Verde Terra Pty Ltd v Central Coast Council; Central Coast Council v Environment Protection Authority (No 11)

[2023] NSWLEC 110

Land and Environment Court

New South Wales

Medium Neutral Citation:

Verde Terra Pty Ltd v Central Coast Council; Central Coast Council v Environment Protection Authority (No 11) [2023] NSWLEC 110

Hearing dates:

20 June 2022 and 23 October 2023

Date of orders:

23 October 2023

Decision date:

23 October 2023

Jurisdiction:

Class 4

Before:

Pepper J

Decision:

See orders at [106].

Catchwords:

COSTS: determination of the ‘event’ – whether costs should be apportioned – whether costs payable on an indemnity basis on the basis of Calderbank offers – whether costs payable on an indemnity basis on the basis of abuse of process – legal principles – costs apportioned – costs payable on an ordinary basis only.

Legislation Cited:

Civil Procedure Act 2005, ss 56, 98

Protection of the Environment Operations Act 1997, s 50(2)

Uniform Civil Procedure Rules 2005, rr 1.5, 42.1, 42.5, Sch 1

Cases Cited:

Ainger v Coffs Harbour City Council (No 2) [2007] NSWCA 212

Allianz Australia Insurance Limited v Rawson Homes Pty Ltd (No 2) [2021] NSWCA 334

Anastasiou v Wallace [2020] NSWLEC 14

Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 5) [2021] FCA 246

Australians for Sustainable Development Inc v Minister for Planning (No 2) [2011] NSWLEC 70

Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359

Baresic v Slingshot Holdings Pty Ltd (No 2) [2005] NSWCA 160

Bassett v Cameron (No 2) [2021] NSWSC 419

Bostik Australia Pty Ltd v Liddiard(No 2) [2009] NSWCA 304

Brown v Randwick City Council (No 2) [2012] NSWLEC 28

C G Maloney Pty Ltd v Noon [2011] NSWCA 397

C&V Engineering Services Pty Ltd v Metropolitan Demolitions Pty Ltd (No 2) [2023] NSWCA 240

Calderbank v Calderbank [1975] 3 All ER 333; (1975) 3 WLR 586

Cando Management and Maintenance Pty Ltd v Cumberland Council [2019] NSWCA 26; (2019) 237 LGERA 128

Chief Commissioner of State Revenue v Platinum Investments Management Ltd(No 2) [2011] NSWCA 197

ColgatePalmolive Co v Cussons Pty Ltd [1993] FCA 801; (1993) 46 FCR 225

Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219

E Group Security Pty Ltd v Chief Commissioner of State Revenue (No 2) [2021] NSWSC 1296

Edmonds v Barrington Winstanley Group Pty Ltd (No2) [2023] NSWCA 197

Favotto Family Restaurants Pty Ltd v Chief Commissioner of State Revenue (No 2) [2020] NSWSC 519

Filetron Pty Ltd v Innovate Partners Pty Ltd atf Banton Family Trust 2 and Goulburn Mulwaree Council (No 3) [2023] NSWLEC 104

Harrison v Schipp [2001] NSWCA 13

Hastings Point Progress Association v Tweed Shire Council (No 3) [2010] NSWCA 39; (2010) 172 LGERA 157

Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375

James v Surf Road Nominees Pty Limited (No 2) [2005] NSWCA 296

Jeffery & Katouskas v SST Consulting Pty Ltd [2009] HCA 43; (2009) 239 CLR 75

Latoudis v Casey [1990] HCA 69; (1990) 170 CLR 534

Leichhardt Municipal Council v Green [2004] NSWCA 341

Liao v New South Wales; Zhang v State of New South Wales [2014] NSWCA 71

LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd [2003] NSWCA 74

Lu v Walding(No 3) [2022] NSWLEC 15

Masters in Building Training Pty Ltd v State of New South Wales (No 2) [2022] NSWSC 697

Mead v Watson as Liquidator for Hypec Electronics [2005] NSWCA 133; (2005) 23 ACLC 718

Miwa Pty Ltd v Siantan Properties Pty Ltd (No 2) [2011] NSWCA 344

Oikos Constructions Pty Ltd t/as Lars Fischer Constructions v Ostin (No 2) [2021] NSWCA 98

Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72

PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd (No 2) [2021] FCAFC 147

Preston v Nikolaidis(No 2) [2021] NSWSC 174

Rosniak v Government Insurance Office (1997) 41 NSWLR 608

Sze Tu v Lowe (No 2) [2015] NSWCA 91

The Uniting Church v Takacs (No 2) [2008] NSWCA 172

Verde Terra Pty Ltd v Central Coast Council; Central Coast Council v Verde Terra Pty Ltd (No 3) [2020] NSWLEC 40

Verde Terra Pty Ltd v Central Coast Council; Central Coast Council v Environment Protection Authority (No9) [2022] NSWLEC 29

Verde Terra Pty Ltd v Central Coast Council; Central Coast Council v Environment Protection Authority (No10) [2022] NSWLEC 49

Webuildem Pty Ltd v Arab Bank Australia Ltd [2013] FCA 37

Category:

Costs

Parties:

Proceedings 2019/101279
Verde Terra Pty Ltd (Applicant/First Cross Respondent)
Central Coast Council (First Respondent/Cross Claimant)
Mangrove Mountain Landfill Pty Ltd (Second Cross Respondent)
Mangrove Properties (NSW) Pty Ltd (Third Cross Respondent)
Proceedings 2019/203552
Central Coast Council (Applicant)
Verde Terra Pty Ltd (Second Respondent)

Representation:

Counsel:
Proceedings 2019/101279
P Larkin SC with J Stuckey-Clarke and G Tsang (Applicant)
T Howard SC with M Astill (First Respondent/Cross Claimant)
P Larkin SC with J Stuckey-Clarke and G Tsang (First, Second and Third Cross Respondents)
Proceedings 2019/203552
T Howard SC with M Astill (Applicant)
P Larkin SC with J Stuckey-Clarke and G Tsang (Second Respondent)

Solicitors:
Proceedings 2019/101279
Ashurst (Applicant)
MBM Legal (First Respondent)
Proceedings 2019/203552
MBM Legal (Applicant)
Ashurst (Second Respondent)

File Number(s):

2019/101279
2019/203552

Publication restriction:

Nil

JUDGMENT

Verde Terra and the Council Each Seek Costs

1. The definitions used in Verde Terra Pty Ltd v Central Coast Council; Central Coast Council v Environment Protection Authority (No 9) [2022] NSWLEC 29 are employed in this judgment for ease of reference.

2. In what is hoped to be the final chapter in this long running litigation, the issue of costs falls to be finalised, with the VT parties and the Council (not the EPA) seeking an award of costs in their favour, and in the case of the VT parties, an award of costs on an indemnity basis.

3. Having regard to the issues determined in each party’s favour, I am of the opinion that in the VT proceedings the costs should be apportioned, with the Council liable for 65% of the VT parties’ costs of the proceedings, albeit on an ordinary basis only. And in the Council proceedings, notwithstanding the dismissal of the Council’s cross-summons, the VT parties should pay the Council’s costs, again on an ordinary basis. All parties are to pay their own costs of the proceedings insofar as the participation of the EPA is concerned. The costs of the costs applications should be borne by each party to those applications.

The Orders Sought by the Parties

4. Both principal parties relied upon correspondence exhibited to an affidavit of Rachel Daniel, a solicitor employed by Ashurst (who act for the VT parties), which compromised offers of settlement made by each party in accordance with the principles set out in Calderbank v Calderbank [1975] 3 All ER 333; (1975) 3 WLR 586, together with subsequent offers of settlement with respect to the question of costs.

The VT Parties

5. Subject to previous interlocutory costs orders, the VT parties seek the following award of costs:

(1)   In the VT Proceedings, subject to any previous interlocutory costs orders:

(a)   as between the EPA and the VT Parties (being the applicant and cross-respondents), there be no order as to costs;

(b)   the Council pay the VT Parties’ costs of the VT Proceedings on an indemnity basis.

(c)   in the alternative to (b), the Council pay the VT Parties’ costs of the VT Proceedings:

(i)   on the indemnity basis from 30 January 2020, or alternatively from 19 March 2020; and

(ii)   otherwise, on the ordinary basis.

(2)   In the Council Proceedings, subject to any previous interlocutory costs orders:

(a)   as between the EPA and Verde Terra Pty Ltd, there be no order as to costs;

(b)   the Council pay Verde Terra Pty Ltd’s costs of the Council Proceedings on the ordinary basis.

6. Whereas according to the Council the appropriate costs orders should be:

37.   Strong grounds exist, as set out above for costs orders:

a.   in favour of the Council for the Council Proceedings,

b.   in favour of the Council for certain issues in the VT Proceedings, or at least excluding from any costs in favour of the VT Parties for certain issues, and

and

c.   there is no warrant for any indemnity costs order.

38.   However, as there has been mixed success across the two sets of proceedings it might be appropriate to make no order as to costs. That would also avoid the difficult logistical exercise that would fall to the solicitors and costs assessors of attempting to disaggregate the very substantial amount of legal work over several years, and allocate each to an issue. The making of no order as to costs is likely to have a similar practical effect and would be significantly quicker and cheaper and probably equally just (in terms of the Civil Procedure Act).

Issues to be Determined

7. From the written and oral submissions, the following issues fall to be determined in this application:

1. whether costs should be apportioned in the VT proceedings having regard to the findings made in Verde Terra (No 9) in respect of the issues raised therein;

2. whether the costs of the VT proceedings should be paid on an indemnity basis having regard to various Calderbank offers, or the finding by the Court of an abuse of process against the Council;

3. which party, if anyone, is liable for the costs of the Council proceedings, given that although the further amended summons was ultimately dismissed, the Court nevertheless found in favour of the Council on the issues raised by it; and

4. whether, in the alternative, the Court should order that each party pay their own costs of each of the proceedings.

Relief and Orders of the Court in Verde Terra (No 9)

8. In order to decide these issues, it is important to understand what the ‘event’ was in each set of proceedings. This necessitates a brief examination of the matters raised and resolved by Verde Terra (No 9), the relief granted by the Court, and its reasons for doing so.

