Statewide Planning Pty Ltd v Penrith City Council (No 3)

[2018] NSWLEC 109

Land and Environment Court

New South Wales

Medium Neutral Citation:	Statewide Planning Pty Ltd v Penrith City Council (No 3) [2018] NSWLEC 109
Hearing dates:	26 February 2018
Date of orders:	27 July 2018
Decision date:	27 July 2018
Jurisdiction:	Class 1
Before:	Sheahan J
Decision:	The Council’s Notice of Motion is upheld. See paragraph [169]
Catchwords:	COSTS: Whether fair and reasonable to depart from the usual order in Class 1 proceedings that each party pay its own costs – application for costs made more than 28 days after final orders in the appeal – principles to apply – costs of motion.
Legislation Cited:	Environmental Planning and Assessment Act 1979 Land and Environment Court Rules 2007
Cases Cited:	Aldi Foods Pty Ltd v Holroyd City Council (2005) 142 LGERA 141 Arden Anglican School v Hornsby Shire Council (2008) 158 LGERA 224; [2008] NSWLEC 103 Community Association DP270253 v Woollahra Municipal Council (2015) 207 LGERA 268; [2015] NSWCA 80 Dunford v Gosford City Council (No 3) [2015] NSWLEC 96 Futurespace Pty Ltd v Ku-ring-gai Council (2009) 169 LGERA 45; [2009] NSWLEC 153 Grant v Kiama Municipal Council [2006] NSWLEC 70 Hunter v Central Coast Council [2017] NSWLEC 154 Ku-ring-gai Council v Bunnings Properties Pty Ltd (No 2) [2018] NSWLEC 19 Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 Luxe Manly Pty Limited v Northern Beaches Council [2016] NSWLEC 156 Marinkovic v Rockdale City Council (2007) 151 LGERA 385; [2007] NSWLEC 71 McDonald's Australia Limited v Ashfield Council (No 2) [2012] NSWLEC 268 Port Stephens Council v Sansom (2007) 156 LGERA 125; [2007] NSWCA 299 Statewide Planning Pty Ltd v Penrith City Council [2017] NSWLEC 1133 Statewide Planning Pty Ltd v Penrith City Council (No 2) [2017] NSWLEC 1440 Tomko v Palasty (No. 2) (2007) 71 NSWLR 61; [2007] NSWCA 369 Universal Childcare Pty Ltd v Leichhardt Municipal Council [2008] NSWLEC 277 Valoth v Parramatta City Council (No 2) [2012] NSWLEC 161
Category:	Costs
Parties:	Statewide Planning Pty Ltd (Applicant) Penrith City Council (Respondent)
Representation:	Counsel: Mr J Doyle, barrister (Applicant) Mr N Eastman, barrister (Respondent)   Solicitors: Connor & Co Lawyers (Applicant) Dentons Australia (Respondent)
File Number(s):	2016/155219

Judgment

A: Introduction

1. The Respondent Council in this Class 1 appeal now seeks orders for costs against the Applicant company.

2. The Class 1 appeal was commenced against Council’s deemed refusal of a development application (“DA” – 15/0207) for a subdivision, and was ultimately disposed of by the Court, over a period of 2.5 years, in a series of decisions.

3. The subdivision proposal underwent a large number of “iterations” or “revisions”, if not “formal” amendments, over that period, and some costs orders have already been made against the company, with some indeed accepted by it.

4. The present Notice of Motion (“NOM”), dated 27 October 2017, seeks the following orders:

1   Leave is granted to the respondent to file this motion out of time.

2 The applicant pay forthwith the respondent’s costs thrown away as a result of amending the development application on 19 December 2016, pursuant to section 97B of the Environmental Planning and Assessment Act 1979 [(“the EPA Act”)], as agreed or assessed.

3   The applicant pay forthwith the respondent’s costs of the proceedings on a party party basis, other than in respect of which the Court has already made costs orders, as agreed or assessed.

4   The applicant pay the respondent’s costs of the motion.

Leave required?

5. The company resists the leave sought in par 1 of the NOM, on the basis of the Court’s Practice Note for Class 1 Development Appeals, (22 March 2017), which mandates (in par 106) that such costs applications should be filed within 28 days of “final orders”.

6. The chronology of relevant events is not really disputed, but the respective counsel seriously contest the effect or significance of various events, in costs terms.

7. Council saw the need to collate an extraordinary mass of documentary material, to be verified and filed in support of its NOM, and I accept that that exercise took some time.

8. The length of the delay (16 August to 27 October 2017), although regrettable, and the reason for it, have been adequately explained. Clearly, the Council has an arguable case for a costs order, and there is no serious prejudice to the Applicant if the NOM proceeds. The tests in Tomko v Palasty (No. 2) (2007) 71 NSWLR 61; [2007] NSWCA 369, at [55] per Basten JA, have, therefore, been satisfied. (See competing arguments at Tp58, L8-p59, L38, and p64, L22-p65, L42.)

9. Insofar as the Court’s leave may be required to bring the motion after the 28 days had expired, I am prepared to grant it.

Material before the court

10. Before the Court on the hearing of this NOM are:

1. An extensive affidavit by Council’s solicitor, Yustin (“Justin”) Koprivnjak, sworn 27 October 2017, together with three large bundles of exhibited documents (Exhibit YAK1 – to which I shall refer simply by tab numbers, rather than volume numbers, and in the absence of folio numbers);

2. An affidavit in reply by the company’s present solicitor, Amanda Johnstone (who took over the matter from solicitor Gordon Hartley on or about 27 or 28 April 2017, and swore her affidavit on 9 February 2018), together with a bundle of exhibited documents (Exhibit APJ-1 – to which I shall refer by tab or folio numbers);

3. Two further, but smaller, bundles of correspondence between the parties (Exhibits A1 and A2), tendered by Mr Justin Doyle, counsel for the company – Exhibit A1 contains communications on the costs issues regarding the Class 1 appeal itself, and Exhibit A2 communications on the question of the costs incurred in respect of the NOM now before the Court (i.e. par 4);

4. Comprehensive written submissions from both Mr Doyle and Council’s counsel, Mr Nick Eastman; and

5. A marked-up chronology of events, cross-referenced to some of the above materials, put before the Court by Mr Doyle, as a submission (Tp37, LL8-18), in response to the chronology set out in Mr Eastman’s submissions.

Costs to be determined?

11. As the company submits to the costs order sought in par 2 of the NOM, that leaves for my determination pars 3 and 4 of the NOM, both of which costs orders are opposed by the company.

12. The costs incurred by the Council in the proceedings are detailed in Koprivnjak’s affidavit (in par 105), in these terms:

Dates	Solicitors fees	Counsel fees
From 12 October 2015 To 28 July 2016	$59,299.11	$12,100.00
From 28 July 2016 To 21 December 2016	$34,213.02	$6,600.00
From 28 April 2017 To 30 August 2017	$6,709.04
TOTAL	$100,221.17	$18,700.00

(Invoices are provided in Exhibit YAK-1 at tabs 33, 51, and 70.)

13. Importantly, the company has made an “open” offer to accept an order that it pay $10,000 to the Council, in addition to satisfying all costs orders already made in the proceedings, to settle Council’s residual claim for costs.

14. While that offer can be seen as a concession by the Applicant that Council may be entitled to recover more of its costs than have so far been ordered by the Court, the Council must still discharge its onus of showing that any further order for payment is just, equitable, fair, and reasonable.

The subject matter

15. The site concerned in the DA and the appeal covers an area of some 4.8ha at 25 Rance Road, Werrington, and was formerly a Sydney Water depot.

16. I accept Ms Johnstone’s observation (par 10) “that a significant number of physical characteristics of the site, and aspects of its history, complicated the design and planning for a subdivision”. She nominates major issues concerning contamination, tree removal, major necessary road upgrades, stormwater infrastructure, housing design, and civil engineering.

