Land and Environment Court of New South Wales CITATION : Noel Import (Australia) Pty Limited v Wollondilly Shire Council and Ors [2001] NSWLEC 212 APPLICANT Noel Import (Australia) Pty Limited FIRST RESPONDENT Wollondilly Shire Council PARTIES : SECOND RESPONDENT National Parks Association of NSW Inc. THIRD RESPONDENT Georges River Environmental Alliance Inc. FOURTH RESPONDENT Georges River Environmental Action Team Inc. FILE NUMBER(S) : 10876 of 2000 CORAM: Talbot J KEY ISSUES: Costs :- class 1 proceedings discontinued - Pt 11 r 5 or exceptional circumstances Environmental Planning and Assessment Act 1979 s 97(4) LEGISLATION CITED: Land and Environment Court Act 1979 s 69 Land and Environment Court Rules 1996 Pt 11 r 5 Bevillesta Pty Ltd v Parramatta City Council (1988) 65 LGRA 358; Kentgreen Dural Pty Ltd v Hornsby Shire Council (1999) 103 LGERA 219; CASES CITED: Latoudis v Casey (1990) 170 CLR 534; Manly Wharf Pty Ltd v Manly Council (1997) 98 LGERA 245; Menangle Sand & Soil Pty Ltd v Wingecarribee Shire Council & Others (2000) 108 LGERA 209; Oshlack v Richmond River Council (1998) 193 CLR 72 DATES OF HEARING: 05/09/2001 DATE OF JUDGMENT: 09/11/2001 APPLICANT Mr J E Robson (Barrister) SOLICITORS Glasson, Gemmell & McGill FIRST RESPONDENT Mr A J Seton (Solicitor) LEGAL REPRESENTATIVES: SOLICITORS Marsdens SECOND RESPONDENT Mr T G Howard (Barrister) SOLICITORS N/A JUDGMENT: IN THE LAND AND Matter No. 10876 of 2000 ENVIRONMENT COURT Coram: Talbot J OF NEW SOUTH WALES Decision Date: 11 September 2001 Noel Import (Australia) Pty Limited Applicant v Wollondilly Shire Council First Respondent National Parks Association of NSW Inc. Second Respondent Georges River Environmental Alliance Inc. Third Respondent Georges River Environmental Action Team Inc. Fourth Respondent REASONS FOR JUDGMENT 1. Following the filing of a notice of discontinuance of these proceedings the first and second respondents have moved the Court for orders that the applicant pay their costs. 2. On 31 October 1997 the applicant lodged a development application seeking consent for the extension of an existing clay mine at Bulli Road, Appin. The application was determined by refusal of consent on 1 May 2000. The class 1 application was filed in the Court on 8 September 2000. 3. The first respondent is the consent authority. The second respondent was entitled to be heard at the hearing of the appeal as if it were a party to the appeal, pursuant to s 97(4) of the Environmental Planning and Assessment Act 1979 ("the EP&A Act"), in its capacity as an objector to the application. 4. On 22 January 2001 the first respondent provided answers to a request for particulars in respect of the statement of issues filed on 7 December 2000. 5. On 13 December 2000 the second respondent raised the same issues in a separate statement of issues and raised three further issues. 6. Following correspondence between the applicant and the second respondent, the second respondent amended its statement of issues on 20 April 2001. 7. At the sixth callover on 5 April 2001 the Registrar set the matter down for hearing over six days in August 2001, commencing on 6 August 2001. 8. The first respondent served three statements of evidence by experts, upon which it relied, on 23 July 2001. The second respondent also filed and served a number of detailed experts reports. 9. On Friday 3 August 2001 the applicant filed a notice of discontinuance. 10. The argument by the respondents initially relies upon the principle established by a number of authorities in this Court to the effect that where a party discontinues proceedings the cost consequence contemplated by Pt 11 r 5(1) of the Land and Environment Court Rules 1996 ("the LEC Rules") will follow ( Manly Wharf Pty Ltd v Manly Council (1997) 98 LGERA 245; Kentgreen Dural Pty Ltd v Hornsby Shire Council (1999) 103 LGERA 219; Menangle Sand & Soil Pty Ltd v Wingecarribee Shire Council & Others (2000) 108 LGERA 209). In Bevillesta Pty Ltd v Parramatta City Council (1988) 65 LGRA 358 Bignold J noted that where an appeal is belatedly withdrawn or discontinued it is usual for the Court to award the other party costs thrown away by the belated withdrawal. His Honour made no reference to Pt 11 r 5. 11. The power conferred by s 69 of the Land and Environment Court Act 1979 ("the Court Act") to award costs in the discretion of the Court is expressly subject to the rules. The power, nevertheless, is to be exercised judicially ( Latoudis v Casey (1990) 170 CLR 534). The general purpose of an order for costs is to provide compensation to the successful party. 12. Nevertheless, the compensatory principle is not a rigid or inflexible requirement (Kirby J in Oshlack v Richmond River Council (1998) 193 CLR 72 at 121 – 122). 13. The general principle that costs are to be awarded according to the exercise of the unfettered discretion of the Court is qualified to the extent that the Court will take into account, in circumstances where an appeal has been discontinued without the consent of the other party to the litigation, whether the discontinuance was reasonable conduct in the circumstances of the case to sufficiently negate the ordinary costs consequences of a discontinuance. That is not to say that it is sufficient to establish that the discontinuing party has behaved reasonably in order to escape a costs order. 