Land and Environment Court New South Wales Medium Neutral Citation: Simmattown Pty Ltd v Randwick City Council [2024] NSWLEC 118 Hearing dates: 31 October 2024 Date of orders: 31 October 2024 Decision date: 31 October 2024 Jurisdiction: Class 1 Before: Pain J Decision: The Court orders that: (1) The notice of motion dated 21 August 2024 is dismissed. (2) The Council is to pay the Applicants' costs of the notice of motion dated 21 August 2024. Catchwords: COSTS – whether costs payable by applicant following discontinuance of Class 1 appeal after hearing commenced – application of no discouragement principle – no costs order made Legislation Cited: Land and Environment Court Rules 2007 (NSW), r 3.7 Cases Cited: Boral Cement Pty Ltd v SHCAG Pty Ltd [2013] NSWLEC 203 CBUS Property Pty Ltd v North Sydney Council [2024] NSWLEC 47 Fulton Hogan Pty Ltd v Blacktown City Council [2020] NSWLEC 169 Ross v Lane Cove Council [2013] NSWLEC 109 Segal v Waverley Council (2005) 64 NSWLR 177; [2005] NSWCA 310 Texts Cited: Practice Note Class 1 Development Appeals (3 April 2018) Category: Costs Parties: Simmattown Pty Ltd (First Applicant) Cheung Properties Pty Ltd (Second Applicant) Randwick City Council (Respondent) Representation: Counsel: A Gadiel (Applicants) M Astill (Respondent) Solicitors: Mills Oakley (Applicants) Randwick City Council (Respondent) File Number(s): 2021/322119-004 ex tempore JUDGMENT on costs 1. The Council has filed a notice of motion dated 21 August 2024 seeking an order that the Applicants pay its costs between 7 May 2024 and 25 July 2024 and the costs of the motion. The notice of motion arises in a Class 1 appeal in which parties generally pay their own costs in light of the 'no discouragement' principle. Rule 3.7(2) of the Land and Environment Court Rules 2007 (NSW) provides that in Class 1 matters no order for costs should be made unless the Court considers it fair and reasonable to do so. Subrule (3) identifies non exhaustively circumstances where the Court might consider making a costs order. The Council seeks its costs relying on subrule 3.7(3)(b)(ii). Circumstances in which the Court might consider making a costs order to be fair and reasonable include that a party has failed to provide, or has unreasonably delayed in providing, information or documents that are necessary to enable a consent authority to gain a proper understanding of, and give proper consideration to, the application. 2. The Council read the affidavit of Ms McGrath filed on 21 August 2024 which attached correspondence between the parties' solicitors and outlined steps taken in the Class 1 appeal. The Statement of Facts and Contentions (SOFC) dated 31 May 2024 and SOFC in reply dated 12 June 2024 were also considered. 3. The Applicants commenced a Class 1 appeal against the deemed refusal of a Development Application (DA) for the redevelopment of the Coogee Bay Hotel site on 12 November 2021. 4. On 7 May 2024 the Council notified the Applicants that development consent had been granted by the Sydney Eastern City Planning Panel (the Panel) subject to a deferred commencement condition relating to the provision of acoustic information within 12 months and invited the Applicants to discontinue the Class 1 appeal. 5. The Applicants maintained the appeal as they wished to pursue four contentions, including in relation to the timeframe specified in the deferred commencement condition concerning acoustic impact to seek an extension for compliance to five years. 6. In accordance with the Court's Practice Note Class 1 Development Appeals particularly par 20 (identifying the issues in dispute) and Schedule C the parties prepared SOFC and SOFC in reply and there was correspondence between the solicitors identifying the matter of whether expert evidence would be called. The Applicants did not consider any expert acoustic evidence was warranted given the contentions raised and mindful of the Class 1 Practice Note pars 22(d), 24 requiring parties to consider whether expert evidence is genuinely necessary to resolve the issues in dispute in development appeals. The Council's solicitors reserved their position on whether they would seek to rely on expert evidence but did not ultimately do so. 7. The Applicants identified in the SOFC four contentions. In the SOFC in reply the Council did not object to contentions 1 and 2. They did not agree to contentions 3 and 4. The terms of contention 4 concerning the deferred commencement condition were directed to the timeframe of 12 months and why it should be extended. The SOFC in reply on contention 4 addressed the issue of timeframe. No other aspect of acoustic impact was identified by the Council. 8. It is apparent from the contents of contention 4 and the SOFC in reply that the timeframe for compliance was the sole matter in issue between the parties. Neither party identified acoustic issues generally as a matter in contention. 9. The one day hearing commenced on 25 July 2024 before Senior Commissioner Dixon. Contention 3 was agreed during the hearing. After lunch the Senior Commissioner identified to the parties that the Assessment Report prepared for the Panel dealing with acoustic matters which she was provided with identified that there was a lack of information. The Senior Commissioner flagged that as the matter before her was a hearing de novo she would need to be satisfied of all relevant merits matters before development consent could be granted, which included her consideration of a deferred commencement condition on a fundamental matter of acoustic impact for the DA. The Applicants discontinued the appeal shortly afterwards on 25 July 2024. 10. I was informed by Mr Gadiel solicitor for the Applicants and accept that the appeal was discontinued because no expert acoustic evidence was before the Court and it would have been necessary to apply for the appeal to be adjourned to enable that evidence to be obtained. The possibility also arose for the development consent the Applicants had obtained to be refused by the Senior Commissioner. 