Land and Environment Court New South Wales Medium Neutral Citation: Twynam Investments Pty Ltd v Goulburn Mulwaree Council [2021] NSWLEC 7 Hearing dates: 1 February 2021 Date of orders: 4 February 2021 Decision date: 04 February 2021 Jurisdiction: Class 1 Before: Moore J Decision: See orders at [66] Catchwords: COSTS - appeal pursuant to s 30 of the Heritage Act 1977 against the making of an interim heritage order by the Respondent - consideration of the question of whether the Ministerial Order investing the Respondent with power to make interim heritage orders - Ministerial Order mandated jurisdictional prerequisites to be satisfied prior to the power to make any interim heritage order being available to the Respondent - jurisdictional prerequisite in Sch 2(2)(d) of the Ministerial Order not satisfied - Respondent had no power to make the interim heritage order against which the Applicant had appealed - agreement between the parties that the Class 1 proceedings were appropriate to be discontinued - dispute as to costs of the proceedings upon discontinuance - Applicant applies for costs order in its favour upon discontinuance - r 3.7(2) of the Land and Environment Court Rules 2007 applies permitting costs to be awarded only if "fair and reasonable" to do so - invalidity of interim heritage order, because a jurisdictional prerequisite was not satisfied, engaged r 3.7(3)(f)(i) - appropriate to order that the Respondent pay the Applicant's costs of the Class 1 proceedings - costs to be paid as agreed or assessed. COSTS - costs of costs applications in Class 1 proceedings ordinarily follow the event - no basis to depart from this position - Respondent to pay the Applicant's costs of its costs application (excluding costs of nominated excessive photocopying) as agreed or assessed Legislation Cited: Environmental Planning and Assessment Act 1979, ss 1.5, 8.7 Heritage Act 1977, ss 4, 25, 25(4), 30 Land and Environment Court Act 1979, ss 34, 39(2) Land and Environment Court Rules 2007, rr 3.7, 3.7(2), 3.7(3)(c)-(d), 3.7(3)(f), 3.7(3)(f)(i) Uniform Civil Procedure Rules 2005, r 42.1 Cases Cited: Byron Ventilink Pty Limited v Byron Shire Council (2005) 142 LGERA 215; [2005] NSWLEC 395 Forte Construction Group Pty Ltd v Inner West Council [2018] NSWLEC 1400 Grant v Kiama Municipal Council [2006] NSWLEC 70 Latoudis v Casey (1990) 170 CLR 534 Li v Willoughby City Council [2018] NSWLEC 1262 Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6, (1997)186 CLR 622 Sze Tu v Lowe (No 2) [2015] NSWCA 91 Taylor v The Owners of Strata Plan 11564 and Others (2014) 253 CLR 531; [2014] HCA 9 Twynam Investments Pty Ltd (formerly known as Twynam Agricultural Group Pty Ltd) v Goulburn Mulwaree Council [2020] NSWLEC 1557 Texts Cited: Government Gazette (No 130, 1 November 2019), Interim Heritage Order Curtilage Map Land and Environment Court of New South Wales, COVID-19 Pandemic Arrangements Policy Category: Costs Parties: Twynam Investments Pty Ltd (Applicant) Goulburn Mulwaree Council (Respondent) Representation: Counsel: Mr T To, barrister (Applicant) Ms N Hammond, barrister (Respondent) Solicitors: Shaw Reynolds (Applicant) Maddocks (Respondent) File Number(s): 373865 of 2019 Publication restriction: No TABLE OF CONTENTS Introduction The Company's Notice of Motion The Notice of Motion hearing Representation The evidence Relevant statutory provisions Introduction The EP&A Act definition The Heritage Act provisions The relevant provisions of the Court Rules The Ministerial Order The scope of the 2008 subdivision consent The Class 1 development application appeal The Company's IHO appeal contentions The Council's appeal response Discontinuance of the substantive proceedings The Company's costs position The Council's costs position Consideration Exclusion of excessive photocopying Costs of the costs application Orders Judgment Introduction 1. Twynam Investments Pty Ltd (the Company) owns a property at Marulan (the property) in the local government area administered by Goulburn Mulwaree Council (the Council). 2. Ms Hammond, barrister for the Council, set out in her written submissions a comprehensive chronology of all potentially relevant actions of the parties (commencing with the 2008 subdivision consent). Only a limited number of the elements there set out later require to be noted for the purposes of providing an appropriate context for understanding the issues engaged for my consideration in these Notice of Motion proceedings brought by the Company in its Class 1 appeal against the Council's making of the Interim Heritage Order (the IHO). 3. On 1 November 2019, the Council made the IHO pursuant to s 25 of the Heritage Act 1977 (the Heritage Act), encompassing a nominated item of environmental heritage (Wingello Park Dwelling and Barn Complex) and a defined curtilage for this. The curtilage was identified, by a heavy red boundary, on a marked air photo that was described as the Interim Heritage Order Curtilage Map. The IHO and the Interim Heritage Order Curtilage Map were published in the Government Gazette of 1 November 2019. 4. The Company exercised its right under s 30 of the Heritage Act to appeal against the making of the IHO. This appeal was filed on 27 November 2019. It will later be necessary to consider the contentions raised by the Company in its Statement of Facts and Contentions filed 1 April 2020 in these appeal proceedings. 