17. The relevant DA seeking a 152 lot residential subdivision, and associated remediation, civil, road, landscaping, and drainage works, was lodged on 9 March 2015.

18. The Class 1 appeal against the deemed refusal of the DA was filed on 21 September 2015 (not 21 February 2018, as Johnstone deposes in her par 11). It would appear from Mr Eastman’s submissions that perhaps not all the “DA documents” were filed with the Class 1 application (see [42] below).

19. As Mr Eastman notes (subs par 10), that appeal had a “long and difficult procedural history”, but “was ultimately able to be resolved by agreement (subject to minor disputes on conditions)”.

20. However, final orders were not made in the proceedings until 16 August 2017.

B: Costs in Class 1 – the law

21. Costs are compensatory, and not punitive, in character: Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59.

22. Section 97B of the EPA Act relevantly provides (emphasis added):

Costs payable if amended development application filed

(1)   This section applies to proceedings if the Court, on an appeal by an applicant under section 97 allows the applicant to file an amended development application (other than to make a minor amendment).

(2)   In any proceedings to which this section applies, the Court must make an order for the payment by the applicant of those costs of the consent authority that are thrown away as a result of amending the development application.

(3)   The regulations may provide for circumstances in which subsection (2) does not apply.

(4)   This section has effect despite the provisions of any other Act or law.

23. The threshold question in any application for s 97B costs is whether the amendment allowed is “minor”, and some principles to guide that decision were articulated by Pepper J in Futurespace Pty Ltd v Ku-ring-gai Council (“Futurespace”)] (2009) 169 LGERA 45; [2009] NSWLEC 153, at [42].

24. Rule 3.7 of the Land and Environment Court Rules 2007 “essentially mirrors what Preston Ch J said in Grant v Kiama [Municipal Council [2006] NSWLEC 70]” (Tp10, LL4-6), and relevantly provides (emphasis added):

Costs in certain proceedings (cf Land and Environment Court Rules 1996, Part 16, rule 4)

(1)   This rule applies to the following proceedings (except for appeals under section 56A of the Act):

(a)   all proceedings in Class 1 of the Court’s jurisdiction,

...

(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,

(c)   that a party has acted unreasonably in circumstances leading up to the commencement of the proceedings,

(d)   that a party has acted unreasonably in the conduct of the proceedings,

(e)   that a party has commenced or defended the proceedings for an improper purpose,

(f)   that a party has commenced or continued a claim in the proceedings, or maintained a defence to the proceedings, where:

(i)   the claim or defence (as appropriate) did not have reasonable prospects of success, or

(ii)   to commence or continue the claim, or to maintain the defence, was otherwise unreasonable.

C: The Costs Dispute

25. On 15 December 2017, Johnstone wrote to Council’s solicitor Jodie Wauchope, “without prejudice save as to costs” (Exhibit A2, fols 1-2), indicating that Statewide would not oppose proposed Order 2, but reserved its position on the costs of obtaining that order (i.e. proposed Order 4), “as you have never sought our clients consent in that regard”.

26. Johnstone indicated in that letter that the Applicant would oppose proposed Order 3, but reserved its rights in respect of late filing of the application (proposed Order 1, discussed above at [5]-[9]). She summarized some of the relevant events during 2016, and offered (fol 2), on a Calderbank basis:

1.   Our client will pay $10,000 to Council in respect of the costs order made on 9 September 2016;

2. Our client will consent to an order that it pay Council’s costs thrown away as a result of amending the development application on 19 December 2016, pursuant to s97B of the [EPA Act], in the sum of $10,000;

3.   Council’s Notice of Motion filed 27 October 2017 is dismissed, with no order as to costs.

27. Koprivnjak replied, on 12 January 2018 (Exhibit A2, fols 3-5), also on a “without prejudice” basis, formally rejecting the offer and estimating “costs thrown away” as follows:

1. as at 9 September 2016 (“First 97B Order”), $39,828.00

2. from 9 September 2016 up to and including 19 December 2016 (Second 97B Order), $27,050.50

28. In respect of each of those “events” in the case, the Council argued:

“your client’s offer of $10,000.00 does not reasonably satisfy this order for costs thrown away.”

29. In respect of proposed Order 3, Koprivnjak’s letter argued that Council:

“unreasonably incurred costs as a direct result of your client’s conduct”, some of which it particularized in the context of Rule 3.7.

30. Council offered to settle the NOM, again on a Calderbank basis, for $77,298.76, inclusive of the order of 9 September 2016, noting that that amount represented “approximately 65% of the total of costs [Council] incurred in these proceedings”.

31. On 23 January 2018, Johnstone responded (Exhibit A2, fols 6-7), offering “without prejudice”, and again on a Calderbank basis:

1. $10,000 in respect of the 9 September 2016 order;

2. to consent to Order 2, with no liability for the costs of Council’s obtaining it; and

3. $10,000 in respect of proposed Order 3.

32. She added (fol 7) that the Applicant would continue to oppose Order 4, because the costs motion was filed without notice to it, and the Applicant reserved its right to seek costs on the motion if the Council succeeded only partially.

33. I also record here that, in her affidavit (especially at pars 38 to 41), Johnstone complains of several cases of lateness on the part of Council, which has particular duties as a “model litigant” in regard to timeliness (see also Doyle’s subs at 36 – quoted in [124] below).

D: Chronology of Events

34. The following chronology has been adapted principally from that set out in Mr Eastman’s submissions (at pars 11 to 59), which was based on Koprivnjak’s affidavit, but it has been supplemented from Mr Doyle’s submissions and Johnstone’s affidavit:

The DA lodged with Council

35. The Applicant lodged its DA the subject of these proceedings, on 9 March 2015. Mr Doyle says of the DA (subs par 15):

... the [DA] was substantial, seeking consent for:

a)   a change of use to residential accommodation;

b)   a residential subdivision of 152 lots (as originally lodged),

c)   removal of almost all of the established trees across the site,

d)   site remediation works according to an audited RAP under which the property was sold by Sydney Water,

e)   associated civil works including recontouring of the land to redirect stormwater flows,

f)   formation of a new large temporary drainage basin on the land,

g)   provision for future connection of that basin to Council's infrastructure as yet unconstructed,

h)   an internal road system,

i)   upgrading of a major local intersection.

36. On 2 April 2015, the Respondent sent the Applicant a letter (Exhibit YAK-1, tab 1) indicating a number of non-compliances with the relevant controls (e.g. it was not of sufficiently high density), and suggested that the DA be withdrawn.

37. The Applicant responded to this on 4 May 2015, providing additional information (Exhibit YAK-1, tab 2).

38. Issues remained outstanding, according to the Respondent, so on 12 June 2015 it wrote to the Applicant about them (Exhibit YAK-1, tab 3).

39. On 7 July 2015, the Respondent's engineering expert emailed the Applicant's engineer a summary of matters discussed between them at a meeting on that day (Exhibit YAK-1, tab 4), and, on 10 July 2015, the Respondent's traffic expert emailed the Applicant's traffic consultant with advice regarding outstanding traffic issues (Exhibit YAK-1, tab 5).

40. Between 29 July and 2 September 2015, the Applicant and its consultants provided the Respondent with further documents, formally amending the DA (Exhibit YAK-1, tab 6), and, between 18 September 2015 and 18 January 2016, the Respondent's officers assessed the Amending DA Documents (Exhibit YAK-1, tab 7).

The Class 1 appeal is lodged

41. As a consequence of these events, the DA was not determined before the expiry of the 40 day deemed refusal period, and (despite the ongoing assessment by Council) the Applicant commenced these Class 1 appeal proceedings on 21 September 2015.

