Universal Childcare Pty Ltd v Leichhardt Municipal Council

[2008] NSWLEC 277

Land and Environment Court

of New South Wales

CITATION:

Universal Childcare Pty Ltd v Leichhardt Municipal Council [2008] NSWLEC 277

PARTIES:

APPLICANT
Universal Childcare Pty Ltd
RESPONDENT
Leichhardt Municipal Council

FILE NUMBER(S):

10127 of 2007

CORAM:

Sheahan J

KEY ISSUES:

Costs :- whether fair and reasonable to depart from the usual order in class 1 proceedings that each party pay its own costs

LEGISLATION CITED:

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 & Anor (2008) 158 LGERA 224
Bruyan, S v Hawkesbury City Council [2006] NSWLEC 51
Gee v Port Stephens Council (2003) 131 LGERA 325
Grant v Kiama Municipal Council [2006] NSWLEC 70
Hakim and Anor v Canada Bay City Council and Anor [2008] NSWLEC 118
Holroyd City Council v Peter Kubacki & Anor [2007] NSWLEC 804
Hunter Development Brokerage Pty Ltd v Cessnock City Council (No.2) (2006) 68 NSWLR 177
Latoudis v Casey (1990) 170 CLR 534
Marinkovic v Rockdale City Council [2006] NSWLEC 601
Marinkovic v Rockdale City Council (2007) 151 LGERA 385
Michael Barclay v Mosman Council (No.2) [2005] NSWLEC 291
Millenium Projects Pty Limited v Baulkham Hills Shire Council [2004] NSWLEC 761
Motorplex (Australia) Pty Ltd v Port Stephens Council [No.2] [2007] NSWLEC 770
Moussa v Owners Corporation of Strata Plan 65404 & Ors (No.2) [2008] NSWLEC 121
Owners of Strata Plan 74664, 74662, 74667, 74670, 74668 v Auburn Council [2008] NSWLEC 230
Pepperwood Ridge Pty Ltd v Newcastle City Council [2008] 160 LGERA 164
Pikoulas v Canterbury City Council (No.4) [2008] NSWLEC 166
Port Stephens Council v Sansom (2007) 156 LGERA 125
Residents Against Improper Development Inc and Another v Chase Property Investments Pty Ltd (2006) 149 LGERA 360
Universal Child Care Pty Ltd v Leichhardt Municipal Council [2007] NSWLEC 808
Vigor Master Pty Limited v Warringah Council [2006] NSWLEC 140

DATES OF HEARING:

15 July 2008

 
DATE OF JUDGMENT: 

30 September 2008

LEGAL REPRESENTATIVES:

APPLICANT
Mr N Eastman
SOLICITORS
Gadens Lawyers

RESPONDENT
Mr J Ayling SC
SOLICITORS
Pike Pike & Fenwick

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Sheahan J

30 September 2008

10127 of 2007 Universal Childcare Pty Ltd v Leichhardt Municipal Council

JUDGMENT

Introduction

1 His Honour: The Council successfully resisted the Applicant company’s appeal in this matter ([2007] NSWLEC 808 per Bly C), and now seeks to recover part of its costs. To succeed, the Council has to persuade the court that in all the circumstances it is “fair and reasonable” for the court to (1) make a costs order of some sort, and then (2) fashion an order that it finds “fair and reasonable” to meet those circumstances.

2 The orders sought by Mr Ayling SC for the Council are:

“ 1. That the applicant in the proceedings (respondent on the notice of motion dated 21 December 2007) pay the respondent’s costs incurred by the applicant’s amended application and unreasonable delay in providing information and documents that were necessary to enable the consent authority to gain a proper understanding of, and give proper consideration to, the application as follows:
(a) The costs unnecessarily incurred including all attendances related to the correspondence and reports referred to in annexure A to the affidavit of Jacinta Anne Reid sworn 9 July 2008.
(b) The costs of the amended application including the cost of all supplementary reports by Court appointed experts dealing with the amendments and all attendances relating to the amended application.
2. The costs referred to in paragraph 1 shall be quantified as agreed or assessed, and paid within 28 days thereof.
3. That the applicant in the proceedings (respondent on the notice of motion dated 21 December 2007) pay the respondent’s costs of the notice of motion ”.

3 The bundle constituting “Annexure A” to affidavits from Jacinta Reid and Margaret Lyons contains a total of 28 items “submitted” on dates ranging from 16 April 2007 (the day before an extensive interlocutory hearing before Biscoe J) to 21 November 2007 (the first day of the two day hearing before Bly C and some 15 months after the relevant pre-DA meeting), and dealing with survey, contamination, stormwater, flooding, traffic, acoustics, architectural plans, childcare centre management, and landscaping. At least one (item 7) was a flood study dated 5 February 2007, but not submitted until 30 April 2007 (sought by Council in its pre-DA letter of 15 September 2006). An acoustic report (item 17) dated 15 May 2007 was not submitted until 12 June 2007. One of the amended architectural plans dated 16 November 2007 was version “K” indicating many revisions; others were numbered “D” and “E”. By August/September 2007 the initial plans had been so substantially amended that the Council decided they should be re-notified (19 September-10 October). No parties’ single expert reports are included. The amended application in its final form was eventually refused consent by the court – judgment was delivered on 13 December 2007.

