Tabaquero v Campbelltown City Council

[2000] NSWLEC 68

Land and Environment Court

of New South Wales

CITATION:	Tabaquero V Campbelltown City Council [2000] NSWLEC 68
PARTIES:	APPLICANT: Tabaquero RESPONDENT: Campbelltown City Council
FILE NUMBER(S):	10768 of 1999
CORAM:	Bignold J
KEY ISSUES:	Costs :- Class 1 proceedings - Discontinuance of proceedings a few days before fixed hearing date. Discontinuance held to constitute special circumstances within the Court’s Practice Direction on costs.
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979, s 97
CASES CITED:	Kentgreen Dural Pty Ltd v Hornsby Shire Council (1999) 103 LGERA 219; Manly Wharf Pty Ltd v Manly Council (1997) 98 LGERA 245
DATES OF HEARING:	30/03/00
DATE OF JUDGMENT:	03/31/2000
LEGAL REPRESENTATIVES:	APPLICANT: Mr J Webster, Barrister SOLICITORS Thurlow Fisher RESPONDENT: Mr A Seton, Solicitor SOLICITORS Marsdens

JUDGMENT:

IN THE LAND AND Matter No . 10768 of 1999

ENVIRONMENT COURT OF Coram : Bignold J.

NEW SOUTH WALES 31 March 2000

DIEGO TABAQUERO

Applicant

v

CAMPBELLTOWN CITY COUNCIL

Respondent

JUDGMENT ON COSTS

Bignold J:

1. By its Notice of Motion filed 22 February 2000, the Respondent (the Council) seeks an order that the Applicant pay the Council’s costs in the proceedings, involving an appeal pursuant to the Environmental Planning and Assessment Act 1979 s 97against the Council’s determination refusing development consent to an application to erect a building for use as a church and school on land known as lot 130, Deposited Plan 135465, situate at Denham Court (the appeal site).

2. The Council’s claim arises out of circumstances where the Applicant, on 4 February 2000, filed a Notice of Discontinuance in the proceedings which were fixed for hearing on 7, 8 and 9 February 2000.

3. The Notice of Discontinuance was filed and served without prior notice and without the consent of the Council.

4. The Council’s claim for costs is founded upon the provisions of the Rules of Court Pt 11 r 5 which relevantly provides as follows:

5. (1) If a party to any proceedings discontinues them in whole or in part, the Court may, on the application of another party, order the discontinuing party to pay the costs of any party against whom the discontinued claim was brought and who does not consent to the discontinuance.

(2) The costs payable to a party under any order made under this rule are to be the costs of the party occasioned by the discontinued claim and reasonably incurred before service on the party of notice of the discontinuance.

5. The appeal site is owned by Leppington Park Pastoral Pty Ltd, (the Landowner) which had given its consent to the making of the development application. That application, which had been made on 25 January 1999 , was determined by the Council on 8 September 1999 by refusing development consent for eight reasons as stated in the Notice of Determination.

6. The appeal to this Court was filed on 24 September 1999 by the Applicant’s Solicitors, Thurlow Fisher.

7. At the first callover, conducted on 19 October 1999, the Council was directed to serve and file a statement of issues. This was filed on 3 November 1999 which nominated 13 separate issues.

8. At the next callover, conducted on 4 November 1999, the hearing of the proceedings was fixed for 7, 8 and 9 February 2000.

9. At the time that the Applicant’s Solicitors filed the Notice of Discontinuance on 4 February 2000, it is to be noted that no expert reports had been served or filed in the proceedings on behalf of the Applicant. However, the Council’s expert reports had been served and filed by this time (albeit service had occurred on 28 January 2000 instead of 24 January 2000 as required by the Court’s relevant Practice Direction and Rules).

