SPRINGMIST PTY LTD and SHIRE OF AUGUSTA-MARGARET RIVER
[2005] WASAT 143 (S)
•21 JUNE 2005
| JURISDICTION | : STATE ADMINISTRATIVE TRIBUNAL | ||
| STREAM |
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| ACT |
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| CITATION |
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| MEMBER |
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| HEARD |
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| DELIVERED | : 21 JUNE 2005 | ||
| SUPPLEMENTARY | |||
| DECISION | : 21 NOVEMBER 2005 | ||
| FILE NO/S |
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| BETWEEN | : SPRINGMIST PTY LTD |
Applicant
AND
SHIRE OF AUGUSTA-MARGARET RIVER
Respondent
Catchwords:
Costs - Whether respondent's conduct unreasonable or vexatious - Scope of costs recoverable as expenses, loss, inconvenience and embarrassment - Relevance of conduct prior to commencement of application - Assessment of quantum - Hourly charge rates exceeding allowance for Supreme Court proceedings
[2005] WASAT 143 (S)
Legislation:
State Administrative Tribunal Act 2004 (WA), s 87(1), s 87(2), s 87(3), s 87(4),
s 87(5)
State Administrative Tribunal Rules 2004 (WA), r 40, r 42,
Supreme Court Rules 1970 (NSW), Pt 52 r 23(2)
Victorian Civil and Administrative Tribunal Act 1998 (Vic), s 75(2), s 109
Result:
Respondent ordered to pay costs of $2558.60 but application for costs otherwise dismissed
Category: B
Representation:
Counsel:
| Applicant | : | Mr P McQueen and Mr MA Etherington |
| Respondent | : | Ms PE Cahill |
Solicitors:
| Applicant | : | Phillips Fox |
| Respondent | : | Ms S Boulter |
Case(s) referred to in decision(s):
Cachia v Hanes & Anor (1994) 179 CLR 403
| Citygate | Properties | Pty | Ltd | and | City | of | Bunbury |
(2005) 38 SR (WA) 246; [2005] WASAT 53
Interstructure Pty Ltd v Kaldawi & Klarica [2002] VCAT 1492
Leseur Investments Pty Ltd and City of Melville [2005] WASAT 90
Nakkasoglu v Bayside CC [2000] VCAT 682
Noonan David & Ors v Boroondara CC [2001] VCAT 1548
Permanent Trustee Australia Ltd v City of Wanneroo (1994) 11 SR (WA) 1
Straw v Proctor [2004] VCAT 464
[2005] WASAT 143 (S)
Case(s) also cited:
Nil
[2005] WASAT 143 (S)
REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision
1 Following the decision of the Tribunal in this matter delivered on
21 June 2005, the applicant applied for orders that the respondent and the respondent's representative pay the applicant's costs on an indemnity basis. The application for costs was not confined to legal costs and disbursements, but encompassed a range of costs, expenses and losses said to have been incurred by the applicant as a result of the delay by the respondent in processing the original application for development approval, and as a result of the respondent's approach to the proceedings before the Tribunal. The applicant quantified the costs at $388 164.33 plus certain unspecified nominal sums. It also sought recovery of the costs for preparation of, and arguing, the hearing in relation to the costs application.
2 The Shire acknowledged that the actions of Ms Boulter, its
representative at the hearing, did cause some unnecessary costs to be incurred in respect of a relatively small aspect of the proceedings, but otherwise denied that it had acted in a manner that warranted it being ordered to pay the applicant's costs. It also argued that losses and expenses of the nature claimed were not recoverable under the provisions of the State Administrative Tribunal Act 2004 (WA) (the SAT Act).
3 The Tribunal examined the conduct of the Shire from the time of the
initial lodgement of the application for development approval to the institution of the application for review and then to the completion of the hearing. It decided that the Shire's conduct, other than in relation to the matter conceded by the Shire, did not warrant an order being made for the payment of the applicant's costs. The Tribunal added that many of the items of loss and expense claimed as costs would not in any event be recoverable under the provisions of the SAT Act. It concluded that s 87(3) of the SAT Act did not entitle a party to claim compensation in the nature of damages from a decision-maker on the basis that the decision-maker's conduct fell short of acceptable standards. The compensation that may be ordered must relate to the successful party's participation in the proceedings.
The application for costs
The claim for costs is broken down as follows:
• Architectural costs and disbursements $26 877.15;
[2005] WASAT 143 (S)
• Fees for Mr GR Wilkinson, for advice on the likely rental income achievable by the development $250; • Planning consultant's fees and disbursements $8703.75; • Car parking expert fees and disbursements $8764.80; • Legal fees and disbursements $60 390.38 plus fees and disbursements for getting up hearing and attending hearing on costs application; • Loss of rent $137 756.25; • Loss arising from holding costs $58 850; • Loss arising from increases in construction costs arising from delay $85 572; • Loss of opportunity costs – nominal; and • Costs for embarrassment and inconvenience – nominal.