9. Thus in Verde Terra (No 9) the Court made the following relevant observations about the relief to be granted in light of the findings made in that judgment (at [546]-[549]):

RELIEF

546   In light of the findings made above in relation to the real issues raised by the parties for determination, it remains only to order appropriate relief in the two sets of proceedings.

The VT Parties Proceedings and the Council’s Cross-Summons

547   The declaration in prayer 1 for relief of the VT parties’ further amended summons ought to be made. No relief is granted in respect of prayer 2.

548   The Council’s cross-summons must be dismissed.

The Council Proceedings

549   Because it has been held that the variations to EPL 11395 did not have the effect of amending the 1998 consent in the manner contended for by the VT parties, it is not necessary to determine the issues raised by the Council proceedings. However, if this conclusion is not correct, then the alternative relief sought in the Council proceedings should be granted having regard to the Court’s conclusion on severance. …

10. The formal orders of the Court were as follows (at [551]):

ORDERS

551   The formal orders of the Court are therefore:

In proceedings 101279 of 2019

(1)   the Court declares that the applicant may lawfully carry out the works ordered by the Court on 29 August 2014 in proceedings 40900 of 2012 without the need to obtain further development consent and otherwise dismisses the further amended summons; and

(2)   the first cross-applicant’s cross-summons is dismissed;

In proceedings 203552 of 2019

(3)   the further amended summons is dismissed;

In proceedings 101279 and 203552 of 2019

(4)   within 28 days from the date of the publication of this judgment, liberty to the parties to restore to vary the terms of the orders made above to the extent that they do not properly reflect the reasons set out in this judgment;

(5)   costs are reserved. Within 28 days of the date of the publication of this judgment, the parties are to provide to the Court a timetable for the preparation of any hearing on costs in the event that they cannot be agreed; and

(6)   the exhibits are to be returned.

11. Pursuant to the liberty to restore (at [551(4)]), both the VT parties and the Council applied to vary the orders (see Verde Terra Pty Ltd v Central Coast Council; Central Coast Council v Environment Protection Authority (No 10) [2022] NSWLEC 49 at [7]):

Issues Raised by the Application to Amend the Orders

7   Both the Council and the VT parties sought amendment to the orders in both sets of proceedings:

(a)   in the VT proceedings (2019/101279):

(i)   the VT parties sought an order formally dismissing prayer 2 of their further amended summons. Prayer 2 was in the following terms:

A declaration that the Mangrove Mountain Landfill & Golf Course constitutes “development (whether existing or approved)” within the meaning of clause 35 of Schedule 3 of the EPA Regulations.

(ii)   the Council, by contrast sought, for the first time, the following declaration:

The 2014 consent order works do not constitute “development (whether existing or approved)” within the meaning of clause 48 of Schedule 3 of the EPA Regulation 2021 (formerly cl 35 of Schedule 3 of the EPA Regulation 2000).

(b)   in the Council proceedings (2019/203552), the Council requested that orders be made in the form of those suggested at [549(a)-(e)] of Verde Terra (No 9). While not reproduced here for the sake of brevity, suffice it to say that the paragraph set out “alternative relief” setting aside variations permitted by the EPA to the conditions of EPL 11395. The relief posited was ‘alternative’ insofar as it was only necessary to grant it if the conclusion that the variations to EPL 11395 did not have the effect of amending the 1998 consent in the manner contended for by the VT parties in the VT proceedings was wrong. Because the Court held that the 1998 consent was not amended in the manner contended for by the VT parties, as the Council repeatedly stated throughout the lengthy hearing, it followed that it was not strictly necessary to determine the issues raised by the Council proceedings (for example, T191:01-11; 264:47-265:03; 692:41-693:07 and 1531:38-43).

12. In the result, the Court varied order (1) made in Verde Terra (No 9) (see Verde Terra (No 10) at [44(1)]):

Orders

44   In conformity with the reasons articulated above, the Court makes the following orders:

In proceedings 101279 of 2019

(1)    the words “and otherwise dismisses the further amended summons” are added to the conclusion of order (1) at [551] of Verde Terra (No 9) so that order (1) now reads:

(1)   the Court declares that the applicant may lawfully carry out the works ordered by the Court on 29 August 2014 in proceedings 40900 of 2012 without the need to obtain further development consent and otherwise dismisses the further amended summons; …

13. The costs of the application to vary were reserved. Because no submissions were made by either party in this application in respect of those reserved costs, they form part of this judgment.

14. Applying the principles articulated below in relation to the Court’s discretion to award costs, given that the Council did not succeed on any of the matters raised by it in the variation application, and whereas the VT parties obtained the relief they sought, the Council would otherwise be liable to pay the VT parties’ costs of the application to vary the orders (the EPA did not appear). However, because neither party made submissions to the Court in respect of the payment of these costs, they are to be costs in the cause.

The VT Proceedings

The Discretion to Award Costs

15. It is a somewhat trite statement of principle that the function of an award of costs is to compensate and not to punish (Latoudis v Casey [1990] HCA 69; (1990) 170 CLR 534 at 543 and Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [44]).

16. Pursuant to s 98 of the Civil Procedure Act 2005 (“the CPA”) costs are at the discretion of the Court subject to any applicable rules of the Court. Rule 42.1 of the Uniform Civil Procedure Rules 2005 (“the UCPR”) states as follows:

42.1     General rule that costs follow the event

Subject to this Part, if the court makes any order as to costs, the court is to order that the costs follow the event unless it appears to the court that some other order should be made as to the whole or any part of the costs.

17. This broad discretion as to costs must be exercised judicially and having regard to the overriding statutory purpose enshrined in s 56 of the CPA.

18. Costs should follow the event unless it appears that some other order should be made as to the whole or any part of the costs. Rule 42.1 of the UCPR applies to this Court in Class 4 proceedings pursuant to r 1.5 and Sch 1 of the UCPR.

19. How the ‘event’ is to be defined will depend on the nature of the litigation, but the term generally, for the purpose of r 42.1, refers to the event of the claim and may be understood as referring to judgment on that claim or the practical result (Sze Tu v Lowe (No 2) [2015] NSWCA 91 at [39] and Oikos Constructions Pty Ltd t/as Lars Fischer Constructions v Ostin (No 2) [2021] NSWCA 98 at [11]). That said, cases involving several parties and/or issues may require taking multiple events into account (Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15], Lowe at [39] and Filetron Pty Ltd v Innovate Partners Pty Ltd atf Banton Family Trust 2 and Goulburn Mulwaree Council (No 3) [2023] NSWLEC 104 at [13]).

20. It has been held that something “out of the ordinary in the case” is required to justify departure from the general rule that costs follow the event (Hastings Point Progress Association v Tweed Shire Council (No 3) [2010] NSWCA 39; (2010) 172 LGERA 157 at [18]).

Legal Principles Applicable to Apportionment

21. One circumstance where the Court may consider it appropriate to make a different costs order is where multiple issues are involved and a successful party fails on an issue, or group of issues, that are discrete from those upon which it has succeeded (Allianz Australia Insurance Limited v Rawson Homes Pty Ltd (No 2) [2021] NSWCA 334 at [16]). In those circumstances, it may be appropriate that the successful party receives only a portion of the costs to which it would have otherwise been entitled to (James v Surf Road Nominees Pty Limited (No 2) [2005] NSWCA 296 at [32]-[33], Bostik Australia Pty Ltd v Liddiard (No 2) [2009] NSWCA 304 at [38], Lowe at [40], Masters in Building Training Pty Ltd v State of New South Wales (No 2) [2022] NSWSC 697 at [6]-[8] per Ward CJ in Eq, Australians for Sustainable Development Inc v Minister for Planning (No 2) [2011] NSWLEC 70 at [13]-[19] per Biscoe J, Brown v Randwick City Council (No 2) [2012] NSWLEC 28 at [9] per Preston J and Lu v Walding (No 3) [2022] NSWLEC 15 at [137] per Pain J). That is the present case upon a proper analysis of the event in the VT proceedings.

22. Without being exhaustive, the legal principles governing the apportionment of costs may be summarised as follows:

1. the fact that a party does not succeed on all issues raised in the proceedings is not sufficient in and of itself for the Court to depart from the usual rule and award costs only in respect to the issues on which the party succeeded (Brown at [11] and Lu at [137]). The general rule is that “where there are multiple issues in a case the Court generally does not attempt to differentiate between issues on which a party was successful and those on which it failed” (Bostik at [38]);

2. this is because justice may not be served if parties are dissuaded from canvassing all material issues for fear of an adverse costs order (Australians for Sustainable Development and the authorities cited thereat at [14]-[16]). Equally, litigants should not be rewarded for the pursuit of unmeritorious issues;

3. there is a distinction between cases that involve clearly discrete issues for determination and those in which all issues are inseparable, or at least sufficiently linked, to the overall disposition of a particular matter. Unless a particular issue, or group of issues, is clearly dominant, separable or discrete, it will be appropriate to award the costs of the proceedings to the successful party without attempting to differentiate between those issues on which it was successful and those upon which it failed (James at [32]-[33], Masters in Building at [7], Brown at [11] and Lu at [137]);

1. where a court exercises its discretion to apportion costs, any apportionment itself involves an exercise of the wide discretionary powers of the court, which should be liberally construed (Bostik at [38], James at [36] and Masters in Building at [7]);

2. mathematical precision is illusory and the exercise of discretion will often depend on matters of impression and evaluation (Bostik at [38], Masters in Building at [7] and Lu at [137]);

3. once it is decided that an otherwise successful plaintiff has failed on a separable or dominant issue such that it is not appropriate that the plaintiff receive all of its costs, in deciding how the discretion as to costs should be exercised to achieve fairness the perspective of both parties should be considered (Rawson Homes at [17]);

4. a separate issue can relate to any disputed question of fact or law before a court upon which a party fails (James at [34], Bostik at [38] and Masters in Building at [7]);

5. in determining the discreteness of the issue, it is relevant to consider whether the time taken on each issue during argument and in evidence can be identified or realistically estimated (Bostik at [38], James at [35] and Masters in Building at [7]);

6. it is also relevant to consider whether the issues on which the party failed lacked real merit (Lowe at [40] and Brown at [11]); and

7. the circumstances in which a party that is successful overall may be deprived of its costs or ordered to pay costs on a discrete issue are not limited to cases where it was unreasonable for the successful party to raise the issue on which it failed (Lowe at [40]).