10. It is upon the basis of the foregoing facts (and in particular those encompassing the litigation history) that the Council’s claim to costs in the proceedings is founded. In this respect, it relies upon a number of decisions in this Court culminating in Kentgreen Dural Pty Ltd v Hornsby Shire Council (1999) 103 LGERA 219 which establish what I have called a “presumptive entitlement” to costs in favour of the party against whom the proceedings are discontinued.

11. In Kentgreen, after reviewing all relevant recent authorities in this Court, I re-affirmed the principle that I had expounded in Manly Wharf Pty Ltd v Manly Council (1997) 98 LGERA 245, where I had undertaken a review of the earlier cases in this Court, while recognising that the four later decisions (which are discussed in the judgment) provided—

illustrations of circumstances where the discontinuance of the proceedings has been held to be reasonable conduct on the part of the discontinuing party and as such, such conduct has been held sufficient to negate the ordinary cost consequences of a discontinuance of proceedings…..: see at 224.

12. In Manly Wharf , I had propounded both the relevant general principle and exceptions to it. The general principle was propounded in the following terms:

Ordinarily costs will be awarded against a discontinuing party because the discontinuance of the proceedings either (i) satisfies the “exceptional circumstances” test within the meaning of the Court’s Practice Direction or (ii) operates as an established exception to that Practice Direction.

Having regard to the all embracing terms of the Practice Direction (as to which see the Chief Judge’s judgment in Outdoor Australia Pty Ltd v Auburn Council (1996) 89 LGERA 365,) the preferable basis for the proposition I have enunciated may be that the discontinuance of the proceedings satisfies the exceptional circumstances test: see at 249

13. The exceptions to the general principle were propounded in the following terms:

However I would emphasise that although an order for costs against the discontinuing party will ordinarily flow from the discontinuance of the proceedings, it may be established that the discontinuance reflects, not a total abandonment of the applicant’s claims, but a compromise or settlement of them, in which circumstances it may be just that there be no order as to costs following upon the discontinuance of the proceedings.

Moreover the party against whom the proceedings have been discontinued may forfeit its presumptive entitlement to costs if it has been guilty of any relevant misconduct in the litigation. This is the basis upon which I would understand Talbot J in Bryant to have held there to be an absence of exceptional circumstances, notwithstanding the discontinuance of those proceedings.: see at 249 and 250

14. In Kentgreen, I noted at 224 that in three of the four decisions post Manly Wharf that I there considered—

…the Court’s conclusion that the discontinuance was reasonable in the circumstances of the case and were not exceptional circumstances , was based upon some action by the other party in the litigation ( Gilling ; Symchung ) or some supervening action beyond the parties’ control ( David Crane ).

15. In Kentgreen , the discontinuing party in resisting an order for costs, sought to take the case beyond the boundary that the decided cases had reached, by submitting that a discontinuance reflecting a responsible decision by the discontinuing party, based upon professional advice as to the prospects of the litigation, should be held not to constitute “ exceptional circumstances ” within the Court’s Practice Direction: see at 224.

16. This submission was rejected in the following passages at 225:

In my judgment, the circumstances of the Applicant’s discontinuance of the proceedings in the present case do not displace the ordinary cost consequence of a discontinuance, as is contemplated by Part 11 Rule 5(1) of the Rules of Court, and as applied in the Manly Wharf case.

The Applicant’s decision to discontinue was entirely its decision, in the sense that it was unaffected by any action taken by the Council in the litigation or by any supervening action beyond the parties’ control. It may be readily inferred that the Applicant, in discontinuing the proceedings, acted entirely responsibly in the litigation, in the light of the professional advice it received after it had commenced the litigation. However, it had sought the early hearing of the appeal and the professional advice that it obtained, which obviously and profoundly affected its decision to terminate the litigation, was received only three weeks before the fixed hearing date, at a time when the Council had presumably incurred costs in preparing its case.