5. As is customary in Class 1 proceedings, these proceedings were the subject of a conciliation conference pursuant to s 34 of the Land and Environment Court Act 1979 (the Court Act). That conciliation process was unsuccessful, being terminated on 19 August 2020. The successful resolution of the separate Class 1 proceedings concerning the Company's additions and alterations development application resulted in the agreement between the parties that these proceedings should be discontinued. As later noted, those separate Class 1 proceedings otherwise play no role in these proceedings (other than providing an uncontested basis upon which discontinuance should be permitted). The Company's Notice of Motion 1. On 24 September 2020, a Notice of Motion was filed for the Company seeking the following orders: 1 Leave is granted to discontinue the proceedings. 2 The Respondent pay the Applicant's costs of and incidental to the proceedings, including: a. the costs incurred by the Applicant from 26 November 2019 to the commencement of the proceedings on 27 November 2019; b. the costs of Mr Paul Davies in dealing with the proceedings and all attendances relating to the proceedings; and c. the Applicant's costs of the notice of motion, as agreed or assessed. 3 The costs referred to in paragraph 2 shall be paid within 30 days of agreement or certificate of determination of assessment, as the case may be. 4 Any further orders as the Court deems appropriate. The Notice of Motion hearing 1. On 1 February 2021, I conducted the hearing on the above Notice of Motion. The hearing was undertaken using Microsoft Teams software. This hearing was conducted in accordance with the Court's COVID-19 Pandemic Arrangements Policy. No physical attendance in the courtroom was required. Representation 1. Mr T To, barrister, appeared for the Company, whilst Ms N Hammond, barrister, appeared for the Council. Each of the advocates provided helpful written submissions setting out the nature of each party's position on the question of costs. The evidence 1. Evidence in these proceedings was given by affidavit. On behalf of the Company, two affidavits from Ms Alyce Kliese, a solicitor employed by the Company's legal representative (dated 24 September and 8 December 2020), were read without objection. A significant volume of material was contained in annexures to Ms Kliese's first affidavit, whilst limited material was annexed to her second affidavit. A copy of the relevant pages of the Government Gazette (No 130, 1 November 2019) containing the IHO were in evidence behind Tab A of the annexures to Ms Kliese's affidavit of 24 September 2020. 2. An affidavit dated 26 November 2020 from Mr Michael Winram, the Council's legal representative, was read on behalf of the Council. This affidavit was read without objection. A folder of material exhibited to this affidavit was tendered (with this material becoming Exhibit 1). 3. No oral evidence was required. Relevant statutory provisions Introduction 1. Limited elements of two statutes are engaged for the purposes of my consideration. The first is the definition of "development" in the Environmental Planning and Assessment Act 1979 (the EP&A Act). The second is the provision in the Heritage Act enabling the Minister administering that legislation to make an order setting the terms pursuant to which a local government council could make an IHO under that legislation. 2. The special provisions of the Land and Environment Court Rules 2007 (the Court Rules) applying, relevantly, to costs in Class 1 proceedings such as these also require consideration. The EP&A Act definition 1. It is unnecessary to set out the detailed terms of the definition of "development" contained in s 1.5 of the EP&A Act as, during the course of the hearing before me, Ms Hammond (quite properly) made the concession that works permitted by the Company's 2008 subdivision consent fell within the scope of this definition. The Heritage Act provisions 1. The relevant provision of the Heritage Act permitting the Minister to mandate the circumstances under which a local government council can make an IHO are contained in s 25. The relevant terms of this provision are: 25 Minister can authorise councils to make interim heritage orders for items of local heritage significance (1) The Minister may, by order published in the Gazette, authorise a council to make interim heritage orders for items in the council's area. (2) A council authorised under this section may make an interim heritage order for a place, building, work, relic, moveable object or precinct in the council's area that the council considers may, on further inquiry or investigation, be found to be of local heritage significance, and that the council considers is being or is likely to be harmed. (3) … (4) An authorisation under this section can be given subject to conditions and a council cannot act in contravention of the conditions of its authorisation. (5) … 1. In addition, s 30 of the Heritage Act provides for an appeal to this Court, in Class 1, against the making of an IHO by a council. It is not necessary to set out this provision. 2. Finally, it is also necessary to consider the definition of the term "harm" in s 4 of the Heritage Act. It is unnecessary to repeat the entirety of the definition. The relevant elements of it are reproduced below: harm means— (a) …, or (b) …, or (c) in relation to a place or precinct—damage, despoil or develop the land that comprises the place or is within the precinct or damage or destroy any tree or other vegetation on, or remove any tree or other vegetation from, the place or precinct. The relevant provisions of the Court Rules 1. The Court Rules applying, relevantly, to costs in Class 1 proceedings are contained in r 3.7. This rule is in the following terms: 3.7 Costs in certain proceedings (1) This rule applies to the following proceedings (except for appeals under section 56A of the Act)— (a) all proceedings in Class 1 of the Court's jurisdiction, (b) …, (c) … (2) The Court is not to make an order for the payment of costs unless the Court considers that the making