Styles v Wollondilly Shire Council (No 3)

[2001] NSWLEC 133

Land and Environment Court

of New South Wales

CITATION:	Styles v Wollondilly Shire Council (No.3) [2001] NSWLEC 133
PARTIES:	APPLICANT Lynette Mary Styles RESPONDENT Wollondilly Shire Council
FILE NUMBER(S):	40153 of 1999
CORAM:	Sheahan J
KEY ISSUES:	Costs :- in class 4 proceedings - application for indemnity costs and for costs of notice of motion - principles to be applied
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979
CASES CITED:	Aghajanian v Stanley Thompson Valuers Pty Ltd [2000] NSWSC 215; Carver & Anor v Bankstown NSWLEC 130, 27 aPRIL 1999; Christofidellis v Zdrilic [2000] FCA 679; Degmam Pty Ltd v Wright No.2 (1983) 2 NSWLR 354; Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397; Hofer v Howell Developments [No.2] NSWLEC 42; Horseshoe Pastoral v Smith (CA) 7 November 1995); Latoudis v Casey (1990) 170 CLR 534; MGICA v Kenny & Good [No.4] (1996) 140 ALR 707; Oshlack v Richmond River (1998) 193 CLR 72 ; Port Stephens Council v Randell [2000] NSWLEC 169; Rosniak v GIO (1997) 41 NSWLR 608; Sanko Steamship Co Ltd v Sumitomo Australia Ltd (unreported, Federal Court, 7 February 1996); Styles v Wollondilly Shire Council (No.2) [2001] NSWLEC 18
DATES OF HEARING:	16/05/2001
EX TEMPORE JUDGMENT DATE :	05/16/2001
LEGAL REPRESENTATIVES:	APPLICANT Barrister Mr J McKenzie Solicitors Johnson & Sendall RESPONDENT Barrister Mr D Wilson Solicitors Marsdens

JUDGMENT:

IN THE LAND AND Matter No: 40153 of 1999
ENVIRONMENT COURT Coram: Sheahan J
OF NEW SOUTH WALES 16 May 2001

LYNETTE MARY STYLES

Applicant

v

WOLLONDILLY SHIRE COUNCIL

Respondent

JUDGMENT

Background

1. Ms Styles lost this case in my reserved judgment of 1 March 2001 and was ordered to pay the Council’s costs on a party-party basis.

2. The issues before the court today are:

1. whether or not Ms Styles should pay any of those costs of Council on an indemnity basis, and
2. what, if any, order should be made regarding the costs of this Notice of Motion seeking such indemnity costs.

3. I will not repeat any of the 256 paragraphs or 65 pages of my judgment - [2001] NSWLEC 18 - but the key relevant events in this matter are as follows:

(a) The incidents at the Council meeting of 8 February 1999.
(b) The interlocutory proceedings 15-26 July 1999.
(c) The applicant’s apology on 26 July 1999.
(d) Her electoral defeat on 11 September 1999, followed by her decision to proceed with the claim on an amended basis.
(e) The substantive proceedings heard on and between 11 February and 25 July 2000.
(f) Settlement discussions on and between 11 May and 21 July 2000, before the hearing resumed and concluded.
(g) Correspondence re a possible claim for indemnity costs, on and between 2 and 15 August 2000, while judgment was reserved.

4. The respondent offered to settle the proceedings on the basis that each party pay its own costs with, presumably, the application being either dismissed, or discontinued with the respondent’s consent. The offer was declined.

5. The respondent says that its letter of offer was not a “Calderbank” letter as such, but had the same effect. However, the application for a costs order on an indemnity basis was not, on the evidence available to me, foreshadowed in those May-July negotiations, although it was clearly foreshadowed during the closing stages of Mr Wilson’s oral submissions at the end of the hearing on 26 July 2000. See generally on such notice Horseshoe Pastoral v Smith (Court of Appeal, 7 November 1995).

Indemnity Costs?

6. Essentially, orders for costs are compensatory, not punitive. Latoudis v Casey (1990) 170 CLR 534.

7. So, in what circumstances are costs orders, therefore, to be made on an indemnity basis?

8. The cases require the court, in its costs discretion, to conclude somewhat along the following lines:

· The case is “manifestly hopeless” or “demonstrably devoid of merit”, and the relevant party either should, if properly advised, have known it had “no chance of success”, had some “ulterior motive”, or chose to wilfully disregard relevant facts or clear law. They are the concepts in Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397.