Parties’ Submissions

23. The VT parties submitted that it was neither necessary nor desirable to dissect the costs of the VT proceedings, whether on the basis of each prayer for relief or on the basis of each issue, because the majority of the time spent during the final hearing was directed to the issues raised by prayer 1 of the further amended summons and the Council’s cross-summons. This was to be contrasted with the issues raised by prayers 2 to 5 which took up minimal hearing time.

24. Accordingly, the costs of the VT proceedings should not be dealt with by apportionment but by the application of the general rule that costs follow the event, the ‘event’ being the successful making of the declaration in prayer 1 and the dismissal of the Council’s cross-summons.

25. It was the Council’s position that the VT parties had achieved partial success in the VT proceedings insofar as only the declaration sought in prayer 1 was made. Moreover, the Council had achieved success on many factual and legal issues, and therefore, an appropriate exercise of the Court’s discretion would not warrant making a costs order in the VT parties’ favour for the whole of those proceedings.

The Costs of the VT Proceedings Should be Apportioned

26. Given the parties’ submissions, it is necessary to revisit the pleadings and examine the findings made by the Court in Verde Terra (No 9) in respect of the issues arising in those pleadings in the VT proceedings.

27. The Court summarised the pleadings in the VT proceedings as follows (at [122]-[131]):

VT Proceedings

122   The VT proceedings seek declaratory relief to the effect that no further development consent is required “to carry out the Mangrove Mountain Landfill & Golf Course” and that the development described in the 2018 DA constitutes development “involving alterations or additions”, or is ancillary to development for which development consent (the 1998 consent) has already been granted.

Prayer 1

123   VT parties seek a declaration to the effect that it is entitled to construct and operate the Mangrove Mountain Landfill and Golf Course (“MMLGC”) without any further development consent.

124   It should be noted that the MMLGC is stated in VT parties’ further amended points of claim (“FAPOC”) to have “the meaning referred to in” paragraph 75 of the VT parties’ FAPOC, which is in the following terms:

75   By reason of the matters pleaded above, no further development consent is required by the Applicant under the EPA Act prior to the carrying out of the development (Mangrove Mountain Landfill & Golf Course):

(a)   the subject of the Consent (including as varied as referred to in paragraphs to 28 to 64 and 72 to 74 above); and/or

(b)   required to be carried out in conformity with the 2014 Orders.

Prayer 2

125 Prayer 2 seeks a declaration that the MMLGC constitutes “development (whether existing or approved)” within the meaning of cl 35 of Sch 3 of the Environmental Planning and Assessment Regulation 2000 (“the EPA Regulations”).

126 Clause 35 of Sch 3 of the EPA Regulations effects an exemption from the requirement for an environmental impact statement (“EIS”) where development satisfies certain criteria, including that it is alterations or additions to existing or approved development. The question posed by this prayer is whether there is existing or approved development on the site and if so, what it comprises.

127 It should be noted that even if the VT parties do not require any further development consent to carry out the works identified in the 2014 consent orders, this does not resolve the question of whether these works are approved within the meaning of cl 35 of the EPA Regulations.

Remaining Prayers for Relief Are Abandoned

128 The remaining prayers concerned the 2018 DA (that is, the alterations and additions DA) and the application of cll 35 and 37A of Sch 3 of the EPA Regulations.

129 In the context of the 2018 DA, cl 35 of the EPA Regulations requires that the relevant development must constitute alterations and additions to existing development and that, in the opinion of the consent authority, the alterations or additions do not significantly increase the environmental impacts of the total development. In the alternative, cl 37A permits development that is ancillary to other development, namely, the MMLGC, and that is not proposed to be carried out independent of the other development.

130   Declarations were sought in prayers 3 to 5 of the further amended summons to the effect that the 2018 DA constituted alterations or additions, or were ancillary, to the existing development of the MMLGC.

131   During closing submissions, it was agreed that these prayers should not be entertained by the Court in the Class 4 VT proceedings because their determination would involve the Court in a selective fact-finding exercise, without full or proper evidence before it, in circumstances where the legislature had reserved to the consent authority (which this Court was not in the exercise of its Class 4 jurisdiction) the role of determining the 2018 DA. As described above, there are currently extant Class 1 proceedings before this Court concerning the 2018 DA. As a consequence, prayers 3 to 5 for relief were abandoned by the VT parties (see T1347:05 and 1542:30).

28. The relief sought in prayers 3 to 5 was abandoned by the VT parties during closing argument (see at [128]-[131]).

29. The issues were set out in the judgment (at [138]-[139]). For convenience they are reproduced below:

ISSUES FOR DETERMINATION IN BOTH SETS OF PROCEEDINGS

138   An agreed list of issues filed by the parties outlined the following matters for determination:

Scope and Application of the 2014 Consent Orders

(a)  first, what is the effect of the 2014 consent orders including:

(i)   what development do the 2014 consent orders require and/or permit?

(ii)   whether the 2014 consent orders are to be construed as ordering the development referred therein to be carried out subject to an implied condition that any requisite development consent be obtained first;

(iii)   if the 2014 consent orders, properly construed, impose a requirement that the development is to be carried out without any implied condition to first obtain development consent, whether the 2013 Heads of Agreement of the parties to procure the 2014 consent orders are void for illegality, irregularity or by reason of being contrary to public policy; and

(iv)   whether the 2014 consent orders are void or unenforceable, or incapable of being performed in the absence of any requisite development consent to carry out the works described therein;

Estoppel and Related Doctrines

(b)  second, whether the principles of estoppel and related doctrines preclude the Council from contending that further development consent is required to carry out the development referred to in the 2014 consent orders;

(c)  third, whether the principles of estoppel and related doctrines preclude the Council from advancing a case that the provisions of the EPAA requiring development consent for designated development operate as a pre-requisite to the lawful construction and operation of the waste facility that the VT parties propose to construct and operate on the land;

(d)  fourth, whether the principles of estoppel and related doctrines have any application in these proceedings;

Development Consent

(e)  fifth, whether any development consent is in force, or is required, under the EPAA to permit the carrying out of development for the construction and operation of a waste facility and landfill on the land, either as described by the 2014 consent orders or that the VT parties propose to construct and operate on the land over a projected operational life a decade;

(f)   sixth, whether the development that the VT parties claim that they are entitled to carry out on the subject land without further development consent (as pleaded in the further amended summons and the FAPOC) is capable of being adequately defined, and, if so, whether that development has been adequately defined;

The 1998 Consent

(g)  seventh, what is the proper construction and effect of the 1998 consent, including:

(i)   whether the 1998 consent permits the construction and operation of the waste facility:

a.   as described by the 2014 consent orders; and/or

b.   that the VT parties propose to construct and operate on the subject land over a projected operational life of approximately 10 years;

(ii)   the purpose (or purposes), nature and scope of the development approved by the 1998 consent;

(iii)   the meaning and effect of conditions 1 and 2 of the 1998 consent, including:

a.   whether either or both of those conditions purport to permit variations to the nature and scope of the landform modification and the waste emplacement permitted under the 1998 consent by means of a revised LEMP subsequently promulgated by the beneficiary of the consent and without the need for the 1998 consent to be modified under Pt 4 of the EPAA, and if so, to what extent;

b.   whether either of those conditions purports to permit variations to the nature and scope of the landform modification and the waste emplacement under the 1998 consent by reason of the operation of EPL 11395 under the POEOA that was varied by the EPA from time to time, and if so, to what extent; and

c.   if, and to the extent that, either of those conditions purports to have any such effect, whether the condition is invalid and of no effect;

Alterations and Additions

(h)  eighth, whether the development contemplated under the 2014 consent orders comprises:

(i)   “existing or approved” development; and/or

(ii)   “other development”,

within the meaning of cll 35 and/or 37A of Sch 3 to the EPA Regulations;

(i) nineth, whether the Court can grant the declarations set out in prayers 1 and 2 of the VT parties’ further amended summons given that at least some of the matters referred to in cll 35 and 37A of Sch 3 to the EPA Regulations are matters for the opinion of the consent authority;

(j)   tenth, whether the 2018 DA can be approved as:

(i)   “alterations and additions to an existing or approved development”; and/or

(ii)   “ancillary to other development” and “not proposed to be carried out independently of that other development”;

within the meaning of cll 35 and/or 37A of Sch 3 to the EPA Regulations;

(k)  eleventh, whether the 2018 DA may be approved without an EIS;

(l)   twelfth, whether VT, unless restrained by the Court, proposes to operate a landfill on the land in breach of the EPAA;

The Council Proceedings Issues

(m) thirteenth, whether r 59.10 of the UCPR precludes the commencement of the Council proceedings, and if so, whether the Council should be granted leave to commence its proceedings out of time;

(n) fourteenth, subject to the preceding paragraph, whether certain determinations made by the EPA to amend EPL 11395 are invalid and of no effect by reason of those amendments purportedly permitting activities constituting controlled development for the purposes of s 50(2) of the POEOA in circumstances where there is no required development consent in force permitting the development;

(o)  fifteenth, whether if any of the determinations are invalid, wholly or insofar as the decision or decisions purport to effect particular amendments to EPL 11395, can any of the impugned amendments be severed from the license; and

Discretion

(p)  sixteenth, whether in the exercise of the Court’s discretion, either party should be denied relief and if so to what extent.

139 The tenth and eleventh issues for determination subsequently became irrelevant in light of the VT parties abandoning prayers 3 to 5 for relief of their further amended summons during closing submissions, as did any reliance on cl 37A of Sch 3 of the EPA Regulations in issues 8 and 9 (T1542:13-19).