5 The various amounts claimed were the subject of a number of
affidavits. Many of the items of expense or loss claimed are calculated on the basis that the applicant contends that the respondent's conduct caused a nine month delay in commencement of the development. The applicant seeks recovery of what would appear to be all of its expenses or losses by reason of that delay. Thus the application seeks recovery of expenses going well beyond the traditional nature of the costs of a party that might be ordered to be paid by another party to proceedings. The claim is based upon a broad construction of the power found in s 87(3) of the SAT Act "to make an order for the payment of an amount to compensate the other party for any expenses, loss, inconvenience, or embarrassment resulting from the proceeding or the matter because of which the proceeding was brought".
6 The application raises two broad issues. The first is whether the
respondent's conduct was such that it should be ordered to pay any of the applicant's costs. The second is whether, on a proper construction of s 87(3) of the SAT Act, expenses and losses of the nature claimed are capable of being included in an order under s 87(2).
[2005] WASAT 143 (S)
The respondent's concession
7 There is one aspect of the applicant's claim which was not contested
by the respondent. The respondent accepted that it should meet the reasonable cost of the preparation of an affidavit of a traffic engineer, Ms C Jelley, prepared after closing submissions. That affidavit was necessary because of assertions made in closing submissions at the hearing of the substantive application by Ms Boulter, the in-house solicitor for the respondent. The assertions were in the nature of expert evidence from Ms Boulter, and were ultimately not accepted by the Tribunal in its reasons for decision. Ms Jelley had been cross-examined by Ms Boulter during the hearing, but the assertions made by Ms Boulter in closing had not been the subject of any questions during cross-examination. Because Ms Boulter pressed the submissions during her closing address, the Tribunal made directions to enable the applicant to respond by filing a supplementary affidavit and submissions. We agree that, in the circumstances, it is appropriate that the respondent be ordered to pay the cost of preparation of that affidavit and written submissions. The respondent accepts that Ms Jelley's costs in relation to the supplementary affidavit, which amounted to $756 plus GST, are reasonable. The applicant claims $3725 for its solicitors', Phillips Fox, costs, in relation to the preparation of the supplementary affidavit and submissions. The total amount of the costs claimed is therefore $4481. While the respondent concedes that some allowance should be made for solicitors' costs, it contends that the amount claimed is excessive and unjustified. We will deal with the issue of quantum later in these reasons.
The chronology of events
8 In order to understand the context of the costs application, it is
necessary to review the history of the applicant's application for
development approval.9 Mr JB Callow, an architect representing Springmist Pty Ltd, first met
a planning officer of the respondent in relation to the proposed development on 14 July 2004. A week later he requested information from the respondent, but, according to Mr Callow, he received no response despite further requests over the following two weeks. Mr Callow then drove from Perth to Margaret River and lodged a formal application for development approval on 9 August 2004. While at the Shire offices on that day, Mr Callow met with the planning officer with whom he had previously spoken, and discussed the proposal. The planning officer raised some concerns about the proposed development.
[2005] WASAT 143 (S)
10 On 12 August 2004 the Shire's development control unit conducted a
preliminary assessment of the development application. On 16 August 2004, the respondent wrote to Mr Callow advising that the application had been the subject of a preliminary review, but would require full assessment. The letter stated:
"The Directorate is experiencing staff shortages and is actively trying to recruit staff. Consequently, customers are experiencing delays in the processing of their applications.
Council seeks your cooperation and patience while there are staff shortages."
11 Between 20 and 22 September 2004, the development application
was advertised in accordance with the requirements of the relevant town
planning scheme.12 During the first half of October 2004, there were two meetings
between Mr Callow and officers of the respondent in relation to aspects of the development. On 21 October 2004 the applicant engaged Mr Simon Hall, a town planning consultant, to assist with progressing the application.
13 Under the terms of the relevant planning instrument, the application
for development was deemed refused on 7 November 2004. On 10 November 2004, Mr Callow wrote to the Shire urging it to ensure that the development application was included in the November council meeting. The letter referred to advice that had apparently been given by a council officer that the item would not go forward until the December meeting. It also referred to a decision by the applicant not to lodge an appeal with the Tribunal notwithstanding the deemed refusal, but rather to endeavour to resolve the matter through the council.
14 On the same day, a planning officer of the respondent wrote by
facsimile to Mr Callow advising of issues in relation to the setback, the location of a verandah over a footpath and a deficiency in the car parking requirements.
