YFG Shopping Centres Pty Ltd v Brisbane City Council (No 3)
[2014] QPEC 56
•23 September 2014
PLANNING & ENVIRONMENT COURT
OF QUEENSLAND
CITATION:
YFG Shopping Centres Pty Ltd v Brisbane City Council & Ors (No 3) [2014] QPEC 56
PARTIES:
YFG SHOPPING CENTRES PTY LTD
(appellant/respondent)
and
FABCOT PTY LTD
(co-respondent/applicant)
FILE NO:
237/13
DIVISION:
Planning and Environment
PROCEEDING:
Hearing of an application
ORIGINATING COURT:
Planning & Environment Court of Queensland, Brisbane
HEARING DATE:
Determined on the papers. Submissions closing on 16 September 2014
DELIVERED ON
23 September 2014
DELIVERED AT:
Brisbane
JUDGE:
R S Jones DCJ
ORDER:
1. YFG Shopping Centres Pty Ltd is to pay two thirds of Fabcot Pty Ltd’s costs of the proceedings heard on 4 August 2014 but the costs of appearances on that date are to be limited to that of senior counsel and instructing solicitor.
CATCHWORDS:
PLANNING AND ENVIRONMENT – COSTS – section 457 of Sustainable Planning Act 2009 – where co-respondent successful in defeating an appeal by the appellant – where the court ought exercise its discretion to award costs – whether the costs order in favour of the co-respondent ought be limited
Sustainable Planning Act 2009
YFG Shopping Centres Pty Ltd v Brisbane City Council & Ors [2013] QPEC 59
YFG Shopping Centres Pty Ltd v Brisbane City Council & Ors (No 2) [2014] QPEC 43
Mio Art Pty Ltd v Macequest Pty Ltd & Ors (No2) (2013) QSC 271
Calderbank v Calderbank (1975) 3 All ER 333
Stanley v Phillips (1966) 115 CLR 470
COUNSEL:
Mr A N Skoein for the appellant/respondent
SOLICITORS:
Connor O’Meara Solicitors for the co-respondent/applicant
Barry Nilsson Lawyers for the appellant/respondent
This proceeding was concerned with an application for costs by Fabcot Pty Ltd (Fabcot) seeking favourable cost orders against YFG Shopping Centres Pty Ltd (YFG) arising out of previous proceedings concerning costs dealt with by me on 15 August 2014. For the reasons given below the orders of the court are:
1. YFG Shopping Centres Pty Ltd is to pay two thirds of Fabcot Pty Ltd’s costs of the proceedings heard on 4 August 2014 but the costs of appearances on that date are to be limited to that of senior counsel and instructing solicitor.
Background
On 28 October 2013, I handed down my reasons effectively disposing of YFG’s appeal against Fabcot’s proposed development in the suburb of Everton Park.[1] Following that, both Fabcot and YFG filed applications seeking cost orders in respect of the substantive appeal. By this time the Brisbane City Council (the respondent in the substantive appeal) and the chief executive, administering the Transport Infrastructure Act 1994 (co-respondent by election) had no further interest in the proceedings and leave was granted for them to withdraw.
[1]YFG Shopping Centres Pty Ltd v Brisbane City Council & Ors [2013] QPEC 59.
On 26 May 2014, I made a number of orders setting out a timetable for the filing and serving of material intended to be relied on at the hearing of the cost applications. The cost applications were heard on 4 August 2014 and on 15 August 2014 I published my reasons and, relevant to this application, made two orders concerning costs and foreshadowed a third:[2]
[2]YFG Shopping Centres Pty Ltd v Brisbane City Council & Ors (No 2) (2014) QPEC 43.
