretion of the Court and that an order as to costs may be made at any stage in the proceedings (s 98(3) and (4)(a)).

20 Rule 42.1 of the UCPR provides that generally costs follow the event:

42.1 General rule that costs follow the event

Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.

21 Ordinarily the power to award costs is exercised after a hearing on the merits. Furthermore, it is usually the successful party which is entitled to his or her costs (Latoudis v Casey (1990) 170 CLR 534). That is to say, success in the action or on particular issues is the primary factor that usually controls the exercise of a discretion. A successful party is prima facie entitled to a costs order (Latoudis at 543 and 566-568).

22 The reason for the rule that ‘costs follow the event’ is because the award of costs to a successful party in civil litigation is not to punish the unsuccessful party, but because it is just and reasonable to compensate the successful for the expense to which it has been put by reason of the litigation (Latoudis at 567 and Oshlack v Richmond River Council (1988) 193 CLR 72 at [67]).

Consideration

Has There Been a Hearing on the Merits?

23 The usual rule that ‘costs follow the event’ is, however, problematic if there has been no hearing on the merits by reason of some intervening event.

24 SCCCR submitted, first, that in the present case because final orders have not been made and because there has been no hearing with respect to the exercise of the Court’s discretion to make such orders, that there had been no hearing on the merits enlivening the usual rule. And second, because the council had not sought to restrain any unlawful use but had only sought declaratory relief with respect to the quantum of material that could be extracted - which, SCCCR submitted, it could not be said with any confidence that Lloyd J would have made in light of his findings - that to award costs in these circumstances would be to impermissibly try what was in effect a hypothetical action between the parties (Re The Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 at 624). SCCCR emphasised, in this regard, the fact that the proceedings were constituted by his Honour having specifically separated the issues for determination from any question of final relief.

25 The council submitted that the fact that no injunctive relief was sought was irrelevant, especially given that its prosecution of the proceedings was with significant merit. Moreover, that even if no declaratory relief was granted there had nevertheless been a merits hearing before Lloyd J. Furthermore, merely because the proceedings before his Honour had been bifurcated with the question of relief to be heard and determined separately, this did not mean that costs could not be awarded with respect to that part of the proceedings that had been argued before the Court. Finally, it submitted that both with respect to the material finding of his Honour, namely, that the permitted rate of extraction was 7,000 tonnes per annum, and in light of the other findings made, that declaratory relief would have, in all likelihood, been ordered.

26 In my opinion, the proceedings before Lloyd J clearly constituted a hearing on the merits. Evidence was presented to the Court and argument was heard in full on the issues that his Honour determined in due course. There can be no doubt that by reason of his Honour’s findings, both legal and factual, merits were established with respect to the lawfulness of the activities undertaken by SCCCR on the site, which, as is evident from both the summons and the amended summons, was the very question that his Honour was asked to decide.

27 At no point did SCCCR accept that it was engaged in any unauthorised activity on the site nor, more specifically, that there was any limitation on its level of extraction. The decision held that from late 2001 SCCCR’s conduct was without authority in several respects and it found a level of extraction dramatically lower that that ever accepted by SCCCR. That no injunctive relief was sought by the council to restrain the activities of SCCCR, is not determinative of the issue of whether there has been a hearing on the merits.

28 Accordingly, I find that there was a hearing on the merits insofar as the issues argued before Lloyd J were determined by him.

Did the Pt 3A Approval Constitute a Supervening Event so as to Remove or Modify the Subject of the Dispute Such that There Should be No Order as to Costs?

29 In Kiama v Grant (2006) 143 LGERA 441 Preston J summarised the principles applicable where there has been a supervening event as follows (at [80(b)]):

…

(b) where some supervening event or settlement so removes or modifies the subject of the dispute that no issue remains except that of costs, the proper exercise of the costs discretion will ordinarily be to make no order as to costs unless:

(i) one of the parties has acted so unreasonably that the other party should obtain the costs of the action; or

(ii) even if both parties have acted reasonably, one party was almost certain to have succeeded if the matter had been fully tried so that the party should obtain the costs of the action.