15 On 16 November, Mr Callow and Mr Hall attended the meeting with
the planning officers of the respondent to discuss the issues raised in the letter of 10 November. Mr Callow followed up that meeting with a letter on 26 November 2004 responding to the issues raised in the Shire's letter of 10 November.
[2005] WASAT 143 (S)
16 On 30 November, Mr Hall provided the Shire with a planning
assessment of the development application, and three days later lodged a notice of appeal to the Town Planning Appeal Tribunal. Apparently the respondent received notice of a directions hearing from the Town Planning Appeal Tribunal by letter dated 6 December 2004, but it was not served with a copy of the notice of appeal until 15 December 2004, two days before the first directions hearing was scheduled before the former Tribunal. On 17 December 2004, the directions hearing was adjourned to 14 January 2005, apparently on the basis that the application was to go to the respondent's council meeting on 20 December 2004.
17 At the respondent's council meeting on 20 December 2004, a
planning officer's report in relation to the application was tabled. That report contained a recommendation for approval of the development subject to numerous conditions. An addendum to the report prepared by Ms Boulter advised the respondent's council that:
"Once an appeal has been lodged with the Tribunal, council does not have jurisdiction to approve or refuse an application for planning consent. This jurisdiction now rests with the Tribunal. The applicant/appellant advised the Tribunal that it does not intend to withdraw the appeal, notwithstanding the fact that the application is before the December ordinary meeting of council. There has been no notification to the shire that the appeal has been withdrawn as at the time of writing this addendum."
18 Ms Boulter, in her affidavit filed in relation to the costs application,
said that the addendum reflects what was then, and still is, her honest belief as to the legal position. The applicant submits that that advice does not represent the accepted legal position in relation to the capacity of a local government to consider a development application after a deemed refusal has arisen by the effluxion of time – see Permanent Trustee Australia Ltd v City of Wanneroo (1994) 11 SR (WA) 1. It is not necessary, for the purpose of this application, for us to decide whose view of the law is correct. It is sufficient that we find, as we do, that the opinion expressed by Ms Boulter was genuinely held, and not motivated by any desire merely to obstruct the application.
19 In view of the advice from Ms Boulter, the council of the Shire
resolved to endorse the relevant planning officer's report, but it did not determine the development application. It was, however, clear from that point onwards that the respondent's position was that the application
[2005] WASAT 143 (S)
should be approved subject to conditions, and that it would adopt that
position in the Tribunal proceedings.20 On 1 January 2005, the functions of the former Town Planning
Appeal Tribunal were assumed by the State Administrative Tribunal, and the application continued before the new Tribunal. The directions hearing of 14 January 2005 was adjourned, at the request of the applicant, until 4 February 2005. The reason given by the applicant's solicitors for requesting the adjournment was to enable them to take instructions that "will potentially facilitate the resolution in whole or part of the appeal as the council of the respondent at its meeting held on 20 December 2004 resolved to endorse a form of conditions of approval by way of a minute of consent orders". The letter advised that the proposed conditions of approval were being considered by the applicant. Those conditions had been detailed in a letter from the Shire to Mr Callow on 11 January 2005. It is clear from that letter that council contemplated that, if the conditions were agreeable, the matter would be dealt with by a minute of consent orders being lodged in the appeal.
21 On 3 February 2005, the applicant's solicitors wrote to the
respondent advising that a number of the suggested conditions were acceptable, but others were not. The solicitors proposed that, at the directions hearing set for 4 February, the appeal should be adjourned for three weeks to permit the drafting of alternative conditions and consideration of those by the Shire.
22 The following day, the Tribunal conducted a directions hearing. The
suggested adjournment for three weeks was not adopted, but rather the Tribunal member conducting the directions hearing adjourned it until 11 February 2005 on the basis that the parties would exchange documents identifying their positions in relation to the proposed conditions of approval. The applicant, through the affidavit of Mr Etherington, is critical of Ms Boulter's state of preparation for the directions hearing of 4 February. Notwithstanding that criticism, it appears that the directions given by the Tribunal at that hearing were designed to progress the matter more promptly than had been contemplated in the applicant's solicitors' letter of 3 February 2005. The question of mediation was also raised by the Tribunal on 4 February 2005, but the applicant resisted mediation, apparently preferring to go as quickly as possible to a hearing.
23 On 10 February 2005, Phillips Fox wrote to the Shire outlining the
applicant's position in relation to the conditions that were not agreed. The
[2005] WASAT 143 (S)
following day, at the further direction hearing, the matter was listed for
hearing on 21 March 2005.24 By letter dated 17 February 2005, faxed on 18 February 2005, the
respondent wrote an eight page detailed response to the applicant's solicitors' letter of 10 February 2005, setting out the respondent's position in relation to each of the conditions challenged by the applicant. That letter agreed to the deletion of one condition, partially supported the proposed amendment of another and suggested reformulation of some conditions, but otherwise generally maintained the respondent's position on the remaining disputed conditions. Explanations were provided as to why the respondent adopted the position which it did in relation to the disputed conditions.