of an order as to the whole or any part of the costs is fair and reasonable in the circumstances. (3) Circumstances in which the Court might consider the making of a costs order to be fair and reasonable include (without limitation) the following— (a) that the proceedings involve, as a central issue, a question of law, a question of fact or a question of mixed fact and law, and the determination of such question— (i) in one way was, or was potentially, determinative of the proceedings, and (ii) was preliminary to, or otherwise has not involved, an evaluation of the merits of any application the subject of the proceedings, (b) that a party has failed to provide, or has unreasonably delayed in providing, information or documents— (i) that are required by law to be provided in relation to any application the subject of the proceedings, or (ii) that are necessary to enable a consent authority to gain a proper understanding of, and give proper consideration to, the application, (c) that a party has acted unreasonably in circumstances leading up to the commencement of the proceedings, (d) that a party has acted unreasonably in the conduct of the proceedings, (e) that a party has commenced or defended the proceedings for an improper purpose, (f) that a party has commenced or continued a claim in the proceedings, or maintained a defence to the proceedings, where— (i) the claim or defence (as appropriate) did not have reasonable prospects of success, or (ii) to commence or continue the claim, or to maintain the defence, was otherwise unreasonable. The Ministerial Order 1. On 12 July 2013, a Ministerial Order was published in the Government Gazette setting out the framework for determination by and conditions under which local government councils (including the Council) could impose an IHO. This Ministerial Order was in evidence at Tab E of the annexures to Ms Kliese's affidavit. Schedule 1 contained the list of councils (including the Council) to which the Order applied. Schedule 2 contained the operative provisions of the Order. 2. The case advanced by Mr To relied upon Sch 2(2)(c) of the operative provisions of the Order. On the other hand, the case advanced by Ms Hammond relied upon Sch 2(1)(b) of the operative provisions of the Order. As each of the advocates only relied on limited elements of the relevant provision invoked, it is unnecessary to repeat each of the elements in their entirety. The relevant portions of the Ministerial Order are the following terms: SCHEDULE 2 Conditions for Local Councils to make Interim Heritage Orders (1) A council must not make an Interim Heritage Order (IHO) unless: (a) … (b) it has considered a preliminary heritage assessment of the item prepared by a person with appropriate heritage knowledge, skills and experience employed or retained by the council and considers that: (i) the item is or is likely to be found, on further inquiry and investigation, to be of local heritage significance; (ii) the item is being or is likely to be harmed; (iii) the IHO is confined to the item determined as being under threat; and (c) … (2) A council must not make an IHO where: (a) … (b) … (c) … (d) a development consent (other than a complying development certificate), has been granted in relation to the item that permits the item to be harmed, and the development consent is still in force; or (e) … 1. The approaches taken by the parties to the relevance of the above elements of the Ministerial Order are starkly divergent and this underpins this costs' controversy. It is, however, to be noted that s 25(4) of the Heritage Act mandates that a council comply with the terms of a ministerial order in the making of an interim heritage order. The scope of the 2008 subdivision consent 1. In 2008, the Company was granted development consent to subdivide the property (the 2008 subdivision consent). The approved subdivision envisaged not only the creation of a number of new allotments but also the construction of what would be necessary roadworks and other works required to service those allotments (when completion of the subdivision had been effected). By 2013, the Council accepts, the 2008 subdivision consent had been validly commenced and, as a consequence, remained on foot at the time of the Council purporting to make the IHO that is the subject of these Class 1 proceedings. 2. Mr To, in his written submissions, incorporated what was described as being an overlay image. This overlay image was said to be a depiction of the land encompassed by the IHO overlain on an extract of the subdivision layout plan approved by the 2008 subdivision development consent. 3. In her written submissions, Ms Hammond questioned the provenance of Mr To's image, indicating that the Council did not necessarily accept that it represented an accurate depiction of the interrelationship between the two elements said to be incorporated in it. However, during the course of the hearing, Ms Hammond (again quite properly) made a further concession on behalf the Council. That concession was that the 2008 subdivision consent did grant approval from the Council for the carrying out of activities within the IHO‑defined curtilage. This further concession removed the necessity for Mr To to take me through necessary evidentiary material to seek to establish the validity of the image upon which he had proposed to rely. The concession meant that the relevant elements of each of the written submissions did not require further consideration. 4. This concession, taken together with that earlier noted, meant that there was no contest that the 2008 subdivision consent permitted development within the IHO‑defined curtilage. The Class 1 development application appeal 1. In parallel with these proceedings, the Company had also commenced a separate Class 1 appeal pursuant to s 8.7 of the EP&A Act (the DA proceedings) relating to an application which had been made to the Council for development consent for additions and alterations to the dwelling on the property. 