Land and Environment Court New South Wales Medium Neutral Citation: Filetron Pty Ltd v Innovate Partners Pty Ltd atf Banton Family Trust 2 and Goulburn Mulwaree Council (No 3) [2023] NSWLEC 104 Hearing dates: On the papers (written submissions filed 16, 28, 30 June and 7 July 2023) Date of orders: 16 October 2023 Decision date: 16 October 2023 Jurisdiction: Class 4 Before: Robson J Decision: See orders at [32] Catchwords: COSTS — Exercise of discretion to award costs in Class 4 judicial review proceedings — Whether the making of an order under s 25B for conditional validity of a development consent is the event costs should follow — Whether costs should be apportioned in circumstances — Whether a consent authority should be exempted from costs by reason of its submitting appearance COSTS — Interlocutory process — Exercise of discretion to award costs in relation to an application under s 25C of the Land and Environment Court Act 1979 (NSW) — Where the orders are opposed Legislation Cited: Civil Procedure Act 2005 (NSW), s 98 Environmental Planning and Assessment Act 1979 (NSW), s 4.15 Land and Environment Court Act 1979 (NSW), ss 25B, 25C Uniform Civil Procedure Rules 2005 (NSW), rr 1.5, 42, 42.1, Sch 1 Cases Cited: Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261 Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 Filetron Pty Ltd v Innovate Partners Pty Ltd atf Banton Family Trust 2 and Goulburn Mulwaree Council [2023] NSWLEC 45 Filetron Pty Ltd v Innovate Partners Pty Ltd atf Banton Family Trust 2 and Goulburn Mulwaree Council (No 2) [2023] NSWLEC 93 Highland v Labraga (No 3) [2006] NSWSC 871 Homemakers Supacenta-Belrose Pty Ltd v Warringah Council (No 2) [2008] NSWLEC 126; (2008) 158 LGERA 90 James v Surf Road Nominees (No 2) [2005] NSWCA 296 Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15 Rossi v Living Choice Australia Ltd [2015] NSWCA 244 Sze Tu v Lowe (No 2) [2015] NSWCA 91 Windsurfing International Inc v Petit [1987] AIPC 90-441 Category: Costs Parties: Filetron Pty Ltd (ACN 054 309 009) (Applicant) Innovate Partners Pty Ltd (ACN 131 941 145) atf Banton Family Trust 2 (First Respondent) Goulburn Mulwaree Council (Second Respondent) Representation: Counsel: J Lazarus SC with M Seymour (Applicant) J Hutton SC with G Ng (First Respondent) A Hammond (Second Respondent) Solicitors: CML Lawyers Pty Ltd (Applicant) Shaw Reynolds Lawyers (First Respondent) Maddocks Lawyers (Second Respondent) File Number(s): 2021/00353279 Publication restriction: Nil Judgment 1. In these Class 4 judicial review proceedings, Filetron Pty Ltd ('Filetron') challenged the grant of development consent DA0288/2021 ('Consent') to Innovate Partners Pty Ltd atf Banton Family Trust 2 ('Innovate') by Goulburn Mulwaree Council ('Council). On 27 April 2023, I made orders pursuant to s 25B of the Land and Environment Court Act 1979 (NSW) ('Court Act') suspending the operation of the Consent and specifying the terms the compliance with which would validate the Consent: Filetron Pty Ltd v Innovate Partners Pty Ltd atf Banton Family Trust 2 and Goulburn Mulwaree Council [2023] NSWLEC 45 ('primary proceedings'). I reserved the question of costs. 2. On 24 May 2023, after the issue of a notice of determination for the regrant of the development consent with the required alterations ('regranted consent'), Council filed a notice of motion seeking various orders under s 25C(2) of the Court Act. That relief was opposed by Filetron, and the parties each provided written submissions. That matter proceeded on the papers and on 11 September 2023, I determined the motion in favour of Council and made orders validating the regranted consent and revoking the suspension of that instrument: Filetron Pty Ltd v Innovate Partners Pty Ltd atf Banton Family Trust 2 and Goulburn Mulwaree Council (No 2) [2023] NSWLEC 93. I also reserved costs of the motion. 3. The proceedings having been finalised; the issue of costs remains. Each party filed submissions with respect to costs of each of the primary proceedings and of Council's motion. The parties have consented to the question of costs being determined on the basis of their written submissions. 4. These reasons assume familiarity with the factual background detailed in the preceding judgments. However, I record for convenience, that Filetron advanced two grounds of relief in the primary proceedings, being, first, that Council's delegate failed to properly consider certain matters under s 4.15(1)(b) of the Environmental Planning and Assessment Act 1979 (NSW) ('EPA Act') (to avoid confusion, hereafter, 'Ground 1'); second, that Council's delegate did not have delegated authority to determine the development application (hereafter, 'Ground 2'). Filetron was successful in respect of Ground 1. Costs of the primary proceedings Submissions 1. The respective positions of each of the three parties on costs of the primary proceedings are divergent. Relying on the general rule that costs follow the event, Filetron submits that it is entitled to its costs as it succeeded in challenging the development consent (by establishing that it was granted contrary to the EPA Act). Filetron emphasises that the relevant event pursuant to which costs should be awarded is the Court's finding that a material error was made by Council in its consideration of Innovate's development application, rather than the Court's decision to make an order under s 25B of the Court Act. It disavows any "disentitling" conduct. 