30. It is correct that the Court observed that “at the heart of the proceedings” was the question of whether the 2014 consent orders could and should be set aside, a matter upon which the VT parties were ultimately successful. In the ordinary course, this ‘event’ would suggest that the Council ought to pay the entirety of the VT parties’ costs of the VT proceedings.

31. However, as the issues identified above demonstrate, arriving at the basal conclusion that the 2014 consent orders ought not be set aside involved the resolution of a number of sub-issues, the determination of which occupied a substantial amount of Court time, both in terms of argument and evidence, and which resulted in a measure of success for both parties. In this regard:

1. the Court found in favour of the VT parties insofar as it held that no further development consent was required to carry out the development described in the 2014 consent orders (the first issue: at [272]-[290]). However, it must be recalled that it was the delivery of the Court’s decision in Anastasiou v Wallace [2020] NSWLEC 14, published four months after the hearing had commenced, that resulted in the Council properly conceding that no development consent was needed to carry out the work the subject of the 2014 consent orders, thereby assisting in the making of the declaration the subject of prayer 1 of the VT proceedings by the Court;

2. but in doing so, the Court rejected the VT parties’ arguments in respect of the construction of the 1998 consent (especially conditions 1 and 2 of that instrument) by holding that, having regard to the 1998 consent upon which the 2014 consent orders were premised, there was no authorisation for a development on the land for the purpose of a waste disposal facility of the magnitude being proposed by the VT parties. Resolution of this issue required the Court to extensively analyse the planning instruments and have regard to contested expert surveying evidence, both of which occupied a substantial portion of the hearing time and argument, as reflected in the reasons for judgment (at [177]-[236], [253]-[261], [265]-[271] and [293]). Moreover, the Court did not accept the VT parties’ submission that subsequent LEMPs (that is subsequent to the 1997 LEMP), LMPs, and variations to EPL 11395, had the effect of modifying the terms of the 1998 consent (at [237]-[252] and [262]-[264]) (issue seven. The fifth and sixth issues were not pressed to the extent that they had not already been subsumed into and dealt with in other issues);

3. the Court held, contrary to the Council’s submissions, that neither the 2014 consent orders nor the 2013 Heads of Agreement were liable to be set aside on the grounds of illegality, irregularity or because they were contrary to public purpose (at [300]-[365]). This issue also occupied a considerable amount of the hearing time by way of evidence and argument (see sub-paragraphs (iii) and (iv) of the first issue);

4. the Court held that the second, third and fourth issues, namely, the principles of estoppel and related doctrines, operated against the Council to prevent it from seeking to set aside the 2014 consent orders (at [366]-[444]). Much argument and evidence was devoted to this group of issues;

5. the Court found in favour of the Council on issues eight to nine in respect of whether the development contemplated by the 2014 consent orders comprised “existing or approved” development for the purpose of cl 35 of Sch 3 of the EPA Regulations (at [450]-[463]). This meant that the VT parties were unsuccessful in obtaining the relief sought in prayer 2;

6. the tenth and eleventh issues were withdrawn by the VT parties and the twelfth issue was not pressed by either party;

7. in relation to discretion (issue sixteen), the Court found in favour of the VT parties in respect of all of the arguments made by the Council (at [528]-[540]) in relation to prayer 1 for relief. The Court did not need to consider the issue in respect of prayer 2 given the conclusion reached in the judgment as to the availability of this remedy (at [541]-[543]);

8. because the Council’s cross-summons was responsive to the VT parties’ summons, as was agreed by the parties (at [132]), it was not necessary for the Court to entertain the cross-summons and it was dismissed; and

9. although prayers 3 to 5 were abandoned by the VT parties in closing submissions (at [131]), they comprised only a small proportion of the hearing.

32. Allowing for the impressionistic nature of the evaluation the Court has been tasked to perform in deciding whether or not to apportion costs in the VT proceedings, what emerges from the above analysis is that although the VT parties enjoyed success with respect to many of the issues raised for determination in the VT proceedings, there were a number of discrete issues that occupied considerable hearing time and evidence upon which the Council was successful, in particular, issues seven, eight and nine.

33. For this reason, while it is plainly not appropriate that each party pay their own costs of the VT proceedings, as submitted by the Council, it would equally not be fair to award the entirety of the costs of those proceedings to the VT parties. The seventh issue may properly be characterised as a dominant and discrete issue, and the eighth and nineth issues, while not necessarily as dominant, were nevertheless clearly severable.

34. I therefore consider that to achieve fairness between the parties to the VT proceedings, the Council ought to pay 65% of the VT parties’ costs of the VT proceedings.

35. The costs of the Council’s cross-summons are included in the overall award of costs in the VT proceedings, and therefore, no separate costs order is made in respect of it.

The Indemnity Costs Issue

36. The Court is empowered to award costs on an indemnity basis under r 42.5 of the UCPR.

37. It is established law that there must be “some special or unusual feature” in a case to justify the Court departing from the ordinary practice of ordering costs other than on a party/party basis (Colgate Palmolive Co v Cussons Pty Ltd [1993] FCA 801; (1993) 46 FCR 225 at 230 per Sheppard J; Rosniak v Government Insurance Office (1997) 41 NSWLR 608 at 616 per Mason P; Harrison v Schipp [2001] NSWCA 13 at [139]; Mead v Watson as Liquidator for Hypec Electronics [2005] NSWCA 133; (2005) 23 ACLC 718 at [8]).

38. As was observed by Ward CJ in Eq (as her Honour then was) in Bassett v Cameron (No 2) [2021] NSWSC 419 (at [26]):

26   As to special costs orders referable to the unreasonable conduct of litigation, the discretion to award indemnity costs may be exercised where there is some special or unusual feature or circumstances in the case (concerning the conduct of the party against whom the order is made and relating to the proceedings in question) to justify such an order (i.e., some “relevant delinquency” by the party as a litigant – see Oshlack at [44] per Gaudron and Gummow JJ). In that regard, “relevant delinquency” does not mean moral delinquency or some ethical shortcoming but delinquency bearing a relevant relation to the conduct of the case (see, for example, White Constructions ACT Pty Ltd (in liq) v White [2004] NSWSC 303 at [11] per McDougall J). Conduct in relation to the matter may be discreditable to an extent warranting a party being deprived of costs (see, for example, Jamal v Department of Health (1988) 14 NSWLR 252 at 271 per Mahoney JA).

39. The categories in which the discretion to award costs on an indemnity basis may be exercised are not closed, but include where a party has unreasonably failed to accept an offer of compromise; where a party reagitates matters that were or should have been resolved by the court thereby amounting to an abuse of process (Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359 at 362 and Webuildem Pty Ltd v Arab Bank Australia Ltd [2013] FCA 37; (2013) 300 ALR 99 at [60]-[62] and [76] per Foster J); where the arguments advanced by the unsuccessful party are weak, that is, without legal or factual basis (C G Maloney Pty Ltd v Noon [2011] NSWCA 397 at [121]-[122] per Campbell JA), or where there is “some relevant delinquency” (that is, plainly unreasonable conduct: LMI Australasia Pty Ltd v Baulderstone Hornibrook Pty Ltd [2003] NSWCA 74 at [108] and [119]) by a litigant in relation to the conduct of the proceedings (Oshlack at [44] and Colgate Palmolive at 233).

40. The delinquency must be connected with the litigation itself; it must relate to the way the litigation is conducted and not the strength of the case (Mead at [9]):

9   Furthermore, the impugned conduct of the party against whom such an award of indemnity costs is sought must be connected with the litigation itself. In particular, it must be related to the way the litigation is conducted. It is thus insufficient that the party against whom the award is sought has engaged in unconscionable conduct or breaches of fiduciary duty in a particularly deplorable way. The latter conduct comprises the subject matter of the litigation rather than a delinquency in its conduct. Thus, as Lindgren J observed in NMFM Property Pty Limited v Citibank Limited (No 11) (2001) 109 FCR 77 at 92,

"In my opinion, there is no counterpart ordinary rule that in the absence of special circumstances indemnity costs will be ordered where the losing party was guilty of ethical or moral delinquency in the antecedent facts which have given rise to the litigation. …The conduct of the party that is relevant to the issue of indemnity costs is the party's conduct as litigant."

41. The circumstances in which the conduct may be found to be unreasonable include, as was usefully summarised in Australian Competition and Consumer Commission v Colgate-Palmolive Pty Ltd (No 5) [2021] FCA 246 (at [10] per Wigney J):

10The circumstances in which it may be found to be unreasonable for the successful party to be subjected to the expenditure of any costs are not fixed or closed, but have been found to include, relevantly: where “the applicant, properly advised, should have known that he had no chance of success” (Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Ltd (1988) 81 ALR 397 at 401 ; De Alwis v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCAFC 77 at [7] ); where the moving party “persists in what should on proper consideration be seen to be a hopeless case” (J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (No 2) (1993) 46 IR 301 at 303 ); where the applicant’s case was “always clearly foredoomed to fail” and “they ought to have known this to be so” (Smolle v Australian and New Zealand Banking Group Ltd (No 2) [2007] FCA 1967 at [25] ); where an application is “wholly untenable and misconceived” (Henke v Carter [2002] FCA 492 at [22] ); and where an applicant persists in prosecuting a proceeding without regard to the evidentiary difficulties in the case (Yates Property Corporation Pty Ltd v Boland (No 2) (1997) 147 ALR 685 at 693 ): see generally Melbourne City Investments at [5]; Seven Network at [1102]; Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 233.

42. While success in an application for indemnity costs is more likely if the party against whom the order is sought was put on notice of the intention to seek such an order, this is not a necessary requirement (Ainger v Coffs Harbour City Council (No 2) [2007] NSWCA 212 at [29]).

43. As the correspondence below demonstrates, the Council was notified by the VT parties of an intention to seek an indemnity costs order in respect of both proceedings, albeit after the hearing had commenced.

44. The VT parties contended that the Court should exercise its discretion to make an order for indemnity costs because the Council:

1. had, in relation to the issue that lay at the heart of the proceedings, namely, the validity of the 2014 consent orders, engaged in an abuse of process;

2. had unreasonably rejected two Calderbank offers made by them;

3. had relied upon “very weak” arguments in defending the VT proceedings and in prosecuting its cross-summons; and

4. had engaged in conduct falling short of the model litigant standard.

