Tenacity Investments Pty Ltd v Ku-ring-gai Council (No 3)

[2010] NSWLEC 1221

Land and Environment Court

of New South Wales

CITATION:

Tenacity Investments Pty Ltd v Ku-ring-gai Council (No 3) [2010] NSWLEC 1221
This decision has been amended. Please see the end of the judgment for a list of the amendments.

PARTIES:

APPLICANT
Tenacity Investments Pty Ltd

RESPONDENT
Ku-ring-gai Council

FILE NUMBER(S):

10221 of 2010

CORAM:

Acting Registrar Gray

KEY ISSUES:

COSTS :- Section 96AA modification - Amended plans filed - Deficiency of plans lodged with Class 1 development appeal - non-compliance with Schedule A - whether fair and reasonable to order costs

LEGISLATION CITED:

Civil Procedure Act 2005
Environmental Planning and Assessment Act 1979
Land and Environment Court Rules 2007
Practice Note – Class 1 Development Appeals
Uniform Civil Procedure Rules 2005

CASES CITED:

Idoport Pty Ltd v National Australia Bank [2007] NSWSC 23
Marinkovic v Rockdale City Council [2007] NSWLEC 71

DATES OF HEARING:

6 August 2010

 
DATE OF JUDGMENT: 

13 August 2010

LEGAL REPRESENTATIVES:

APPLICANT
Mr Sattler, Solicitor
Sattler & Associates

RESPONDENT
Mr Marincowitz, Solicitor
Sparke Helmore

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Acting Registrar Gray

13 August 2010

10/10221 Tenacity Investments Pty Ltd v Ku-ring-gai Council

JUDGMENT

1 REGISTRAR: These proceedings come before me on a question of costs following leave being granted to the applicant to rely on amended plans.

2 The development that is the subject of the proceedings has a long history both with the Council and in the Land and Environment Court. In 2005 the applicant lodged a development application with Ku-ring-gai Council (“the Council”). The Council refused the application, and the applicant appealed to the Court. The appeal was upheld and development consent was granted by the Court on 2 May 2006. Subsequent to the granting of development consent by the Court, an application was made to the Court pursuant to s 96 of the Environmental Planning and Assessment Act 1979 (‘the EP&A Act’) to modify the development consent. On 17 October 2006 the Court delivered judgment on the s 96 application, granting the application in part but refusing a number of the proposed modifications. There were then further proceedings commenced by the applicant in Class 3 of the Court’s jurisdiction in 2006, seeking an easement for drainage through neighbouring properties which was ultimately granted by the Court.

3 The present proceedings are an appeal against the refusal by the Council of an application pursuant to s 96AA of the EP&A Act to modify the development consent granted by the Court. The modifications proposed seek to change the approved vehicular access arrangement from car lifts to a driveway configuration with circular ramp access. The modification application also seeks to replace a void that currently exists in the basement with a new apartment. Changes to the internal layout and landscaping are also sought as a consequence of the proposed modification to the vehicular access.

4 The modification application was lodged with the Council in October 2009 and was ultimately refused by Notice of Determination dated 15 January 2010. The present proceedings were then commenced on 29 March 2010. Save for two applications for joinder by a resident objector, which were refused by me on 5 May and 16 July, the proceedings took a fairly ordinary course. When the matter came before the Court on 28 April 2010 for directions, the proceedings were adjourned to the return date of a notice of motion for joinder a few days later. At the return date and hearing of that notice of motion, directions were made to progress the matter to a preliminary s 34 conference. The s 34 conference was then held on 28 May but was adjourned for a further conference to allow the applicant to provide additional documents.

5 Following the termination of the s 34 conference on 2 July, the applicant sought leave to amend the plans by way of notice of motion filed 12 July 2010. The applicant had by that stage provided a traffic report to the respondent, together with draft architectural and landscape plans. The amendments the subject of the application for leave included the substitution of new architectural plans and amended landscape plans. Whilst the amendments did not change the concept of the modification application, they added significant detail to the nature and extent of the modifications proposed. The notice of motion was dealt with on the same day as the directions hearing following the s 34 conference, and, by consent, leave was granted to the applicant to rely on the amended documents. The result of the amendments was to significantly narrow the issues raised in the proceedings, such that three contentions were removed and two of the three remaining contentions were significantly narrowed. However, costs were not agreed upon and the matter was stood over to an e-court call-over to enable the parties to reach an agreement on costs. An agreement was not reached and the proceedings were then re-listed for a hearing on the question of costs.