4 The history of the project will be more fully described after I set out the basic legal principles to be applied to the costs application.

The principles

5 The presumptive starting point on costs, when the court is dealing with Class 1 proceedings, is that there will be “no order as to costs”. There must be “some circumstance that justifies making an order”. See Residents Against Improper Development Inc and Another v Chase Property Investments Pty Ltd (2006) 149 LGERA 360 (“RAID”) per McClellan ChJ CL at [219]-[251].

6 The courts have acknowledged that “the administration of justice requires a high level of consistency in approach”, when the wide discretion available to the court is exercised, and it must be exercised judicially. See Port Stephens Council v Sansom (2007) 156 LGERA 125 (“Sansom”) at [46]-[52], in which case the Court of Appeal reviewed the long line of then-relevant authorities such as Gee v Port Stephens Council (2003) 131 LGERA 325, RAID (above), and Hunter Development Brokerage Pty Ltd v Cessnock City Council (No.2) (2006) 68 NSWLR 177, and the discussion in Jerrold Cripps QC’s 2001 Report on this court (Spigelman CJ at [15]-[16]). That wide discretion is not fettered by the “non-discouragement” principle underpinning the basic rule or presumption that there be “no order”. 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. See Sansom at [54], [76], [92], [93] and [97].

7 “Indicative guidelines” have evolved to assist in the consistent exercise of the costs discretion in Class 1 (and Class 2) matters, and in deciding in particular cases whether the presumptive “no costs” rule is overcome. See discussion of Sansom, e.g., in Arden Anglican School v Hornsby Shire Council & Anor (2008) 158 LGERA 224 per Biscoe J.

8 In that evolution process, the relevant Rules and various judicial pronouncements have sought to identify particular circumstances in which the court might find an order “fair and reasonable”. For example, Rule 3.7(3) of the 2007 Land and Environment Court Rules lists the following “circumstances”, among others, which might support Mr Ayling’s submission that an order be made in Council’s favour in this case:

“(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 .”

9 In Grant v Kiama Municipal Council [2006] NSWLEC 70 (“Grant”) (at par [15](c)) Preston ChJ similarly nominated as a relevant “circumstance”:

“(c) where a party fails to provide or delays unreasonably in providing information or documents required as part of the application for approval, including statements required by the relevant statute such as an environmental impact statement or species impact statement …, or statement of environmental effects … or statements or information required by an environmental planning instrument, or information or documents centrally relevant to the development the subject of the application and necessary to enable a consent authority to gain a proper understanding of and to give proper consideration to the application ...”

10 As the Chief Justice noted in Sansom – in which the Court of Appeal (sitting five judges, the other four of whom agreed with the judgment of the Chief Justice) endorsed (at [56]) the principles stated by Preston ChJ in Grant – such lists of “circumstances” as appear in the Rules and Grant are not a complete catalogue, but a collection of examples, of circumstances where a costs order may be made in Class 1 proceedings.

11 The Grant principles have been consistently applied by the judges of this court – by me in cases like Holroyd City Council v Peter Kubacki & Anor [2007] NSWLEC 804 and Pikoulas v Canterbury City Council (No.4) [2008] NSWLEC 166, and by other judges of the court in the cases I cited in those matters, and in other cases such as Motorplex (Australia) Pty Ltd v Port Stephens Council [No.2] [2007] NSWLEC 770, Hakim and Anor v Canada Bay City Council and Anor [2008] NSWLEC 118, Moussa v Owners Corporation of Strata Plan 65404 & Ors (No.2) [2008] NSWLEC 121, Pepperwood Ridge Pty Ltd v Newcastle City Council [2008] 160 LGERA 164; and Owners of Strata Plan 74664, 74662, 74667, 74670, 74668 v Auburn Council [2008] NSWLEC 230.

12 Each case turns on its own particular facts and those facts have to be closely scrutinised on each occasion to ascertain if making an order is “fair” and/or “reasonable”. In his submissions Mr Ayling drew a distinction between fairness and reasonableness, suggesting that the former test might be a little more subjective and the latter a little more objective. The Chief Justice in Sansom (at [48]) said that they were broad criteria, embracing all rational considerations relevant to the judgment to be made.

13 Although the case was decided before Grant, Sansom, and the 2007 rule changes, Talbot J’s comments in Aldi Foods Pty Ltd v Holroyd City Council (2005) 142 LGERA 141 (“Aldi”) (at [5]) remain pertinent:

“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.”

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, all of which evidence I have examined to arrive at the following history of the matter.

Relevant History

15 On 11 September 2006 the Applicant consulted the Council’s Executive Planner (Adele Cowie) with its plans, prior to lodgement of its Development Application to develop a childcare centre at 153-159 Balmain Road, Leichhardt. The proposal involved demolition of the existing buildings on those blocks (2 houses and an old factory), erection of a new two-storey building to be used as the centre, and associated parking/access arrangements. The Centre was to offer 74 child places and operate 7am to 7pm Monday to Friday.

16 On 15 September 2006 Ms Cowie wrote at length to the Applicant, indicating that Council was “unable to support the proposal as presently submitted, due to significant non-compliances with Council’s planning controls”, and requesting additional “information”, which was needed to accompany any DA, so that the Council could properly consider the proposal, including:

· A stormwater drainage concept plan, incorporating on-site detention facilities.