25 On 2 March 2005, the respondent wrote to the Tribunal seeking to
vacate the hearing date of 21 March, and instead to undertake a formal mediation process. It is not clear precisely how that request was dealt with, but no mediation took place, and the hearing date of 21 March was maintained. On 10 March the applicant provided witness statements to the respondent and to the Tribunal.
26 On 18 March 2005, the respondent wrote to the applicant's solicitors,
referring to a "lengthy telephone conference" between them on 14 March. The letter states that it was apparent from that conference that many of the issues the subject of the appeal might be open to resolution prior to the hearing.
27 Immediately before the hearing on 21 March 2005, the parties
conducted informal discussions between themselves during which all of the conditions except for conditions relating to car parking were resolved. The hearing then proceeded in relation to the car parking issues.
28 During the course of the hearing, Ms Boulter raised an issue as to the
validity of the development application which had only occurred to her during her final preparation of the hearing. That issue related to the need for consent from the entity which was the effective "owner" of the road reserve adjacent to the proposed development because columns supporting the balcony of the upper level were to be located on the road reserve. Ms Boulter asserted that Main Roads Western Australia was the "owner" of that land and that its consent was required. The resolution of that issue, raised at the last moment, made further work and enquiry necessary. For reasons dealt with in detail at [5] – [22] of the Tribunal's reasons delivered on 21 June 2005, the point raised was found not to be an
[2005] WASAT 143 (S)
impediment to the grant of approval. The Tribunal, in its reasons, expressed disapproval of the fact that the matter was raised so late in the proceedings.
29 We have set out above the events occurring in the hearing in relation
to Ms Jelley's evidence which have led to the respondent's concession as
to some liability to meet the applicant's costs.30 The hearing was finally completed on 23 March 2005 when closing
submissions were made. In the interim, the parties had clarified the factual position in relation to the identity of the "owner" whose consent was required in relation to the part of the development on the road reserve.
31 Ms Jelley's supplementary affidavit and written submissions were
delivered on 19 April 2005, and the Tribunal delivered its reasons for
decision on 21 June 2005.
Characterisation of the respondent's conduct
32 It is common ground between the parties that the starting position in
relation to costs of parties to proceedings before the Tribunal is that the parties bear their own costs – see s 87(1) of the SAT Act; Citygate Properties Pty Ltd and City of Bunbury (2005) 38 SR (WA) 246; [2005] WASAT 53. The applicant contends that, in this matter, the respondent has acted unreasonably and/or vexatiously, has precipitated delay in the resolution of the matter and has caused embarrassment and inconvenience to the applicant and its consultants, all of which has resulted in substantial, unnecessary costs being incurred. In particular, the applicant submits that the respondent "disregarded the principles of due process and procedural fairness" in that:
"(i) it has failed to genuinely attempt to enable and assist the
Tribunal to make a decision on its merits;(ii)
it has not genuinely attempted to make a decision on its merits contrary to s 87(2) [sic s 87(4)(b)] of the SAT Act;
(iii)
it has unreasonably drawn out and delayed the determination of the application and the proceedings contrary to s 87(4) [sic] of the SAT Act; and
(iv)
it has caused the applicant to incur wasted costs and suffer increased development costs associated with the proposed development."
[2005] WASAT 143 (S)
In our view, the criticisms of the respondent's conduct are not made
out.
34 The proceedings before the Tribunal took slightly in excess of four
months from lodgement of the appeal to completion of the hearing. That
period included:
• two weeks between lodgement of the appeal and the first directions hearing before the Town Planning Appeal Tribunal; • almost a month between the first and second directions hearing during which the respondent's council considered and resolved to endorse a recommendation of approval subject to conditions, and during which time the Christmas/New Year break occurred; • an adjournment for three weeks to a third directions hearing at the request of the applicant; • a further adjournment on 4 February 2005 for one week to enable the applicant's solicitors to provide a substantive and detailed response to the proposed conditions of approval which had been communicated to the applicant on 11 January 2005; and • a period of approximately six weeks before the final directions hearing and the substantive hearing.
35 Given the intervention of the Christmas period, and the transition of
jurisdiction from the Town Planning Appeal Tribunal to the State Administrative Tribunal, when looked at objectively the time between institution of the appeal and its final hearing was relatively short. At least four weeks of that period is attributable to the applicant's request to adjourn the January directions hearing essentially for reasons of convenience of the applicant.