30 SCCCR argued that the Pt 3A approval is a supervening event that has effectively removed the subject of the dispute between the parties such that no issue remains except that of costs, and that therefore, either the proper exercise of the costs discretion is that there should be no order as to costs or, because the council acted unreasonably in pursuing the litigation in light of the application for designated development (which had been made prior to the proceedings being commenced), the council should lose any entitlement it has to an award of costs. It reinforces the latter submission by contending that it cannot be said that one party was almost certain to have succeeded had the matter been tried to completion. In support, SCCCR relied on authorities such as Lai Qin and Kiama Council v Grant.

31 However, in my view, these decisions are distinguishable on the basis that in each case there was no hearing on the merits whatsoever because the supervening event that occurred meant that the hearing did not proceed. That is not what has happened here.

32 Although the Pt 3A approval clearly rendered futile any further hearing of the proceedings, it nevertheless came after the matter had been fully argued before his Honour and findings had been made by the Court. There was, therefore, no avoidance of any costs of the litigated action by reason of the supervening event.

33 As stated above, because there has been a hearing on the merits, the Court has discretionary power to award costs irrespective of the subsequent Pt 3A approval or the separate nature of the proceedings. This is expressly provided for in s 98(3) and (4)(a) of the CPA.

34 In my view, subject to the question of whether or not there has been any disentitling conduct on the part of the council and which, if any, party succeeded in the proceedings before Lloyd J, a cost order may appropriately be made by the Court.

35 This is because although I accept that the Pt 3A approval was a supervening event, I do not accept that it so removed or modified the subject of the dispute such that no issue remained except that of costs. The proceedings before Lloyd J may be viewed as both separate but nevertheless entire. The subject of the dispute before Lloyd J, namely, the issues for determination and factual findings made pursuant to those issues, remained, irrespective of the question of relief.

36 In these circumstances, a costs order ought to be made in order to compensate the successful party against the expense to which it has been put by reason of the litigation.

37 Thus this is not a case where the proper exercise of the costs discretion is to make no order as to costs. While a supervening event occurred, there was a full hearing on the merits on the separate issues his Honour was asked to decide and which he did decide.

Did the Council Succeed?

38 In order to determine which, if any, party ‘succeeded’ before Lloyd J it is necessary to analyse his Honour’s written reasons.

Decision of Lloyd J on 14 December 2009

39 As apparent from the judgment, the issues before his Honour were:

(a) what was the correct categorisation for the current use of the site under the Shoalhaven Local Environmental Plan 1985 (“the LEP”) (“the first issue”);

(b) was the current use unlawful in the absence of development consent or existing use rights (“the second issue”);

(c) to what extent was the current use authorised by the 2003 development consent? Specifically, to what extent did the consent authorise the blending of material extracted from the site with the material the subject of the development consent and to what extent did the consent authorise the exportation of material (not being bricks) from the site (“the third issue”);

(d) was the current use protected by existing use rights, and in particular, was the current extraction of material protected by existing use rights (“the fourth issue”);

(e) was the current blending and importation of material protected by existing use rights (“the fifth issue”);

(f) was the current exportation of non brick material protected by existing use rights (“the sixth issue”);

(g) what was the application date of the applicable statutory limitation contained in the EPAA to the existing use? Was it 3 February 1996, when s 109(2) of that Act came into effect or was it 16 December 2007, when the immunity which SCCCR took the benefit of under s 74 of the Mining Act ceased (“the seventh issue”);

(h) was there was an enlargement, expansion or intensification of the use for an “extractive industry” (“the eighth issue”); and

40 In summary:

(a) in relation to the first issue, his Honour found in favour of the council by holding that the extraction of material by SCCCR fell clearly within the definition of “extractive industry”. As to the importation and blending of material, his Honour held that this constituted a separate use as an “industry” (at [21]). These findings were contrary to the submissions of SCCCR;

(b) in relation to the second issue, his Honour held, also against SCCCR, that the current use was unlawful in the absence of development consent or existing use rights (at [22]-[23]);

(c) in relation to the third issue, his Honour held that the development consent did not authorise the blending of extractive material with the imported waste products (at [32]). In so holding, his Honour accepted the submissions of the council. With respect to the extent to which the consent authorised the exportation of material, Lloyd J accepted the submissions of SCCCR and held that the consent did allow for the exporting of the end product from the site (at [39]);

(1) first, he accepted the submissions of SCCCR that the current extraction of material was protected by existing use rights (at [94]-[101]);