6 The Court’s discretion to award costs arises by virtue of the provisions of s 98 of the Civil Procedure Act 2005. In class 1 proceedings, that discretion is required to be exercised in accordance with r 3.7 of the Land and Environment Court Rules 2007, which provides:

“(1) …
(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:
(a) …
(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 proceedings.
(d) …”

7 The respondent submits that the circumstances of these proceedings fall within r 3.7(3)(b) and (c). The respondent submits that there were serious deficiencies with the plans that were filed with the modification application. The respondent points to the contents of the assessment report and the notice of determination. Each of those documents clearly set out the difficulties that the Council had in properly assessing the modification application. Paragraph 6 of the notice of determination sets out the precise nature of the inadequacies that hindered the Council’s assessment of the application. The particulars are as follows:

“(a) A traffic report addressing the merits of the car ramp and its impact upon the local road network should have been submitted with the application.
(b) The plans failed to provide sufficient information about how the ramp would function, the visual impact and the impact on the amenity of the apartments.
(c) The plans for the townhouse component approved by the Land and Environment Court was not included in the plans to allow a complete assessment of the application.
(d) A survey to scale was not provided with the application (1:100).
(e) A landscape plan for the entire development site (1:100) was not submitted with the application.
(f) The deep soil compliance plan (1:100) was not to scale.
(g) The landscape plan was not consistent with the architectural plans in the following areas:
(i) The location of the proposed pedestrian entry bridge.
(ii) The extent of the private courtyard area for townhouse 4.
(iii) The terrace for unit 23 is shown on the landscape plan but not marked on the architectural plans.
(h) No shadow diagrams were submitted with the application to assess solar access for the new unit and other units affected by the circular ramp.
(i) The details of levels and/or retaining walls on the north-western boundary should have been indicated to allow an assessment of solar access.”

8 The respondent submits that in circumstances where the applicant was aware of the inability of the Council to properly assess the application due to the inadequacy of the plans, it was unreasonable for the applicant to then commence the appeal proceedings. To that end, the respondent relies upon the affidavits of Ms Pearson sworn 13 July 2010 and Mr Smith sworn on the same date. Those affidavits depose that the absence of information provided to the Council with the modification application prevented a proper assessment of the application.

9 The respondent also draws to my attention the provisions of Practice Note – Class 1 Development Appeals (“the Practice Note”), which require the plans filed with the proceedings to be in accordance with Schedule A. The respondent says that the plans filed were not in accordance with the requirements of Schedule A. The affidavits of Ms Pearson and Mr Smith set out, in precise detail, the nature in which the plans filed with the present proceedings did not comply with Schedule A.

10 The respondent therefore submits that the circumstances fall squarely within r 3.7(3)(b) and (c) and that therefore the applicant should pay the costs of the respondent thrown away by reason of the amendment. The solicitor for the respondent, Mr Marincowitz, asks that the costs order be made in a fixed sum between $12,140 and $16,119. Those costs have been calculated by taking the actual costs outlined in the schedule of fees less the work relating to the two applications for joinder. That figure is then subtracted by one third to reflect the single issue that remains as a result of the amendment and that would be contested even if the amendments had been made at an earlier stage.

11 The applicant opposes a costs order and submits that if there is a costs order to be made, the respondent should be liable for the applicant’s costs of the proceedings. The applicant submits firstly that the issues concerning the inadequacy of the information should have been raised prior to the Council’s determination of the application. In that regard, the applicant relies on Annexure D to the affidavit of Mr Poole sworn 3 August 2010, which is an email from Mr Brown, the consultant town planner engaged by the applicant, to the Council’s assessing officer, Ms Pearson. That email states “we will address all the issues raised once we have all of your initial feedback…” The applicant also relies upon the contested evidence of a telephone conversation between Mr Poole and Ms Pearson, where it is alleged that Mr Poole suggested that additional time be provided so that he could discuss any issues with Mr Brown following his return from holidays. The applicant submits that in circumstances where the applicant indicated its willingness to discuss any issues that arose concerning the modification application, the Council ought to have raised those issues prior to determining the application. The applicant says that this would have allowed them to respond to the issues raised by the Council and therefore avoid the need for proceedings in the Court. The applicant submits that the Council’s failure to do so, and the subsequent determination made by the Council, forced the applicant to commence proceedings in order to obtain the approval sought. In those circumstances, the applicant submits that it would not be just and equitable for the applicant to be forced to pay the Council’s costs of proceedings that could have been avoided.

12 The applicant submits secondly that, contrary to the Council’s position, there was adequate material before the Council to properly assess the modification application and resolve the issues raised. The applicant relies on the affidavits of Mr Poole and Mr Brown in support of this submission. However, these affidavits are of limited assistance. Each of the affidavits contain material that demonstrates a failure by the drafter to appreciate the difference between fact and submissions, and to understand that only the former is appropriate for the content of an affidavit. For example, in paragraph 4.10 of the affidavit of Mr Poole, the director of the applicant company, Mr Poole states “On 1 May 2010 I was on site at Pymble and took some photographs, it seemed clear to me that Robyn Pearson had not properly considered the proposal with respect to the site...” It is clear that this is not an assertion of a fact. Nor is it an opinion based on described facts. Whilst the rules of evidence do not apply in class 1 proceedings, this does not allow parties to put into evidence things that are not actually in the nature of evidence. I therefore decline to accept as evidence the various inferences and assumptions set out in the affidavit of Mr Poole, including the assertion that the Council did not properly consider the application.

