Land and Environment Court of New South Wales CITATION : MacDonald v Mosman Municipal Council [2000] NSWLEC 67 APPLICANT: PARTIES : Roderick MacDonald RESPONDENT: Mosman Municipal Council FILE NUMBER(S) : 10166 of 1999 CORAM: Lloyd J KEY ISSUES: Costs :- planning and building appeal - conduct of both parties amounting to exceptional circumstances - applicant's conduct cancels out entitlement to costs - costs of motion for costs Conveyancing Act 1919, s88B LEGISLATION CITED: Environmental Planning & Assessment Act 1979, s79C(1)(e) Land and Environment Court Act 1979, s39(4), s69 Latoudis v Casey (1990) 170 CLR 934; MacDonald v Mosman Municipal Council (1999) 105 LGERA 49; CASES CITED: Outdoor Australia Pty Ltd v Auburn Council (1996) 89 LGERA 365; Pancho Properties Pty Ltd v Wingecarribee Shire Council I (No 2) [1999] NSWLEC 277; Pavements and Excavations Pty Ltd v Tones, NSWCA, 28 March 1991, unreported DATES OF HEARING: 24/02/00 DATE OF JUDGMENT: 04/11/2000 APPLICANT: T S Hale (barrister) SOLICITORS: Pike Pike & Fenwick LEGAL REPRESENTATIVES: RESPONDENT: P C Tomasetti (barrister) SOLICITORS: Hill Thomson & Sullivan JUDGMENT: IN THE LAND AND Matter No: 10166 of 1999 ENVIRONMENT COURT Coram: Lloyd J OF NEW SOUTH WALES Decision date: 11/04/00 MacDonald Applicant v Mosman Municipal Council Respondent JUDGMENT HIS HONOUR: 1. On 21 September 1999 I delivered judgment in an appeal under s 97 of the Environmental Planning & Assessment Act 1979 ("the EP&A Act") against the imposition of a condition of development consent granted by the respondent ("the Council"). I allowed the appeal and granted consent to the development application with the deletion of the disputed condition ( MacDonald v Mosman Municipal Council ((1999) 105 LGERA 49). The successful applicant now applies by notice of motion for an order that the Council pay its costs of the appeal. 2. The Court has issued a long standing practice direction as follows: The practice of the Court is that no order for costs is made in planning and building appeals unless the circumstances are exceptional. The reason for the practice has been stated many times. For example, in Outdoor Australia Pty Ltd v Auburn Council (1996) 89 LGERA 365, Pearlman J said (at 369) that "t he practice direction was made to encourage dissatisfied parties to seek review of planning and building decisions by councils without risk of costs if unsuccessful ". More recently in Pancho Properties Pty Ltd v Wingecarribee Shire Council (No 2) [1999] NSWLEC 277, Talbot J said (at paragraph [10]): 10. The underlying objective of the Court's Practice Direction that no costs orders will be made in merit appeals other than in exceptional circumstances is to allow dissatisfied applicants, and councils, to pursue an appeal to this Court without the prospect of being submitted to a costs order wherever the party has acted in good faith and not in a frivolous, vexatious or oppressive manner based on an improper motive. 3. Mr T S Hale SC, appearing for the applicant, submits that the circumstances in this case are exceptional. The relevant facts may be briefly described. On 5 August 1997 the Council granted development consent for a dwelling house at 6 Coronation Avenue, Mosman. On 16 October 1997 the Council granted building approval for the dwelling house. The plans which are the subject of the development consent showed an elevated walkway from Coronation Avenue to the upper floor of the proposed dwelling house as being deleted. The plans which are the subject of the building approval likewise show the same elevated walkway with the notation " deleted " across the walkway. The development consent had been granted after several meetings between the adjoining neighbours and the Council's staff which resulted in the neighbours' acceptance of the plans but with the deletion of the elevated walkway. The construction of the dwelling house involved a number of departures from the standards required by the Council's residential development control plan, which the neighbours were prepared to accept provided the elevated walkway was deleted. 4. After the applicant commenced construction of the dwelling house he made a further development application for an elevated walkway from Coronation Avenue to the upper level of the dwelling. The Council refused its consent to the development application and the applicant appealed to the Court under s 97 of the Act. The appeal was heard by a Commissioner who dismissed the appeal and refused development consent. In dismissing the appeal the Commissioner noted the previous concessions made by the adjoining landowners to the departures from the residential development control plan on the understanding that the elevated walkway would be deleted. The applicant had taken advantage of an approval which incorporated extensive concessions by way of departures from the residential development control plan and which impacted adversely on the adjoining properties on the understanding that the elevated walkway would be deleted. The Commissioner dismissed the appeal on the grounds that the elevated walkway which was the subject of the appeal was now proposed in disregard of the understanding which had been reached and which in any event, was unsatisfactory in that it was too bulky and it posed a high degree of intrusion on the neighbouring properties in terms of privacy and amenity. The Commissioner went on to state, however, that alternative design options were available to the applicant. The present proposal, which was the subject of the disputed condition which I determined on 21 September 1999, is another design option which the Commissioner said was available to the applicant. It provided for a ground level walkway from Coronation Avenue to stairs and a landing at the dwelling house. The Council granted its consent to the development application subject to the disputed condition. 