42. Mr Eastman says (at subs 15) that “a very limited amount of documents were included with the Class 1 Application” (see Koprivnjak par 18). Mr Doyle emphasises (par 16) that the appeal was commenced six months after lodgement of the DA, and (Tp38, LL28-41) that “the principal documents”, e.g. the SEE, were attached to the appeal form, and that Council “could have been in no meaningful doubt as to ... what the application [then] comprised”.

43. On 20 October 2015, the first directions hearing was held (Exhibit YAK-1, tab 9).

44. On 26 October 2015, the Respondent filed and served its Statement of Facts and Contentions (SOFAC), including the contention (Contention 1) of “inadequate information”' (see Exhibit YAK-1, tabs 8 and 11). I noted during the hearing (Tp11, L22) that that contention was (still) advanced some seven and a half months after the DA was lodged. However, the SOFAC nominated six other merits issues (Koprivnjak par 19, c.f. Johnstone par 12).

45. On 4 November 2015, the day before the s 34 conference was to commence, and with no requirement to do so, the Applicant's solicitor served a “draft” Statement of Contentions in Reply (Exhibit YAK-1, tab 12), provided for the purposes of the s 34 conference.

The Section 34 process

46. The first s 34 conference then proceeded on 5 November 2015. Directions were made adjourning the s 34 process, and requiring the Applicant to provide further documents to the Respondent.

47. During the s 34 process (as to which see Koprivnjak pars 23-24), which lasted until it was formally terminated on 6 April 2016, the Applicant, according to Mr Eastman (subs pars 17-20), provided the Respondent with revised or amended sets of documents six times (Exhibit YAK-1, tabs 13 and 14).

48. On 13 November 2015, a further direction was made for the Applicant to provide amended documents and plans to the Respondent on 4 December 2015 (Koprivnjak par 24, and Exhibit YAK-1, tabs 15-22), and the proceedings were adjourned to 22 December 2015.

49. The Applicant notes (Exhibit APJ-1, p5) that, during November, it provided information to Council and sought a meeting to discuss stormwater issues, and, on 2 December 2015, Council requested that the cost of housing be included even though the DA was for subdivision. The Applicant also complains (Exhibit APJ-1, fol 3) that Council’s traffic engineer would not consult without going through Council’s legal advisors, and (Exhibit A1, fol 1) that Council did not respond on stormwater conditions until 17 December 2015.

50. On 22 December 2015, further directions were made adjourning the proceedings to 9 February 2016, to allow time for notification of amended application documents, and for provision by the Applicant of further amending documents to the Respondent.

51. On 9 February 2016, further directions were made for (1) the Applicant to provide further reports and drawings to the Respondent by 19 February 2016; (2) the Respondent to provide the Applicant with its assessment of the further reports and drawings by 4 March 2016; and (3) the matter to be listed for 4 March 2016.

52. On 4 March 2016, further directions were made, adjourning the matter until 11 March 2016, and requiring the Respondent to provide the Applicant with a response to its amended application documents on or by 9 March 2016.

46. On 11 March 2016, the matter was again adjourned, until 29 March 2016, to allow the Applicant time to consider and respond to the Respondent's comments.

47. On 29 March 2016, the matter was again adjourned.

48. On 6 April 2016, the parties attended for further discussion. The s 34 conference process was formally terminated, and the matter adjourned to 13 April for directions before the Registrar.

The lead-up to the hearing

56. Following the termination of the s 34 conference, the Applicant provided the Respondent with amended application documents a further five times. On only two occasions was leave sought by the Applicant to rely on some of those amending documents (Koprivnjak par 25, and Eastman subs par 21).

57. During April 2016, (Exhibit A1, fols 7, 8 and 10), the Applicant says, there was some delay on Council’s part.

58. Also following termination of the s 34 conference, a Notice of Motion to rely on an amended application was filed on 22 April 2016 (Koprivnjak pars 26-27).

59. On 29 April 2016, that 22 April 2016 Amendment motion was heard, and the Applicant was given leave to rely on amended application documents (Koprivnjak pars 28-29). Directions were then made for the filing and service of joint reports by 4 July, in preparation for a hearing on 25 and 26 July 2016. Mr Doyle says of this event (par 40):

Council sought s97B costs in relation to that amendment but an order for costs was not made because the Registrar determined that the amendments were minor.

(See also Johnstone par 33, and Exhibit A1, fol 31.)

60. On 2 May 2016 (also Exhibit A1, fol 31), Statewide’s then solicitor (Gordon Hartley) wrote to various persons including Mr Doyle, noting that the Court had granted leave to the Applicant to amend its application, but had declined Council’s application for costs, allegedly because the amendments were minor.

61. On 8 June 2016, the Respondent served an Amended Statement of Facts and Contentions (AmSOFAC), which again included the contention about inadequate information, but also now seven other merits issues (Koprivnjak pars 30-31, c.f. Johnstone par 14).

62. Between 21 June and 8 July 2016, the parties corresponded about experts, joint conferencing, and the identification of “the documents which make up the application” (Koprivnjak pars 32 and 34, and Exhibit YAK-1, tabs 27 and 29).

63. On 1 July 2016, and again with no direction to do so, the Applicant filed a folder called the Applicant's Bundle of Documents (1 July 2016 Bundle), with a cover letter from the Applicant's solicitor indicating:

The bundle consists of the documents prepared in support of the development application. The material has been previously provided to Council, but has not previously been filed with the Court. The material in the attached bundle excludes superseded material. [(Koprivnjak par 33 and 34, and Exhibit YAK-1, tab 28)]

64. Mr Eastman notes that no application was made at that time to amend the application, nor to seek leave to rely on amended plans. He says (subs par 26) that seeking leave “is both necessary and orthodox, whereas an Applicant bundle of this type, is not”.

65. There was much interaction between the parties during July (Exhibit APJ-1, fols 25 to 55).

66. The Respondent had the matter restored to the list for the Court to determine the status of the 1 July 2016 Bundle, and, on 11 July 2016, the Applicant was given leave to rely on 2 reports (ecology and stormwater) from the 1 July 2016 Bundle, and further directions were made (Koprivnjak par 35). No costs order was made (Johnstone par 34), and Mr Doyle also notes (par 4 and Exhibit A1, fol 17) that “Council’s solicitor conceded in open Court that no new material had been included in the bundle”. (The Applicant claims in its annotated chronology (page 9) that Council “had all documents since at least April 2016”.)

67. On 14 July 2016, the Applicant served on the Respondent a bushfire report, and, on 18 July 2016, the planning, traffic, and engineering joint expert reports were filed.

68. On Friday 22 July 2016, noting that the hearing was commencing the following Monday, the Applicant's solicitor provided the Respondent's solicitors with an email indicating that the Applicant proposed to rely on the following at the hearing (22 July 2016 Bundle – Koprivnjak par 38, and Exhibit YAK-1, tab 31):

1. Schedule of amendments

2. Masterplan MPO1, Rev A prepared by Aleksander Design Group dated 22 July 2016.

3. Masterplan MP02, Rev A prepared by Aleksander Design Group dated 22 July 2016.

4. Landscape Streetscape DA Plan, LDA-001 Rev P and LDA-002 Rev G, prepared by Ground Link dated 21 July 2016.

(Eastman subs par 29)

69. On 22 July 2016 (Exhibit A1, fol 21), Hartley wrote to Council’s solicitor on the record (Jodie Wauchope) enclosing by way of service a series of plans dated that day said to incorporate 10 matters which had been discussed in joint reports, and to address matters agreed between the competing experts. The Applicant proposed to rely upon the plans at the hearing, and said that their purpose was “to resolve contentions and limit the matters in dispute”.

The hearing

70. On the first day of the hearing, 25 July 2016, Commissioners Brown and Dickson attended onsite and conducted the view, and expert conclaves were conducted (Doyle par 19, and Johnstone par 17).