2. The DA proceedings were settled following a conciliation conference conducted by O'Neill C pursuant to s 34 of the Court Act on 28 October 2020. Her decision recording that agreement had been reached (Twynam Investments Pty Ltd (formally known as Twynam Agricultural Group Pty Ltd) v Goulburn Mulwaree Council [2020] NSWLEC 1557) said, at [9]: The proposal was amended following the agreement of the heritage experts on a scheme for alterations and additions to the existing dwelling that retains the identified heritage values of the dwelling. I accept the parties' agreed submission that the amended proposal is acceptable in terms of its impacts on the identified heritage values of the existing dwelling. 1. Matters concerning the DA proceedings play but a limited, later‑noted role in my consideration of the Company's costs application in these IHO proceedings. The Company's IHO appeal contentions 1. I have earlier noted that the Company had filed, on 1 April 2020, a Statement of Facts and Contentions in support of its appeal against the making of the IHO. A copy of that document was in evidence behind Tab K of the annexures to Ms Kliese's affidavit of 24 September 2020. 2. This document pleaded four separate bases upon which the Company contended that the appeal against the IHO should be upheld. The first of those contentions advanced the proposition that there was no available statutory basis, in light of the terms of the Ministerial Order and the requirement in s 25(4) of the Heritage Act, upon which the IHO could have been made by the Council. 3. The three additional contentions pressed on behalf of the Company raised matters going to merit consideration of the scope and extent of the IHO. 4. For the purposes of my present consideration, it is only necessary to set out in full the first of these contentions. The contention (and its supporting particularisation) were in the following terms: 1. Existing Development Consents The IHO has been made in circumstances where development consents have been granted and are in force, contrary to the Ministerial Authorisation. Particulars a) Schedule 2 of the Ministerial Authorisation requires that "a council must not make an IHO where… a development consent (other than a complying development certificate), has been granted in relation to the item that permits the item to be harmed, and the development consent is still in force". b) The development consent number 539/0607/DA for a rural subdivision with staged release (the Subdivision Consent) was granted, permits the item to be harmed, and is still in force. c) The development consent number 45/1011/MOD modified the Subdivision Consent, was granted, permits the item to be harmed, and is still in force. d) The development consent number DA/0180/1011 for alterations and additions to the existing dwelling at 14597 Hume Highway, Marulan, was granted, permits the item to be harmed, and is still in force. The Council's appeal response 1. The Council's Statement of Facts and Contentions in Reply (Annexure L to Ms Kliese's affidavit of 24 September 2020) was filed on 14 May 2020. The Council's response to the Company's first contention was in the following terms: 1. Existing Development Consents In response to Contention 1 the Respondent says: The IHO has been made in accordance with the Ministerial Authorisation. Council agrees that development consent number 539/0607/DA as modified by 45/1011/MOD for a rural subdivision with staged release (the Subdivision Consent) was granted and is in force but considers that it does not permit the item to be harmed. Particulars a) Schedule 2 of the Ministerial Authorisation requires that "a council must not make an IHO where… a development consent (other than a complying development certificate), has been granted, permits the item to be harmed, and is still in force." b) The development consent number 539/0607/DA for a rural subdivision with staged release does not permit the item to be harmed. The application was supported by a Non - indigenous Heritage Assessment dated August 2007, prepared by New South Wales Archaeology Pty Ltd which recommended "the proposed subdivision will not directly impact any of the identified heritage items at "Wingello Park"". c) The development consent number 45/1011/MOD modified the Subdivision Consent, and is still in force. This modification was primarily concerned with staging. The subdivision layout remained substantially the same in relation to the heritage items and in accordance with the original approved plans for the Subdivision Consent, therefore the modification did not permit the items to be harmed. d) The development consent number DA/0180/1011 for alterations and additions to the existing dwelling at 14597 Hume Highway, Marulan was granted and has lapsed. No evidence has been provided to Council to indicate commencement of the consent prior to, or since the consent lapsed on 28 January 2016. Discontinuance of the substantive proceedings 1. The resolution of the DA proceedings to the satisfaction of the Company and the Council by the s 34 agreement discussed earlier rendered it unnecessary for the Company to pursue these Class 1 proceedings to finality. 2. As can be seen from the terms of the Company's Notice of Motion earlier set out, the proposed first order is: Leave is granted to discontinue the proceedings. 