2. Innovate, who appeared as an active contradictor in relation to both grounds raised by Filetron, similarly submits that the rule that costs ordinarily follow the event should apply in its favour, albeit by relying on a different characterisation of the relevant "event". Innovate highlights that Filetron sought (in its amended summons) a declaration of invalidity and was unsuccessful in obtaining such relief in circumstances where, by application of s 25B of the Court Act, the Consent was merely suspended. Further, Innovate submits that Filetron's failure to obtain the practical relief it had sought in the proceedings is apparent from the fact that it has commenced proceedings in the Court of Appeal in respect of the whole of the primary judgment. As such, the s 25B order is the relevant event and thereafter the basis upon which costs should be determined. 3. Innovate however concedes that a slight apportionment of the costs it maintains it is entitled to recover from Filetron as a result of being the successful party may be appropriate in circumstances where Filetron succeeded in relation to Ground 1. However, the proportion of costs to which it remains entitled should be "substantial". 4. In the event that, contrary to its primary position, the Court determines costs in favour of Filetron, Innovate submits that Filetron should not be awarded any of its costs for the period up to and including 9 November 2022 given that various grounds of review upon which it relied up until that date were either abandoned or rejected by the Court. As for the remainder of Filetron's costs on and from 10 November 2022, Innovate notes that the ground upon which Filetron failed (Ground 2) dominated the course of argument and therefore submits that any costs order should be limited to 25 per cent of the costs incurred by Filetron during that period and should be borne equally by it and Council. 5. Council submits, first, that it ought not be liable for costs in relation to Ground 1 as it chose not to defend that ground and entered a submitting appearance. In circumstances where that ground was actively defended by Innovate, Filetron may be more appropriately compensated for its costs in this respect by Innovate. Council, however, seeks an order in its favour for costs incurred in relation to Ground 2, where it took an active role and where Filetron was unsuccessful. In this regard, and insofar as the two grounds of appeal raised discrete issues, Council submits that it is appropriate for the Court to make an issues-based apportionment of the costs. 6. Innovate, however, qualifies the implication of Council's conduct in entering a submitting appearance in circumstances where it only did so in relation to one of the grounds of review and where Council's prior conduct was the effective cause of the litigation. In these circumstances, it submits that should the Court find in Filetron's favour in relation to costs, liability should be borne in equal proportions by both respondents. Findings 1. The Court has a broad discretion as to costs pursuant to s 98 of the Civil Procedure Act 2005 (NSW) ('CP Act') and the Uniform Civil Procedure Rules 2005 (NSW) ('UCPR') to determine by whom, to whom, and to what extent costs are to be paid. In Class 4 proceedings, the Court's discretion with respect to costs is governed by the presumption in r 42.1 of the UCPR that costs will follow the event and be payable on the ordinary basis unless the circumstances justify some other order: UCPR, r 1.5; Sch 1. 2. As costs are contested, it is necessary to consider whether, in the circumstances, it is appropriate to depart from that general presumption in r 42 of the UCPR and, if so, in what fashion and to what extent. Characterisation of the "event" 1. It is first necessary to identify the "event" that costs should follow. In this regard, despite the Court being generally concerned with the practical result of a particular claim, I accept that a case involving several parties and issues may require taking multiple events into account: Windsurfing International Inc v Petit [1987] AIPC 90-441 at 37,861-37,862 (Waddell J); Doppstadt Australia Pty Ltd v Lovick & Son Developments Pty Ltd (No 2) [2014] NSWCA 219 at [15]; Sze Tu v Lowe (No 2) [2015] NSWCA 91 at [39]. 