71. On the second day, 26 July 2016, an in-principle agreement was reached between the parties' town planning and traffic experts. The hearing was adjourned, to 19 August 2016, in order to allow the Applicant's engineering expert to discuss with the Respondent's engineering experts what information was needed to assess the amended plans in the 22 July 2016 Bundle and formulate a stormwater solution. The solicitors’ report to Council indicates that Mr Eastman foreshadowed seeking a s 97B costs order, “once the application documentation is known”. (Koprivnjak par 40, and Exhibit YAK-1, tab 32).

72. On 27 July 2016, the Applicant's experts met with the Respondent's experts, and, between then and 4 August 2016, the experts corresponded with respect to that meeting (Koprivnjak par 42, and Exhibit YAK-1, tab 34).

73. On 4 August 2016, the Respondent's solicitors emailed the Applicant's solicitor seeking confirmation of the Applicant's stormwater concept, and foreshadowing claims for costs “thrown away ... in addition to any s 97B costs” (Koprivnjak par 43, and Exhibit YAK-1, tab 35).

74. On 18 August 2016, the Applicant's solicitor sent the Respondent's solicitors an email referring to the discussions between the Applicant's and Respondent's experts, and advising that the engineering details would be completed by Wednesday, 24 August 2016. This email attached a new set of plans (18 August 2016 Bundle – Koprivnjak par 44, and Exhibit YAK-1, tab 36).

75. As at 19 August 2016, issues with the plans tabled by the Applicant at the hearing in July 2016 had not been resolved, and directions were made for the Applicant to provide the Respondent with further material by 23 August 2016, with Council to respond by 30 August 2016. The matter was adjourned to 6 September 2016 for directions (Koprivnjak par 45, and Exhibit YAK-1, tab 37).

76. Between 25 August and 5 September 2016, Dentons received further material from the Applicant's solicitor. Documents were not provided by 23 August as directed (Koprivnjak par 46, and Exhibit YAK-1, tab 38).

77. On 5 September 2016, Council’s engineering expert reported on the further material provided (Koprivnjak par 47, and Exhibit YAK-1, tab 39):

This approach is unsupportable from both an engineering, planning and landscaping perspective and it is reiterated that the core issues raised during the section 34 process and hearing are not being suitably addressed by the applicant. As a result of this it is again suggested that the matter be re-listed for hearing to seek a final determination on the matter.

78. On 6 September 2016, the issues with the plans tabled by the Applicant at the hearing in July 2016 had not been resolved by the further material provided, and directions were made for the Applicant to put on a Notice of Motion to rely on amended plans. The matter was adjourned for directions to 9 September 2016 (Koprivnjak par 48, and Exhibit YAK-1, tab 40).

79. On 8 September 2016, the Applicant filed a NOM to rely on further amended plans and documents (Koprivnjak par 49, and Exhibit YAK-1, tab 41).

80. On 9 September 2016, the Applicant was granted leave to rely on further amended plans and documents. An order was made, by consent, that the Applicant pay the Respondent's costs thrown away (Doyle par 42, and Johnstone pars 20 and 35), and a timetable was ordered for the preparation of further hearing on 19 December 2016, including further joint reporting by 30 September 2016 (Koprivnjak par 50, and Exhibit YAK-1, tab 42).

81. Mr Eastman says (par 38) that the 9 September 2016 Amendments included documents which, the Respondent's experts had informed the Applicant's experts, were not supported, and that, between 26 and 29 September 2016, the Respondent's solicitors and its experts attempted to make contact with the Applicant's solicitor and experts for the purposes of arranging joint conference, and filing reports, as directed (Koprivnjak pars 51-52, and Exhibit YAK-1, tab 43).

82. Johnstone says (par 35) that:

... The Respondent has never written to the Applicant regarding the quantum of those costs sought by Council, and accordingly I say that it has been impossible for the Applicant to agree to an amount payable for those costs.

83. Between 6 and 13 October 2016, the Respondent's solicitors corresponded with the Applicant's solicitor with respect to (1) the information being provided by the Applicant's experts to its solicitor, (2) the slippage in the timetable, caused by the unavailability of the experts to confer, and (3) the appropriate variation to the timetable. As a consequence of the slippage in the timetable caused by the Applicant's experts, the Respondent proposed a variation to the directions that joint expert reports were to be filed and served by 21 October 2016 (Koprivnjak par 53, Exhibit A1, fol 24, and Exhibit YAK-1, tab 44).

84. Such orders were made, by consent, on 17 October 2016 (Koprivnjak par 54).

85. On 18 October 2016, the Respondent's planning expert attended the offices of the Applicant's planning expert to hold a joint conference with the Applicant's planner, but also in attendance was the Applicant's engineer (Koprivnjak par 55-56, and Exhibit YAK-1, tab 46).

86. Between 18 and 26 October 2016, notwithstanding the extension of time, the Respondent's experts' attempts to finalise their reports within the time provided were delayed by the provision by the Applicant's experts of further revised plans and concepts not before the court which, in order to be properly considered by the Respondent's experts, required the provision of additional information (Koprivnjak par 57, and Exhibit YAK-1, tab 47).

87. On 26 October 2016, the Further Joint Traffic Report was finalised and filed; on 28 October 2016, the Further Joint Planning Report was finalised and filed; and on 3 November 2016, the Further Joint Engineering Report was finalised, and it was filed on 4 November 2016 (Koprivnjak par 58-60, and Exhibit YAK-1, tab 47.1). The Applicant complains (chronology p15) that Council’s conditions were due on 28 October 2016, but not served until 15 December 2016.

88. The Respondent's planner outlined the list of unresolved contentions, which, as at 6 December 2016, still included "Inadequate and inaccurate information", along with now five merits issues (Koprivnjak par 62, and Exhibit YAK-1, tab 48). That was seven and a half months after the April 2016 amended application.

89. Between 5 and 19 December 2016, the Applicant's solicitor sent Dentons further correspondence relating to further joint reporting on s94 contribution, and provided yet another alternative subdivision layout. This correspondence also included (on 18 December 2016) an unsolicited offer to enter into a voluntary planning agreement (Koprivnjak par 63, and Exhibit YAK-1, tab 49).

90. At a short hearing on 19 December 2016, “the parties had reached agreement that the development could be approved subject to resolution of appropriate conditions” (Johnstone par 22, and Exhibit APJ-1, fol 95). Judgment was formally reserved, but directions were made for the parties to provide the Court with competing conditions of consent, and submissions on points of disagreement. The parties did so between 20 and 21 December 2016 (Koprivnjak par 64, Exhibit YAK-1, tab 50, and Exhibit APJ-1 pp110-169).

The Court’s first judgment

91. On 3 March 2017, Commissioner Brown delivered the Court’s first of two judgments in these proceedings ([2017] NSWLEC 1133 – Exhibit YAK-1, tab 52). At paragraphs ([22] to [26] of that judgment, the Applicant was required to amend its plans to the Respondent's satisfaction, within three weeks (Koprivnjak par 67). At par [97], after reviewing Futurespace, the Commissioners said:

... As it is agreed that the changes are not minor and we find that the applicant is to pay the respondent’s costs, as agreed or assessed, under s 97B of the EPA Act. Following compliance with the directions, this will be formalised in the final orders.

92. Contrary to Mr Doyle’s suggestion (Tp33, L31), that March 2017 judgment does not qualify as an exercise of this Court’s “amber light” approach, as to which see Marinkovic v Rockdale City Council [(“Marinkovic”)] [2007] NSWLEC 71, 151 LGERA 385, and my decisions in Luxe Manly Pty Limited v Northern Beaches Council [2016] NSWLEC 156, and Ku-ring-gai Council v Bunnings Properties Pty Ltd (No 2) [2018] NSWLEC 19.

93. On 16 March 2017, the Respondent's solicitors emailed the Applicant's solicitor informing him that the Respondent was preparing conditions in light of the 3 March judgment, which could not be finalised until the Applicant provided agreed amended plans in accordance with the 3 March judgment (Koprivnjak par 68).