· A flood study

· A traffic (and parking) study

· An SEPP 55 (remediation) assessment

· Consultation with neighbours regarding noise, traffic, and other amenity issues.

17 Council was particularly concerned with inappropriate streetscape appearance, non-compliance with the building location zone, amenity implications for neighbouring properties, and lack of justification for the demolition of the existing brick house at 159 Balmain Road – keeping 159 and incorporating it into the overall design “perhaps as staff accommodation” would, it was said, achieve a “better street presentation”.

18 The second last paragraph of the letter said:

“ Council is prepared to consider further amendments to the proposal aimed at addressing those non-compliances, and offers you the opportunity to submit modified plans, and attend one additional meeting with Council staff at no further charge. Please note, this opportunity will remain available for three months from the date of this letter. Any meeting held after the elapse of three months will be subject to the applicable pre development application process and charges ”.

19 I accept what Mr Ayling says (T6, L32ff) about the letter indicating a helpful rather than difficult approach by the Council – in a letter running to more than three closely typed pages, Council was saying to the proponent that it needed certain information to measure, assess and consider the physical impacts of the proposal. Far from foreshadowing a refusal of consent, the letter contained constructive suggestions, including that the DA not be lodged until some of those identified issues had been further explored in the more informal, and less costly, pre-DA process which had commenced. For example, the letter puts the Applicant on notice that, while the former use of the site indicated that remediation would be necessary pursuant to SEPP 55, such remediation would not itself necessitate development consent, and it would be preferable for the remediation to form part of the DA assessment process, due to the need to demolish existing structures if the project went ahead.

20 The invitation extended for further discussion (see par [18] above) was never taken up, and, as Mr Ayling submitted (T7, L8ff), “there is no indication … that the specific requirements of the council in relation to those matters that are identified … [was] taken seriously and complied with”.

21 Development Application No. D/2006/760 (“the DA”) was lodged on 19 December 2006 with plans materially similar to those discussed on 11 September. On 9 January 2007 Council advised the Applicant that the DA would not be supported, as its pre-DA concerns had not been addressed, and, specifically, the following information had not been provided: flood study, stormwater concept plan, remedial action plan, and an up to date traffic report. The Council invited the Applicant to withdraw the DA, and enter further discussions on a “substantive redesign”, but the Applicant responded, on or about 19 January 2007, that it would not withdraw, and that it wanted Council to fulfil its duty to assess the DA. Flood and remediation reports would “be provided shortly”, and the Applicant would obtain additional traffic information. It is to be noted that cl.55 of the EPA Regulation makes clear that a Council is not obliged to entertain amendments to an undetermined application.

22 An unfavourable assessment report dated 30 January 2007 resulted in Council’s refusal of the DA on 5 February 2007 on twenty stated grounds. The main issues identified in the refusal were bulk, scale, streetscape, parking, traffic, neighbour amenity, flood study, remediation, and demolition of an “intact cottage” at 159 Balmain Road. Four of the grounds relied on LEP 2000, 11 on DCP 2000, 3 on failure to support the DA with a flood/stormwater study, up to date traffic report and remediation action plan, and the other two grounds were stated to be “site not suitable” and “not in the public interest”.

23 The Class 1 appeal was lodged, against the refusal (erroneously described as the deemed refusal) of the DA, on 16 February 2007.

24 On 5 April 2007 Council filed a comprehensive statement of issues under nine headings, setting out the deficiencies of the information provided from the “complete assessment” point of view, and the inadequacies, for example, of the traffic and acoustic reports on the file. Otherwise the particular concerns remained those indicated in the 15 September 2006 letter (see pars [16] and [17] above) and overshadowing of No.151 Balmain Road.

25 Council’s solicitors offered on 5 April 2007 not to seek costs if the appeal were discontinued by 10 April. That offer was extended to 12 April, but not accepted. By that stage Council was warning the Applicant of the additional costs it was incurring in trying to have the Applicant remedy its lack of appropriate information. Thereafter the court proceedings assumed a regrettably adversarial character.

26 Council declined the Applicant’s suggestion (on 5 April) that the parties attempt mediation, on the grounds that Council still lacked sufficient information to properly formulate its position on the DA. Council also declined to accept further material in the form of amendment, rather than having a proper, or at least a complete, DA to assess. The subsequent filing of some of the “missing” information resulted in adjustment of the issues in the appeal as it progressed through the court, and some technical (not necessarily merit) deficiencies in the application were later identified by Parties’ Single Experts.

27 The shortcomings of the DA which were still evident at 17 April 2007 were fully ventilated when the matter came before Biscoe J, and the Council told His Honour it should not have to run the case “on a shifting landscape”. It wanted to force the matter on, to be determined on the basis of the inadequate information which the Applicant had “presently before the Court”. His Honour noted the Applicant had been “tardy in putting on information”. The Applicant’s position on that occasion was that the Council’s refusal came while the Applicant was gathering and had only partially compiled the further information Council was seeking by the time the DA went in. Mr P McEwen SC (for the Applicant on that occasion) told His Honour the missing material would be on by 1 May, and that the Applicant had settled on 76 as the number of child places (cf 74 in the DA).