3. YFG Shopping Centres Pty Ltd is to pay two thirds of Fabcot Pty Ltd’s costs of the appeal dealt with by this court on 18, 19, 20, 23, 24, 25, 26 and 27 September 2013;
4. Fabcot Pty Ltd is to pay YFG Shopping Centres Pty Ltd any of its costs thrown away on 26 March 2014 and 8 April 2014;
5.As to the costs of these applications I would be inclined to order that YFG Shopping Centres Pty Ltd is to pay Fabcot’s Pty Ltd’s costs of the applications dealt with on 4 August 2014 but such costs be limited to the costs of preparing its initial written submission in support of its application and in reply to the submissions made on behalf of YFG Shopping Centres Pty Ltd;
6. I will hear further from the parties if necessary before finalising order five. …
YFG was satisfied with the order foreshadowed above. Fabcot was not and sought an order that YFG pay all of its costs of the application dealt with on 4 August 2014 “on a standard basis”.[3] Following that application, orders were made setting out a timetable for the filing and serving of material upon which the parties’ intended to rely in respect of this application. The closing date for the filing and serving of material was 16 September 2014. It was agreed by the parties that the matter could be dealt with on the papers.
[3]In YFG Shopping Centres Pty Ltd v Brisbane City Council & Ors [2014] QPEC 43 after referring to Mio Art Pty Ltd v Macequest Pty Ltd & Ors (No2) [2013] QSC 271 (per Jackson JJ), indicated that the use of the term “on a standard basis” is a redundancy.
In the written submissions relied on by Fabcot, its primary position was set out in paragraph 3. However, in paragraph 21 a fallback or alternative position was advanced:
“It is therefore respectfully submitted that Fabcot should be entitled to its costs from first to last. In the event that the court concludes that some moderation should be applied, it is submitted that not allowing the costs of junior counsel at the hearing of the costs application on 4 August 2014 would appropriately achieve a just adjustment in the circumstances.”
As indicated above YFG was content with the cost orders foreshadowed but strongly opposed the relief now sought by Fabcot. Before dealing with the matters Fabcot relied on in support of its application it is necessary for some comment on the “implication” identified in paragraph 6 of Fabcot’s written submissions. The so called implication is largely unfounded. In paragraph 40 of my reasons dated 15 August 2014 I said:
“Turning to the costs of the application heard by me on 4 August 2014 I would make four observations. First, given the degree of Fabcot’s success it is entitled to some form of favourable costs order. Second, given that Fabcot was not entirely successful any cost order has to be moderated to reflect that. Third, counsel on both sides relied very heavily on their written submissions. Fourth, with absolutely no disrespect intended, it struck me that once the written submissions had been prepared junior counsel for Fabcot was not required. On balance I have decided that absent good reasons to the contrary, Fabcot’s costs associated with the application ought be limited to the costs associated with preparing its initial written submissions and its submissions in reply.”
I would have thought that the type of order foreshadowed did not exclude the costs of, by way of examples, the filing and serving of the application and supporting material and instructions to and conferring with counsel. In any event, if there was any doubt about what was intended by the order that could have been readily clarified.
The matters relied on by Fabcot
Fabcot relied on six “reasons” in support of its application:
(i) In the absence of compromise Fabcot was required to prepare and file an application to recover its costs;
(ii) YFG delivered its submissions in reply “late, on the morning of the hearing, necessitating that Fabcot’s counsel deal with those issues orally”. And, YFG submissions in reply contained 40 paragraphs traversing some 13 pages;
(iii) The applications made by the parties raised new issues for determination by the court by virtue of the amendments to s 457 of the Sustainable Planning Act 2009 (SPA) concerning costs;
(iv) The substantive appeal was very costly for the parties;
(v) Fabcot did its best to resolve the issue of costs by making a Calderbank offer;
(vi) There was no sound reason for excluding the costs of the appearance of junior counsel at the hearing of the costs application.
In respect of many of these matters I agree with the submissions made by Mr Skoien, counsel for YFG. As to the first matter, that Fabcot was required to prepare and file an application for costs was a step of its own making. That a compromise was unable to be reached about costs might be relevant in considering YFG’s conduct concerning the Calderbank offer however, it is not a relevant consideration in its own right.
