Land and Environment Court of New South Wales CITATION : Strategic Resources (Australia) Ltd v Ku-ring-gai Municipal Council & Anor [2000] NSWLEC 157 APPLICANT Strategic Resources (Australia) Ltd PARTIES : FIRST RESPONDENT Ku-ring-gai Municipal Council SECOND RESPONDENT Warren Walter Madgwick FILE NUMBER(S) : 40084 of 2000 CORAM: Sheahan J KEY ISSUES: Costs :- class 4 proceedings - resolved without full hearing - indemnity costs - party/party costs LEGISLATION CITED: Beilby v Viney & Anor [2000] NSWLEC 93; Degmam Pty Ltd v Wright (No.2) (19830 2 NSWLR 354; CASES CITED: Fountain Selected Meats (Sales Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397; Jan Yee Australia Pty Ltd v Woollahra Council & Anor (40232 of 1995, 26 March 1997); McKinnon v Hallbridge Pty Ltd (30148 of 1997, 10 July 1998) DATES OF HEARING: 15/06/2000 EX TEMPORE 06/15/2000 JUDGMENT DATE : APPLICANT Mr P McClellan QC (Barrister) with Mr A Galasso (Barrister) SOLICITORS Price Waterhouse Coopers FIRST RESPONDENT LEGAL REPRESENTATIVES: Mr P Schofield Solicitor Pike Pike & Fenwick SECOND RESPONDENT Mr Finnane QC (Barrister) Solicitors Garrett Walmsley & Madgwick JUDGMENT: IN THE LAND AND Matter No: 40084 of 2000 ENVIRONMENT COURT Coram: Sheahan J OF NEW SOUTH WALES 15 June 2000 STRATEGIC RESOURCES (AUSTRALIA) LTD Applicant v KU-RING-GAI MUNICIPAL COUNCIL First Respondent WARREN WALTER MADGWICK Second Respondent JUDGMENT 1. The only remaining issues to be dealt with in this case are the questions of costs arising as between the applicant and the first respondent (" Council"). 2. The substantive proceedings were effectively resolved this morning by the act of Mr Schofield, on behalf of the Council, in handing over to Mr McClelland, on behalf of the applicant, a bundle of documents, being the stamped plans which are now before me in Exhibit A . 3. The rest of the morning was spent arguing where the responsibility for the costs of the proceedings should lie, and, just before I adjourned for lunch, I indicated that I would make no order for or against the second respondent Madgwick, who has been a leading objector to the proposed development, which is the subject of these and earlier proceedings, and who successfully moved the court, on Tuesday before Lloyd J, for an order that he be joined as a respondent to these proceedings. 4. The history of the matter should be summarised in an abbreviated way. 5. The Council on 10 November 1998 refused the relevant development application, which would appear to be for a 16 unit SEPP 5 project in a residential precinct of the suburb of Wahroonga, specifically on land known as 26 Wahroonga Avenue and 69 Boundary Road, Wahroonga. 6. The applicant successfully appealed to this court and Commissioner Roseth granted approval on 49 conditions on 25 March 1999. 7. The most relevant condition is Condition 40 which required as follows: 40. A hydrologic analysis of the site is to be undertaken to ensure that the extensive excavations along the western boundary of the site do not disturb ground water flows and/or unduly affect the soil moisture content of the adjacent down slope properties. A report by a suitably qualified professional is to be submitted with the Building Application. 8. Conditions 39 and 41 are also relevant to these proceedings and I quote them for the record: 39. The applicant must ensure that the road, footway and sediment control fencing adjacent to the site are adequately maintained during the construction works. The payment of a cash bond of $5,000 shall be made prior to the release of building approval to ensure the performance of these works to the satisfaction of Council's Director Infrastructure. The developers representative on site shall be given 4 hours written notice to complete the outstanding work. Upon non compliance Council will engage emergency staff to complete the required works and deduct the cost from this cash bond. 41. To ensure structural stability where excavation extends below the level of the base of the footings of a building on the adjoining allotment of land, full details prepared by a suitably qualified person showing method of protection of such building from damage to be submitted with the Building Application. 9. Why condition 41 is raised today is a mystery to me, as the evidence is clear that the applicant's compliance with it was certified on 9 April 1999 (see p91 of Mr Baird's affidavit of 14 June 2000). 10. In respect of condition 40, the evidence is that the applicant submitted to Council, in support of its building application, a report by Keighran Geotechnics, and, on or about 2 September 1999, Council issued, on the recommendations of its officers to a meeting on 24 August 1999, and despite hearing submissions from objectors at that meeting, a building approval, subject to a comprehensive schedule of 135 conditions, several of which were stated to be conditions precedent to the release of the building application plans, and/or to the commencement of works. 11. Of particular relevance is condition 62 in these terms: 62. Two means of egress are to be provided from carpark B as required by the Building Code of Australia D1.4. AMENDED PLANS ARE TO BE SUBMITTED AND APPROVED PRIOR TO THE RELEASE OF THE BUILDING APPLICATION. 12. On 14 March 2000 Council received a report from its officers, dated 6 March, which recommended that the Keighran Geotechnics report be accepted as providing the relevant information for the applicant to comply with condition 40. 13. Council again at that meeting heard submissions from objectors Madgwick, Phillips and Oates, some or all of whom appear to have authored comprehensive and strongly worded submissions to Council regarding this project, both before and since the Commissioner's decision, and/or the issue of the building approval. 14. Council resolved in these terms on 14 March 2000: That the geological report by Keighran Geotechnics be rejected and further reports be submitted to Council to satisfy the conditions of the Building Application as previously requested by Council. 