Thaina Town (On Goulburn) Pty Ltd v City of Sydney Council

The case of Thaina Town (On Goulburn) Pty Ltd v City of Sydney Council concerned an appeal to the Supreme Court of New South Wales Court of Appeal regarding an award of costs in the Land and Environment Court. The dispute originated from a Prevention Notice issued by the City of Sydney Council to Thaina Town, requiring it to address issues with an exhaust ventilation system. Thaina Town appealed this notice, and while the appeal was successful in the Land and Environment Court, the question of costs remained contentious.

The primary legal issues before the Court of Appeal were whether the Land and Environment Court had erred in its approach to awarding costs, particularly in the context of a merits review under the *Protection of the Environment Operations Act 1997* (POEO Act). Specifically, the court had to consider the application of Rule 4 of Part 16 of the Land and Environment Court Rules, the discretionary nature of costs, and whether a long-standing practice of not awarding costs in certain types of proceedings unduly constrained the exercise of that discretion. The court also had to determine the appropriate weight to be given to the nature of the proceedings and whether characterising them broadly as "Class 1 proceedings" or "merits review proceedings" was too simplistic.

The Court of Appeal, in allowing the appeal, reasoned that the Land and Environment Court's discretion regarding costs was not unfettered and must be exercised in accordance with the relevant legislative regime and rules. It was held that the practice of not awarding costs in merits review proceedings, while having some historical basis, could impermissibly constrain the judicial discretion. The court emphasised that the POEO Act, in this context, did not equate the Court's role to that of an original administrative decision-maker, distinguishing it from other merits review proceedings. The court found that the Land and Environment Court had failed to properly exercise its discretion by adhering too rigidly to a practice that did not fully account for the specific circumstances and legislative framework.

Consequently, the Court of Appeal granted leave to appeal, directed the Claimant to file a Notice of Appeal, and upon its filing, allowed the appeal. The court ordered that the Respondent (City of Sydney Council) pay the Appellant's (Thaina Town) costs in the Land and Environment Court before both Commissioner Brown and Justice Preston, as well as the costs of the appeal in the Supreme Court.