2. As noted above, Filetron's amended summons raised two grounds of review in relation to the development consent as a result of which it sought a declaration of invalidity. Importantly, success in relation to either ground would have voided the development consent and resulted in the Court either suspending or invalidating it. I consider that the relevant "event" is therefore a finding that there has been a breach or that there had been a failure to delegate which would lead to invalidity. Leaving aside for a moment Innovate's success in obtaining a s 25B order, Filetron was successful in establishing Ground 1, that is, it was successful in bringing an application which gave rise to a finding that there was a breach of the EPA Act sufficient to otherwise invalidate the development consent. In addition, I note that an order under s 25B only arises in circumstances where a court would otherwise have determined that a development consent is invalid. This approach is supported by Pain J's findings in Homemakers Supacenta-Belrose Pty Ltd v Warringah Council (No 2) [2008] NSWLEC 126; (2008) 158 LGERA 91 at [11]-[12] that, in circumstances such as the present, the "event" is the Court's conclusion as to invalidity rather than the outcome of the s 25B discretion. 3. The above finding suggests that costs ought to be awarded in Filetron's favour subject to there being no disentitling conduct and to any appropriate apportionment being made. I do not consider that Filetron has engaged in any form of disentitling conduct, nor has any party so suggested. The abandonment by Filetron of a number of pleaded claims in its original summons on 9 November 2022 (some two weeks before the primary hearing) is not determinative in my view as the Court made orders by consent on 8 November 2022 that Filetron would pay Innovate's costs thrown away by reason of the amendment. Appropriateness of apportioning costs 1. Noting that Filetron failed in relation to Ground 2 of its amended summons, I accept that in circumstances where there has been a mixed outcome in the proceedings, in the sense of the successful party (Filetron) not succeeding on all issues, it may be appropriate to consider an apportionment of costs as between different issues in the proceedings. 2. A court will usually only deprive the successful party of the costs relating to an issue on which the successful party lost when that issue is clearly dominant or severable: Monie v Commonwealth of Australia (No 2) [2008] NSWCA 15 at [64] (Campbell JA); James v Surf Road Nominees (No 2) [2005] NSWCA 296 at [35]. As previously noted, Filetron's amended summons raised two streams of argument, one relating to a failure of Council's delegate to consider mandatory matters and a consequential breach of the EPA Act (Ground 1), and the other concerning the decision-maker's alleged lack of (delegated) authority to determine the development application (Ground 2). Albeit directed to the same relief, these grounds raised issues that were legally and factually separate, required consideration of different evidence and principles, and overall had no bearing upon one another. To that extent, I find that some apportionment of the costs to be borne by both Innovate and Council is appropriate. 3. Be that as it may, given the relatively short amount of time that the delegation claim required to be pleaded and considered, and in circumstances where it occupied a small field of the evidence adduced in the proceedings, I consider that a small percentage deduction in the overall costs is appropriate. In so finding, I am conscious that the extent of apportionment is a matter of discretion and that an assessment of this nature does not require mathematical precision: Dodds Family Investments Pty Ltd v Lane Industries Pty Ltd (1993) 26 IPR 261. Doing the best I can in a broad-brush way, subject to my consideration of Council's position later in this judgment, I consider it is reasonable that, subject to the matters considered below, Filetron should receive 80 per cent of its costs of the primary proceedings. Implications of Council's conduct in entering a submitting appearance 1. Finally, Council's decision to enter a submitting appearance in relation to Ground 1 of the amended summons invites consideration of whether liability for Filetron's costs should be borne jointly and severally by Innovate and Council. While a submitting appearance does not provide an immunity from costs for a consent authority, where a contradictor exists and the consent authority genuinely takes no part in the proceedings, it will generally not be ordered to pay costs: Rossi v Living Choice Australia Ltd [2015] NSWCA 244 ('Rossi') at [73] (Basten JA; Ward JA agreeing); Highland v Labraga (No 3) [2006] NSWSC 871 at [19]-[23]. 2. Council filed a submitting appearance only in relation to Ground 1, which was actively defended by Innovate (who, as noted above, actively defended both grounds advanced). Filetron accepts that Ground 1 occupied a larger part of the proceedings. To the extent that Council did not actively participate on this issue, its conduct in this regard did not result in any of the parties incurring additional costs. Further, insofar as Innovate actively defended Ground 1, the risk of Filetron not being compensated in this respect is mitigated. 