36 It is true that, immediately before the hearing, the respondent made
concessions in relation to a number of the disputed conditions. The applicant contends that those concessions should have been made earlier, and in particular, after receipt of the applicant's solicitors' letter of 10 February 2005. It is desirable that parties make appropriate concessions as early as possible in the proceedings and do not leave it to the door of the hearing room before doing so. Delay in making
[2005] WASAT 143 (S)
concessions can result in unnecessary expense to the other parties. It is a reality, however, that in the course of final preparation for a hearing, with the benefit of the exchange of witness statements, parties will undertake a re-assessment of the position they have adopted on particular issues to that time. That process often leads to last minute concessions, and frequently complete settlement of matters, just before the hearing is due to commence. The continuous assessment of a party's position on the issues in a matter is to be encouraged, even if it creates an appropriate change of position immediately before, or even during, a hearing.
37 In this case, the applicant's letter of 10 February 2005 was given
detailed consideration and received a timely response by the letter of 17 February 2005. Thereafter the respondent unsuccessfully sought to arrange mediation, and endeavoured by telephone conferences during March to further discuss and resolve some issues.
It is not contended by the applicant that there was no justification for a hearing in relation to the parking issues.
39 In our view, it simply cannot be said that the respondent has failed to
genuinely attempt to enable and assist the Tribunal to make a decision on its merits or that the respondent unreasonably drew out or delayed the determination of the proceedings. In relation to the applicant's conduct within the proceedings, apart from the matter giving rise to the necessity for supplementary evidence from Ms Jelley, the respondent did not cause the applicant to incur wasted costs. It was regrettable that the issue as to the consent of the "owner" of the road reserve was a matter raised only during the course of the hearing. That caused enquiries to be made by the applicant as to the question of care and control of the road reserve. It being a matter of jurisdiction for the Tribunal, once the issue became apparent to the respondent, it was proper for it to be raised. Had it been raised earlier, the same sorts of enquiries which ultimately became necessary would have been made, albeit at an earlier stage. The same cost and inconvenience is likely to have arisen whenever the issue was raised. The costs which were incurred were, therefore, not wasted costs, even though the issue was ultimately decided in favour of the applicant's position.
40 The applicant does not complain only of the respondent's conduct in
relation to the application for review. The applicant's position is the respondent did not genuinely attempt to make a decision on the merits of the application for approval prior to the institution of the application for review on 4 December 2004. Undoubtedly the applicant was anxious to
[2005] WASAT 143 (S)
proceed with its proposed development. It, and its consultants, undoubtedly experienced frustration that the application was not brought before the council of the respondent by October 2004 or November 2004. Delays by reason of staff shortages, of which Mr Callow was warned within a week of lodgement of his application, undoubtedly played their part. No doubt the position was not helped by the original planning officer dealing with Mr Callow leaving the respondent's employment during October 2004.
41 The applicant may regret its conscious decision to delay instituting
an appeal against the "deemed refusal", but rather to continue to endeavour to resolve the matter with the Shire. Nevertheless, the provisions in town planning schemes which deem an application refused are designed to provide a remedy to applicants where an application for development approval is not dealt with in a timely way. Even if s 87(3) does, as the applicant contends, give jurisdiction to the Tribunal to award compensation to an inconvenienced applicant as a result of delay by a decision-maker prior to the institution of an application for review, the Tribunal would be slow to award compensation where the applicant chooses not to exercise its right to bring the matter before the Tribunal following a deemed refusal, but rather to continue to pursue the matter with the original decision-maker.
42 Given that there was a necessity to advertise the application made to
the respondent, it could not realistically be expected that the application would be dealt with by the council of the respondent earlier than its October meeting. Indeed, in his affidavit, Mr Callow asserts that, if the planning officer's report to council had been prepared more expeditiously, the development application should, in his experience, have enabled consideration by council at "either its October 2004 or November 2004 meetings".
43 During October there were communications between the applicant's
representatives and the respondent's planning officers concerning issues which the respondent had identified in relation to the original application. Revised plans were lodged at the beginning of October. Meetings and correspondence continued through November and the matter was then dealt with at the council's meeting in December. We accept Mr Callow's assertion that, in the usual course, it would be reasonable to expect that the application would have been dealt with by the November meeting of council. However, the fact that it was not dealt with until the next meeting after the November meeting does not indicate inordinate delay.
[2005] WASAT 143 (S)
44 The applicant relies, as a foundation of its application, on
Mr Callow's contention that the actions of the Shire unnecessarily delayed the development by nine months. He makes that assertion based on the fact that the matter should have been dealt with at the October or November 2004 meetings of council which would have allowed documentation to proceed and a building licence to be applied for so that construction could have commenced in early January 2005. He said in his affidavit sworn 13 July 2005 that the earliest that construction could now commence is October 2005. He also asserts that if the development application had been approved at the December 2004 council meeting, he would have advised the applicant to appeal against any unacceptable conditions but otherwise to seek to progress the implementation of the development. Finally, he asserts that, based on his experience, the actions of the Shire caused the applicant to unnecessarily engage experts and incur costs that would not ordinarily be required to assess the development application of this scale.