1. The now agreed position between the parties is that these proceedings should be discontinued. It is, therefore, appropriate to make the order thus sought - only leaving in contest the issue of costs in this Class 1 appeal and of this costs application. The Company's costs position 1. Mr To's written and oral submissions were thoughtful and comprehensive. Without any disrespect to those submissions, the case he advanced on behalf of the Company can be summarised in a series of short propositions. These are: * the IHO that purported to be made by the Council was in breach of Sch 2(2)(d) of the Ministerial Order; * this was because the 2008 subdivision consent operated to permit harm as defined to the identified heritage item, this being the relevant exclusionary element of the provision in the schedule; * the first contention pressed by the Company in its Statement of Facts and Contentions in these proceedings expressly raised this invalidity; * properly understood, it was inevitable that the Company would have succeeded in establishing the correctness of that contention and, hence, the invalidity of the IHO; * establishing such a conclusion to the satisfaction of the decision-maker in these Class 1 proceedings would have necessitated the decision‑maker then concluding that the Company's appeal against the IHO should be upheld and that the Council's opposition was futile; * such a finding was within power for a decision-maker in Class 1 proceedings and would not involve the necessity for any impermissible purported declaration‑making, declaration‑making being only permissible in Class 4 proceedings; * the inevitability of the Class 1 decision-maker reaching that conclusion that the IHO was invalid did not require me, in these proceedings, to undertake any impermissible hypothetical merit hearing, contrary to the discussion by McHugh J in Re Minister for Immigration and Ethnic Affairs; Ex parte Lai Qin [1997] HCA 6, (1997)186 CLR 622 (Lai Qin); and * the above matters satisfied r 3.7(3)(f)(i) of the Court Rules, thus making it appropriate to make a costs order in these proceedings in favour of the Company. The Council's costs position 1. During the course of her oral submissions, Ms Hammond expanded on her written submissions explaining why these IHO proceedings were properly to be characterised as ones engaging matters of merit consideration concerning the IHO. 2. She took me to three Class 1 decisions where the role of the Court in addressing an interim heritage order had been considered. Each of these decisions, she submitted, provided a basis upon which I should conclude that the IHO engaged by these proceedings was one with respect to which the Court, standing in the shoes of the Council, would have had power to assess merit matters engaged by the Council's processes and to assess whether, on relevant merit matters, it would have been appropriate for the Class 1 decision‑maker to exercise the discretions of the Council and thus sustain the IHO or, potentially, intervene to modify or adjust in some fashion using the power available pursuant to s 39(2) of the Court Act. 3. This position arises, as I understood her submissions (both written and oral), because a proper understanding of the four contentions advanced by the Company, in its 1 April 2020 Statement of Facts and Contentions, all engaged matters of merit consideration concerning the IHO. 4. The first decision to which Ms Hammond took me was a decision of Pain J in Byron Ventilink Pty Limited v Byron Shire Council (2005) 142 LGERA 215; [2005] NSWLEC 395. Of particular relevance to Ms Hammond's argument were paragraphs [47], [52] and [61] of her Honour's decision. These paragraphs were in the following terms: 47 The Applicant further argued that the Court only had power to continue or revoke the IHO as made by the Council, and that the Court did not have power to amend the IHO. As s 29(4) of the Heritage Act refers only to the power of councils to revoke IHOs, and no reference is made to any power to modify an IHO, the Applicant argued that it must have been the intention of Parliament to limit the Court's power to the revocation of an IHO. The Applicant contrasted s 29(4) of the Heritage Act to s 120L of the Heritage Act which specifically provide for the revocation and modification of orders by the Court. This meant that the Court could not amend the IHO to refer only to the 1929 building. … 52 If the Court found that the Council had improperly issued the IHO, the Council submitted that in the alternative the Court could and should amend the IHO made over the subject site such that it applied only to the 1929 building. The Council submitted that under s 39(2) of the Land and Environment Court Act 1979 ("the Court Act") the Court stands in the Council's shoes in making the IHO. The Council argued that it is therefore open to the Court to amend as well as revoke the IHO. … 61 As I have found that the Council has not breached Sch 1(1)(b)(i) of the Minister's order and cl 5.5.2(1)(b)(i) of the Guidelines and Sch 1(1)(b)(iii) of the Minister's order and cl 5.5.2(1)(b)(iii) of the Guidelines, it follows that the Council has not breached Sch 1(6) of the Minister's order and cl 6 of the Guidelines. I do consider the Guidelines are mandatory and must be complied with given Sch 1(6) of the Minister's order. 