94. On 20 March 2017, the Applicant's solicitor responded to the Respondent's solicitors, indicating the amended plans required by the judgment would be completed by Friday, 24 March 2017, and as such proposed a Court communication seeking a variation to the timetable ordered in the 3 March judgment (Koprivnjak par 69, and Exhibit YAK-1, tab 53). On 21 March 2017 Council provided amended conditions (chronology p18).

95. As at 24 March 2017, the Applicant's solicitor had not provided any further amended plans (Koprivnjak par 71).

96. Instead, between 26 and 28 March 2017, inclusive, the Applicant provided a number of sets of plans purportedly amended in accordance with the 3 March judgment (Exhibit YAK-1, tab 54), but Mr Eastman says (par 48) that “these were provided in such a way that it was neither certain nor explained how these were in accordance with the 3 March Judgment”.

97. On 27 March 2017, the Applicant’s solicitor provided to the Respondent a draft set of conditions, purportedly in accordance with the judgment (Koprivnjak par 75).

98. On 3 and 5 April 2017, the Respondent's solicitors again asked the Applicant's solicitor to provide the Respondent with a complete suite of plans, amended in accordance with the 3 March judgment (Koprivnjak par 78).

99. On 7 April 2017, at 6:00pm, the Applicant's solicitor responded with an email containing a link to a set of plans. Mr Eastman says (par 50) that the link was not properly provided until 11 April 2017 (see also Koprivnjak pars 79-82, and Exhibit YAK-1, tab 55).

100. On 7 and 13 April 2017, notwithstanding the emails between the solicitors, the Applicant's consultants emailed the Respondent's planner purportedly submitting documents in accordance with the conditions of consent, but not in accordance with the 3 March judgment, and seeking confirmation of an amendment to the subdivision plan (Koprivnjak par 83, and Exhibit YAK-1, tab 56).

101. By 19 April 2017, the Respondent's experts had reviewed the plans and documents provided, as at that date, and the Respondent's planning expert emailed the Respondent's solicitors indicating (Exhibit YAK-1, tab 57) that:

The information now significantly amended is unsatisfactory in its detail, accuracy and the resulting drainage and finished ground level outcomes. The civil design amendments are contradictory to agreements reached during the hearing with respect to landscaping, drainage and traffic contentions and renders the proposal non supportable again.

102. On 21 April 2017, the Respondent's solicitor emailed the Applicant's solicitor to inform him that they were instructed that the documents provided by the Applicant were unsatisfactory in detail, accuracy, and, to the extent that they are legible, had not been prepared in complete accordance with the judgment. He sought to have the matter relisted (Koprivnjak par 85, and Exhibit YAK-1, tab 58). Johnstone counters (par 42) that “the applicant’s solicitor contacted the Court to relist the matter as conditions of consent could not be agreed. The applicant’s solicitor requested a response from Council to the updated material and conditions provided by the applicant”.

103. On 28 April 2017, the matter was relisted before the Registrar, on which occasion the Respondent's solicitors made an application for the Respondent's costs flowing from a default of the Court's order of 3 March 2017. The Applicant had appointed new solicitors at this stage (Koprivnjak par 87, and Johnstone pars 1 and 36).

104. On 2 May 2017, Council’s engineer’s comments were provided to the Applicant (Johnstone par 42).

105. Between 2 and 26 May 2017, the solicitors corresponded regarding links emailed to Council’s representatives on 2, 9 and 12 May 2017 with amended conditions and plans (Koprivnjak par 90, and Exhibit YAK-1, tab 62). Johnstone counters (par 43) that “on or about 9 May 2017, amended documents were provided to Council’s solicitor following Council’s comments and in accordance with the Judgment. The plans were already agreed between the experts before the hearing. I suggested to Council’s solicitor that any further amendments suggested by Council could be made at Construction Certificate stage”.

106. Johnstone deposes (pars 44-45):

44   On 10 May 2017 I had a telephone conversation with Council’s solicitor. Plans and documents were then further amended as requested by Council.

45   On 23 May 2017, I requested Council's response to the amended plans. On 24 May 2017, I requested contact details for Council's engineer so that the applicant could speak with Council's engineer directly.

107. By order of the Registrar, on 17 May 2017 (Exhibit YAK-1, tab 60), the Applicant paid costs of $2,673.40 (Doyle par 43, Koprivnjak par 88, Johnstone par 37, and Exhibit YAK-1, tab 61), and the matter was to be relisted before the Commissioners on 26 May 2017 (Koprivnjak par 89).

108. On 26 May 2017, before the Commissioners, the Applicant sought and was granted an extension of time to 21 June 2017, to provide the Respondent with plans satisfactory to it. Koprivnjak advised Johnstone in detail of Council’s remaining concerns (Koprivnjak pars 90-91, and Exhibit YAK-1, tabs 62-63).

109. Johnstone deposes (pars 46-47):

46   I refer to paragraph 91 of the Koprivnjak Affidavit. Council provided its response to the plans just before the matter was in Court on 26 May 2017 requesting further amendments beyond those sought by the Court. The applicant's difficulties with contacting Council staff was raised before the Commissioners. I was in Court that day and heard Mr Eastman who appeared on behalf of the Respondent, assure the Court that the Council staff would now take the applicant's calls.

47   On 29 May 2017 and 1 June 2017, I again requested the contact details for Council's engineer. On 2 June 2017, a telephone discussion finally occurred between the parties.

110. On 6 June 2017, the parties met at the Respondent's chambers to discuss what was required to satisfy the Respondent with respect to the requisite amendments to the plans (Koprivnjak pars 91-92, and Exhibit YAK-1, tabs 63-64).

110. By 21 June 2017, the Applicant had again not provided the Respondent with plans to its satisfaction as directed. On that date, the Respondent's planner emailed the Respondent's solicitors stating that although plans had been provided (by email at 12:18pm), the Applicant's planner subsequently called him, requesting that they be ignored, as they contained errors (Koprivnjak par 94, and Exhibit YAK-1, tab 65).

111. On 21 June 2017, the Commissioners directed the Applicant to file, by 12 July 2017, plans satisfactory to the Respondent, and conditions which reflected the judgment (Koprivnjak par 96, and Exhibit YAK-1, tab 66).

112. Johnstone deposes (par 48):

48   I refer to paragraph 96 of the Koprivnjak Affidavit. Amended documents were provided to Council on 21 June 2017. On 21 June 2017, the matter was adjourned by consent to allow Council time to consider the amended documents. Both parties were directed to file agreed Conditions of Consent, not just the applicant.

114. Plans and conditions, prepared in accordance with the 3 March judgment, and to the Respondent's satisfaction, were filed on 12 July 2017 (Koprivnjak pars 97-98, and Exhibit YAK-1, tab 67).

The Court’s second judgment

115. On 16 August 2017, and after final amendment of the plans, final judgment (No 2) was given, and final orders made, in these proceedings ([2017] NSWLEC 1440 – Exhibit YAK-1, tab 68).

116. Mr Koprivnjak observes (par 101):

In the Final Judgment the Commissioners made no further comments about section 97B costs, but also made no order for the payment by the applicant of the respondent’s costs under s97B of the [EPA Act].

117. Between 16 August and 1 September 2017, the respective solicitors corresponded about, and the Court finalized, the “correct” conditions to be attached to the orders (Koprivnjak par 103, and Exhibit YAK-1, tab 69).

118. Mr Doyle submitted (Tp55, LL26-29, and 41-42):

... seeing the applicant obtained a development with conditions that were different to those which the council urged, there had to be a hearing, there had to be submissions, there had to be a court process and there had to be a judgment, ... [and] council is ultimately successful there in obtaining a deferred commencement condition.