15. Mr Banning authored a letter to Strategic Resources Australia Pty Ltd on 24 March 2000 which advised of the Council having resolved on 14 March to that effect. The letter continues: Therefore, it will be necessary for you to appoint another hydraulic and geotechnical consultant to specifically address Condition 40 of the Court's consent. So as to meet the terms of the Court's consent the report should set out in clear and concise terms the methodology and results obtained. 16. It is worthy of note that Council's minutes of that meeting, and that resolution, say nothing about any so called " audit " of any conditions, other than condition 40, and, further, that Council did not pass an amendment which called for engagement of an independent consultant to report on compliance with the " Conditions of Consent " (note the plural and see p 92 of the Council papers annexed to Mr Baird's affidavit of 14 June 2000). 17. I need not stay to consider the conflicting evidence as to the communications between officers of the Council and those who have been working on behalf of the applicant. It is clear that there were many dealings between the parties, and also that the Council has reviewed the project on many occasions, obviously being commendably responsive to serious neighbourhood concerns about it. 18. Much has been made today of compliance with building condition 62. 19. Were I satisfied that some of the applicant's assertions about how Council dealt with that particular aspect of the matter I may have entertained its application for indemnity costs, but I note that in Council's report dated 7 December 1999 (p86 of Mr Baird's affidavit of 14 June 2000) it is stated that the relevant " plans have yet to be submitted ". 20. The applicant's evidence is that it thought it had lodged relevant plans in October 1999, but I am certainly satisfied that it was not told that it had not satisfied that requirement, until these proceedings had been commenced on 31 May 2000. 21. The principles in respect of " indemnity costs " are best stated by Woodward J, in Fountain Selected Meats (Sales) Pty Limited v International Produce Merchants Pty Limited (1988) 81 ALR 397, when he held that indemnity costs should be considered when proceedings are manifestly hopeless or demonstrably devoid of merit. His Honour said: I believe that it is appropriate to consider awarding 'solicitor and client' or 'indemnity' costs, whenever it appears that an action has been commenced or continued in circumstances where the applicant, properly advised, should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive, or because of some wilful disregard of the known facts or the clearly established law. Such cases are, fortunately, rare. But when they occur, the court will need to consider how it should exercise its unfettered discretion. 22. Now those remarks are obviously in circumstances where an order was sought by a respondent against an applicant devoid of merit. I dealt with these issues in McKinnon v Hallbridge Pty Limited (30148 of 1997, 10 July 1998), and regard should also be had to the judgment of Holland J in Degmam Pty Ltd v Wright (No.2) (1983) 2 NSWLR, 354. 23. The mislaying of paperwork within Council is not sufficient justification for an order for indemnity costs. Nor is the apparent application of what has been described as " pressure " by a Mayor or other Councillor, elected by the people, to a Council officer, even if it occurs while Council's solicitor is on his feet. 24. Nor is the legality of either the 14 March 2000 resolution, or the resolution to require a bond of $200,000, instead of $5,000, really germane to the question of costs, whether on an indemnity or party/party basis, and I decline to make an order for indemnity costs. 25. Whatever the background and history, the dispute about the release of stamped plans is over. 26. I was, in the end, not asked to make the injunctive order that was sought, and I declined to grant the second respondent leave to seek, in these proceedings , a declaration that conditions 40 and 41 had not been satisfied. 27. There was no basis laid for an order that Mr Schofield not hand over the plans, so he did so voluntarily. 28. The tests I must apply in deciding whether or not I should order Council to pay the applicant's costs in such circumstances are set out conveniently in my 11 May 2000 judgment in Beilby v Viney & Anor [2000] NSWLEC 93, at pars 42-54, and I need not repeat them here, because I do not think that they are the subject of any doubt. 29. Suffice for me to say, though, that the test is that formulated by Bignold J in Jan Yee Australia Pty Ltd v Woollahra Council & Anor (40232 of 1995, 26 March 1997). It is quoted in par 52 of the Beilby judgment, and the test His Honour formulated for making a costs order is that the trial judge should ask the question whether " the proceedings were justifiably commenced, justifiably continued, justifiably settled and in all probability would have succeeded…. had they been fully litigated ". 30. Negotiations about this dispute continued after the resolution of 14 March, and by the end of May time was running out, in a commercial sense, for the applicant. From the Bar Table it appears that time ran out today. 31. On 31 May 2000, which is only 15 days ago, Mr Hanna wrote to Council indicating that these proceedings would be commenced as soon as a further request, on that day, for the plans to be released once the $200,000 bond was ready, was refused. 32. Negotiations again continued once the case was begun. The matter was almost resolved on Tuesday. 33. Council was at last satisfied yesterday with Mr Banning's audit of compliance with the conditions of consent and building approval, and Council had also received yesterday a favourable report from Environmental Investigation Services ( Exhibit C1 ) - a report, incidentally, it had resolved three months ago not to seek. 34. In my view, on the Jan Yee test, the applicant is clearly entitled to an order that the Council pay its costs, but only on a party/party basis. The relief it sought in all the circumstances of this case, whatever their merit, can only be described as " minimalist ". 35. Accordingly, the formal orders of the court will be: 1. The Second Respondent is ordered to meet all his own costs. 2. The First Respondent is ordered to meet the Applicant's costs on a party/party basis. 3. The exhibits will be 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.