28 That undertaking by Mr P McEwen was given against the background of Ms Reid, solicitor for the Council, saying to Biscoe J (T17 April 2007, p2 L46-p3 L2):

“ The applicant hasn’t indicated what evidence it wishes to put on, whether there are amended plans, further documents which the council has put it on notice since the pre-development application meeting in September of last year were required. What the council says is that this application is a little different to the ordinary where the applicant hasn’t listened to any information that the council has given it or feedback with respect to that application and that the council shouldn’t be prejudiced by having to accept in dribs and drabs further information in support of the application. If I could take you to the statement of issues filed in the matter dated the 3 April 2007, you’ll see that the council alleges insufficient information in support of the application as well as it being a fundamentally ill-conceived proposal ”.

29 For the appeal to proceed as then constituted was an inappropriate use of the court, the Council argued, as the court is not “a vehicle to encourage the Council to come to the conference table with you” (T14, L6-7). In the end, Biscoe J determined that s.34 offered the best way forward to resolve the parties’ dispute, and made directions, with a view to an on-site hearing commencing on 5 June 2007.

30 The amended application as it stood in April/May 2007 was notified 16 to 30 May, and five objections were received. The 5 June hearing date was vacated. Repeated callovers followed and material was continually submitted. Parties Single Experts on traffic and acoustics were appointed and produced reports. The rival town planners met and produced a joint report. A target hearing date of 15 July (noted as such on the file, but not confirmed by the Council in this costs hearing, and disputed by the Applicant) passed while this was happening, and a hearing was fixed for 27-28 August. On 10 August the Applicant filed a Notice of Motion for amended plans. The August hearing dates were vacated and the 21-22 November listing arrived at.

31 After Commissioner Brown gave some case management directions, and Ms Lyons had put on her affidavit of 15 August 2007, seeking to crystallise materials required from the Applicant for the hearing, Mr Whealy wrote to Ms Reid on 20 August 2007 in congenial resolution-focussed terms regarding ten outstanding matters, not many of which Council found satisfactorily resolved by what he proposed in that letter. Again Council expressed concern about the costs occasioned to both parties by the Applicant’s partial provision of information.

32 Amended Statements of Issues and of Basic Facts were filed in October, but evidence was still being finalised at that time, much of it originally requested in September 2006, and much of it regrettably inadequate. (For example, Single Acoustic expert Cooper’s report of 14 November 2007 discloses that the Applicant had by then still not adequately depicted proposed noise barriers, and had not adequately dealt with management and aircraft noise issues). Two days before the November hearing the Applicant’s solicitor could not finalise a list of the documents the Applicant would rely upon at the hearing.

33 When Commissioner Bly heard the matter on 21-22 November he had before him objections received from a number of local residents. In par [13] of his judgment he summarised their main points thus:

“ The application … was advertised on two occasions resulting in the objections being received from a number of residents in Balmain Road and Waratah Street (at the rear of the site). These objections mainly raise the following concerns:

· Traffic congestion in Balmain Road and Waratah Street and increased demand for on-street car parking thus reducing available parking for residents.

· Unacceptable noise levels likely to be generated by the child-care centre resulting in reduced residential amenity during the lengthy hours of operation between 7 a.m. and 7 p.m. This is unlikely to be mitigated by the provision of noise barriers. Noise was of particular concern to the occupants of the neighbouring house to the north at 161 Balmain Road.

· The proposed flat roofed modern structure will be out of character with the existing buildings in the locality.

· There are already two family day-care centres operating in Waratah Street and an additional close-by child-care centre is not warranted.

· Overlooking from the child-care centre resulting in loss of privacy.

· Excessive bulk and scale and inappropriate building appearance when viewed from neighbouring properties to the east.”

34 In par [15] of his judgment Commissioner Bly noted that there were twenty reasons for the Council’s refusal, but that some had since been resolved. Those subsisting for his determination were summarised as follows:

· Adverse impacts on the amenity of neighbouring dwellings including solar access, traffic, landscaping and building bulk contrary to the requirements of the planning controls.

· The proposed building and the car park would be out of character with the streetscape and development in the locality contrary to the requirements of the planning controls.

· The traffic, vehicular access and car parking arrangements are unsatisfactory.

· The existing, relatively sound small detached dwelling at 159 Balmain Road should be retained.

· Site remediation and flooding/stormwater drainage has not been resolved.

35 When the hearing moved from the site to the courtroom, the Respondent Council explained to the Commissioner that there remained three essential issues in the case (at [18]):

· Whether the proposed development would have an inappropriate character for the locality and an inappropriate presentation in the streetscape taking into account the requirements of the planning controls.

· Whether the amenity of the neighbouring and nearby residential properties would be adversely affected in terms of the design and bulk of the building, reduced solar access and loss of on street parking.

· Whether the site is suitable for a child-care centre taking into account the noise generated by overflying aircraft associated with the Sydney airport.

36 The learned Commissioner noted the extensive disagreement between the expert planners (56 pages of comments cf 6 pages of agreements) on a range of matters touching upon those three essential issues (see pars [33]-[34] and [52]-[53] of his judgment). On the character/streetscape issue he concluded that he favoured Council’s Ms Lillie on many of the key matters in dispute (see pars [35]ff). On the residential amenity issues he noted that the most affected neighbouring property was No.151 Balmain Road and that the Applicant had purchased it. As it was not amalgamated into the site and was not to be part of the project, the Commissioner concluded that the asserted impacts on it needed to be considered. In this respect he found in favour of the objectors (see pars [54]ff). In respect of aircraft noise, the Commissioner dealt with the provisions of Australian Standard AS2021-2000 and, while observing that the issue remained a live one, it was not determinative of the childcare use being found inappropriate for approval.