In my judgment, the circumstances of the discontinuance in the present case, do not justify a decision not to exercise the costs power expressly conferred by Pt 11 r 5 of the Rules of Court, and governing the situation when the proceedings are discontinued without the consent of the other party. The express power to order costs having been thereby enlivened, I am of the opinion, that the preponderance of authority in this Court (including the cases decided since the Manly Wharf case) is that the discontinuance is relevantly to be regarded as constituting exceptional circumstances sufficient to award costs in accordance with the Court’s Practice Direction—par 10, it not being established that the discontinuance was induced by any action of the Council or supervening action beyond the control of the parties; rather it being deliberate and no doubt, responsible decision of a litigant, acting on professional advice concerning prospects of success in the proceedings.

17. As I understood the Applicant’s submission, the principles that I have recited are not disputed, although Counsel for the Applicant emphasised the necessity to examine the facts of the particular case, and was not surprisingly wary of any notion of “ presumptive entitlement ”.

18. In this respect, the Applicant relies upon various conversations between representatives of the Landowner of the appeal site and the Council that took place in December 1999 and January 2000, involving representations made by the Landowner for the rezoning of the appeal site so as to permit dwelling house development thereon.

19. The only evidence of these conversations is provided in the affidavit of Mr Vince Lopresti, a Director of the Landowner, sworn 27 March 2000.

20. Mr Lopresti was not required for cross-examination and there was no evidence in rebuttal. In these circumstances, I accept his account of the conversations (noting that I had overruled various objections to this affidavit raised by the Council’s Solicitor).

21. Mr Lopresti’s affidavit establishes the following facts:
1. He was well aware of the Applicant’s appeal to this Court. However, it had always been the Landowner’s preference to develop the appeal site for residential purposes rather than for the purposes sought by the Applicant.
2. The Applicant proposed to purchase the appeal site, subject to the grant of the development consent that it had sought and subject to the Landowner underwriting the Applicant’s costs of the appeal to this Court.
3. In December 1999, he and a fellow director met with the Mayor of the Council and a Council servant, Mr Dennis Moore, to inquire whether the Council would support a rezoning of the appeal site (and an adjoining lot also owned by the Company) to enable a dwelling-house to be erected on each lot.
4. At the meeting, the Council was furnished with advice obtained from its Solicitors concerning the proposed rezoning.
5. Mr Lopresti referred to the Applicant’s appeal “to be heard in a month’s time” and said that if the rezoning issue could be resolved “without going to Court, we would be happy to discuss it”.
6. The fellow director said to the Mayor: “we are quite prepared to defer the Court matter until the end of March and give Council an opportunity to look into it”.
7. Mr Lopresti formed the impression that the Mayor and Mr Moore had agreed to defer the proceedings.
8. In or about the third week in January 2000, the Landowner spoke to Mr Moore who told him that he was preparing a report to the Council on the rezoning application, but that it would be difficult to have it ready for the Council’s first meeting to be held in February.
9. Some time after the third week in January 2000, the Landowner again spoke to Mr Moore, who stated “that the Council would be willing to consent to deferring the hearing” of the Applicant’s appeal but that a barrister had been briefed and his fees would have to be paid. The Landowner had agreed to pay the fees.
10. Thereafter, the Landowner had spoken to the Applicant who had agreed to discontinue the proceedings.

22. The question that arises is whether this evidence, justifies a finding that, in the circumstances of the case, the discontinuance of the proceedings a day or two before the fixed hearing date should he held not to constitute “exceptional circumstances” within the meaning of the Court’s Practice Direction.

23. In my judgment, it does not, principally because it reveals absolutely nothing of the Applicant’s conduct in the litigation. Of that conduct, the only evidence is that earlier recited in the litigation history, namely the Applicant’s Solicitors instituted the proceedings on 24 September 1999 and appeared at the two callovers before the Registrar in October and November 1999, securing on the latter occasion the hearing dates for the appeal on 7, 8 and 9 February 2000. Nothing else is revealed of the Applicant’s conduct in the litigation until the Applicant’s Solicitors filed the Notice of Discontinuance on 4 February 2000.