45 A number of observations can be made about Mr Callow's assertions.
The first is that there is no explanation as to why there would have been a delay of only six weeks to commence construction if approval was granted in November 2004, but there would be a delay of at least four months between the Tribunal's approval of the development in June 2005 and the commencement of construction.
46 The second is that it is clear that, whenever council had considered
the matter, its approval would have included the conditions which the applicant found unacceptable, and which became the subject of the proceedings before the Tribunal. The applicant would have appealed against those conditions. It is highly likely that the appeal proceedings would have hindered the implementation of the development.
47 Given the fact that the total period from initial lodgement of the
development application with the respondent to delivery of the Tribunal's reasons amounted to approximately nine months, the suggestion that the actions of the respondent caused a delay of nine months appears quite untenable.
48 Based on his personal experience with the applicant, Mr Callow
deposes to the fact that the applicant has not had to engage the services of a town planner or legal consultant to gain a development approval in respect of similar developments before. Presumably, that assertion is made to support Mr Callow's proposition that the engagement of consultants in this case was necessary because of "the actions of the Shire
[2005] WASAT 143 (S)
in processing the development application". Precisely which actions Mr Callow is referring to are not specified. Presumably what is referred to are the earlier difficulties to which Mr Callow deposes in obtaining information from and generally dealing with officers of the respondent.
49 It is well known that developers frequently engage the assistance of
consultants to assist in the development approval process. A decision to do so is a matter entirely within the discretion of the developer. No doubt, some local governments are more demanding than others as to requirements they impose upon applicants in the development process. In this matter, the respondent's officers did raise concerns about aspects of the proposed development in the months after the application was lodged. There was no suggestion that the concerns were baseless, and indeed the applicant revised its plans to cater for some of the concerns raised. Whatever frustrations the applicant may have felt about issues raised by the respondent, there is no basis in the evidence for concluding that the raising of those issues was in any way unreasonable.
50 Although the applicant complained that, at the meeting of
20 December 2004, the council of the respondent if properly advised, would have granted a conditional approval, rather than resolved to endorse the officer's recommendation for conditional approval, in our view, the distinction is of little substance. It was quite clear, from 20 December 2004 onwards, that the respondent was willing to approve the development subject to specified conditions. It contemplated the execution of the consent order to that effect in the Tribunal proceedings. The appeal proceeded in precisely the same manner as it would have proceeded were it an appeal against the conditions of an approval granted on 20 December 2004. In our view, the evidence does not support the proposition that the respondent did not genuinely attempt to make a decision on the merits of the application.
The scope of s 87(3)
51 In view of our conclusions in relation to the characterisation of the
respondent's conduct, it is not necessary for us to determine whether the various losses and expenses claimed by the applicant are recoverable by way of a costs order under s 87(2). However, in view of the fact that the parties made detailed submissions, both in writing and orally, as to the construction of s 87(3), and because the applicant filed extensive affidavits concerning its expenses and losses, it is appropriate that we make some observations about the nature of losses and expenses to which s 87(3) refers.
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Section 87(3) provides:
"(3). The power of the Tribunal to make an order for the payment by a party of the costs of another party includes the power to make an order for the payment of an amount to compensate the other party for expenses, loss, inconvenience, or embarrassment resulting from the proceeding or the matter because of which the proceeding was brought."
53 The applicant describes its claim as falling under two broad
categories. The first is the "costs resulting from the proceeding" comprising legal fees, expert fees and disbursements associated with the application for review and the application for costs. There is no doubt that the legal fees and expert fees associated with the hearing are expenses which, in an appropriate case, are capable of being the subject of a costs order under s 87 of the Act.
The second category is "costs and compensation resulting from the matter because of which the proceeding was brought" comprising:
(i) fees and disbursements of the architect and planner prior to the institution of the proceedings and in respect of the council meeting held on 20 December 2004;
(ii) loss of rent;
(iii) loss arising from holding costs;
(iv) loss arising from increases in construction costs arising from delay;
(v) loss of opportunity; and
(vi) embarrassment and inconvenience.
55 It was the second category of costs which was the subject of debate
between the parties. The resolution of the debate turns upon the proper construction of the words "an amount to compensate the other party for any expenses, loss, inconvenience or embarrassment resulting from … the matter because of which the proceeding was brought.".