As to the second matter, a number of observations are necessary. First, it is clear that both parties are, to an extent, guilty of some non compliance with the orders made concerning the filing and serving of material. However, nothing turns on that. Fabcot was represented by very experienced counsel in this jurisdiction. And, in my view, the issues raised in the reply of YFG were not so complex as to jeopardise the progress of the matter. As much can be discerned by reference to the way this matter proceeded on 4 August 2014. Proceedings commenced at 9.59am. I was then invited to read the material relied on by the parties. At 10.05am the court adjourned to allow that to occur and, on the resumption of proceedings at 10.45am, I was advised that the parties were “talking” and that the matter ought be stood down to allow that to continue. On that basis the court adjourned at 10.47am and did not resume until 11.17am. Unfortunately the matter was unable to be resolved but in any event the entire proceedings were concluded by 1.30pm. Oral arguments occupied no more than about two and a quarter hours. Further, I do not recall Mr Hughes QC, senior counsel for Fabcot raising any substantive prejudice arising out of the late delivery of YFG’s reply. Had sufficient prejudice been shown the matter of course could have been adjourned with appropriate cost orders. I see no merit in this point.
As to the fourth matter, I agree that the litigation would have been very costly for both parties. However, that issue was largely dealt with when I made the substantive cost orders on 4 August 2014 which were largely favourable to Fabcot.
As to the sixth point, essentially for the reasons already outlined above, I do not see how the late delivery of YFG’s reply necessitated the need for junior counsel.[4] Further, as to the “starting point” referred to[5] while there may be no “authority” I disagree with the general thrust of the submission made. In my opinion, a litigant is under an obligation to review its legal requirements as matters proceed. While senior and junior counsel might have been necessary for the conduct of the substantive hearing, involving as it did the management of witnesses including the taking of evidence in chief, cross-examination and conferring with expert witnesses, that situation is a vastly different one from that involved and dealt with by me on 4 August 2014. As Barwick CJ observed in Stanley v Phillips[6] the emphasis ought be on what is adequate to enable justice to be done and not on what might be considered necessary to ensure maximum success.
[4]Fabcot’s written submission at para 14.
[5]Fabcot’s written submissions at para 16.
[6](1966) 115 CLR 470 at 479.
Accordingly, for these reasons I consider the only new “reason” raised that could justify the orders sought by Fabcot is that concerning the “Calderbank offer”. However, for reasons discussed below I now agree that it was appropriate for Fabcot to be represented by counsel at the cost hearing.[7] Notwithstanding the written submissions I still do not consider that it was necessary for junior counsel to also appear on the hearing on 4 August 2014. However, in this context I also now recognise that the foreshadowed order did not even provide for an appearance on the day by Fabcot’s solicitors.
[7]Fabcot’s “third reason”. Refer also to para [19] of these reasons.
The Calderbank offer
The so called “Calderbank” offer is a reference to that part of the reasoning of the Court of Appeal, Civil Division, in Calderbank v Calderbank[8] dealing with costs. Cairns LJ (with Scarman LJ and Sir Gordon Willmer agreeing) reached the conclusion that in circumstances where the offer by the wife to settle the matter exceeded the final determination by the court in favour of the husband in a matrimonial proceeding and where that offer was not accepted, the wife was entitled to a favourable cost order.[9] However, the court was only entitled to have regard to that offer once the “without prejudice bar had been lifted”. A common practice then became to make offers of settlement on the basis of the offer being “without prejudice save as to costs”. Such a letter was sent to the solicitors for YFG by Fabcot’s solicitors on 31 July 2014. That letter relevantly provided:[10]
[8](1975) 3 All ER 333.
[9]See at p 343.
[10]Exhibit TTL-1 to the affidavit of Truc Thanh Ly.