24. What Mr Lopresti’s evidence does establish is what the Landowner was doing in the relevant period coinciding with the litigation history, in its attempts to secure a rezoning of the appeal site (and other adjoining lands owned by the Landowner) by its representations made to the Council.

25. Significantly, Mr Lopresti’s affidavit does not reveal whether the Council was informed (i) that the Landowner was underwriting the Applicant’s appeal; and (ii) that the Landowner preferred the rezoning of the appeal, to the development of the appeal site by the school and church building. More significantly, Mr Lopresti’s affidavit does not reveal any involvement by the Applicant in the discussions within the Council or any dealings between the Landowner and the Applicant during the litigation history, other than the discussion at the end of January 2000 in which the Applicant agreed to discontinue the proceedings. In all this, the status and future of the pending appeal remains a mystery, and invites the inquiry whether the appeal was genuine or merely seemed as an advantage to the Landowner in its rezoning application.

26. Finally, does Mr Lopresti’s affidavit reveal any disentitling misconduct by the Council in the pending litigation? In my opinion, no misconduct is revealed. Rather, the evidence establishes no more than—
(i.) an acknowledgment by the Mayor at the December 1999 meeting of the Landowner’s statement that “it was prepared to defer the Court matter until the end of March…..”; and
(ii.) a statement made by Mr Moore in the conversation held at the end of January 2000 that the Council would be prepared to consent to a “deferring of the hearing” provided that the Landowner pay the brief fee for Council’s barrister.

27. The second mentioned fact, in my judgment necessarily implies that the first mentioned fact did not involve any agreement by the Council to defer the hearing. If it did, why was it necessary for the Landowner to enquire of Mr Moore at the end of January 2000 whether Council was prepared to defer the hearing, and why was it necessary to the Landowner to agree to pay the fee of Council’s briefed barrister?

28. Whatever impression Mr Lopresti may have formed of what transpired at the meeting with the Council’s Mayor in December 1999 (and whenever that impression was formed) it could not have been the fact that at that meeting the Council had agreed to the Court hearing being deferred. (Had the Council so agreed, why would it not have instructed its Solicitors to defer all preparation on the case?)

29. Once it is established that it was not until the end of January 2000 that the Landowner sought the Council’s consent to defer the hearing fixed just one week distant, at a time when the Council had not only briefed a barrister, but had served its expert reports in the proceedings, it simply cannot be concluded that the Council had acted unreasonably in the litigation or had taken any action or initiative which had effectively supervened the proceeding. Add to this finding, the fact that the next known action by either the Landowner or the Applicant, was the unannounced filing of the Notice of Discontinuance of the proceedings (itself inconsistent with the agreement that the Landowner had sought from the Council to defer the Court hearing) and the overwhelming conclusion is that the Applicant (doubtless highly influenced by the Landowner) voluntarily chose to discontinue the proceedings but a few days before the fixed hearing, and at a time when the Council had already incurred costs in preparing for the case.

30. In these circumstances, the Applicant has not established any reason or justification to depart from the ordinary costs consequence of a discontinuance of proceedings a day or two before the fixed hearing date without the consent of the other party, which was prepared for the case.

31. For all the foregoing reasons, I am of the opinion that the Council is entitled to costs pursuant to the Rules of Court Pt 11 r 5(2), namely its costs reasonably incurred prior to the discontinuance.

32. Additionally, the Council is entitled to its costs of its present Motion which has been unsuccessfully resisted by the Applicant.

33. Accordingly, I make the following orders:
1. Pursuant to the Rules of Court, Pt 11 r 5, the Applicant is to pay the costs of the Respondent, being the costs reasonably incurred by the Respondent in the proceedings prior to the discontinuance of the proceedings on 4 February 2000, in the sum agreed, or failing agreement, as assessed.
2. The Applicant is to pay the Respondent’s costs on the Motion, in the sum agreed, or failing agreement, as assessed.