The general extent of costs awarded in litigation was discussed by the High Court in Cachia v Hanes & Anor (1994) 179 CLR 403 at 410. That matter concerned costs under P 52 r 23(2) of the Supreme Court Rules 1970 (NSW). The majority concluded that the costs there referred to were confined to money paid or liabilities incurred for professional
[2005] WASAT 143 (S)
legal services and did not include compensation for time spent by a litigant who was not a lawyer in preparing and conducting his case. That is the approach generally taken to awards of costs of litigation against an unsuccessful party. It is the approach that has generally been adopted in the Victorian Civil and Administrative Tribunal (VCAT) when dealing with the general power to award costs under s 109 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (VCAT Act) - see Nakkasoglu v Bayside CC [2000] VCAT 682.
Section 87(3) of the SAT Act is similar to s 75(2) of the VCAT Act Section 75 of the VCAT Act provides:
"(1) At any time, the Tribunal may make an order summarily dismissing or striking out all, or any part, of a proceeding that, in its opinion –
(a) is frivolous, vexatious, misconceived or lacking in substance; or (b) is otherwise an abuse of process. (2) If the Tribunal makes an order under sub-section (1), it may order the applicant to pay any other party an amount to compensate that party for any costs, expenses, loss, inconvenience and embarrassment resulting from the proceeding. …"
58 The approach taken by VCAT to the construction s 75(2) is that it
enables the Tribunal to order that an applicant pay costs which go beyond the traditional notion of legal costs as explained in Cachia v Hanes & Anor. Thus, in Noonan David & Ors v Boroondara CC [2001] VCAT 1548, VCAT ordered the payment of the fees of a professional advocate who had appeared at the hearing on the basis that those fees fell within the expression "expense and loss" in s 75(2). A similar approach was taken in Interstructure Pty Ltd v Kaldawi & Klarica [2002] VCAT 1492. In Straw v Proctor [2004] VCAT 464, VCAT allowed the recovery of the expense of litigants in person for their "expense of understanding, researching and inconvenience of attending to a direction hearing as well as summary dismissal hearing" where the proceedings had been dismissed as vexatious.
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59 Neither the Tribunal's researches, nor the researches of counsel, have
identified any occasion when VCAT has construed the expression "costs, expenses, loss, inconvenience or embarrassment resulting from the proceeding" as encompassing the kind of consequential loss or damage of the nature of the items included in the second category of costs claimed by the applicant in this matter.
60 The applicant, however, relies upon the additional words contained
in s 87(3) which are not included in s 75(2) of the VCAT Act, namely "an amount to compensate the other party for any expenses, loss, inconvenience, or embarrassment resulting from … the matter because of which the proceeding was brought" (emphasis added). It has submitted that those words extend the scope of costs orders in a way which enables the Tribunal to consider the conduct of parties prior to institution of the application for review. By way of example, it is suggested that the Tribunal can take account whether one party acted unreasonably with the effect that the other party was forced to commence or continue unnecessary proceedings.
61 The applicant's submission is supported by the terms of s 87(4). That
sub-section identifies, without limiting other matters that may be considered, factors to which the Tribunal is required to have regard. Where it is the decision-maker against whom a costs order is sought, the Tribunal is to have regard to whether the decision-maker genuinely attempted to make a decision on its merits. That necessarily involves an examination of the parties conduct prior to commencement of the application for review.
62 The point is illustrated by the Tribunal's decision in Leseur Investments Pty Ltd and City of Melville [2005] WASAT 90 where the Tribunal made an order for payment of costs under s 87(2) on the basis that the respondent had failed to consider the application on its merits. In reaching that conclusion, the Tribunal examined the history of the application before the original decision-maker, and in particular the factors to which it appears to have had regard in reaching its decision. Having reached its conclusion, the Tribunal ordered that the respondent pay the applicant's costs of $1500, which represented the costs of the applicant's agent in conducting the proceedings.
63 The words "or the matter because of which the proceeding was
brought" do expand the range of the conduct that might be examined for the purposes of an order under s 87. That is not to say, however, that the addition of those words expands the nature of the "expenses, loss,
[2005] WASAT 143 (S)
inconvenience or embarrassment" which are properly the subject of an order. Section 87(1) establishes the general position of the Tribunal, namely that the parties bear their own "costs in a proceeding of the Tribunal". Section 87(2) then provides for a discretion for the Tribunal to make an order departing from that general rule. In empowering the Tribunal to make an order for the payment by a party "of all or any of the costs of another party" the costs being referred to are the "costs in a proceeding of the Tribunal" which would otherwise be the subject of the general rule prescribed by s 87(1). Section 87(3) extends the range of expenses that may be encompassed in an order for costs. As in s 87(2), the words "an order for the payment by a party of the costs of another party" found in s 87(3) are a reference to the other party's "costs in a proceeding of the Tribunal".