(2) second, his Honour accepted the submissions of the council to find that the current blending of imported waste material with the extracted materials was not subject to existing use rights (at [138]); and

(3) third, agreeing with the submissions of SCCCR, his Honour held that the use of the site for exportation was at all relevant times something which did not require a separate development consent and was not a “use” of the land (at [159]);

Mining Act

(f) in relation to the eighth issue, his Honour accepted the submissions of the council that there had been an expansion and intensification of the use and rejected the submission of SCCCR that the use should be more broadly categorised (at [193]-[199]); and

(g) in relation to the ninth issue, his Honour noted that the council had sought a declaration that the quantum of output of combined blended material was 64,555 tonnes per annum “or such other quantum as the Court determined appropriate” in the circumstances. The council had submitted that in light of the history of extractive use averaging about 7,000 tonnes per annum for a considerable period of time, followed by a period of approximately five years in which the average extraction was about 65,000 tonnes per annum, the long term average was much lower than 65,000 tonnes per annum. Alternatively, the council had submitted that the rate of extraction ought to be fixed at 65,000 tonnes per annum. The respondent had submitted that the Court should apply a liberal approach and that an averaging exercise over a number of years was not appropriate. His Honour held that a reasonable period would encompass the entire period between the commencement of operations in 1947 and 23 November 2001, and that after examining extraction rates during this period and applying the limitations on use in s 109(2) of the EPAA liberally, the extraction of material should be limited to 7,000 tonnes per annum (at [209]).

41 Thus Lloyd J came to the following conclusions and made the following orders (at [210]-[211]):

extractive industry

industry

extractive industry

(3) The use of the land for brickmaking was a separate independent use as an industry and an existing use, but that use was abandoned in about 2000 when brickmaking ceased.

crushing and recycling of waste products

(5) The development consent allows the exportation of the crushed and recycled waste products.

industry

extractive industry

Mining Act

(9) The consequence of s 109(2)(c) is that extraction from ML1 is limited to a maximum of 7,000 tonnes per annum.

42 There is some force in the submission by SCCCR that having regard to the findings made by Lloyd J it cannot be said that the council has wholly succeeded in the proceedings. For example, to the extent that it was contended by the council that material extracted from the quarry could not be exported, his Honour held that SCCCR did have a right to extract and export material from its site.

43 In the circumstances it is unfortunate that neither party raised the question of whether, if it were not wholly successful, it would be appropriate to apportion costs (as to the principles see Bonaccorso at [8]). But because the issue was not discussed, I have not entertained it.

44 Therefore, and at the risk of overly simplifying the findings made by Lloyd J, I accept the submission of the council that the significant majority of the issues separated for determination by his Honour were ultimately found in favour of the council and that ultimately its prosecution of them was meritorious.

45 SCCCR relied on two decisions to submit that absent substantive relief having been obtained by the council it was not entitled to its costs on the basis that it could not claim success (Warringah Shire Council v Sedevcic (1986) 57 LGERA 335 at 344 and Pittwater Council v Bolitho [2007] NSWLEC 355 at [164]). In my opinion, these decisions do not assist SCCCR.

46 In Sedevcic, the council was ordered to pay the respondent’s costs in circumstances where it sought a declaration that the use of certain land for a shop was prohibited and an order that the respondent cease using the land for that purpose, but failed to prove that no relevant consent was granted due, in part, to the fact that during the first thirteen years of the shop’s existence there were no council records. In these circumstances the Court was unable to determine whether the activity was unlawful. Accordingly, having lost its application for which it bore the onus of proof, it was ordered to pay costs. By contrast, in the present case it cannot, on any analysis of Lloyd J’s decision, be said that the council has failed.

47 In Bolitho, the council sought injunctive relief requiring the respondent to remove two horses from her residential property and to take certain remedial steps to clean up the area used by the horses. Preston J held that because the Council never gave the respondent the opportunity of taking such measures to keep the horses in an appropriate manner, as an alternative to their removal, the proceedings may not have been necessary. The consequence was that the council was largely unsuccessful in its class 4 application, and accordingly, the Court declined to grant the substantive relief sought by the council notwithstanding that the respondent was in breach of s 124 of the Local Government Act 1993. Thus each party was ordered to pay their own costs.