3. While Council's conduct triggered the Class 4 judicial review proceedings, the mere fact that the decision-maker is found to have erred in its approach is not, in and of itself, a sufficient reason to order costs against it, being costs incurred after the entry of a submitting appearance: Rossi at [73] per Basten JA (Ward JA agreeing). Any costs incurred after the entry of its submitting appearance in relation to Ground 1 were incurred because Innovate defended that ground. To order costs against Council in relation to Ground 1 would have a punitive flavour and ignore that costs are compensatory: Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 at 543; also see Rossi at [73]. 4. In reaching my decision, I however take into account the fact that Council actively participated in relation to Ground 2 in circumstances where there was a well-represented active contradictor. 5. In summary, although s 98 of the CP Act gives a broad discretion as to costs and although there are well-established circumstances where it may be appropriate to depart from the presumption that costs follow the event, I am not satisfied that there is a proper basis to set aside the general presumption that costs follow the event in the present circumstances. As such, I find that Filetron is entitled to its costs subject to two qualifications. First, given Filetron's failure in relation to Ground 2 of its amended summons, I find that it is only entitled to recover 80 per cent of its costs. Secondly, as an allowance for Council's limited participation in these proceedings, the amount to be recovered by Filetron should be apportioned between the respondents by reason of 75 per cent as against Innovate and 25 per cent as against Council. Costs of the notice of motion Submissions 1. I now turn to the competing submissions as to the question of costs of Council's notice of motion. 2. Innovate and Council both emphasise that Council enjoyed an unqualified success in relation to the relief it sought in its notice of motion such that the general rule that costs follow the event favours an order that Filetron pays their costs of, and incidental to, the notice of motion. 3. Filetron submits that its partial success in the primary proceedings meant that Council and Innovate would have had to incur costs in seeking relief under s 25C of the Court Act irrespective of whether it opposed it or not. In addition, it submits that the "event" upon which costs are to be determined remains this Court's conclusion in the primary judgment that there had been a breach of the EPA Act giving rise to invalidity of Council's development consent. On this basis, Filetron's position is that the costs of the notice of motion should be costs in the cause, or alternatively that there should be no order as to the costs of the motion. 4. Although acknowledging that the respondents would have had to incur costs under s 25C of the Court Act in any event, Innovate submits that Filetron's opposition substantially increased the costs so incurred. In addition, Innovate submits that the outcome of the primary proceedings (being Filetron enjoying "some success") constitutes a separate "event" and does not bear upon the costs of the motion. Findings 1. While I consider that there is some force in the view that the "event" relevant for present purposes is Council's success in obtaining the orders sought in its notice of motion, and while I partially reject Filetron's submission that costs of the notice of motion should be assessed (as costs in the cause) by reference to the Court's findings in the primary proceedings, I consider that the somewhat unusual circumstances which led to the notice of motion displace the usual order as to costs. 2. As submitted by Filetron, and conceded by Innovate, I consider that Council would have had to incur costs in seeking relief under s 25C of the Court Act even in the absence of opposition from Filetron. Moreover, the background to the motion was Filetron's success in the primary proceedings (as a result of Council's conduct). 3. Innovate, in this regard, is as much affected by Council's breach of the EPA Act as Filetron. It also only had to make submissions with respect to Council's application under s 25C of the Court Act as a result of Filetron's opposition to the orders sought by Council in its notice of motion. 4. Taking all the above matters into account, I consider that the appropriate order for the Court to make is that each party bears their own costs of the notice of motion. Orders 1. The Court orders that: 1. Filetron Pty Ltd is entitled to recover 80 per cent of its costs of the primary proceedings, with 75 per cent of that amount to be borne by Innovate Partners Pty Ltd atf Banton Family Trust 2 and the remaining 25 per cent to be borne by Goulburn Mulwaree Council. 2. Each party to bear their own costs of the notice of motion. ********** 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: 16 October 2023