119. Mr Doyle notes (par 44) that, apart from costs orders to which I have referred in the above chronology, “no issue as to costs in the litigation was raised by the Council after [those] final orders were made”, until the present NOM was filed on 27 October 2017. Johnstone says (pars 49-50) that it was filed on 30 October 2017, “with no notice ..., nor indeed any other correspondence from the Respondent ...”.

E: The Competing Arguments

The Council

120. The Council’s argument that an order in its favour is “fair and reasonable in the circumstances” is summarized in paragraphs 6, 7, and 64-68 of Mr Eastman’s written submissions:

6. The Respondent contends that in the circumstances of this case, an order pursuant to Rule 3.7 of the Land and Environment Court Rules 2007, warrants the making of an order for costs in favour of the Respondent.

7. The principal reason for that is the applicant has acted unreasonably in its history of extensive delay in providing accurate, appropriate and responsive information in these proceedings, that goes well beyond and cannot be caught by s 97B orders alone.

...

64. This is a case involving eggregious (sic) delay and amendment, going well beyond the scope of that which could otherwise be caught by s 97B. The number of amended documents the respondent was required to consider were not mere amendments and went well beyond the parties working towards a good environmental outcome: [Marinkovic] at [22]-[26].

65. There have been in these proceedings more than a dozen revisions of the plans. All of these needed to be dealt with by the Respondent and only some of these were the subject of amendment applications to which s 97B could apply.

66.   ... although there have been so many amendments, it is not the making of amendments of itself that has caused the problem, but the applicant's conduct of serious delay and non-compliance with (what essentially were agreed or self imposed) deadlines or court imposed orders, the later (sic) being the more onerous.

67.   Although the Respondent worked towards resolution of these proceedings the following justifies a costs order that is fair and reasonable in this case:

a.   The sheer number and volume of changes the respondent was required to assess, only a fraction for which leave was sought;

b.   The extensive delay in providing those amendments;

c.   The delay in describing accurately to the Respondent what was to be assessed;

d.   The extent to which inconsistencies permeated the plans for 2 plus years;

e.   The non-compliance with directions, which utlimately (sic) resulted in more than a dozen directions hearings because deadlines could not be met.

68.   These instances, especially when viewed cumulatively, go well beyond the parties working towards a good environmental outcome, as referred to in Marinkovic and fall squarely within the category of conduct outside what can be reasonably expected in the usual conduct of a class 1 appeal, and it is this conduct to which Rule 3.7(3) is directed.

121. Mr Eastman also submitted (Tp13, LL43-46):

... during the five-month period of the conciliation, the applicant provided the respondent with six versions of the amended plans, and then following the termination of 34, the applicant provided the respondent with some further amended documents on five occasions, and only two of those occasions was leave sought ...

122. He adopted (Tp30, LL46-50), from Marinkovic, for application in this case, the criterion that the “applicant has stepped outside what can reasonably be expected in the usual conduct of a class 1 appeal”, by its “almost uncountable revisions, amendments, further information.”

123. On the open offer that the Applicant accept an order for $10,000, in addition to satisfying orders already made in Council’s favour, Mr Eastman submitted (Tp62, LL49-50) that the Court had “no yardstick against which to necessarily compare it”, and (Tp63, LL44-45) that the offer is “a concession” that Council “needs to be paid something on top of the 97B orders”.

The Applicant

124. Mr Doyle responded both in writing (pars 20-27, 32, 36 and 37), and orally. His written submissions say:

20   The DA was amended on a number of occasions with the Court's leave, with the amendment on each occasion responsive to issues raised by the Council.

21   On each occasion the proceedings were adjourned, the adjournments were allowed by consent presumably because both parties agreed that conciliation was preferable to the cost and uncertainty of a hearing. The extended process of negotiation between the parties was consented to and permitted by the Court having regard to the complexity of the [DA].

22   The result of these negotiations between the parties was a major reduction in issues to the point where there was no hearing on the merits and the contest was reduced to an adjudication of the parties' respective positions in relation to conditions.

23   ... The outcome of the proceedings was mixed, with the applicant obtaining a development consent that it could not have obtained without the intervention of the court.

24   Significantly, in relation to many issues, the ultimate design of the proposal was substantially dependent on Council decision making. Specifically, a major road intersection had to be redesigned with a new complicated round-about installed. Design of that round-about was necessarily a collaborative process. So [too], the design of the internal drainage basin, and whether there ought to be one or two basins was dependent upon developing Council infrastructure. The Council's original position that there be two basins and that the development could not proceed without an easement and design which connected the basin to a neighbouring property was dropped partly through witness conferral and partly through the determinations of the Commissioners.

25   The number of amendments made to the plans was a factor of the Council insisting that it would not permit its experts to consider any iteration of the scheme inside or outside of the s.34 process unless the material was filed in Court. That requirement had the effect of increasing the number of filed amendments during a negotiation process which was proceeding by consent.

26 Where plans were amended by more than a minor extent, costs under s.97B of the Act were allowed, and an order to allow for the final amendment was consented to by Council.

27   In terms, the orders made in that regard compensate the Council for all costs thrown away by any significant amendment made to the plans. Where the proceedings can only be construed as a settlement with give and take on both sides, and with a mixed judicial determination of remaining issues, there is no sufficient ground to expand upon the costs orders already made.

...

32   At a simplistic level, it might be said that the Applicant has been successful. The appeal has been upheld and many conditions which the Council had advanced were rejected by the Court. However, the case is better presented as a compromise outcome. Through the conclave process, sensible concessions made during extensive conciliation consented to by the parties, and through an adjudication of remaining non-determinative issues, an approval was reached which both parties can accommodate.

...

36   The history of the present proceedings demonstrates that the Council itself has been responsible for delays in the proceedings. Examples are set out in the Affidavit of Amanda Patricia Johnstone sworn 9 February 2018 at paragraphs [38] – [51] including:

a.   Council's Statement of Facts and Contentions was filed 11 days late;

b.   Council's Amended Statement of Facts and Contentions was filed 12 days late;

c.   On 4 March 2018 (sic), the Court ordered Council to provide a response to the applicant's amended plans and documents by 9 March 2016. Council's response was not provided until 15 March 2016;

d.   Council's draft Conditions of Consent were due on 28 October 2016, but were not served until 15 December 2018, 7 weeks late;

e.   Council delayed in providing a response to the applicant's plans amended in accordance with the 3 March Judgment.

Outcome in the present proceedings

37   The judgment of Commissioners Brown and Dickson was delivered on 3 March 2017. The outcome reflected a result which was favourable to both the applicant and the Council on different issues. The applicant's Development Application was approved and issues in dispute in relation to the final form of conditions were resolved, with both parties succeeding and failing on different areas of argument.

125. Mr Doyle said during his oral submissions:

1. (Tp33, LL18-22):

... there is work done in this case in relation to which costs ought be ordered, but there is another part to this case which served a useful purpose in which the planning purposes of this Court in relation to the development application, including its amendments, was usefully performed.

2. (Tp34, LL29-36):

... both the amber light aspect and also the conclave aspect, as matters which may oblige a party effectively to adopt an amendment which has been agreed to by experts conferring and agreeing pursuant to a direction of the Court, and that is what happened here. The Court directed the experts to meet. The experts met and agreed, and the applicant made, at least, some of the important amendments, and the council - also the council made a number of its concessions to adopt what was the result of that procedure.

3. (Tp35, LL16-21):

Now, given that those orders have been made, made by consent, and at least one case quantified and paid, we must be in a situation where we're looking at the difference between the orders that have been made, the additional order that my client has said it's accepting of by way of open offer made in the submissions today, and working out whether that is a fair resolution of the complaints of the council.

4. (Tp37, LL27-30):

... we say there are aspects to the chronology in which either the council might be responsible for some delay or at least that the matter complained of should not be attributable or seen as attributable to some fault of the applicant.