Abuse of Process

45. Specifically, the VT parties submitted that by the Council arguing that further development consent was required in order to carry out the development the subject of the 2014 consent orders, a claim it abandoned during the hearing, by denying the availability of the doctrines of res judicata, issue estoppel, Anshun estoppel and abuse of process, and by pursuing a cross-claim seeking to have the 2014 consent orders set aside on various bases that the Court held were foreclosed by those doctrines, this constituted special or unusual circumstances warranting the departure from the usual practice of ordering costs on an ordinary basis.

46. In response, the Council submitted that, having regard to the principles relating to indemnity costs discussed above, there was no relevant delinquent conduct by it to warrant an award of indemnity costs. The abuse of process the Council was found to have engaged in did not involve fictitious conduct, amount to a sham, or seek to deceive the Court. Likewise, the Court was not being used unfairly, dishonestly, or for some ulterior or improper purpose. Nor could the proceedings defended by the Council be characterised as manifestly groundless or without foundation. On the contrary, at all times the Council’s motivation was to protect the environment.

47. In short, the Council contended that there being no blameworthy misconduct on its part, the costs payable, if any, should be on an ordinary basis.

48. The term ‘abuse of process’ is one of wide import, including (Jeffery & Katouskas v SST Consulting Pty Ltd [2009] HCA 43; (2009) 239 CLR 75 at [27]-[28]):

27   An early statement of the power of any court to prevent abuse of its processes is found in an 1841 case, Cocker v Tempest:

“The power of each Court over its own process is unlimited; it is a power incident to all Courts, inferior as well as superior; were it not so, the Court would be obliged to sit still and see its own process abused for the purpose of injustice.”

That statement foreshadowed the contemporary approach in the United Kingdom and Australia which takes no narrow view of what can constitute “abuse of process”. Nevertheless, certain categories of conduct attracting the intervention of the courts emerged in the nineteenth and twentieth centuries and included:

“(a)  proceedings which involve a deception on the court, or are fictitious or constitute a mere sham;

(b)   proceedings where the process of the court is not being fairly or honestly used but is employed for some ulterior or improper purpose or in an improper way;

(c)   proceedings which are manifestly groundless or without foundation or which serve no useful purpose;

(d)   multiple or successive proceedings which cause or are likely to cause improper vexation or oppression.”

28   The term “abuse of process”, as used in Australia today, is not limited by the categories mentioned above or those which constitute the tort. It has been said repeatedly in the judgments of this Court that the categories of abuse of process are not closed. In Walton v Gardiner the majority adopted the observation in Hunter v Chief Constable of the West Midlands Police that courts have an inherent power to prevent misuse of their procedures in a way which, although not inconsistent with the literal application of procedural rules of court, would nevertheless be “manifestly unfair to a party to litigation … or would otherwise bring the administration of justice into disrepute among right-thinking people”. This does not mean that abuse of process is a term at large or without meaning. Nor does it mean that any conduct of a party or non-party in relation to judicial proceedings is an abuse of process if it can be characterised as in some sense unfair to a party. It is clear, however, that abuse of process extends to proceedings that are “seriously and unfairly burdensome, prejudicial or damaging” or “productive of serious and unjustified trouble and harassment”.

49. In C G Maloney Pty Ltd v Noon [2011] NSWCA 397 the Court of Appeal recognised that where an Anshun estoppel argument succeeds, this is a “relevant and powerful matter to take into account in exercising a discretion concerning costs” because “there has already been litigation about issues closely related to those in the proceedings in question, and the matter at issue in the proceedings in question was so relevant to the subject matter of the previous action that it would have been unreasonable not to rely upon it" (at [120]). The significance of this consideration to the exercise of the discretion to award costs is strengthened if the unsuccessful party’s case is weak (at [120] to [122]).

50. As discussed above, in Verde Terra (No 9) the Court found that estoppel and related doctrines, including Anshun estoppel and abuse of process, applied to defeat the Council’s defence of the VT proceedings. In summarising its findings in this regard, the Court said (at [440]-[444]):

Summary of Findings on Estoppel and Related Doctrines

440   The evidence detailed earlier in this judgment establishes that the VT parties not unreasonably assumed that there was no issue with the very matters that the Council now seeks to agitate concerning the validity of the 2014 consent orders and the 2013 Heads of Agreement procuring those orders.

441   That evidence also establishes that the VT parties acted to their detriment in consenting to the making of the 2014 consent orders and in acting in furtherance of the orders made.

442   In all these circumstances, it is unjust and unfair to permit the Council to presently act in a manner that is contrary to the position adopted by it during the 2012 proceedings by procuring and agreeing to the making of the 2014 consent orders. It is therefore estopped from doing so.

443   Further, and in the alternative, the Council’s conduct in seeking to set aside the 2014 consent orders is both unjustifiably oppressive to the VT parties and gives rise to the perception that the administration of justice is inefficient, and therefore, amounts to an abuse of process.

444   Finally, it should be noted that in making these findings I have taken into account the submission made by the Council that, insofar as estoppel and abuse of process are concerned, because the VT parties have not sought in any substantive way to implement the 2014 consent orders, but rather went about amending the 1997 LEMP and seeking variations to EPL 11395 to expand the size and scale of the waste disposal operation on the land, they cannot avail themselves of these doctrines. While there is some merit in this argument, it is not sufficient, in my view, to displace the other discretionary factors to which the Court has had regard (for example, the delay by the Council and the detriment suffered by the VT parties and various third parties) in arriving at the conclusions above.

51. However, in my view, these conclusions are insufficient to amount to a special or unusual feature or circumstance that merits an award of indemnity costs. First, it should be noted that the Council’s defence of the VT proceedings (and the prosecution of its cross-summons) was at the very least arguable and not “very weak” as described by the VT parties. So much so is evident by the amount of hearing time and discussion in the judgment devoted to these issues.

52. Second, it cannot be the case that in every instance where a party is successful in relation to a claim of estoppel or abuse of process that an indemnity costs order is made. This is not reflected in the case law.

53. Third, in the present case, although the Council was not successful in resisting the application of these doctrines, there was nothing delinquent in its conduct of the VT proceedings, nor were the arguments raised by the Council in its defence to the VT proceedings or its cross-summons so “wholly untenable or misconceived” that they would justify an order for costs other than on an ordinary basis. The mere fact that with the benefit of hindsight after reviewing the reasons for judgment the unsuccessful party should have known that it was likely to lose, is generally not sufficient to warrant an order of indemnity costs (Preston v Nikolaidis (No 2) [2021] NSWSC 174 at [9] per Williams J).

54. In this instance, I accept the submission of the Council that there was no relevantly blameworthy conduct, such as defending the VT proceedings or bringing the cross-summons without any chance of success, or unreasonable conduct by the Council during the proceedings. On the contrary, while the Council’s cross-summons was dismissed for reasons that included estoppel and abuse of process, the latter doctrine did not involve a deception on the Court or amount to a mere sham, a dishonest use of the processes of the Court. Nor was the Council’s position manifestly groundless. While the concept of abuse of process encompasses categories of conduct that are broader than those just described, I nonetheless do not consider that the vexation and oppression visited upon by the VT parties was, in all the circumstances and having regard to the complexity of the issues raised in the proceedings, sufficient to engage the application of indemnity costs on this basis.

55. In so concluding, even in the absence of any direct evidence to this effect (for the reasons set out in Verde Terra Pty Ltd v Central Coast Council; Central Coast Council v Verde Terra Pty Ltd (No 3) [2020] NSWLEC 40), it may be inferred from correspondence tendered in the course of the costs applications, that at all times the Council was acting in the public interest during the proceedings. While the delay in seeking to set aside the 2014 consent orders remains unexplained by the Council (again, see Verde Terra (No 3)), the discretion to award indemnity costs on the basis of an abuse of process is enlivened by the conduct of the parties during the litigation. In any event, the Council’s participation in the VT proceedings was principally as respondent, with the filing of the cross-summons and the commencement of the Council proceedings a response to the proceeding commenced by the VT parties.

56. I therefore do not accept that the VT parties are entitled to indemnity costs on the apportioned costs awarded in their favour on the basis that the Court found that the Council’s conduct was estopped from seeking to set aside the 2014 consent orders or that its attempt to do so amounted to an abuse of process.

Legal Principles Applicable to Calderbank Offers

57. The principles relating to Calderbank offers were recently summarised in C&V Engineering Services Pty Ltd v Metropolitan Demolitions Pty Ltd (No 2) [2023] NSWCA 240 (at [29]-[31]):

29.   There is no presumption that a party who does not accept a Calderbank offer and does not obtain a more favourable judgment will necessarily pay indemnity costs from the date of that offer: Leichhardt Municipal Council v Green [2004] NSWCA 341 at [19] (Santow JA, Bryson and Stein JJA agreeing); Tati v Stonewall Hotel Pty Ltd (No 2) [2012] NSWCA 124 at [9] (Bathurst CJ, Allsop P and Beazley JA agreeing).

30.   The relevant principles on an application for indemnity costs following a Calderbank offer are well established. Success on such an application depends upon whether the offer was a genuine offer of compromise and whether the offeree acted unreasonably in all the circumstances in refusing the offer, tested as at the time the offer is made and not with the benefit of hindsight resulting from a known outcome recorded in a judgment: Miwa Pty Ltd v Siantan Properties Pte Ltd (No 2) [2011] NSWCA 344 at [8], [11] (Basten JA, McColl and Campbell JJA agreeing); Krolczyk v Winner t/as J Winner Building Services [2022] NSWCA 196 at [217] (Griffiths AJA, White and Kirk JJA agreeing).

31.   The party seeking an indemnity costs order bears the onus of demonstrating that the other party’s failure to accept a Calderbank offer was unreasonable in all the circumstances.