14. The purpose of Pt 11 r 5 is to clarify the power of the Court in the circumstances of a discontinuance where there has been no determination of the issues and the identity of the successful party may not be readily apparent. The rule also has the effect of maintaining the proceedings on foot for the purpose of determining the question of costs after the discontinuance has taken effect. 15. Mr Robson submits, on behalf of the applicant, that the other parties reaped a significant benefit when effectively the proceedings were determined in their favour without incurring the further cost of a hearing at the conclusion of which there would not have been a reasonable expectation of a cost order in their favour. 16. It is no answer to a claim for costs, following discontinuance, to say that the discontinuing party could have continued with the class 1 application in the expectation that it might not have expected a costs order against it, having regard to the Court's practice and indeed the Practice Direction, that costs will not usually be awarded in that jurisdiction unless exceptional circumstances are shown. In this respect account needs to be taken of the observation made by McHugh J in Oshlack at p 97, as follows:- Thus, the court may properly depart from the usual order as to costs when the successful party by its lax conduct effectively invites the litigation; unnecessarily protracts the proceedings; succeeds on a point not argued before a lower court; prosecutes the matter solely for the purpose of increasing the costs recoverable; or obtains relief which the unsuccessful party had already offered in settlement of the dispute. 17. In an affidavit sworn by its solicitor, the applicant explains the circumstances under which the decision to discontinue the proceedings was taken, as follows:- On 26 July 2001 as a result of matters raised in the Respondent's reports (and, indeed, certain factual/expert conflicts between the Respondents' experts) the Applicants instructed Dr. Stephen Ambrose, a zoologist and Dr. AnneMarie Clements, a botanist to peer review the reports served by the Council and by the Association. On Sunday, 29 July 2001 Dr. Ambrose and Dr. Clements, with support staff, conducted a detailed site inspection and on 1 August 2001 conferred with the Applicants' solicitors and Mr. A. Gelbart, Counsel retained for the hearing. As a result of the conference Dr Ambrose and Dr Clements needed more time to consider further the whole of the evidence. Further advice was provided by Dr Ambrose and Dr Clements on Thursday 2 August 2001. On the basis of the detailed further expert opinion, Mr. Gelbart advised that although properly arguable, the further detailed material and the true conflict in the experts' positions, the Applicants' case was less than likely to succeed. Having regard to further expense that would be incurred by the parties in a 6 day hearing involving detailed expert evidence and Counsel's advice the Applicants decided to consider a renewed application to Council. 18. Apart from the filing and service of the expert's reports, pursuant to the LEC Rules, the decision to discontinue the appeal does not appear, in any relevant sense, to be based upon any action taken by either of the respondents. Irrespective of whether the applicant acted responsibly in discontinuing the proceedings there is nothing to show that there was any catalyst which occurred contemporaneously with the decision to discontinue that was not available to the applicant and its advisors at any time following the lodgement of the development application. 19. The Court has not been persuaded that there are any factual circumstances that would deter it from making an order for costs against the discontinuing party either pursuant to the power conferred by Pt 11 r 5 of the LEC Rules or as a consequence of the existence of exceptional circumstances created by the conduct of the applicant when it discontinued the proceedings effectively the day before the hearing. 20. Pursuant to s 97(4) of the EP&A Act, the second respondent was entitled to be heard at the hearing of the appeal as if it were a party to the appeal. Section 69 of the Court Act speaks only of "costs of or incidental to proceedings in the Court". There is no distinction in terms between a litigant who is a party to the proceedings and a person who is entitled to be heard "as if he, she or it were a party to the appeal". The Court has no doubt that the second respondent is entitled to the exercise of the discretion of the Court in relation to the payment of costs. 21. For all of the above reasons the first and second respondents are entitled to an order that the applicant pay the costs thrown away as a consequence of the filing of the notice of discontinuance. 22. The formal orders of the Court are as follows:- 1. The applicant pay the costs of the first respondent thrown away as a consequence of the filing of a notice of discontinuance on 3 August 2001. 2. The applicant pay the costs of the second respondent thrown away as a consequence of the filing of a notice of discontinuance on 3 August 2001. 3. The applicant pay the costs of the first respondent in respect of the notice of motion filed by the first respondent on 10 August 2001. 4. The applicant pay the costs of the second respondent in respect of the notice of motion filed by the second respondent on 6 August 2001. 5. The exhibits may 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.