37 Commissioner Bly’s conclusions appear in pars [65]-[69] of his judgment. He was satisfied that the childcare centre and the proposed parking arrangements would function well, but the impacts on neighbours, streetscape, and the character of the area meant that the proposal should not be approved. He noted that Ms Lillie indicated she could well support a childcare centre in this location as there is likely to be appropriate demand. It was also an advantage that an unsightly factory building would be replaced with a building of architectural merit. However, the proposal failed to meet the planning controls – “… what is needed for this site is a development comprising landscaping, parking and built form that is responsive to the applicable planning controls” (par [68]).

38 In par [69] he noted, in conclusion, that he had not been persuaded that the proposal was relevantly consistent with LEP 2000 and its objectives, nor appropriately responsive to DCP 2000.

Council’s submissions

39 Mr Ayling submits that the voluminous material now before the court on this costs application “discloses a course of conduct over a lengthy period of time …, which gives rise to it being reasonable and fair that we should have our costs of dealing with many of these issues”. The documents in evidence on the motion “are to a large extent correspondence between solicitors either dealing with the supply of information or responding to it” (T13, L20-25). The applicant “by its behaviour over a lengthy period”, by neglecting to supply to the Council sufficient information “to enable the Council properly to assess the application”, by its “general conduct … in not getting its act together …, not just delay, … multiplication of tasks, [and] constant variations … to the subject matter of the application” caused the Council to expend “a substantial amount of money over and above what it might rationally be expected to … expend in contesting this appeal” (T1, L36-40; and T28, L21-T29, L2).

“… [T]here is a lot of material that needed to be provided in order to understand exactly how this application was going to be reflected in bricks and mortar, the levels, the way in which the driveways worked, the noise attenuation measures, a hundred other things that arose during the course of the hearing – or the course of preparation, which were all foreseeable and which all could have been dealt with by the engagement of competent experts at an early stage to prepare appropriate reports and submit them with the development application, or at the latest to submit them to at the time of the lodgement of the appeal so that the matter could have proceeded quickly…[T]hat is the exact opposite of what happened in this case. What we had was an eking out of information over a period of months, all of which resulted in the necessity for correspondence, email correspondence, mail correspondence, the preparation of additional documents, attendance of my solicitors at innumerable call overs, and indeed the vacation of the hearing dates on I think three occasions …” most of which “could have been avoided if more attention had been paid to the council’s request at the outset and if more attention had been paid by the applicant to satisfying the simple requirement that it went to court it was ready to proceed and had all the information available to at least deal with those issues which it should have suspected and would have suspected were not likely to be controversial once the information was provided” (T29, L7-33).
“…[W]e should be compensated in costs for all the work we had to do in chasing all these additional reports and all the correspondence we had to undertake in relation to the additional reports and supply the additional information and in gong to all the call overs that were brought about partly at least by the necessity to seek further information and the like. However that … can be determined if there be no agreement by … a costs assessor ” (T31, L27-32).

40 Mr Ayling posed the question (T36, L5-12):

“[I]s it reasonable to leave the public at the mercy of an applicant who can so conduct his appeal as to magnify the expense that the public has to bear by the behaviour that he engages in. The answer to that question is no, it’s not reasonable to do that. Some sort of sanction, some sort of protection against that kind of outcome is desirable and the making of an order for costs in this case contrary to the primary position of the rule has that consequence therefore it’s reasonable”.

41 Mr Ayling went on to quote the example that it would not be reasonable for Councils to be allowed to compel applicants to spend massively in respect of simple appeals where approval should be a foregone conclusion. Nor is it reasonable for Councils to force applicants to pursue a court case so that the court can bear the odium of the decision. He concluded his oral submissions in chief (T36, L24-40):

“So reasonableness applies very substantially as a consideration which applies very substantially as a result of the understanding of the nature of the process through which the appeal should notionally go and departures from that process in actual fact …[T]he progress of this appeal was slow and laborious. That a considerable amount of money time and effort was expended by the council – and no doubt by the applicant’s solicitors as well but that’s immaterial – on getting into a satisfactory state evidence in relation to the matters which were essentially technical or mechanical and which could have been dealt with in another way if a more expeditious approach to dealing with those matters had been adopted. As a result great expense was incurred which need not have been incurred and the court out (sic) to make an order by way of exception to the general rule which allows the council to be compensated in respect of that additional costs (sic)”.

42 In her affidavit (par 11) Ms Reid, solicitor for the Council, says:

“… those costs could have been avoided had the applicant acted reasonably in the circumstances leading up to the commencement of the proceedings by lodging the necessary information with the development application or at the very latest prior to lodgement of the appeal when it had notice of an inadequate application ”.