11. The Council seeks its costs under r 3.7(3)(b)(ii). It submits that the Applicants should have brought forward information lacking in the DA as identified in the Assessment Report before the Panel because it should have been aware in a hearing de novo that a commissioner of the Court would need to be satisfied of all relevant matters before development consent could be granted. This was submitted to be a requirement imposed by r 3.7(3)(b)(ii) regardless of what was in the Class 1 Practice Note which requires the parties to specify the issues in dispute. The Applicants should have discontinued on 7 May 2024 or provided sufficient information in the appeal on acoustic matters to enable the Senior Commissioner's consideration, essentially regardless of what was in the SOFC and SOFC in reply. 12. It is clear from the solicitors' correspondence that all were aware that the appeal was at large. 13. That the Applicants should have been prepared on acoustic issues generally in the Class 1 appeal because that was a major issue before the Panel so that the Applicants should have considered that might be a matter the Senior Commissioner would raise, despite no contention identifying that issue, is entirely contrary to how the Court requires parties to prepare for Class 1 appeals. 14. As the Applicants identified: In terms of merit matters, in the normal course of proceedings, the Court is tasked with determining an appeal by addressing the principal contested issues as particularised in the contentions in the statement of facts and contentions and the statement of facts and contentions in reply. [Segal v Waverley Council (2005) 64 NSWLR 177; [2005] NSWCA 310 at [43]-[44] (Tobias JA, Beazley and Basten JJA agreeing)] A Commissioner of the court is not bound to determine the proceedings solely by reference to the issues raised by the parties. If, however, the proceedings are to be determined by reference to matters outside the issues, then procedural fairness requires that the parties be put on notice that some additional issue is raised. [Boral Cement Pty Ltd v SHCAG Pty Ltd [2013] NSWLEC 203 at [31]]. 1. The Council's hands were not tied by the Panel decision to approve, contrary to its submission that it could not approach the Class 1 appeal on the basis that development consent should be refused. That appeared to be an explanation for why the Council did not identify acoustic issues generally as a reason for refusal in the SOFC in reply. 2. Essentially the Council's submissions would require the Applicants to have tried to consider in advance, and essentially in a vacuum in the absence of an identified issue, any matter that might occur to a commissioner separately to what the parties themselves have identified in case preparation as the issues in dispute. The Council sought to avoid that consequence by stressing that in this case the matter of acoustic impact was so major that this matter should have been obvious to the Applicants. I do not accept that submission as a cursory reading of the Assessment Report identifies several major issues as warranting consideration being urban design, traffic impacts and view loss inter alia. If the Council's submissions were accepted there would be no reason why the Applicants should limit their additional evidence to acoustic matters and not include evidence in these other matters. 3. As the Applicants submitted in the absence of a contention warranting reliance on expert evidence it is highly unlikely the Applicants would have been able to obtain permission from the Court to adduce such evidence during case preparation. 4. That the Applicants discontinued is not a basis for awarding costs, and the Council has the onus of showing that the decision to discontinue lacked a proper basis per Fulton Hogan Pty Ltd v Blacktown City Council [2020] NSWLEC 169 at [114]-[115]. I have accepted Mr Gadiel's explanation but in any event the Council bears such an onus and did not seek to discharge it. 5. Ross v Lane Cove Council [2013] NSWLEC 109 identifies at [10] a similar circumstance to this matter where an issue emerges at a hearing, with resultant increased risks of litigation and an applicant discontinuing, not being a circumstance which should give rise to a costs order against the discontinuing party. 6. The Council's construction of subrule 3.7(3)(b)(ii) that a Class 1 appeal being a hearing de novo means that acoustic matters should have been addressed, although no contention identified this topic, gives the word 'application' too much work to do. The application is informed by the issues defined by the parties and does not mean an application for the purpose of subrule 3.7(3)(b)(ii) is at large. I also do not accept that the rule applies in the manner put irrespective of the Court's Class 1 Practice Note applying to ensure that parties specify issues they wish the Court to consider and which inform the necessity of adducing expert evidence. 7. It is not appropriate that I undertake essentially a merits assessment on the question of whether there was information not provided by the Applicants on acoustic matters which should have been, as the Council submitted. The Applicants disputed that submission. I note that the Panel granted development consent subject to conditions including in relation to a deferred commencement condition in relation to acoustic impacts, as was recommended in the Assessment Report. 8. No basis for unreasonable behaviour by the Applicants arising from subrule 3.7(3)(b)(ii) has been established by the Council. The notice of motion dated 21 August 2024 is dismissed. 9. In relation to costs of the notice of motion, I canvassed widely in CBUS Property Pty Ltd v North Sydney Council [2024] NSWLEC 47 the various approaches to such costs applications to conclude that there is no fixed rule in relation to costs and the application of subrule 3.7(3)(a)(ii) is one means of considering costs. That can be applied usefully in this matter given the nature of the parties' arguments. It follows that the Council should pay the Applicants' costs of the notice of motion dated 21 August 2024. Orders 1. The Court orders that: 1. The notice of motion dated 21 August 2024 is dismissed. 2. The Council is to pay the Applicants' costs of the notice of motion dated 21 August 2024. ********** 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: 08 November 2024