48 Again, in my opinion, a proper analysis of Lloyd J’s decision on 14 December 2009 does not reveal, unlike Bolitho, that the council was “largely unsuccessful” or that it acted unreasonably in the conduct of the litigation (Bolitho at [162] and [164]). Also, unlike Bolitho where the respondent had throughout indicated her willingness to undertake appropriate measures to permit the horses to remain to the extent that she had sought the council’s advice in this regard, in the present case SCCCR refused to countenance any form of compromise until it lost the application to vacate the hearing dates for the second time a week before the hearing was due to commence. The circumstances of the two respondents are not comparable. As Preston J said in Bolitho (citing Sedevcic at 342), “the Court properly must have regard to the individual circumstances and the justice of each case” (at [26]).

49 For the reasons discussed above, I am of the view that the council has been sufficiently ‘successful’ thereby entitling it to a costs order in its favour.

Has There Been Disentitling Conduct by the Council Such That it Loses Any Entitlement to Have its Costs Paid?

50 SCCCR submits that the council engaged in disentitling conduct, or put another way acted unreasonably, by pursuing the litigation in the face of what it says was certain Pt 3A approval. In particular, it points to the unreasonableness of the council’s actions in refusing to support the application to vacate the hearing dates before Lloyd J on 25 August 2009, given that by then SCCCR had agreed to accept the proposed limits on its extraction proffered earlier by the council.

51 The council, on the other hand, echews any suggestion that it has acted unreasonably in the conduct of the proceedings. It submits that given it is the repository of the regulatory role to ensure that SCCCR’s activities are carried out with consent as part of the management of its local government responsibilities under the LEP, it was reasonable to commence and continue with the proceedings in order to determine the lawfulness of SCCCR’s acts in light of:

(a) the outcome in the earlier Norman Plant Hire decisions;

(b) the coming into force the repeal of s 74 of the Mining Act ;

(c) its refusal of DA07/2723;

(d) the persistent dilatory conduct of SCCCR once the proceedings had commenced;

(e) the refusal of SCCCR to engage in genuine attempts to resolve the subject matter of the proceedings by way of limiting the quantum of material extracted pending resolution of the application for designated development;

(f) the rejection by SCCCR of the council’s offer of an undertaking to be given by SCCCR in order to permit the proceedings to be adjourned for a lengthy period of time pending the Pt 3A application being determined; and

52 I agree with the submissions put by the council. The submissions of SCCCR are premised on three fallacies:

(a) first, the assumption that the lodgement of the Pt 3A designated development application would have necessarily resulted in the grant of Pt 3A approval. Even though a Pt 3A application had been lodged with the Minister, it could not be assumed that approval would be granted. This was especially so given the lengthy passage of time taken for the approval to be given. Moreover, even if the approval were forthcoming, there was no reason to further assume that no third party objections would occur. The combination of these circumstances, together with the rejection by SCCCR of any position acknowledging unlawful activity by it, or to accept an interim restraint on their extraction, together with the ultimate findings of Lloyd J, established an entirely reasonable mandate for the prosecution of the Class 4 application;

(c) third, to the extent that SCCCR complains that costs were wasted as a consequence of the hearing proceeding when the very thing that it predicted would occur, namely, Pt 3A approval being granted, eventuated, the fallacy in this submission is that there was unfairness in the council agitating to have the proceedings heard, when a similar offer had been put by the council and rejected by SCCCR in May 2009. The reality is that notwithstanding that council had informed SCCCR that it was uncertain as to whether or not SCCCR could lawfully engage in the extraction of material both on the site and at its current level, SCCCR continued to do so. Moreover, SCCCR was unwilling, until the week prior to the hearing, to place any limits on its extractive capacity in order to avoid litigation. By either giving the undertaking sought by the council in May 2009, or at the very least, negotiating some alternate level of extraction, SCCCR could have avoided the very thing about which it now complains, namely, a hearing on the merits, with all its attendant costs. It did neither.