1. The second of the decisions to which Ms Hammond took me was a decision of Gray C in Forte Construction Group Pty Ltd v Inner West Council [2018] NSWLEC 1400. The paragraphs of the Commissioner's decision relevant to the submissions advanced by Ms Hammond were [7] and [17] to [20]. These paragraphs were in the following terms: 7 In considering the appeal, pursuant to s 39(2) of the Land and Environment Court Act 1979 ("LEC Act") the Court re-exercises the functions of the Council in determining whether to issue the IHO. There is a dispute between the parties as to what needs to be determined in exercising that power. The Council's position is that the Court's role is confined to determining whether there should be interim protection, and to the question of whether the building "may, on further inquiry or investigation, be found to be of local heritage significance" in accordance with s 25(2) of the Heritage Act. Forte Group's position is that, if there is no further inquiry or investigation to be carried out, the Court's role extends to determining whether the building is of local heritage significance. … Determining the role of the Court on appeal against an IHO 17 In understanding the role of the Court on appeal and the application of s 39 of the LEC Act, it is imperative to consider the function that was carried out and the bounds of the discretion exercised by the Council in issuing the IHO. It is this function and discretion that informs the role of the Court, which has pursuant to s 39(2) "all the functions and discretions which the person or body whose decision is the subject of the appeal had in respect of the matter the subject of the appeal." 18 The discretionary power of the Council to issue an IHO arises pursuant to s 25(2) of the Heritage Act. However, that discretion is given only by authorisation by the Minister. Section 24 makes it clear that the Minister has the power to make an IHO, and s 25 concerns the power to authorise local councils to make an IHO. Sub-sections (1) and (2) of section 25 are as follows: "(1) The Minister may, by order published in the Gazette, authorise a council to make interim heritage orders for items in the council's area. (2) A council authorised under this section may make an interim heritage order for a place, building, work, relic, moveable object or precinct in the council's area that the council considers may, on further inquiry or investigation, be found to be of local heritage significance, and that the council considers is being or is likely to be harmed." 19 The bounds of the exercise of the discretion conferred in (2) are limited by the terms of the authorisation. Sub-section (4) provides: "(4) An authorisation under this section can be given subject to conditions and a council cannot act in contravention of the conditions of its authorisation." 20 Therefore, pursuant to s 39(2) of the LEC Act, the Court's power permits it to exercise the discretion conferred by s 25(2) of the Heritage Act subject to the limitations on that function imposed by the conditions of the authorisation. 1. The third decision to which Ms Hammond took me was the decision of O'Neill C in Li v Willoughby City Council [2018] NSWLEC 1262. A number of paragraphs ([5], [6], [21] to [23] and [26]) require setting out to provide a basis for understanding why Ms Hammond proposed that this decision also supported the broad submission she advanced on behalf of the Council. These paragraphs of O'Neill C's decision were: 5 The Council has raised a single contention in these proceedings, namely that on further inquiry or investigation the dwelling house at 9 Centennial Avenue Chatswood may be found to be of local heritage significance. 6 The applicant contends that the jurisdiction for the Council to have made the IHO was not sufficiently engaged, because the Council in making the IHO did not comply with the terms of condition (1)(b) of the conditions for local council's to make IHOs, set out in Schedule 2 of the Ministerial Order published in the NSW Government Gazette No. 90 dated 12 July 2013 on pages 3421-3 ("Ministerial Order", Exhibit 5, Tab 34), requiring the Council to consider a preliminary heritage assessment of the item prepared by a person with appropriate heritage knowledge, skills and experience employed or retained by the Council. … 21 I am satisfied that in making the IHO for 9 Centennial Avenue, Chatswood, the Council complied with the conditions in Schedule 2 of the Ministerial Order authorising the Council to make IHOs for items within its local government area in accordance with s 25 of the Heritage Act and that the IHO was validly made. 22 The applicant submitted that the conditions in the authorisation contained in the Ministerial Order are fundamental in nature and the absence of an essential precondition to the exercise of power granted under the Heritage Act by the Ministerial Order means that there was no decision made by the Council in relation to the IHO. It is in the statutory framework of the Heritage Act that unless the preconditions to the grant of power existed, the Council had no power to make the IHO (Project Blue Sky Inc and others v Australian Broadcasting Authority (1998) 194 CLR 355, 381). As a consequence, the Court does not get to the point of considering the merits of this appeal, because the jurisdictional point raised by the applicant is a threshold question and s 39(3) of the LEC Act presupposes the presence of jurisdiction for the purposes of determining the merits. 23 Notwithstanding my finding that the IHO was validly made, this Court has jurisdiction to consider afresh the Council's decision to make the IHO, pursuant to ss 39(2) and (3) of the LEC Act, because the Council's decision to make the IHO is a decision purported to have been made in the exercise of the powers conferred by an enactment, whether or not as a matter of law it was validly made (Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd (1979) 24 ALR 307 [18] and the "Lawlor principle" has been most recently embraced by the High Court in Plaintiff M174/2016 v Minister for Immigration and Border Protection & Anor [2018] HCA 16 [39]). … 26 As the draft Heritage Inventory Sheet was compiled by the Council's heritage planner, based on the information provided in the two heritage reports, which were authored by heritage consultants with architectural and cultural heritage expertise, the requirement in condition (1)(b) of the Ministerial Order for the Council to consider a preliminary heritage assessment of the item prepared by a person with appropriate heritage knowledge is satisfied. 