58. As set out by Ward CJ in Eq (as her Honour then was) in E Group Security Pty Ltd v Chief Commissioner of State Revenue (No 2) [2021] NSWSC 1296, the factors to be taken into account when considering whether the rejection or non-acceptance of a Calderbank offer is unreasonable include (at [59]):

1. the stage of the proceedings at which the offer is received;

2. the time allowed to the offeree to consider the offer;

3. the extent of the compromise offered;

4. the offeree’s prospects of success assessed as at the date of the offer;

5. the clarity with which the terms of the offer were expressed; and

6. whether the offer foreshadowed an application for indemnity costs in the event of its rejection.

59. The factors set out by her Honour were more recently endorsed in C&V Engineering Services (at [32]) and Edmonds v Barrington Winstanley Group Pty Ltd (No 2) [2023] NSWCA 197 (at [7]).

60. By contrast, matters found to be relevant in determining whether the rejection of a Calderbank offer was not unreasonable include (E Group at [60]):

1. that all relevant evidence had not been served as at the time of the offer;

2. that the full parameters of the dispute remained uncertain as at the time of the offer;

3. that the offeror’s case changed after the making of the offer;

4. the inclusion of conditions in the offer; and

5. that the issues in dispute in the proceedings were complex.

61. As to the genuineness of any Calderbank offer, Basten JA opined in Miwa Pty Ltd v Siantan Properties Pty Ltd (No 2) [2011] NSWCA 344 that (at [9]):

9   There is authority for the proposition that both an offer of compromise under the rules and an informal offer must involve "a real and genuine element of compromise": The Anderson Group Pty Ltd v Tynan Motors Pty Ltd (No 2) [2006] NSWCA 120; 67 NSWLR 706 at [8]. While this terminology is not entirely apposite, it has been described as "serviceable": Regency Media Pty Ltd v AAV Australia Pty Ltd [2009] NSWCA 368 at [25] (Spigelman CJ, Beazley and McColl JJA). To characterise an offer by reference to epithets such as "real" or "genuine" adds little to the requirement of compromise, and may imply (wrongly) that the appropriate inquiry is as to the subjective intentions of the offeror: Hancock v Arnold; Dodd v Arnold (No 2) [2009] NSWCA 19 at [23] (Ipp, McColl and Basten JJA); Evans of Robb Evans & Associates v European Bank Ltd (No 2) [2009] NSWCA 170 at [17]-[18]. As explained by Giles J in Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 at 368:

"Compromise connotes that a party gives something away. A plaintiff with a strong case, or a plaintiff with a firm belief in the strength of its case, is perfectly entitled to discount its claim by only a dollar, but it does not in any real sense give anything away, and I do not think that it can claim to have placed itself in a more favourable position in relation to costs unless it does so."

62. In Leichhardt Municipal Council v Green [2004] NSWCA 341 Santow JA put the proposition this way (at [23]):

23   It is clear that an offer with no real element of compromise in it, which is designed merely to trigger the costs sanctions, will not be treated as a genuine offer of compromise. Thus an offer by a plaintiff demanding the full amount claimed was held not to be an offer of compromise attracting costs penalties: Tickell v Trifleska Pty Ltd (1991) 25 NSWLR 353. Rogers CJ Comm D concluded that the test was:

“…whether in the totality of the circumstances, the offer by the plaintiff represented any element of compromise or whether it was merely, yet another, formally stated demand for payment designed simply to trigger the entitlement to payment of costs on an indemnity basis.”

63. Green was applied in Baresic v Slingshot Holdings Pty Ltd (No 2) [2005] NSWCA 160 (at [13]) and was cited with approval in The Uniting Church v Takacs (No 2) [2008] NSWCA 172 (at [14] and [22]).

64. In Herning v GWS Machinery Pty Ltd (No 2) [2005] NSWCA 375, the Court referred to authorities that state that there must be a genuine offer of compromise which would be unreasonable for a party not to accept in order to trigger the favourable exercise of the costs discretion (at [5]):

5   The general approach adopted in this Court is that where an offer involves "no real element of compromise" but merely "invites capitulation by the appellant" it will not result in a variation of the usual costs order: see, eg, Townsend v Townsend (No 2) [2001] NSWCA 145 (Giles JA) at [5]."…

65. Relevantly, while the rejection of a Calderbank offer in circumstances where it transpires that the final result in the proceedings is less favourable to the offeree enlivens the discretion to award indemnity costs, it does not create an automatic right to such an order (Favotto Family Restaurants Pty Ltd v Chief Commissioner of State Revenue (No 2) [2020] NSWSC 519 at [28] and Chief Commissioner of State Revenue v Platinum Investments Management Ltd(No 2) [2011] NSWCA 197 at [9]).

66. As Basten JA noted in Miwa, the response of the offeree must be assessed at the time it was made and not with the benefit of hindsight resulting from a known outcome (at [11]).

67. The offer does not need to set out with specificity the bases upon which it is said that the offeree should accept the compromise. In Miwa, Basten JA accepted this proposition (at [13]) and emphasised that the amount offered to compromise the claim should not be trivial, derisory, or contemptuous (at [14]-[15]).

The Calderbank Letters

68. From 30 January to 19 March 2020, the parties engaged in correspondence concerning the likely outcome of both sets of proceedings. Accordingly, on 30 January 2020 the VT parties made the following offer of compromise purportedly in accordance with the principles in Calderbank (“the first offer”):

In our view, the likely outcome of the Class 4 Proceedings is that the Court will:

•   make the declarations in prayers 1 and 2 of our client’s Amended Summons in the VT Proceedings, and potentially all of the orders sought in the Amended Summons;

•   dismiss your client’s cross summons in the VT Proceedings;

•   refuse leave to commence the EPL Proceedings out of time or otherwise dismiss the EPL Proceedings; and

•   order your client to pay our client’s costs of the Class 4 Proceedings, and potentially an indemnity costs order if the Court finds that the Council’s conduct in the Class 4 Proceedings amounts to abuse of process.

However, in the interests of compromise, we are instructed to make an offer in accordance with the principles set out in Calderbank v Calderbank [1975] 3 All ER 333, in the following terms:

1.   the EPL Proceedings be dismissed;

2.   the Central Coast Council’s cross claim in the VT Development Consent proceedings be dismissed;

3.   Central Coast Council will submit to orders of the Court regarding declarations in prayers 1 and 2 of the Amended Summons in the VT Development Consent Proceedings (on the understanding that "Mangrove Mountain Landfill & Golf Course" has the meaning given to it in the Amended Points of Claim) (appreciating that our clients would still need to persuade the Court to make the declarations);

4.   Central Coast Council will submit to the discontinuation of the balance of the Amended Summons in the VT Development Consent Proceedings without prejudice to the determination of the balance of the issues in Land and Environment Court Proceedings No. 2019/101257 and No. 2018/246174;

5.   Central Coast Council will pay Verde Terra Pty Limited, Mangrove Mountain Landfill Pty Ltd and Mangrove Properties (NSW) Pty Ltd (together, the Verde Terra Parties) 80% of their costs of the VT Development Consent Proceedings (including the cross claim) and the EPL Proceedings, as agreed or assessed (ie, 80% of the total amount of the Verde Terra Parties "party-party" costs or costs on the ordinary basis of both class 4 proceedings).

This offer remains open for acceptance until 5:00pm on Tuesday, 18 February 2020.

This offer involves genuine and significant compromise, especially considering that, at the heart of your client's case is an abuse of process, and that if the offer is accepted, not only will the Verde Terra Parties compromise on 20% of their "party-party" costs of the Class 4 proceedings, but they will also forego a real opportunity to seek an indemnity costs order.

69. This was rejected on 13 March 2020, in a detailed response by the Council, for the following reasons:

My client and its legal representatives have likewise considered the parties’ respective pleadings and arguments carefully. Having done so, my client does not agree with your characterisation of litigation and its likely outcome/s.

The starting point is that, in proceedings 2018/101279, your client seeks declaratory relief which it is unlikely the Court will grant. In particular, your client’s prayer for a declaration that no further development consent is required by the Applicant to carry out development you define as “the Mangrove Mountain Landfill & Golf Course” is unlikely to be granted for the fundamental reason that there is no development consent for that development.

Putting to one side the lack of clarity about the development said to comprise the "Mangrove Mountain Landfill and Golf Course", it is evident the development referred to in prayer 1 of your client’s claim is a designated development which includes a proposed major waste facility utilising very large landfill cells, excavated up to 40 metres or so below existing ground level, and covering an area of in excess of 4 hectares for the placement for the placement of general solid (non-putrescible) waste for a period of 10 years. The development consent on which your client relies in seeking a declaration that no further development consent is required is the 1998 Consent. On any reasoned view of it, the 1998 Consent is not a consent for the waste facility you have proposed. Your client’s pleadings and arguments to the effect that the 1998 Consent permits the proposed development on the basis that, by reason of the operation of Conditions 1 and/or 2 of that instrument, the 1998 Consent was, in effect, internally amended by the EPA licence variations and by the preparation by the proponent of updated LEMPs, is not supported by principle or authority and has no real prospect of succeeding. You have read and heard our argument in relation to these matters.

…

My client has always accepted that the circumstance that the former Gosford City Council was an active party to the agreement to procure the 2014 Consent Orders is a circumstance that makes its position more difficult than it otherwise would be. However, that does not mean that my client is either wrong in taking the position it is taking or that its case, as pleaded and argued is untenable or unlikely to succeed. Quite the contrary: the outcomes of this case are likely to turn on the paramountcy of the public welfare statute and the need to meet the obligations imposed under that statute. My client, as a local government authority with a shared responsibility to administer the planning laws under the EP&A Act, must properly take a position of upholding the planning laws rather than taking a position which would permit them to be circumvented. The EP&A Act requires that a waste facility development of the nature and scale your client proposes to carry out on the Mangrove Mountain Golf Course, which is clearly designated development for the purposes of the Act, must be the subject of the processes mandated by the Act. …

70. A counter-offer, similarly asserted to be consistent with a Calderbank letter, was made by the Council to the VT parties in these terms:

On a without prejudice basis, except as to costs, and in accordance with the principles set out in Calderbank v Calderbank [1975] 3 All ER 333, my client offers to compromise its position in these proceedings and settle the proceedings on the following terms:

1.   The Verde Terra parties to make a development application in accordance with the Environmental Planning and Assessment Act 1979 and the regulations thereunder, seeking development consent for the designated development comprising:

a.   the development contemplated by the orders made by consent on 29 August 2014 in proceedings 2012/40900, as amended by

b.   the development contemplated by development application 55862/2018.