43 In par 12 of and annexure “A” to her affidavit, Ms Reid goes through the index to the documents in the bundle labelled “Annexure A” (and referred to in par [3] above), and identifies in respect of the 28 documents a total of 57 elements of legal work (numbered “a” to “eee”) ”that relates to the amended application and unreasonable delay of information, documents and plans by the applicant”. All those elements of work were examined during the hearing (see T13-T25 for Mr Ayling’s analysis), and Mr Ayling submits that it “discloses a course of conduct over a lengthy period of time … [between the first statement of issues and the commencement of the hearing] which gives rise to it being reasonable and fair that we should have our costs of dealing with many of these issues … [T]hey are to a large extent correspondence between solicitors either dealing with the supply of information or responding to it” (T13, L20-25, and par 13 of Lyons affidavit).

44 Mr Ayling conceded in his submissions in reply that “… some things were inevitable and not blameworthy and other things were” (T62, L44-45). “…[Y]our Honour may come to the conclusion quite rationally and properly that certain amendments, certain reports and so forth were in the ordinary course of ordinary litigation, ordinary responses, ordinary reactions to things which occurred in the ordinary course of the conduct of a class 1 appeal.” (T63, L3-7). Where an expert is engaged by the court or as a Parties’ Single Expert a new problem may arise that nobody had anticipated, and Mr Ayling concedes that that is “within the ordinary course or litigation” and needs to be responded to.

45 As a possible alternative to the order he suggested in opening (see par [2] above), Mr Ayling submitted that it was open to the court to select a date when it thinks the process ceases to result in additional or unnecessary costs being incurred, but he much prefers the order as drafted.

46 On the “non-discouragement” point, Mr Ayling says that people should be discouraged from bringing appeals in circumstances where they have not adequately supported their case with proper information on a timely basis. A costs order in favour of Council in this matter would not discourage any other applicant from bringing an appeal; “What it would do would be to encourage the bringing of an appeal but to discourage the conduct of that appeal in a matter which was unsatisfactory and inappropriate. That can’t be a bad outcome; that’s a good outcome” (T35, L43-46).

47 In his concluding submissions Mr Ayling said:

“…[W]hen one looks at the history of the matter it’s clear that at the very outset the council wished to afford to this applicant the opportunity to deal with a number of major issues that it saw as being contra-indicative of the capacity of the council to grant a consent, it provided a detailed exposition of what those matters were and if in fact the applicant had taken notice of what the council told it and had made a determined and sensible attempt to provide the information that the council asked for the long chain of reports, counter reports, supplementary reports and addenda would have been much abbreviated, indeed it may not have been necessary at all” (T63, L9-18). “…[T]he necessity for the applicant to correct or complete the reports which it had originally filed and which were incomplete or unsatisfactory in what were obviously fairly patent ways or were responding to fresh questions which were sensibly asked about the changes that they proposed in their supplementary reports” (T63, L23-26). “It’s all very well to say that the ordinary course of litigation produces this to-ing and fro-ing of information, it probably does. But as I have just indicated, your Honour, the submission is that if the council’s invitation to provide this information in the first place had been taken up or if it had been provided in a complete and proper way at the time the application was lodged much of the time expended and a considerable expenditure of costs involved in chasing up various matters which arose in the way they did would have been avoided ” (T63, L37-43).

Applicant’s Response

48 In response to Council’s “Annexure A”, Mr Eastman relied on a comprehensive and very helpful schedule, handed up by way of submission, dealing with all the relevant items of legal work, but from the Applicant’s perspective. Mr Whealy’s comprehensive affidavit, which calls upon that schedule, starkly joined issue with the evidence of Ms Lyons and Ms Reid – for example, they differ strongly on whether the material filed with the Class 1 application went beyond the 19 January information – but the court sees little value in picking over these quite specific disputes.

49 In essence, the Applicant’s starting point is to say that (1) all the information at issue on the question of costs responds to Council’s request, and/or Statements of Issues filed in the appeal on Council’s behalf, and/or issues identified by Parties’ Single Experts, and that (2) not much of it could genuinely be regarded as an amendment to the DA, and that which could be so regarded, amounts to only a minor/technical, but not a major/substantive, amendment. Mr Whealy sees the DA plans and Statement of Environmental Effects as adequately meeting the pre-DA concerns of the Council, and Mr Eastman submits that as all the relevant material ended up before the Commissioner, all the Applicant has to show to justify there being “no order” as to costs is that any delay was not unreasonable.

50 He concedes that much of the delay of which Council complains occurred at the beginning of the matter, but submits that the “to and fro” process that occurred in this case is “entirely usual” for what the authorities call the “evolutionary process” experienced in Class 1 proceedings. He says that the test for the court in this matter is whether there has been unreasonable delay and costs incurred which did not result from the provision of information in the ordinary course of that process.

51 He further submits that the pre-DA focus was on the need for three particular items of material – an updating of the traffic report, a remediation action plan, and a flood study. Despite the fact that he concedes that at least one of those documents was available in early February, they were not put on in the matter until April or early May. He says that they caused “small matters” to arise, or they led to some queries which came in due course from the Single Experts. The Council having refused to receive any more information, and having then proceeded to refuse the DA, the Applicant had no choice but to appeal in order to have its submissions properly heard. Once the proceedings were on foot, the Council issues were met as soon as they were raised.