OR

· The relevant party relied upon a “false and deliberately concocted” claim or defence - that was Holland J’s finding in Degmam Pty Ltd v Wright No.2 [1983] 2 NSWLR 354 - or the party’s conduct was “ethically or morally delinquent” - Rosniak v GIO (1997) 41 NSWLR 608.

OR

· The case was continued after it patently became totally hopeless and pointless, such as when the fire-damaged building was demolished in Carver & Anor v Bankstown [1999] NSWLEC 130 (my judgment delivered 27 April 1999).

OR

· In the context of failure to settle, the courts have adopted the test of whether it was “unreasonable” of the relevant party to continue after the relevant offer was made and refused.

9. The court has today been referred to a number of authorities within and outside this court.

10. Many involve proceedings not relevantly similar to this court’s class 4 jurisdiction, such as those in class 3 encroachment cases, where there is a specific statutory provision, and a practice discretion to be considered and applied (see e.g. my judgment in McKinnon v Hallbridge, No 30148 of 1997, 10 July 1998), but the principles I have just summarised are clearly established and frequently applied by Judges in the exercise of their “discretion at large” (as Hamilton J described it in Aghajanian v Stanley Thompson Valuers Pty Ltd [2000] NSWSC 215). See e.g. Einfeld J in Christofidellis v Zdrilic [2000] FCA 679, adopted and applied by Cowdroy J in the class 4 case Port Stephens Council v Randell [2000] NSWLEC 169.

11. I have been referred also to the Court of Appeal decision in Nobrega v The Catholic Church [1999] NSWCA 133 (see Powell JA at par 21), in which I note that the court adopted the caution of Shepherd J in Sanko Steamship Company Ltd v Sumitomo Australia Ltd (unreported, Federal Court, 7 February 1996) that even a “true” Calderbank letter should not be regarded as the automatic trigger for the subsequently successful party to secure an order for indemnity costs.

12. Each case turns on its own facts, as they may be found to display the reasonableness or otherwise of the parties’ conduct.

13. So far as this court is concerned, although written in a class 3 encroachment case, I can find no fault or shortcoming in the statement of the appropriate principles by Lloyd J in his recent and considered judgment on costs in Hofer v Howell Developments Pty Ltd [No.2] [2001] NSWLEC 42.

14. I conclude, therefore, that there must be at least circumstances which are “out of the ordinary”, such as an element of abuse of process, ulterior or extraneous purposes, or unreasonableness. See MGICA v Kenny & Good [No.4] (1996) 140 ALR 707 and Hofer at par 17. As Gummow & Gaudron JJ called it, in Oshlack v Richmond River (1998) 193 CLR 72 (at 89 - par 44), a “relevant delinquency on the part of the unsuccessful party”.

This case?

15. So, was Ms Styles “unreasonable” to continue beyond 11 May 2000?

16. She was fortified by my interlocutory finding, in a written judgment, of a “substantial issue to be tried”, and presumably by competent legal advice. I then found, in her favour, in my judgment, on the contested questions of utility (pars 161 and 182), statute barring (par 190), and delay (par 240).

17. Certainly the question of damages was clearly going to be difficult for her. That is why I separated the relevant evidence when the affidavits were read. A victory for her in the quest for declarations may have proved “hollow”, if I may use that word, without substantive relief (par 239), but I indicated that she may have survived a discretion argument (pars 244ff).

18. In the final analysis, she had serious contentions regarding at least two of the four declarations she sought - numbers (i) and (iii) - and the court reserved its decision, for seven months, to sift exhaustively through the evidence.

19. The respondent put her seriously under challenge, and conceded absolutely nothing. That was certainly the Council’s right, but she was equally entitled to try to win her case, despite its unusual nature, and its obvious difficulties.

20. As Mr McKenzie observed this morning, it is easy, with the wisdom of hindsight, to conclude that unsuccessful cases were probably “hopeless” all along, but such is the everyday nature of adversarial litigation.

Conclusion & Orders

21. I can find absolutely no basis upon which to make an order for costs in this matter beyond the usual order made against unsuccessful applicants. Order 2 of 1 March 2001 will, therefore, stand, and Order 3 is discharged.

22. As the respondent has been totally unsuccessful in its argument, the Notice of Motion is dismissed and the respondent is ordered to pay the applicant’s costs thereof.