5. The disputed condition which was the subject of the appeal before me required the registration of an instrument under s 88B of the Conveyancing Act 1919 generally restricting any further development between the dwelling house and Coronation Avenue. The person empowered to vary or modify the restriction was to be the Council. 6. After receiving the development consent which included the disputed condition the applicant's solicitors sent a letter to the Council on 26 February 1999 requesting it to remove the condition and, if not removed, then the applicant would appeal, reserving his right as to costs. The Council replied and suggested two courses of action as being available to the applicant: the first was to lodge an application under s 82A of the EP&A Act requesting a review of the determination; the second was to lodge an application to modify the development consent under s 92 of the EP&A Act by the deletion of the condition. After the appeal had been brought the Council sought and obtained legal advice thereon from its solicitors and from counsel in relation to the condition and the likelihood of the Court upholding the condition. 7. In allowing the appeal against the imposition of the condition I followed and applied a number of cases in the Court in which it had been held that it was neither necessary nor generally appropriate to require the registration of restrictions as to user as conditions of development consent. There was, in my opinion, nothing to take the matter outside the principles expressed in those cases ( MacDonald v Mosman Municipal Council at 53). 8. Mr Hale submits that the following matters make the circumstances exceptional and thus justify an order for costs: there was no dispute that the development (being stairs and a landing) was uncontentious and merited approval; the only matter in issue was the disputed condition; by its letter of 29 February 1999 the applicant drew the Council's attention to relevant authorities on the issue and indicated that if required to appeal then costs would be in issue; it may be inferred that the Council's legal advice referred to the authorities which led me to strike out the condition; the decision of this Court referred to in my judgment of 21 September 1999 makes it plain that the Court has not countenanced such conditions in the past and serious questions have arisen as to whether a council is empowered to impose such a condition. 9. Mr P C Tomasetti, appearing for the respondent, made the following submissions. In view of the history (which I have described in paragraphs 3 and 4 above) the Council sought to impose the disputed condition to put prospective purchasers of 6 Coronation Avenue on notice that they could not automatically expect to obtain consent for any substantial structure between the street and the dwelling house. In particular the condition was imposed to protect neighbours from the likelihood of similar development applications; to prevent purchasers of the property, who would have no knowledge of the agreement between the applicant and the neighbours, from disappointment should they seek to develop that area; and to protect the Council from further costs. In Mr Tomasetti's submission the condition was imposed in " the public interest " (s 79C(1)(e) EP&A Act) and was justified as a circumstances of the case (s 39(4) Land & Environment Court Act 1979). The public interest was in advice to prospective purchasers, in protecting the substance of the negotiated agreement between neighbours and in giving prospective purchasers notice of such agreement. The circumstances of the case included the fact that the applicant attempted to obtain the benefit of the concessions made by the neighbours and recanted his side of the agreement by attempting to impose upon them the elevated walkway which he had agreed to delete. In these circumstances it was not unreasonable, in Mr Tomasetti's submission for the Council to impose the condition. 10. I should emphasise that the practice direction is not a rule of the Court. Orders for costs under s 69 of the Land & Environment Court Act are always in the discretion of the Court. A practice must never be allowed to harden into a rule. The practice direction is merely an indication of the way in which parties might ordinarily expect the Court to exercise its discretion in planning and building appeals. 