52 Mr Eastman refutes Mr Ayling’s suggestion that the Applicant “did not adequately come to grips with the information it was required to supply” (T57, L19-20). The chain of correspondence which occurred at the beginning of 2007 clearly demonstrates “that the applicant had indeed come to grips with what information it was required to supply … and demonstrates its willingness to provide that information to the council”. However, the Council then determined that it would refuse the application in any event without receiving, let alone considering that material.

53 His “primary submission is to say we were reasonable about the provision of those three documents that are dealt with in the notice of determination and the pre-determination correspondence because we said we’d provide them, we didn’t get an opportunity to do it” (T61, L46-49).

Consideration

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.

55 The Applicant lodged its DA in this case without assembling all the information the Council had suggested it needed, and without reverting to the Council in response to its invitation to proceed further with a pre-DA consultation. Plainly the DA plans and SEE did not meet all the concerns expressed pre-DA. Council had not declined to countenance or approve a childcare centre on the subject site, and the extra work undertaken in the appeal process was directly related to the failure of the Applicant to give Council information it said it needed to form a view, a view which may or may not have led to refusal and appeal.

56 One month after that lodgement, the Applicant told the Council (on 19 January) that the awaited reports were under preparation and would be provided “shortly”. They did not arrive until 16-30 April. Even the undertakings given to Biscoe J by Mr P McEwen SC, on the Applicant’s behalf, on 17 April 2007, for prompt provision of other necessary material, were not honoured; “some information was promptly supplied but it wasn’t adequately prepared” (T65, L21-22).

57 The court is puzzled why an applicant would choose to meet a Council’s requirements in a case management process seven months after they were notified to the applicant in a pre-DA process where the lawyers were not yet engaged, and when Council was not adopting an adversarial position on the proposal. I do not accept Mr Eastman’s contentions that the Applicant addressed Council’s issues willingly and expeditiously once the proceedings were on foot ([48] and [49] above). Nor do I accept Mr Whealy’s assertion (in par 75 of his affidavit) that “… Council appeared to, from the outset, adopt a position whereby it would object to all attempts by the Applicant to provide further information, notwithstanding the bulk of this information sought to improve the proposal and was purely responsive”. The hydrology report provided on 16 April 2007 had been sought on 15 September 2006.

58 The unfortunate reality of this case (as I noted in par [25]) is that, at least from early April 2007, it was conducted, especially by the Applicant, in a very adversarial way. (See, e.g. Mr Whealy’s letter of 10 April at item AJW 11, his letter of 30 May at item AJW 28, and the Applicant’s aggressive approach to the possibility that some of the subject site might be affected by road widening).

59 The Chief Justice made clear in Sansom that Class 1 appeal proceedings are not to be seen as adversarial, as they exist to pursue a “correct” decision on a proposal and “improve the quality of the decision-making process” (Spigelman CJ, Sansom, at [71]-[73]).

60 I am, therefore, disposed towards making some order for costs in favour of the Council, bearing in mind that costs are compensatory and not punitive in character (Latoudis v Casey (1990) 170 CLR 534), and I will now examine some recent authorities of this court in order to arrive at the most appropriate formulation.

61 In Michael Barclay v Mosman Council (No.2) [2005] NSWLEC 291 (“Barclay”), the only serious issue on the appeal was landscaping. During the hearing the applicant sought an adjournment to amend the plans to increase the area to be landscaped. Council claimed that the applicant knew all along that the proposal’s landscaped area was “well below the requirements of the LEP and the DCP”. Watts C granted conditional consent on the basis of the amended plan, even though the applicant at no stage “conclusively” adopted it, and he later ordered the applicant to pay the Council a pre-determined amount of costs to cover the work involved in assessing the late amendment.

62 In Aldi, Council successfully defended an appeal against refusal of a DA, claiming that the unwillingness of the applicant to consider compromises in the light of a DCP led to a number of amendments being made to plans during the proceedings. Council had only one major issue with the proposal – a setback consistent with a DCP masterplan – and was at all times willing to compromise by accepting a lesser setback than required by the Masterplan, but prior to 24 May 2004 the applicant was unwilling to consider any compromise which gave weight to the DCP masterplan. The court had given an interim judgment on 24 May 2004, allowing an opportunity for the applicant to “rely on further revised plans” [10], but the applicant still made no material change until the next hearing on 23 July 2004 at which His Honour found that the proposal “must fail on its merits” because the final proposal “was antipathetic to the Master Plan”, and refused consent on 30 July 2004.

63 Council sought an order for costs incurred at least after a case management conference before Watts C on 14 April 2004. According to the summary in the headnote, His Honour held:

“(1) The Council had made it plain at the outset its willingness to reach a compromise position outside the context of adversarial proceedings, which enabled a supermarket development to proceed on the subject site provided that the matter which the Council perceived as of primary importance (a setback from Terminal Place consistent with the DCP masterplan) was incorporated within the development.
(2) The Council remained open to that potential resolution throughout the proceedings. This motivated the Council’s attendance, with Council officers capable of giving instructions on compromises present on 2 occasions, at 3 case management conferences before Commissioner Watts.
(3) The setback from Terminal Place was plainly critical to the implementation of the masterplan for the reasons identified by the Council on 10 March 2004.”