2. The development application to be made in accordance with paragraph 1 will be:

a.   assessed by an appropriately qualified and experienced independent expert;

b.   determined by an independent body, such as the

and the council will put in place all delegations required to enable such independent assessment and determination.

3. The Council will provide the resources required to enable the development application to be made in accordance with paragraph 1 to be notified and exhibited in accordance with the Environmental Planning and Assessment Act 1979 and the regulations thereunder and applicable policies of the Council, at the applicant's cost.

4. If the development application to be made in accordance with paragraph 1 is determined by way of refusal, or by way of grant of consent subject to conditions, and an appeal from such determination is commenced in the LEC, the Council will not raise in any such appeal any contention that is not based on the reasons for refusal, or on the conditions imposed by the determination which are the subject of an appeal.

5.   LEC proceedings 2019/101279 and 2019/203552 will be discontinued with the Council and the Verde Terra parties to pay their own costs.

This offer will remain open for acceptance in writing until 4.00pm on 27 March 2020.

The Council reserves the right to rely on this letter in respect of orders for costs in respect of these proceedings.

71. On 19 March 2020 the VT parties refuted the contentions contained in the Council’s offer of compromise and requested instead (“the second offer”):

Shortly prior to the CCC Offer and since the making of the VT Offer 1 the decision of Anastasiou v Wallace [2020] NSWLEC 14 (Anastasiou) was handed down. In that judgment, the Land and Environment Court has rejected several propositions that are fundamental parts of your client's case in the Class 4 Proceedings. In particular, the Court has held:

1. at [52], that development consent is not required for works ordered to be carried out under section 124 of the Environmental Planning and Assessment Act 1979.

2.   at [50], that the reasoning in Cando Management and Maintenance Pty Ltd v Cumberland Council (2019] NSWCA 26 has "no application" to the question of whether development consent is required for works done under a section 124 order.

3. at [60], [30], that it is proper to make declarations to confirm the effect of consent orders made under section 124 "in order to finalise" the dispute.

These issues have been at the heart of your client's case presented during the hearing of these Class 4 Proceedings. There is no reason why the same result would not follow in the Class 4 Proceedings.

As a result, your client's case is destined to fail on this issue. In relation to the other arguments put forward in your client's case, as stated in the VT Offer, we have considered your pleadings and submissions, and the presentation of your case during the hearing, and remain of the view that your other arguments are most unlikely to succeed for the reasons explained in our submissions and during the hearing.

Accordingly, we are instructed to reject the CCC Offer.

Nevertheless, to promote the just, quick and cheap resolution of the dispute, we are instructed to remake the VT Offer made on 30 January 2020, namely that:

1.   the EPL Proceedings be dismissed;

2.   the Central Coast Council's cross claim in the VT Development Consent proceedings be dismissed;

3.   Central Coast Council will submit to orders of the Court regarding declarations in prayers 1 and 2 of the Further Amended Summons in the VT Development Consent Proceedings (appreciating that our clients would still need to persuade the Court to make the declarations);

4.   Central Coast Council will submit to the discontinuation of the balance of the Further Amended Summons in the VT Development Consent Proceedings without prejudice to the determination of the balance of the issues in Land and Environment Court Proceedings No. 2019/101257 and No. 2018/246174; and

5.   Central Coast Council will pay Verde Terra Pty Limited, Mangrove Mountain Landfill Pty Ltd and Mangrove Properties (NSW) Pty Ltd (together, the Verde Terra Parties) 80% of their costs of the VT Development Consent Proceedings (including the cross claim) and the EPL Proceedings, as agreed or assessed (ie, 80% of the total amount of the Verde Terra Parties "party-party" costs or costs on the ordinary basis of both class 4 proceedings).

This offer, made in accordance with the principles set out in Calderbank v Calderbank [1975] 3 All ER 333, remains open for acceptance until 5:00pm on 2 April 2020.

72. The Council having made no claim for indemnity costs on the basis of the VT parties’ rejection of their counter-offer on 13 March 2020, it is only the VT parties’ claim for such costs that falls to be adjudicated in accordance with the principles in Calderbank.

73. The VT parties relied upon both the first and second offers. I accept that in each case the terms of the offer were clear. Rather, at issue is the reasonableness of their rejection by the Council.

74. The VT parties submitted that it was unreasonable for the Council to reject the first offer because by obtaining the relief sought in prayer 1 of the further amended summons the VT parties have achieved a better outcome than that contained in the offer. Moreover:

1. the first offer was made after the first tranche of the hearing, by which stage the Council had had the benefit of the VT parties’ opening written and oral submissions, in addition to the oral evidence of the parties’ photogrammetry and landfill engineering experts;

2. the offer remained open for 19 days in circumstances where the proceedings were adjourned part-heard;

3. the extent of the compromise was “substantial”; and

4. as was evident from the judgment in Verde Terra (No 9), the Council’s prospects of success in the VT proceedings “have at all material times been poor”, especially in respect of its failure or unwillingness to acknowledge the application of the principles concerning estoppel and related doctrines upon any attempt to set aside the 2014 consent orders.

75. According to the VT parties, it was even more unreasonable for the Council to reject the second offer because by this stage the Council had had the benefit of the decision in Anastasiou for some time.

It was Not Unreasonable for the Council to Reject the First or Second Offer

76. Applying the legal principles set out above, turning to the first offer, I do not agree that it was unreasonable for the Council to reject it. The reasons are principally four-fold. First, I do not find the rejection of the first offer to be unreasonable at that nascent stage of the proceedings. Although the offer was made after 15 days of hearing, the subsequent extended and fragmented nature of the hearing resulted in, as was observed in the introduction to Verde Terra (No 9) (at [3]), a different set of issues requiring determination in both the VT proceedings and the Council proceedings when the trial resumed and at the time of its conclusion on 18 November 2020, than those initially presented during opening submissions on 28 October 2019. For example, the further amended summons and further amended points of claim in the VT proceedings were not filed until 11 February 2020. Moreover, the Court had not yet handed down its decision in Anastasiou that clarified the effect of the decision of the Court of Appeal in Cando Management and Maintenance Pty Ltd v Cumberland Council [2019] NSWCA 26; (2019) 237 LGERA 128 insofar as the VT proceedings were concerned.

77. Second, the offer required the Council to submit to the declarations sought in prayers 1 and 2 of the originating process, whereas the VT parties were only successful in obtaining the relief in prayer 1. The Court declined to grant the relief in prayer 2 and the remaining prayers were abandoned by the VT parties. In other words, the final result in the proceedings was less favourable to the VT parties than that offered by them to resolve the proceedings in the first offer.

78. Third, the offer also contained a requirement that the Council proceedings be dismissed. While this is in fact what occurred, as discussed below, the Council enjoyed complete success in those proceedings, which were dismissed by consent because of the findings made in the Council’s favour during the VT proceedings concerning the effect and validity of the variations to EPL 11395. On any reasonable view, this was a less favourable outcome for the VT parties.

79. Fourth, the first offer sought 80% of the costs of the Council proceedings payable to the VT parties, whereas the Court has awarded these costs against the VT parties to the Council. Again, this resulted in a less favourable result for the VT parties.

80. The principal difference between the first and second offer was that by the time the second offer was made the decision in Anastasiou had been delivered on 4 March 2020. Did this make the rejection of the second offer by the Council unreasonable?

81. In my opinion it did not. First, the reasons articulated above with respect to the rejection of the first offer apply equally to the rejection of the second offer, albeit, it must be acknowledged, with less force in respect of the reason given at [76]. In any event, the issues required ultimately to be resolved continued to evolve as the hearing progressed. Second, while the Council decided not to challenge the correctness of Anastasiou, and consequently conceded that no further development consent was required in order to carry out the development the subject of the 2014 consent orders, this was not in and of itself sufficient to make the declaration sought in prayer 1 given the matters raised by the Council in its defence to the VT proceedings and in its cross-summons. These matters were highly arguable and were attended, as observed earlier, by a significant measure of complexity.

82. In truth, the second offer sought capitulation by the Council and offered no real compromise at all given the result in both sets of proceedings. The Council acted reasonably in all the circumstances in rejecting it.

The Council’s Arguments Were Not “Very Weak”

83. By submitting that indemnity costs should be ordered because the Council’s arguments were “at best, very weak”, the VT parties appear to conflate the Council’s loss in respect of prayer 1 with a perceived groundlessness in relation to its defence of the proceedings and its concomitant prosecution of its cross-summons. Given the number of findings, both legal and factual, that were made in the Council’s favour, this contention must be rejected. To reiterate, to lose is not, without more, a basis to depart from an award of costs on the ordinary basis.

The Council’s Conduct Did Not Fall Short of the Model Litigant Standard Warranting an Indemnity Costs Order

84. Assuming for present purposes that the Council enjoys the status of a model litigant, did it engage in disentitling conduct warranting the imposition of indemnity costs?

85. The VT parties argued that it was incumbent upon the Council, as a model litigant, to conduct itself in the proceedings according to a standard that involved dealing with matters promptly and not causing unnecessary delay, endeavouring to avoid litigation where possible, and not relying on technical defences.

84. In addition to an absence of authority furnished by the VT parties in support of the proposition that a party’s status as a model litigant rendered it more susceptible to an indemnity costs order than any other losing litigant, there is no cogent evidence that the Council engaged in any of the conduct described above, or at least not to such an extent that its conduct ought to be characterised as “disentitling”. Directions were in the main complied with by the Council, no unnecessary delay was occasioned by it, it readily consented to multiple rounds of Court ordered mediation, it made concessions where appropriate, and none of the defences that it relied upon can be fairly described as “technical”. For the latter claim the VT parties relied upon Liao v New South Wales; Zhang v State of New South Wales [2014] NSWCA 71 where the Court of Appeal opined that, “it is sometimes possible to say that a particular stance taken in litigation is technical, in the sense that it lacks all substantive merit and is supportable only on a narrow or literal appreciation or interpretation that is at odds with clear reality” (at [357]). Again, for reasons already given this is an inaccurate portrayal of the merit of the Council’s case.