11. In the present case the decision of the Council to impose the condition flies in the face of a number of authorities in this Court which strongly suggest that it is neither necessary nor appropriate to impose a condition of the kind which the Council had imposed. It can be assumed that the Council was aware of the attitude of a number of judges of the Court to the imposition of such conditions. I have referred to these views in my previous judgment. To impose such a condition in the face of settled authority of the Court, thus requiring the applicant to incur otherwise unnecessary costs in an appeal, may be an exceptional circumstance which justifies an order for costs against the Council. 12. On the other hand, however, the applicant had reached an agreement with the Council and his neighbours by which the neighbours withdrew their objections to a number of departures from the Council's residential development control plan provided the applicant deleted the elevated walkway. After obtaining development consent for his dwelling house the applicant recanted from that agreement and made a further development application for the elevated walkway which he had agreed to delete. I refer to the findings of the Commissioner set out in paragraph 4 above. The applicant was obviously not a person to be trusted with keeping his end of an agreement. 13. Despite the fact that the condition which the Council sought to impose was contrary to established authority in the Court, I am of the opinion that in these circumstances the Council was, although misguided, acting in good faith and not in a frivolous, vexatious or oppressive or for an improper motive. It was dealing with an applicant who did not " keep his word ", who failed to honour an agreement and who attempted to circumvent it having first got what he wanted. 14. In ordinary circumstances I would be inclined to make an order for costs against the Council which imposed a condition contrary to well established principles which have been accepted by a number of judges of this Court. The conduct of the applicant, however, cancels out, in my view, his entitlement to an order for costs. But for his conduct the Council would not have been tempted to impose such a condition. In another way, the applicant has only himself to blame for what occurred. The applicant's conduct, it seems, prompted the Council into imposing a condition. Whilst the Council's conduct can be criticised, so too can the applicant's conduct which led the Council to do what it did. The conduct of the Council was an exceptional circumstance; and the conduct of the applicant was an exceptional circumstance. These considerations lead me to the conclusion that there should be no order for costs. 15. This brings me to the question of the costs of the applicant's notice of motion. The applicant has failed. The usual exercise of the Court's discretion as to costs under s 69 of the Land & Environment Court Act would mean that the applicant, being unsuccessful in its notice of motion, should pay the costs of the notice of motion. 16. Mr Hale submits that since the notice of motion is incidental to the appeal then until such time as all orders are made the proceedings are still on foot, so the practice direction should continue to apply: that is to say, there should be no costs on the motion. The contrary argument is that the appeal concluded with the delivery of judgment. The notice of motion is not part of the planning or building appeal and so is not covered by the practice direction. Mr Tomasetti submits that if exceptional circumstances had to apply on a motion for costs it would lead to a proliferation of applications for costs. 17. In my opinion, the successful party on a notice of motion for costs should not be visited with the costs of resisting the motion. This motion is not part of the planning or building appeal, which has concluded. As Pearlman J stated in Outdoor Australia Pty Ltd v Auburn Council, the practice direction was made to encourage dissatisfied parties to seek review of planning and building decisions without the risk of costs if unsuccessful. The applicant's motion for costs, however, involves an additional appearance and the incurring of additional (and generally unexpected) costs which are not part of the planning and building appeal. 18. The authorities on costs establish the principle that attention should be directed to the conduct of the successful party ( Pavements and Excavations Pty Ltd v Tones , NSWCA 28 March 1991, unreported, per Handley JA, with whom Samuels and Mahoney JJA agreed). Moreover, in Latoudis v Casey (1990) 170 CLR 934, Mason CJ said that "i n exercising its discretion to award or refuse costs, a court should look at the matter principally from the perspective of the defendant " (at 542). In the present case it is the Council which is the defendant to the notice of motion. It has been successful in resisting the claim for the costs of the appeal. It should not be visited with the additional (and generally unexpected) costs of the notice of motion. 19.. For the abovementioned reasons I make the following orders: 1. The applicant's notice of motion dated 12 October 1999 for costs is dismissed. 2. The applicant must pay the 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.