5. (Tp37, LL35-50):

... the applicant should not be criticised for that part of any amendment of documents whilst it is part of a court-directed negotiation process. ... the whole purpose of a conciliation process is to allow the parties to explore settlement; that they should not be constrained in the way that they do that.

If the applicant produces during a conciliation process various options and changes to the plans, it is always open to the council to terminate that process, if it sees that as appropriate, but we would say that it's very different in character to the ordinary conduct of an appeal where I guess you do need to put your knife in the ground at some point and be judged. If you move away from that, there's a general proposition that you should pay costs attributable to amendment, but I don't think that principle does apply in a conciliation setting, nor ought it, because otherwise an applicant that sees a way that it might be able to, through conciliation, reduce issues, perhaps solve the complaints that are levelled against it by the council.

6. (Tp38, LL9-14):

... an applicant might say, "Well, how about I do this to solve your problems, council? How about I do this?" Now, the fact that the applicant has done that through a new addition of the plans, shouldn't be criticised. It may have frustrated the council, but for all of that where it is done within the conciliation process, the applicant would say is oughtn't be criticised, or at least it oughtn't have the same principles applied to it.

7. (Tp41, L41-p42, L44):

So this plan, as with many of the plans that there is complaints of, it's just the applicant producing in pictorial form its answer to queries raised by the council. Now, your Honour, it's just simply not fair to simply count the number of plans that are provided to the council because that doesn't necessarily say that each time that the applicant sends a plan that it is amending its application. Your Honour, I can you can imagine quite clearly that in some instances the best way to simply confer or conciliate with the council is to produce a drawing. ... It's where substantial amendments are made that the rules mandate the making of a costs order. ... If the plan was being submitted to revise - to describe pictorially to say just one corner of a road to show that the truck can go around it, that doesn't mean that it's an amendment to the application.

... there was (sic) significant communications between both sides, and ... some of those communications were made pictorially ...

8. (Tp44, LL13-17):

all of the adjournment were by consent. My friend says that's because the council is the model litigant, but we say ... that's because at each step along the way progress was being made towards a resolution, so it was not only good manners that led to the adjournment but also good sense.

9. (Tp45, LL39-41):

So these are not simple matters. It's a 152 lot subdivision. This is not a matter where the applicant is simply changing its mind to obtain some extra yield. This is very complicated and technical work.

10. (Tp47, LL39-31):

... to criticise the applicant for sending any additions of drawings is just not accurate. It's not a fair presentation of the real process that was going on.

11. (Tp50, LL23-28):

... there were continued communications with the council ... but it's not necessarily something where the applicant has done something so extraordinary as to receive an order for costs which goes beyond the costs of the amendment.

12. (Tp61, LL37-44):

... to adopt a position where - just because the council has asked for a document and ultimately it becomes relevant that that becomes sufficient, that you should pay the whole costs of the case is not a proposition that should be adopted by the Court. Nor that an applicant who in every time it sees an issue raised by the council sends over a plan in the hope of resolving that issue should not likely be criticised. That doesn't say that when that method of communication turns into a substantial order that the ordinary rules apply.

13. (Tp62, LL21-25):

the proceedings were useful. They proceeded on a rational basis. The applicant proceeded through making senior experts available to resolve issues. They weren't resolved all in the applicant's favour or the council's favour. They're matters that came before the Commissioners - weren't resolved in the applicant's favour or the council's favour.

126. Mr Doyle’s underpinning submission is that the litigation, as conducted by the Applicant, served “useful purposes”, and led to “good outcomes” (see generally at Tpp39-41). He also sought to distinguish (at Tp43, LL41-42) between “additional” and “amended” materials produced in the context of the s 34 process.

127. Mr Doyle said of the ongoing negotiations (Tp51, LL47-48): “outside the context of a costs hearing, nothing seems particularly extraordinary about that ...”, adding (at Tp54, LL12-13) that:

This is just a process that's being undertaken to good purpose to resolve a complicated subdivision.

128. Of the developing antagonism evident in the negotiations, he says (Tp53, LL15-17):

It is not uncommon in this litigation for the applicant and the council both to think that the other is being unreasonable or difficult. It's just the nature of litigation.

129. He generally argued that such costs as are appropriate are already the subject of s 97B orders (see generally Tp57).

130. If, on applying the appropriate tests, the Court finds a case for additional compensation to Council, “that couldn’t be more than $10,000” (Tp60, especially LL39-48).

131. He concluded (Tp62, LL27-30):

There was a need for this litigation, and, therefore, the Court could not conclude that the applicant should pay all of the costs, and the offer it's made is an appropriate one for those matters where blame can be laid on the applicant.

F: Consideration

132. The parties basically agree upon the principles to be applied, and I will now quote from some of the authorities to which counsel referred.

The Authorities

133. In Marinkovic, to which the relevantly similar 1996 Court rules applied, Preston ChJ noted (at [21]) that Class 1 matters often involve “the generation of amended plans as a consequence of an evolutionary process”, and then said (at [22]-[23]):

22    There should be a capacity for an applicant in class 1 proceedings before the Court to amend its application to respond to evidence, including evidence of a court appointed expert, and to address concerns of the court that is hearing the appeal. A respondent council should expect that an applicant might need to respond in this way. That is to say, such amendments should be seen to be part of the usual process of conducting a class 1 appeal in this Court. The mere making of an amendment is not by itself a circumstance that always makes it fair and reasonable to make an order for costs.

23    Of course, there must be some limit placed upon this capacity to respond to evidence and to the Court’s concerns by means of an amendment. This case is a good illustration. The multiple amendments that were made by the applicant prior to 19 September 2006 is an illustration of where an applicant has stepped outside what can be reasonably expected in the usual conduct of a class 1 appeal.

134. His Honour did not accept ([26]) that there is “an inviolate rule that an order for costs should always be made whenever there is an application to amend”, but said that:

there must be some capacity for an applicant to respond to the evidence and the concerns of the Court. This should be seen as part of the usual conduct of proceedings. Where making that amendment does lead to costs thrown away, then there may be some justification for making an order ...

135. In Universal Childcare Pty Ltd v Leichhardt Municipal Council (“Universal”) [2008] NSWLEC 277, I surveyed key authorities, including (at [13]) Aldi Foods Pty Ltd v Holroyd City Council (2005) 142 LGERA 141, in which Talbot J said (at [5]):

The Rules make it plain that the approach to an application for an order for costs in class 1 proceedings is fundamentally unchanged from the historical position to the extent that the underlying principle is that there will generally be no order as to costs. Accordingly, unless it is in the circumstances of the particular case otherwise fair and reasonable, the Court will approach the exercise of its discretion on the basis that parties are to remain confident they may commence or defend proceedings without the onerous threat of incurring liability for costs other than their own, even if they are not the successful party. In other words costs will not be awarded in the proceedings referred to in Part 16, rule 4 unless it is fair and reasonable to depart from the underlying assumption in the circumstances of the particular case. Reasonableness is to be determined according to the ordinary sense of the word. The award of costs has to be fair as well as reasonable. Thus not only must it be reasonable for costs to be awarded but it must also be just and equitable.

136. I noted (at [6]) what has become known as the “non-discouragement” principle “underpinning the basic rule or presumption that there be ‘no order’”, and then added:

That principle requires the court to be careful not to act in such a way in relation to costs that it will discourage applicants entitled to appeal from doing so because of the risk or threat that failure would more likely result in an order for costs against them.

137. I then noted (at [14] and [54]):

14   It is only when the facts are clear that the principles can be applied. In the present case there is an extraordinary volume of documentary evidence before the court, and competing sworn evidence from the solicitors for the parties on the significance of those documents and particular events ...

...