64 The effect of s 87(3) is that the expenses that may be recovered are
not limited to the traditional notion of legal costs, but can include other expenses and loss in connection with the conduct of the proceedings before the Tribunal. For example, the costs may include the costs of a non lawyer advocate, the expenses of a party having to travel to a hearing or some amount which compensates a party for the inconvenience or expense of its participation in the proceedings.
65 Section 87(3) does not provide a basis upon which compensation, in
the nature of damages, can be awarded because of some negligence or failure on the part of the decision-maker to perform its function diligently and timeously, or because a decision-maker's conduct falls short of the usual expectations of those who seek some consent, approval or permit.
Was there an offer to settle?
66 Section 87(5) of the SAT Act provides that rules may deal with the
effect of offers to settle and responses to such offers on the making of an order for the payment for costs by a party. Rule 40, r 41 and r 42 of the State Administrative Tribunal Rules 2004 (WA) deal with that question. Rule 42 provides that the Tribunal may take into account the fact that a party did not accept an offer more favourable than the Tribunal's ultimate order when the Tribunal determines whether to award costs. The applicant in this matter contended that its letter of 10 February 2005 should be construed as an offer to settle, and contended that the ultimate outcome of the proceedings was one not less favourable than the proposal contained in that letter. Accordingly, the applicant contended that the failure of the respondent to agree to the conditions proposed in that letter should be taken into account in accordance with r 42.
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67 The submission by the applicant overlooks the stipulation in r 42(1)
that the rule applies to a proceeding "other than a proceeding in the Tribunal's review jurisdiction". This case coming within the Tribunal's review jurisdiction, r 42 is of no assistance to the applicant.
The proper allowance for the conceded costs
68 As indicated earlier, the respondent conceded that it should be liable
for the reasonable costs associated with the additional affidavit of Ms Jelley. It did not concede, however, that the amount of $3725 claimed by the solicitors was reasonable.
It is not entirely clear how the applicant derives the figure of $3725 referred to in Mr Etherington's affidavit. His affidavit appends an account which relates to the work done between 29 March 2005 and 19 April 2005 in an amount of $3498. How the balance is made up does not appear. Nor is it clear who performed the various items of work or how much time was spent on the activities described. The product of the work was a 12 page affidavit and five pages of submissions. One of the invoices attached to Mr Etherington's affidavit reveals that the charges for professional time have been made at the rate of $500 per hour for a partner, $250 per hour for a solicitor, and $100 per hour for an articled clerk not including GST. By way of comparison, the legal practitioner's (Supreme Court)(contentious business) determination 2004, item 32 prescribes an hourly rate of $341 per hour (inclusive of GST) for a senior practitioner, and $231 per hour (inclusive of GST) for a junior practitioner. The rate for a clerk or paralegal is $165 per hour (inclusive of GST).
70 Although we accept that the respondent's conduct in raising new
matter in closing and thereby causing unnecessary expense to the respondent warrants an order against it for costs, that conduct is not such as to attract an order for indemnity costs. The respondent should be ordered to pay only the reasonable costs thrown away by the conduct of the respondent. Accordingly, the Tribunal is not prepared to order the payment of legal costs calculated by reference to an hourly rate well in excess of that permitted by the scale applicable to Supreme Court proceedings.
The total invoice amount of $3498 includes disbursements of $445, and GST of $318. The disbursements referred to are described as "court fees" - $252, "facsimile" - $148 and "copying/print/scan" - $45. There is no explanation of the "court fees", and it is not apparent that there were any fees payable to the Tribunal in relation to the filing of the
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supplementary affidavit and submissions. There is no basis to allow that amount. Similarly, it is unclear what the disbursement described as "facsimile" refers to. The activity schedule setting out the work which forms the subject of the account refers to four letters being sent. It is not apparent whether they were sent by facsimile, but even if they were it is not apparent how a disbursement of $148 was incurred. That amount should also not be allowed.
72 Having considered the task undertaken, the Tribunal is of the view
that a reasonable allowance for the work associated with responding to the matters raised by Ms Boulter in closing would be six hours of professional time by Mr Etherington, the solicitor with the conduct of the matter, and one hour for review by a senior practitioner. Mr Etherington comes within the definition of junior practitioner under the relevant determination. Those allowances produce a total of $1727 inclusive of GST. The Tribunal allows that amount in respect to the legal costs component of the award for costs. Added to Ms Jelley's fee of $756 plus GST, the total costs awarded, inclusive of GST, amounts to $2558.60.
| Orders |
For the reasons above the Tribunal orders:
(1) The respondent to pay to the applicant costs in the sum of
$2558.60.(2) The applicant's application for costs is otherwise
dismissed.
I certify that this and the preceding [73] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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JUDGE J CHANEY, DEPUTY PRESIDENT
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