“1.(Fabcot) will not pursue an order that your client pay all of its costs of and incidental to the appeal to be assessed on a standard basis, if your client agrees to an order that YFG pay Fabcot’s costs of and incidental to the appeal arising from the disputed issues in relation to traffic (as and from 19 September 2013), urban design, visual amenity, acoustic amenity, flooding and drainage and sufficient grounds to be assessed on a standard basis;
2.In relation to your client’s applications for costs against our client the applications be dismissed; and
3.That your client pay our client’s costs of the application for costs on a standard basis.
Our client would be prepared to accept a payment of $290,000 in satisfaction of paragraphs 1 and 3 above…” (Emphasis added).
In YFG Shopping Centres v Brisbane City Council the substantive issues in dispute in the appeal were identified as:[11]
[11]At para 15.
“1. Alleged conflict with City Plan 2000;
2. Alleged conflict with the Everton Park Local Plan;
3. The consequences of out of centre development;
4. Urban design and visual amenity;
5. Storm water flooding and drainage (hydraulics);
6. Traffic;
7.Sufficient grounds (in particular the need for the Masters development).”
In YFG v Brisbane City Council (No 2) the relief sought by Fabcot was described by me in these terms:[12]
[12]At paras 9 and 10.
“The relief sought by Fabcot was:
(a)An order that YFG pay its costs of an incidental to the appeal to be assessed on the standard basis; or alternatively
(b)An order that YFG pay its costs of an incidental to the appeal arising out of the disputed issues identified in paragraph 15, subparagraphs (3), (4), (5), (6) and (7) of my decision in YFG Shopping Centres Pty Ltd v Brisbane City Council & Ors…
The alternate relief effectively seeks that YFG pay Fabcot’s costs associated with the issues in dispute concerning out of centre development, urban design and visual amenity, storm water flooding and drainage, traffic and the sufficient grounds dispute.”
In deciding that YFG ought pay two thirds of Fabcot’s costs of the appeal, in YFG v Brisbane City Council (No 2) I relevantly said:[13]
“By reference to my substantive reasons, after setting out the background, the relevant issues were dealt with at pages 11 through to 36. Hydraulic, urban design and visual amenity and traffic issues occupied some seven pages. The balance of the reasons were concerned with matters including conflict with the planning scheme, out of centre development, conflict with the Everton Park Local Plan and economic need. It would not be possible, and indeed in my view not appropriate, to analyse my reasoning in microscopic detail to determine exactly the extent of YFG’s success when compared to that of Fabcot. On balance, I consider the most appropriate course of action is to adopt a relatively robust approach, while recognizing that the ‘conflict’ issues did occupy a significant amount of court time. As a consequence, I have reached the conclusion that YFG ought pay two thirds of Fabcot’s cost of the appeal.”
[13]At para 31.
It can be seen that there is a high level of similarity between the issues identified in the Calderbank offer and the matters I considered relevant in making the costs orders that I did. That is particularly so when the issue of “acoustic amenity” referred to in the offer was dealt with by me under the broader category of “urban design”. Fabcot was successful, in a very real sense, in respect of each of those issues identified in the letter of offer. Further, it is clear by reference to my reasons in YFG v Brisbane City Council (No 2) that not only was Fabcot successful in respect of those issues but it was also successful in respect of the “out of centre development” issue, a matter not raised in the written offer but pursued after the disposal of the appeal.
A review of YFG Shopping Centres Pty Ltd v Brisbane City Council makes it clear that the evidence of the economists went not only to the issue of “sufficient grounds” but also to the issue of “out of centre development”. While it is not able to be precise about this, it is a reasonable inference to draw that had YFG accepted the written offer it would have not had to confront the risk of having to meet at least some of the costs associated with the need to call the economist witnesses. To put it bluntly, at least prima facie, it seems tolerably clear that if YFG had accepted the offer it was more likely than not that its exposure to an unfavourable costs order would have been lessened to a material extent. As identified in YFG Shopping Centres v Brisbane City Council (No 2)[14] the issues of hydraulics, urban design and visual amenity and traffic issues played a relatively lesser role in the appeal not only in respect of the evidence called at the hearing but also in my reasons for judgment.
[14]At para 31.