53 As the procedural history of the proceedings demonstrates, SCCCR was put on notice early as to the council’s uncertainty of the lawfulness of SCCCR’s activities on the site and the need for the council to approach the Court for declaratory relief. Having had its invitation to regularise, or at the very least make submissions as to the lawfulness of their activities, rejected by SCCCR, the council not unreasonably commenced proceedings in June 2008. At that time there was no suggestion that Pt 3A approval was imminent. Thereafter, SCCCR engaged in what can only be described as dilatory conduct, no doubt in part occasioned by their expectation that the approval would be granted. However, far from avoiding or limiting costs, the conduct of SCCCR had the converse effect. Even as late as April 2009, the Pt 3A application was no closer to resolution because further documentation was required to be submitted by SCCCR. Notwithstanding the delay in the Pt 3A application being finalised and in the preparation of its defence to the proceedings, SCCCR continued to extract material at elevated rates and refused to acknowledge any limits on, or an absence of authority concerning, its extractive capacity until very late in August 2009.

54 In these circumstances it cannot, in my view, be concluded that the conduct of the council was unreasonable thereby disentitling it to any costs order in its favour. On the contrary, in my opinion, the only party who acted unreasonably in the conduct of the litigation was SCCCR.

Conclusion and Orders

55 From the discussion above I have concluded that:

(a) although the proceedings were split and the issue of whether final declaratory relief ought to be granted was rendered futile by the supervening event of the Pt 3A approval, there was nevertheless a hearing on the merits in relation to the issues determined by Lloyd J such as to justify an order for costs;

(b) the council was the substantially more successful party in the proceedings before his Honour; and

56 Accordingly, the Court orders that the respondent is to pay the applicant’s costs.

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Citations

Shoalhaven City Council v South Coast Concrete Crushing and Recycling Pty Ltd [2010] NSWLEC 80

Most Recent Citation

A and M Green Investments Pty Limited v Albury City Council (No 2) [2012] NSWLEC 164

Cases Citing This Decision

1

A and M Green Investments Pty Limited v Albury City Council (No 2) [2012] NSWLEC 164

Cases Cited

10

Statutory Material Cited

3

Shoalhaven City Council v South Coast Concrete Crushing & Recycling Pty Ltd [2009] NSWLEC 197

F & D Bonaccorso Pty Ltd v City of Canada Bay Council (No 5) [2008] NSWLEC 235

Latoudis v Casey [1990] HCA 59

CITATION:	Shoalhaven City Council v South Coast Concrete Crushing & Recycling Pty Ltd [2010] NSWLEC 80
PARTIES:	APPLICANT Shoalhaven City Council FIRST RESPONDENT South Coast Concrete Crushing & Recycling Pty Ltd SECOND RESPONDENT Abib Pty Ltd
FILE NUMBER(S):	40630 of 2008
CORAM:	Pepper J
KEY ISSUES:	PRACTICE AND PROCEDURE :- costs where there has been a supervening event - whether a hearing on the merits where findings made but no relief ordered - whether disentitling conduct - whether one party wholly 'successful' - respondent to pay applicant's costs
LEGISLATION CITED:	Civil Procedure Act 2005 s 98 Environmental Planning and Assessment Act 1979 Pt 3A Uniform Civil Procedure Rules 2005 rr 28.2 and 42.1
CASES CITED:	F & D Bonaccorso Pty Ltd v City of Canada Bay Council (No 5) [2008] NSWLEC 235 Kiama v Grant (2006) 143 LGERA 441 Latoudis v Casey (1990) 170 CLR 534 Normans Plant Hire Pty Limited v South Coast Concrete Crushing & Recycling Pty Limited [2006] NSWLEC 390 Normans Plant Hire Pty Limited v South Coast Concrete Crushing & Recycling Pty Limited (No 2) [2006] NSWLEC 734 Oshlack v Richmond River Council (1988) 193 CLR 72 Pittwater Council v Bolitho [2007] NSWLEC 355 Re The Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin (1997) 186 CLR 622 Shoalhaven City Council v South Coast Concrete Crushing & Recycling Pty Ltd [2009] NSWLEC 197 Warringah Shire Council v Sedevcic (1986) 57 LGERA 335
DATES OF HEARING:	6 May 2010
DATE OF JUDGMENT:	26 May 2010
LEGAL REPRESENTATIVES:	APPLICANT Mr A Galasso SC SOLICITORS Morton & Harris FIRST RESPONDENT Mr I Hemmings SOLICITORS Access Law Group SECOND RESPONDENT No Appearance