85. The reality is that this litigation was robustly contested by both parties which, along with delay caused by the Covid-19 pandemic, resulted in the protracted nature of the hearing. While at times fractious, the behaviour of neither party rose to the level of disentitling conduct.

86. This basis for an award of indemnity costs is without foundation and must be rejected.

The EPA

89. Finally, as between the EPA and the VT parties and the EPA and the Council, it was agreed by all parties that each party should bear their own costs of the VT proceedings. In this regard, it should be noted that the EPA was excused from participating in the costs hearing.

The Council Proceedings

90. The Council proceedings were summarised in Verde Terra (No 9) as follows (at [137]):

137 In its further amended summons, the Council sought the setting aside of the variations to EPL 11395 granted by the EPA between May 2009 and November 2011 (or at least the relevant amendments made to EPL 11395 with each variation) on the basis that the EPA had purported to authorise the carrying out of controlled development for which the necessary development consent had not been granted pursuant to s 50(2) of the POEOA.

91. Issues 13, 14 and 15 (quoted above) referrable to the Council proceedings were further refined in Verde Terra (No 9) (at [464]).

92. In contrast to the VT proceedings, the issues raised by the Council proceedings were narrow in compass and related to the primary question as to whether impugned variations to EPL 11395 were invalid because they purported to authorise “controlled development” absent necessary development consent in breach of s 50(2) of the Protection of the Environment Operations Act 1997.

93. By consent, the Court ultimately dismissed the Council proceedings in light of the findings made in the Council’s favour during the VT proceedings concerning the effect of the variations to EPL 11395 on the 1998 consent, thereby rendering the relief sought by the Council unnecessary. However, out of abundant caution and given that the subject matter of the proceedings was nevertheless the subject of legal argument by the parties, it proceeded to determine all issues, refined or otherwise, raised by the proceedings in the Council’s favour. In this regard, the Council achieved total success (at [464]-[523] and [545]).

94. The Council argued that because it had achieved complete success in respect of the findings made by the Court, or put another way, the ‘event’, the Court should award costs in its favour. The fact that actual orders were not made was a consequence of the interaction between the issues in the two sets of proceedings, and not due to any success on the part of the VT parties, or conversely, upon any failure by the Council.

95. In response, the VT parties submitted that because the Council proceedings were dismissed, the Council should pay their costs on an ordinary basis. This is because the Council proceedings were pursued on a contingency basis that never crystallised in light of the VT proceedings, and it therefore ran the risk of bearing the costs liability for the claim on this basis (citing PDP Capital Pty Ltd v Grasshopper Ventures Pty Ltd (No 2) [2021] FCAFC 147 at [9]).

96. But this submission denies the reality of what occurred during the hearing of both sets of proceedings and the findings that the Court made in the Council’s favour in the VT proceedings. To make such an order would be an unreasonable exercise of the Court’s discretion to award costs as discussed above.

97. I am therefore of the view that the appropriate order, in light of the Council’s comprehensive success on the issues raised and agitated to finality by both parties is that the VT parties ought to pay the Council’s costs of the Council’s proceedings, albeit on an ordinary basis (the Council did not suggest otherwise).

The EPA

98. Again, as between the EPA and the VT parties and the EPA and the Council, by consent of the parties, each party is to bear their own costs of the Council proceedings. The EPA did not participate in the costs hearing in respect of these proceedings.

Costs of the Costs Applications

99. The VT parties submitted that the Council should pay their costs of the costs applications on an indemnity basis. The Council made no such demand.

100. The submission therefore demands an examination of correspondence sent by the parties in relation to the issue of costs after Verde Terra (No 9) was delivered but before the costs hearing.

101. On 31 March 2022 the VT parties sent the following offer of compromise to the Council in respect of the costs of the proceedings:

As you know, the Court in its Reasons found that the Council's allegations made in defence of the VT Proceedings and in its cross-summons – particularly its allegations that the 2014 Consent Orders were void for illegality, irregularity and/or by reason of being contrary to public policy – were the subject of estoppels by judgment being res judicata (Reasons, [416]), issue estoppel ([425]) and Anshun estoppel ([432]). The Court also found that the Council's conduct in prosecuting those allegations, both in defence of the VT Proceedings and by way of its cross-summons in the VT Proceedings, amounted to an abuse of process: [439].

In light of the above, and in circumstances including where:

(i)   the validity of the 2014 Consent Orders was the issue "at the heart of the proceedings" (Reasons, [4]); and

(ii)   the Court has found there to be an "unexplained delay" in the Council waiting over four and a half years to seek to have the 2014 Consent Orders set aside ([344]),

our clients consider that they are entitled to an order that, subject to any previous interlocutory costs orders, the applicant/cross-respondents be awarded the costs of the VT Proceedings on an indemnity basis. See, for example Baillieu Knight Frank (NSW) Pty Ltd v Ted Manny Real Estate Pty Ltd (1992) 30 NSWLR 359 at 362 where Powell J said:

The circumstances in which one is justified in departing from that established principle are, as it seems to me, limited, and it seems to me that, as a general rule, an order that costs be taxed on an indemnity basis is justified only where the action taken, or the action threatened, by the defendant constituted, or would have constituted, an abuse of the process of the court, or where the actions of the defendant, in the conduct of any defence to the proceedings, have involved an abuse of the process of the court ...

In addition, on 30 January 2020, in correspondence entitled "without prejudice except as to costs", we invited the Council to submit to such order as the Court may make in relation to declarations 1 and 2 in the VT Proceedings, with dismissal of the balance of the proceedings, the cross-claim and the Council proceedings. That Calderbank offer was rejected by the Council on 13 March 2020. This correspondence was followed by our letter also entitled "without prejudice except as to costs" dated 19 March 2021. The observations made in that letter appear to us to have been vindicated by the Court in its judgment.

Given the above, we are instructed to invite the Council and the EPA to agree to the following costs orders:

VT Proceedings

1   Subject to any previous interlocutory costs orders:

a.   as between the EPA and the VT Parties (being the applicant and cross-respondents), there be no order as to costs;

b.   as between the Council and the VT Parties, the Council is to pay the VT Parties' costs of the VT Proceedings on an indemnity basis.

c.   [sic]

Judicial Review Proceedings

2   Subject to any previous interlocutory costs orders:

a.   as between the EPA and Verde Terra Pty Ltd, there be no order as to costs; and

b.   the Council is to pay the EPA and Verde Terra Pty Ltd's costs of the Judicial Review Proceedings on the ordinary basis.

102. The response by the Council on 7 April 2022, was to reject the offer and propose instead:

It is clear that each of the council and the Verde Terra parties achieved a measure of success in the proceedings, and each was not successful in certain respects, but the ultimate outcome is a vindication of the council's position that a regional waste facility on the subject site should be the subject of an Environmental Impact Statement which assesses the impacts of such a proposal over and above the impacts of the development the subject of the 1998 consent, construed essentially as the council said it should be construed; not over and above the impacts of the waste disposal activities the subject of the 2014 consent orders.

The single declaration made by the court, in the terms as made, does not operate so as to provide the Verde Terra parties with the means to avoid that outcome; which was the whole purpose of the proceedings brought by them. The court expressly declined to make the declaration sought by the Verde Terra parties regarding cl 35 (as it was) of Schedule 3 of the Regulation which was required for that outcome to be avoided.

Verde Terra abandoned, on the penultimate day of the hearing and during closing submissions, all other relief sought in the Further Amended Summons.

I am further instructed that the council would agree to the following orders in both proceedings 2019/101279 and 2019/203552:

1.   As between the Verde Terra parties and the Central Coast Council, each party to pay its own costs, except as provided by order 4.

2.   As between the Central Coast Council and the Environment Protection Authority each party to pay its own costs.

3.   As between the Verde Terra parties and the Environment Protection Authority each party to pay its own costs.

4.   All existing orders as to costs to remain in place.

The council proposes such orders as to costs without prejudice to its rights to appeal the decision and orders made, or any aspect of them, and should any appeal(s) be brought, to revisit the question of costs in light of the outcome of the appeal(s).

103. Given the conclusions arrived at above with respect to which party, and on what basis, the costs of the VT proceedings and the Council proceedings are payable, the final costs results were less favourable to the offerors and were rightly, and reasonably, rejected by both offerees.

104. In particular, as between the Council and the VT parties in the VT proceedings, the Council was not ordered to pay the entirety of the VT parties' costs, and of those costs that it was ordered to pay, these have been ordered to be paid on an ordinary basis. Moreover, in the Council proceedings, the VT parties have been ordered to pay the Council’s costs on an ordinary basis. On no view, therefore, was the discretion to award indemnity costs of the costs application enlivened by the VT parties’ Calderbank costs offer and it was properly rejected by the Council.

105. In my opinion, in light of the forgoing analysis, the appropriate exercise of discretion in light of the matters and principles discussed above, is that each party should bear their own costs of the costs applications.

Orders

106. The formal orders of the Court are therefore:

In proceedings 101279 of 2019

1. the Council is to pay 65% of the VT parties’ costs of the proceedings on an ordinary basis;

2. as between the VT parties and the EPA, each party is to pay their own costs of the proceedings;

3. as between the Council and the EPA, each party is to pay their own costs of the proceedings;

In proceedings 203552 of 2019

4. the VT parties are to pay the Council’s costs of the proceedings;

5. as between the Council and the EPA, each party is to pay their own costs of the proceedings;

6. as between the VT parties and the EPA, each party is to pay their own costs of the proceedings;

In proceedings 101279 and 203552 of 2019

7. the costs of Verde Terra (No 10) are to be costs in the cause;

8. all previous costs orders remain in place;

9. each party is to bear their own costs of the costs applications; and

10. the exhibits are to be returned.

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Decision last updated: 23 October 2023