13 Of equal concern is the affidavit of Mr Brown, the town planning consultant engaged by the applicant. The first paragraph of that affidavit states “I am a director of Ingham Planning Pty Ltd and represent the applicant as an expert planning witness in these proceedings.” The use of the word “represent” is contrary to the rules regarding expert evidence set out in Part 31 of the Uniform Civil Procedure Rules 2005. Those rules make it clear that an expert’s duty is to the Court, and not to the party by whom they are engaged. I note, however, that Mr Brown indicates at paragraph 6 that “I do agree that there may have been inconsistencies between the architectural, landscape and deep soils plans.” Mr Brown generally otherwise deposes of the reasons why the information was not provided with the modification application. In paragraphs 7 and 8 there are a number of assertions that are based on assumptions and inferences, without any alleged facts. One such assertion is that “There has also been a significant cost to the Court.” There are no facts set out upon which this assertion or the other assertions in paragraphs 7 and 8 are made.

14 Thirdly, the applicant submits that the changes to the plans were not such that warrant a costs order. The applicant also submits that costs ought not to be awarded in favour of the respondent in circumstances where the amendments to the plans were simply part of the evolutionary process of the modification application. In that respect, Mr Sattler, the solicitor for the applicant, refers to the decision of the Court in Marinkovic v Rockdale City Council [2007] NSWLEC 71. At paragraphs 21-22 Preston CJ states as follows:

“21 In Aldi Foods Pty Ltd v Holroyd City Council (2005) 142 LGERA 141, Talbot J noted that the generation of amended plans as a consequence of an evolutionary process involving management techniques adopted by the court and the appointment of a court appointed expert is not necessarily of itself a matter for adverse comment in respect of reasonableness in the context of a costs application: see para 14.

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.”

15 Pursuant to r 3.7(2), the question for my consideration is whether it is fair and reasonable to make a costs order having regard to all of the circumstances surrounding the modification application and the present proceedings.

16 I consider that, having regard to the facts and circumstances of the present proceedings, it is appropriate to make a costs order in favour of the respondent. I cannot accept that the Council was obliged to raise all of the issues in order to allow the applicant to provide a response prior to the Council’s determination. Whilst it is desirable for a council to consult with an applicant and to indicate issues that have been identified throughout the assessment process, nothing has been tendered or relied upon that suggests any obligation on them to do so. It is clear that in the Council’s assessment report internal advice from a number of different experts had been obtained. Once the Council had obtained that advice it was in a position to determine the application. In neither of the accounts of the conversation between Ms Pearson and Mr Poole in early January 2010 was there any indication that the applicant would be seeking to rely on additional material. There was therefore no reason the Council ought not to have proceeded with a determination consistent with the internal advice and the assessment.

17 Whilst I accept the general proposition that amendments to the plans are part of the evolution of a development as the appeal progresses, this evolutionary process does not allow an applicant to rely on plans and documents that are inadequate. The provisions of paragraphs 6 and 7 of the Practice Note exist in order to address such a scenario. In that regard, I accept the evidence relied upon by the respondent that the plans relied upon do not comply with Schedule A. Specifically, the plans were not provided to a consistent scale, there was no site plan for the entire development, not all the dimensions and retaining walls were shown on the plans, the landscape plans were incomplete and inconsistent, and the architectural plans were not sufficiently detailed. I accept also the evidence contained in the affidavits of Mr Smith and Ms Pearson in that regard. The affidavits relied upon by the applicant do not assist on that point.

18 The issues in relation to the inadequacy of the information were identified both in the assessment report and in the notice of determination. The applicant was therefore on notice of those issues prior to the lodgement of the present appeal proceedings. It was therefore unreasonable for the applicant to commence proceedings in circumstances where it was on notice of the deficiencies in the information provided to the Council. I accept the Council’s evidence that these documents were required to form a proper assessment of the modification application.

19 The present circumstances are specifically anticipated in r 3.7(3)(b)(ii) as being circumstances in which it may be reasonable to make an order for costs. From the time of commencement of the proceedings up to the point at which the applicant first provided amended plans to the respondent, the applicant had failed to provide documents that were necessary to enable the Council to gain a proper understanding of, and given proper consideration to, the modification application.