However, the matter is not as straightforward as that. The first and third of the numbered paragraphs in the offer identified above speaks of the costs “to be assessed on a standard basis”. However, the offer then goes on to provide that Fabcot would accept $290,000 in satisfaction of the first and third items raised in the offer. It seems that YFG had at least five options available to it. First, simply agree to the terms of the offer. If that occurred the most likely result would be the creation of an obligation on the part of YFG to pay Fabcot the sum of $290,000. The second option might have been for YFG to say we accept the offer but only on the condition that the costs of items 1 and 3 were to be assessed. A third option would have been to accept liability in respect of 1 and 3 but try and negotiate on the sum of $290,000. The fourth option would have been for YFG to simply reject the offer and do nothing more. YFG took the option of rejecting the offer and making a counter offer.
I was not taken to any evidence to show that the sum of $290,000 was a reasonable assessment of the costs associated with the items identified in Fabcot’s offer. I suspect that it would be but that is not sufficient. However, as identified above, the offer made by Fabcot revealed a genuine and reasonable attempt and intention to try to resolve the dispute.
On 1 August 2014 YFG’s solicitors made its counter offer:[15]
“2.2… in the continuing interests of avoiding unnecessary costs being incurred by both sides, our client offers to settle the costs disputes with your client on the basis that:
2.2.1Our client will withdraw their costs applications referred to above bearing their own costs; and
2.2.2With respect to your client’s application for costs, our client agrees to pay your client’s costs of the appeal and the application, in the amount of $50,000.”
[15]Exhibit TTL-2 to the affidavit of Ms Ly.
As Mr Skoein pointed out in his written submissions there was no evidence before the court as to what the likely costs of the litigation would be. That may be so, but in my opinion one does not need to have direct evidence in so far as the counter offer is concerned, to conclude with a high level of confidence that the amount of $50,000 would have been insufficient and, probably to a significant extent, to meet the costs of the issues (or even a number of them) identified by Fabcot in its written offer. Even in the light of the relatively new amendments to s 457 of SPA and the very limited authority on the point, I consider the counter offer was unrealistic. It did not adequately recognize and address the real exposure to an adverse costs order faced by YFG.
The counter offer of YFG made further litigation concerning costs an almost inevitable end result. Given the stakes involved and the absence of jurisprudence regarding s 457 of SPA, the appearance of senior counsel was justified but once the written submissions were completed I do not consider appearance by junior counsel was also necessary. Further, an order of the type primarily contended for by Fabcot fails to have sufficient regard to the fact that it was not entirely successful in its application for costs. Notwithstanding that, the extent of its success warrants some form of a favourable costs order in respect of that proceeding.
It should also be noted that the costs regime prescribed by s 457 of SPA is not, unlike the situation under the Uniform Civil Procedure Rules 1999, one where the usual order would be that “costs follow the event”. Accordingly, the mere existence of a Calderbank offer that equalled or bettered the final result for the other party would not guarantee a successful costs application. Section 457(2) gives to this court a very wide discretion as to costs. Here however, it is not in dispute that Fabcot is entitled to some form of a favourable cost order. The issue was one only about quantum. Fabcot’s offer was in no way determinative but, in the context of this proceeding, it is a relevant consideration in its favour.
Having regard to Fabcot’s level of success on its application and YFG’s lack thereof and upon consideration of the matters raised in the respective submissions of the parties I am now of the opinion that an order more in accord with the approach adopted by me in YFG v Brisbane City Council (No 2) would be appropriate. The order therefore will be in these terms:
1. YFG is to pay two thirds of Fabcot’s costs of the application heard on 4 August 2014 but the costs of appearances on that date are to be limited to that of senior counsel and instructing solicitor.
Order
1. YFG Shopping Centres Pty Ltd is to pay two thirds of Fabcot Pty Ltd’s costs of the proceedings heard on 4 August 2014 but the costs of appearances on that date are to be limited to that of senior counsel and instructing solicitor.
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