54   In adversarial proceedings the principle that “costs follow the event” has a big influence on the parties, not least on settlement of the dispute. On the other hand, the “non-discouragement” principle (see par [6]) underpins the “fair and reasonable” test this court applies in planning appeals.

138. In my conclusion I said (at [71]):

While the present case may not be seen to be as serious a breach of “the usual conduct of a class 1 appeal” process as Marinkovic, I am satisfied that it is fair and reasonable for the Council to recover costs which would otherwise not be incurred in an appeal of this type. While I could set a particular date, or adopt some other formula as the various authorities I have surveyed suggest, I am satisfied that the principal order suggested by Mr Ayling is appropriate, in the sense of being fair, just, reasonable and equitable (as required by the authorities), in all the circumstances.

139. Mr Eastman, who had appeared in Universal, reminded me in the present case (Tp31, LL20-43) that, during argument in Universal, there had been discussion about the concept of what the Council lawyer called the “usual ‘argy bargy’ that goes on between an applicant and Council” in development assessment, as they work, hopefully collaboratively, towards “an appropriate environmental outcome”.

140. Mr Eastman’s argument in the present case is that what occurred here, as in Universal, went beyond such “usual ‘argy bargy’”, or beyond what Marinkovic says is “the usual conduct of a class 1 appeal”.

141. In Arden Anglican School v Hornsby Shire Council (2008) 158 LGERA 224; [2008] NSWLEC 103, Biscoe J said (at [9]):

In the context of the presumptive rule that there will be no order as to costs in planning appeals, the power to make a costs order is in the broadest of terms, that is, what is “fair and reasonable in the circumstances”. All rational considerations are relevant to the formulation of that judgment. In the end, the question is whether, in the opinion of the Court, they are of sufficient weight to overcome the presumptive rule. ...

142. In Valoth v Parramatta City Council (No 2) [2012] NSWLEC 161, I applied the principles I had summarized in Universal, and dismissed an application for costs. I found “no unreasonable, irrational or improper conduct” on Council’s part, and I also awarded to Council its costs on the costs NOM, as I was not satisfied it was reasonable for the Applicants to seek a costs order (see [118]-[121]).

143. In McDonald's Australia Limited v Ashfield Council (No 2) [2012] NSWLEC 268, I dismissed the Council’s application for costs on the basis of the above principles.

144. In Dunford v Gosford City Council (No 3) (“Dunford”) [2015] NSWLEC 96 I dealt with a series of Court of Appeal decisions on orders for costs in Class 1. That Court noted, in Port Stephens Council v Sansom (2007) 156 LGERA 125; [2007] NSWCA 299, at [51], that the formulation “fair and reasonable” requires the Court to make a judgment rather than exercise its wide discretion (Dunford at [30]d.), and that the circumstances identified in Rule 3.7(3) are neither prescriptive nor exhaustive ([30]f). Each case clearly turns on its own facts and circumstances.

145. In Community Association DP270253 v Woollahra Municipal Council (2015) 207 LGERA 268; [2015] NSWCA 80, Barrett JA, delivering the judgment of the Court of Appeal, distinguished (at [53]) between the unreasonableness of conduct, related the particular proceedings, with which Rule 3.7 is concerned, from “unreasonableness” affecting the decision challenged in the proceedings. His Honour said (at [55]):

The Association chose to bring Class 1 proceedings and thereby to enter an arena to which rule 3.7 applied. That being so, it could not (and did not seek to) argue simply that costs should follow the event. It was required to establish that some aspect of the conduct of the Council as a litigant in the Class 1 proceedings made it fair and reasonable that the judge should cause the prima facie position prescribed by rule 3.7(2) to be replaced by a situation in which the Council was required to pay the Association’s costs. The Association has, in my opinion, failed to establish this. ...

146. In November 2017, Pain J dismissed a costs claim in Hunter v Central Coast Council [2017] NSWLEC 154, which concerned the Avoca Beach Theatre. Her Honour noted (at [38]) that:

... despite the presumptive rule in r 3.7 of the Court Act, a comparison of the interests of the parties in planning appeals suggests that an unsuccessful consent authority should be more likely to suffer an adverse costs order than an unsuccessful applicant ...

The present case

147. In the present case I am satisfied that the Applicant has infringed the appropriate standards the Court should apply to the conduct of a Class 1 appeal.

148. That infringement must sound in costs, but the Court must decide to what extent.

149. Section 97B orders have been made, on a piecemeal basis to compensate Council for particular transgressions of the norm during the case, but I must now take an overall view of the Applicant’s conduct, not to punish the Applicant, but again to compensate the Council.

150. The original DA documents (March 2015) were patently inadequate. The original Class 1 appeal documents (September 2015) were also inadequate. During consideration of the amended application (filed April 2016) several suites of documents embodying contradictions were put before the Court, but the July 2016 hearing could not proceed, despite fifteen months to prepare.

151. The Applicant then put on material which went beyond a variation and was “actually inconsistent” (Tp17, L16) with the substance of the application as it had evolved before the Council and the Court.

152. Both the Council and the Court must be able, at all times, to respond to, and assess, what is actually sought by an applicant.

153. The Applicant was wrong “to provide reams of inconsistent material in multiple versions and not squarely say this is my application” (Tp17, LL33-34), and Council was clearly correct to insist that such a major amendment should be sought by NOM.

154. As at 6 December 2016, the available material was (still) rightly considered “inadequate” and/or “inaccurate”, and further new amending material was provided up to and including a hearing on 19 December 2016.

155. In some instances Council waited more than a year for information for which it consistently asked during that time (Tp23, LL10-15), and which really should have accompanied the original DA.

156. Such delays had “significant cost consequences” for the Council as the case proceeded.

157. The Court was prepared to grant, on 3 March 2017, a conditional approval, but further “argy bargy” was required to finalize the conditions, and further amendments were made to achieve final orders.

158. Even three months later again (June 2017), the Commissioners felt the need to give the Applicant “one more chance” (Tp27, LL27-28) to complete its submission of appropriate documentation to enable a decision.

159. Final orders could not be made until 16 August 2017.

Findings

160. Clearly the Council is entitled to compensatory costs.

161. The Court has in effect been asked to signify whether a further payment of $10,000 is sufficient additional compensation to the Council, which assesses its total costs at well over $100,000 ([12] above).

162. I do not consider the amount offered to be sufficient, but, on the other hand, I should not play the role expected of a costs assessor.

163. Nor am I persuaded that I should limit the Council’s entitlement to costs to a particular period, or to a particular percentage of its total costs.

164. However, I am not satisfied that such minor delays as might be blamed on the Council amount to “disentitling conduct” on its part.

165. Accordingly, I have decided to order the Applicant to pay the Council’s costs of the whole proceedings on a party-party basis, as agreed or assessed.

Costs of the costs hearing

166. I must turn then to consider, finally, the parties’ costs on the NOM.

167. As the Council has been entirely successful in its quest for costs, the costs of that quest should follow that “event”, also on a party-party basis, as agreed or assessed.

Conclusion

168. The relief sought in the NOM should be granted.

G: Orders

169. The Orders of the Court are as follows:

1. So far as it may be required, leave is granted to the Respondent to file its Notice of Motion for costs more than 28 days after the Court made its final orders in this appeal, namely on 27 October 2017.

2. The Applicant is ordered to pay the Respondent’s costs thrown away as a result of amending the development application on 19 December 2016, pursuant to section 97B of the Environmental Planning and Assessment Act 1979, as agreed or assessed.

3. The Applicant is further ordered to pay the Respondent’s costs of the proceedings on a party-party basis, other than in respect of which the Court has already made costs orders, as agreed or assessed.

4. The Applicant is also ordered to pay the Respondent’s costs of the Respondent’s motion for costs, including the costs of the hearing on 26 February 2018.

5. The Exhibits are returned, including YAK-1, APJ-1, A1, and A2.

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Decision last updated: 27 July 2018