1. As I have earlier noted, all three decisions were ones in Class 1 and involved appeals against the imposition of interim heritage orders by the relevant local council. Although these decisions arose from the facts and circumstances of the interim heritage order involved in each instance, the passages which I have extracted above do not address matters of merit but address, in each instance, the proper role of the Court in such appeals. 2. It is also to be observed that, although one of the decisions was that of a judge, such a judicial decision in a Class 1 merit appeal has equal weight to that of a commissioner sitting in that same jurisdiction. It is also to be observed that the question of the power of the Court to intervene with respect to the merits of an interim heritage order (if such an order is validly engaged for such an appeal) is consistently approached across all of these three decisions. 3. Based on what has been set out above from those three decisions, Ms Hammond submitted that, properly understood, it would have been necessary in this Class 1 appeal for the decision‑maker to consider whether or not the IHO had been appropriately made and crafted in the context of Sch 2(1)(b) of the Ministerial Order and, therefore, whether some intervention with respect to the IHO was appropriate to be made by that decision‑maker. 4. As the necessary consequence of that set out above, she submitted that for me to engage in consideration of those matters arising from that provision of the Ministerial Order (given that merit issues were in contest between the parties because of the contentions in the Company's Statement of Facts and Contentions and those of the Council in its Statement of Facts and Contentions in Reply) would necessitate the undertaking of a hypothetical trial of the merits of the matters in dispute. This, she submitted, would be in breach of the admonition not to do so from McHugh J in Lai Qin at 624 and 625. 5. The conclusion to be drawn from this, she proposed, was that I should not make any costs order in the Class 1 proceedings in favour of the Company. Consideration 1. As these proceedings are in Class 1, the conventional civil litigation presumption that "costs follow the event" (r 42.1 of the Uniform Civil Procedure Rules 2005; Latoudis v Casey (1990) 170 CLR 534) does not apply. It is replaced by r 3.7(2) of the Court Rules, a provision which only permits costs in proceedings such as these to be awarded if it is "fair and reasonable" that this occur. This provision in the Court Rules sets out a non-exhaustive list of circumstances when it might be appropriate to make a costs order in such matters. Other instances also potentially arise (as discussed by Preston CJ in Grant v Kiama Municipal Council [2006] NSWLEC 70). 2. For present purposes, the Company relies on specific elements of r 3.7(2) of the Court Rules identified by Mr To in his written submissions at paragraph 15. These elements were r 3.7(3)(c), (d) and (f). 3. I am satisfied that the chain of reasoning advanced for the Company, founded on Contention 1 of its Statement of Facts and Contentions of 1 April 2020 (as earlier summarised in setting out Mr To's chain of reasoning) is correct. I have so concluded for the reasons which he advanced. As a consequence, I have concluded that the Company has established, pursuant to r 3.7(3)(f)(i), a proper basis for a costs order in its favour. 4. First, it is clear that Contention 1 raised on behalf of the Company advances the proposition that the IHO had not been made validly by the Council because a proper understanding of the 2008 subdivision consent made clear it was a consent that fell squarely within the scope of Sch 2(2)(d) of the Ministerial Order. In this context, it is to be observed that this element of the Ministerial Order is to be read, relevantly, as if the earlier set out definition of harm was confined to: in relation to a place or precinct— ... develop the land that …. is within the precinct ... 1. The appropriateness of such an approach to the element of the Schedule and the reading of the definition of harm proposed for the Company is entirely consistent with the approach to construction mandated by the High Court in Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28. 2. To endeavour to read it in any different fashion would require an artificial and forced insertion of additional elements as being necessary to understand the provision. Such an approach would be contrary to the decision of the High Court in Taylor v The Owners of Strata Plan 11564 and Others (2014) 253 CLR 531; [2014] HCA 9 - as there is no clearly obvious drafting deficiency in either the terms of Sch 2(2)(d) or the definition of harm that would render it necessary to import additional words in either (or both) to provide clear and unambiguous guidance to a local council concerning limitations on its power to make an interim heritage order and, relevant to these proceedings, a jurisdictional gateway that required to be open before the path of making such an interim heritage order was open to a council. 3. Passage through this gateway is a mandated requirement of a jurisdictional nature. The Ministerial Order makes it clear that a council must not make any interim heritage order if that which is posited by Sch 2(2)(d) as potentially being the position is, in fact, the position with respect to an item or place the subject of consideration as to whether or not making any interim heritage order was permissible. The Heritage Act (s 25(4)) requires the adoption of this approach. 