20 Further, in circumstances where the plans do not comply with Schedule A, paragraph 7 of the Practice Note allows an applicant to make amendments or provide additional information in order to cause the plans to so comply. Leave of the court is not required in order to make such amendments. Paragraph 7 provides:

“7. If the plans the subject of the determination of a consent authority in respect of which a development appeal application is to be made do not satisfy the requirements in Schedule A, the applicant, before lodging the development appeal application, may amend the plans without seeking leave of the Court, but only to the extent necessary to cause the plans to satisfy the requirements in Schedule A. Any other amendment is to be by leave of the Court.”

21 In the present proceedings the applicant failed to take the course set out in paragraphs 6 and 7 of the Practice Note. If the applicant had followed this course, many of the contentions outlined by the Council in the original Statement of Facts and Contentions would not have been raised in the proceedings. Instead, the applicant relied on the architectural and landscape plans that were lodged with the s 96AA application, notwithstanding the issues identified concerning the adequacy of those plans and the information provided. In the circumstances, it is appropriate that the Council be reimbursed for the costs it incurred in dealing with issues that would not have been raised had the applicant not failed to lodge adequate documentation at the commencement of the proceedings. It therefore proper that I make an order that the applicant pay the respondent’s costs thrown away by reason of the amendments to the plans.

22 A question then arises as to whether I ought to make the order for costs in a fixed sum. Whilst it is preferable that orders are made for costs in a fixed sum in order to avoid the costs of a costs assessor and the uncertainty of their determination, courts are generally reluctant to make such an order. In Idoport Pty Ltd v National Australia Bank [2007] NSWSC 23, Justice Einstein set out a number of principles that ought to be considered when determining whether a costs order should be made in a fixed sum. These principles include:

“ii. the touchstone requires that the Court be confident that the approach taken to estimate costs is logical, fair and reasonable: Beach Petroleum at [16];

iii. the fairness parameter includes the Court having sufficient confidence in arriving at an appropriate sum on the materials available: Harrisonv Schipp (2002) 54 NSWLR 738, per Giles JA at para [22]…
…
iv. a gross sum assessment, by its very nature, does not envisage that a process similar to that involved in a traditional taxation or assessment of costs should take place: H arrison v Schipp at para [22];
…
vi. nevertheless the power to award a gross sum must be exercised judicially, and after giving the parties an adequate opportunity to make submissions on the matter: Leary v Leary [1987] 1 WLR 72 at 76, and Beach Petroleum NL v Johnson (No.2) (1995) 57 FCR 119 at 120”;

vii. In terms of the necessity for the approach taken to be logical, fair and reasonable, Von Doussa J in Beach Petroleum NL & Anor v Johnson& Ors(No 2) (1995) 57 FCR 119, put the matter as follows, at paras [16]:
"On the one hand the Court must be astute to prevent prejudice to the respondents by overestimating the costs, and on the other hand must be astute not to cause an injustice to the successful party by an arbitrary “fail safe” discount on the cost estimates submitted to the Court: Leary v Leary at 265. …"

23 The difficulty in the present application is that only a proportion of the Council’s costs of the proceedings can be attributed to the costs thrown away by reason of the amendment. The approach taken by Mr Marincowitz to calculate the fixed sum seems a logical one. However, given that I do not have at my disposal the various documents and file notes relating to each item on the schedule of fees contained in Annexure F to the affidavit of the respondent’s solicitor, I am not in a position to determine the reasonableness or otherwise of the fixed sum sought. An equally logical approach might be the actual costs of the proceedings from the date of lodgement up to the date on which the additional plans and documents were provided following the adjournment of the s 34 conference, excluding those costs that relate to the application for joinder. In my view, a costs assessor would be better placed to consider the reasonableness of the items on the schedule of fees and the assessment of what portion of those costs are thrown away by reason of the amendments to the plans. I will therefore make an order that the costs be paid as agreed or assessed.

24 This leaves for my determination the question of costs of the costs hearing on 6 August 2010. It is generally accepted that where a party steps outside the usual course of proceedings in Class 1 in order to make an application for costs, and is successful in doing so, the costs will follow the event. Further, in circumstances where the evidence established that the applicant clearly fell within one of the established categories of r 3.7(3), it is my view that the applicant was unreasonable in contesting that application. Subsequent to the giving of this decision the applicant was given the opportunity to make submissions on this question, but declined to do so. The applicant therefore ought to pay the respondent’s costs of the costs hearing on 6 August.

25 I therefore make the following orders:

1. The applicant pay the respondent’s costs thrown away by reason of the amended architectural and landscape plans, as agreed or assessed.
2. The applicant pay the respondent’s costs of the costs hearing on 6 August 2010 as agreed or assessed.

16/08/2010 - Changes to coversheet - Paragraph(s) Coversheet