64 His Honour noted (at [14]) that the generation of amended plans as the case evolved during case management, including the appointment of a single expert, is not necessarily adverse to “reasonableness”. In respect of holding (3) in the headnote, His Honour added (at [15]):

“To carry such a principle to extreme would remove any relevance to the appeal process. Experts can differ in respect of subjective as well as objective views of the impact of development and it is appropriate for those views to be fully articulated, tested and reconciled in the appeal process.”

65 The applicant maintained throughout that the masterplan should not be determinative of the application. His Honour concluded that it was not reasonable to make an order for payment of Council’s costs, and ordered Council to pay the applicant’s costs of the motion.

66 Bruyan, S v Hawkesbury City Council [2006] NSWLEC 51 (“Bruyen”) concerned a question of costs arising in regard to a s.96AA application which was eventually resolved by consent orders. Council argued that if the amended SEE had been received when the application was lodged there would have been no reason for the appeal to proceed. Council had repeatedly told the applicant it considered it had insufficient information to properly assess the application. The applicant relied on Aldi. His Honour found that Council had grounds for its initial complaint, so he found it fair and reasonable to allow it to recover its costs up to the date of the SEE, until when it “was not in a position to assess the application, much less determine it”. Each party was ordered to pay its own costs after that date.

67 All three of these cases – Aldi, Barclay, and Bruyan – were relied on by the Chief Judge in formulating the principles he laid down in Grant, which were later endorsed by the Court of Appeal in Sansom.

68 The Chief Judge subsequently delivered two judgments in Marinkovic v Rockdale City Council. In the first on 19 September 2006 – [2006] NSWLEC 601 – His Honour considered the Applicant’s failure to lodge adequate documentation, his multiple amendments, and failure to diligently prosecute his appeal. There were 33 attendances before the court to that date, in a 2004 appeal on a late 2003 DA. Documents and information required by relevant instruments were not provided. At [7] His Honour said “It is incumbent upon an applicant for development consent to comply with … these statutory requirements … to enable the consent authority to consider and determine the development application”. Council then took a long time to determine the DA, and the applicant took a long time to lodge his appeal, and put on his evidence. Council refused the DA when the appeal was on foot. After twenty-one months in the court, following twelve months at Council, the applicant was “only now working out what is the development that it wishes to carry out”. His Honour felt that a costs order was “entirely fair and reasonable” – “up to and including today” (19 September 2006).

69 His Honour gave directions for future conduct of the case, including one that any further amendments of the DA would require His Honour’s leave – a “new start” was called. On 21 September 2006 some amended plans and an architect’s report were filed, and on 15 November 2006 Tuor C gave an interim judgment indicating some concerns with the development depicted in the plans before her, and suggesting certain identified amendments which would lessen environmental impact and result in a better community outcome. Pursuant to directions given on 22 November, amended plans were filed and then advertised. The applicant sought the Chief Judge’s leave to amend, and, on 7 February 2007, His Honour granted leave – (2007) 151 LGERA 385 – and sent the matter back to the Commissioner without any further costs order. His Honour found no unreasonable conduct on the applicant’s part and the matter proceeded “in the usual way” after 19 September.

70 His Honour noted that an applicant in Class 1 should be able to amend its application in response to evidence (including from a single expert) and to address concerns expressed by the court. Councils should see such amendments as part of the usual process of conducting the appeal. There is no legal obligation on an applicant to respond to a Council’s concerns (Aldi at [15]), nor to adverse observations by an appointed single expert (Vigor Master Pty Limited v Warringah Council [2006] NSWLEC 140). However, in Marinkovic the multiple amendments prior to 19 September illustrated “where an applicant has stepped outside what can be reasonably expected in the usual conduct of a class 1 appeal” ([24]). See also Millenium Projects Pty Limited v Baulkham Hills Shire Council [2004] NSWLEC 761 on risk of an order to pay costs which are truly thrown away by reason of an amendment.

Conclusion

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.

72 I am also satisfied that I should order the Applicant to pay the Council’s costs of this Notice of Motion, given the Council’s complete success on it.

73 Biscoe J specifically reserved the costs of the interlocutory hearing on 17 April 2007, and I believe it appropriate that each party pay its own costs of that hearing.

Orders

74 The orders of the court on this Notice of Motion will, therefore, be as follows:

1. That the applicant in the proceedings (respondent on the notice of motion dated 21 December 2007) pay the respondent’s costs incurred by the applicant’s amended application and unreasonable delay in providing information and documents that were necessary to enable the consent authority to gain a proper understanding of, and give proper consideration to, the application as follows:
(a) The costs unnecessarily incurred including all attendances related to the correspondence and reports referred to in annexure A to the affidavit of Jacinta Anne Reid sworn 9 July 2008.
(b) The costs of the amended application including the cost of all supplementary reports by court appointed experts dealing with the amendments and all attendances relating to the amended application.
2. The costs referred to in paragraph 1 shall be quantified as agreed or assessed, and paid within 28 days thereof.
3. That the applicant in the proceedings (respondent on the notice of motion dated 21 December 2007) pay the respondent’s costs of the notice of motion.
4. Each party will pay its own costs of the interlocutory hearing before Biscoe J on 17 April 2007.
5. “ Annexure A ” will remain in the court file, but the two volumes of exhibits relied upon by each party respectively should be returned, to facilitate any costs assessment required.
6. Liberty to Council to apply to the Registrar to uplift “ Annexure A ” if required for the purposes of costs assessment.