4. In these proceedings, the 2008 subdivision consent made it inevitable that, had the jurisdictional gateway and the existence of that consent properly been brought to the attention of the Council (acknowledging, clearly, from the documentary evidence that this position was not drawn to the attention of the Council), the inevitable consequence must have been that the Council could not exercise the power to make the IHO. 5. Such a conclusion is not one founded on any merit matters relating to Contentions 2 to 4 pressed by the Company in its 1 April 2020 Statement of Facts and Contentions. I certainly accept that, had I engaged with those three contentions on this costs application, this would have been an impermissible process. However, for the reasons set out above, I do not get to the position where I might be tempted to do so. 6. I have earlier extracted and set out the relevant paragraphs of the three decisions concerning the making of interim heritage orders relied upon by Ms Hammond in support of the Council's resistance to a costs order being made in the Company's favour. All three of these decisions addressed what was the power of the Court with respect to any interim heritage order in circumstances where that order had been made validly. 7. The necessity for satisfaction of that test of the validity as being anterior to the exercise of merit discretion can clearly be seen from [61] of the decision of Pain J in Byron Ventilink earlier quoted. In that extracted element, although her Honour was explaining that satisfaction of the Guidelines was a jurisdictional prerequisite to the valid making of any interim heritage order, the necessary inference is that an earlier necessary jurisdictional prerequisite (that all necessary mandatory gateways set by the Ministerial Order in Sch 2(2) were open) was necessarily engaged prior to consideration of any merit matters in Sch 2(1). 8. In these proceedings, for the reasons earlier explained, I am satisfied that the necessary jurisdictional gateway in Sch 2(2)(d) was shut, giving rise to the position that the Council did not have jurisdiction to make the IHO. This, in turn, means that it is fair and reasonable to make a costs order in the Company's favour because the Council's defence had no reasonable prospect of success (r 3.7(3)(f)(i) of the Court Rules). Exclusion of excessive photocopying 1. During the course the hearing, when Mr To took me to the photocopy of the Government Gazette of 12 July 2013 which included the Ministerial Order under the Heritage Act, I raised with him what seem to me to be the excessive extent of the photocopied material behind Tab E of the annexures to Ms Kliese's affidavit. This material comprising 49 double-sided pages of the Government Gazette, commencing at gazette folio 3399 and concluding at gazette folio 3496. 2. I indicated that, whilst I accepted that the first of those folios was appropriate to be incorporated in the tendered material (to provide necessary and relevant context) and that gazette folios 3421 to 3424 were also necessarily incorporated as they contained the full terms of the Ministerial Order, I was unable to see any justification in the photocopying and tendering of the remaining 93 Government Gazette folios. 3. As unnecessary photocopying is to be discouraged (for both environmental and cost constraints reasons), I indicated that, in the event that the Company was successful in these costs proceedings (as it has been), I would be excluding, specifically, such photocopying costs as would otherwise have been included for the unnecessary Government Gazette folios. Mr To indicated that he would not contest such an eventuality. Costs of the costs application 1. Although these proceedings, in the broader sense earlier discussed, are subject to the special costs provisions in the Court Rules earlier set out, that position is not customarily applied to costs application as is here the position. For such costs applications, costs customarily follow the event - with the event being the success or otherwise of the moving party (Sze Tu v Lowe (No 2) [2015] NSWCA 91). 2. No submissions were made to me during the course of the hearing that this position should not here be applied. Therefore, as a consequence of the Applicant's general overall success in its costs application, an order in its favour for the costs of these costs proceedings is also to be made. Orders 1. I have earlier set out the terms of the orders sought by the Company in the Notice of Motion with which I am dealing. As I discussed with the advocates, if the Company was to be successful (as it has been), the resulting orders did not require the prescriptive detail embodied in the terms of the orders proposed in the Notice of Motion concerning costs. It therefore follows from my conclusion concerning costs, and the agreed position between the parties that these proceedings should be discontinued, that the orders of the Court are: 1. The proceedings are discontinued; 2. The Respondent is to pay the Applicant's costs of the proceedings on the ordinary basis as agreed or assessed; 3. The Respondent is to pay the Applicant's costs of these costs proceedings (other than the costs associated with the preparation and/or copying of Government Gazette folios 3400 to 3420 and 3425 to 3496 of the annexures to the affidavit of Alyce Kliese dated 24 September 2020) on an ordinary basis as agreed or assessed; 4. The Respondent is to pay the Applicant's costs as ordered in (2) and (3) within 28 days of agreement or assessment of those costs; and 5. The exhibit is returned. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 February 2021