Land and Environment Court of New South Wales CITATION : Kringas v Cooma-Monaro Shire Council [2000] NSWLEC 192 APPLICANT: Simon Kringas PARTIES : RESPONDENT: Cooma-Monaro Shire Council FILE NUMBER(S) : 10200 of 1999 CORAM: Lloyd J KEY ISSUES: Costs :- planning appeal - new LEP made during negotiations regarding consent conditions for subdivision - question of law raised by council as primary issue - failure by council to raise any merit issues - whether exceptional circumstances LEGISLATION CITED: Environmental Planning and Assessment Act 1979, s 68, s 97 Land and Environment Court Act 1979 s 36(5), s 69(2) Berk v Woollahra Municipal Council (No. 2) 78 LGERA 180; Glover v Yarrowlumla Shire Council, Bignold J, NSWLEC, 10 November 1998, unreported; CASES CITED: McDonald Industries Limited v Sydney City Council (1980) 43 LGRA 428; Outdoor Australia Pty Limited v Auburn Council (1996) 89 LGERA 365; Raiti v Leichhardt Municipal Council (1991) 72 LGRA 333 DATES OF HEARING: 21/08/2000 DATE OF JUDGMENT: 08/30/2000 APPLICANT: A A Bradbury (Solicitor) SOLICITORS: Minter Ellison LEGAL REPRESENTATIVES: RESPONDENT: W H Marks (Barrister) SOLICITORS: Last & Maxwell JUDGMENT: 1 IN THE LAND AND Matter No. 10200 of 1999 ENVIRONMENT COURT Coram: Lloyd J OF NEW SOUTH WALES Decision date: 30 August 2000 Simon Kringas Applicant v Cooma-Monaro Shire Council Respondent REASONS FOR JUDGMENT Introduction 1. This is a notice of motion by the applicant that the respondent, Cooma-Monaro Shire Council ("the council") pay the costs of an appeal under section 97 of the Environmental Planning and Assessment Act 1979 ("the EP&A Act") against the refusal of an application for the subdivision of land. 2. Section 69(2) of the Land and Environment Court Act 1979 ("the Court Act") provides that costs are in the discretion of the Court. In exercising its discretion the Court is bound to act judicially; that is to say, in accordance with established principles or practice. The Court has established a principle from its earliest days of making no order for costs in planning appeals against decisions of local councils unless there is some exceptional circumstance ( McDonald Industries Limited v Sydney City Council (1980) 43 LGRA 428). That principle is now contained in the Practice Direction 1993 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. 3. The reason for the principle has been stated many times (for example, in Raiti v Leichhardt Municipal Council (1991) 72 LGRA 333 at 334, Berk v Woollahra Municipal Council (No. 2) 78 LGERA 180 at 184, Outdoor Australia Pty Limited v Auburn Council (1996) 89 LGERA 365 at 369). It is to encourage dissatisfied parties to seek review of planning decisions by local councils rather than discouraging them by burdening them with the risk of an order against them for costs if unsuccessful. The relevant facts 4. The appeal was heard on 8-12 and 15 November 1999 by Commissioner Hussey. The appeal was heard concurrently with another appeal against the refusal of an application to erect a dwelling on one of the allotments of the proposed subdivision (No. 10201 of 1999). Apparently, approximately 85% of the hearing time was devoted to the evidence and submissions relating to the latter application, in which the council was successful, the appeal being dismissed. The council appears not to have led any evidence to justify a refusal of the subdivision application on any merit ground, but relied principally on an argument that the subdivision was not permissible under the relevant environmental planning instrument. 5. The council has raised as an issue the question of whether the proposed subdivision was permissible under the relevant environmental planning instrument. The applicant had sought by notice of motion to have that issue determined as a separate question before the hearing. The notice of motion came before Talbot J on Friday, 5 November 1999. The Court was unable to hear and determine the question before the hearing, which was to commenced the following Monday, 8 November 1999. Accordingly, after hearing the merits of the two appeals the Commissioner referred to a judge for the determination the question of law as to whether the proposed subdivision was permissible under the terms of the environmental planning instrument (section 36(5) of the Court Act). The question of law was heard by Cowdroy J on 6 March 2000 and in a reserved judgment delivered on 17 March 2000 his Honour determined the question in favour of the applicant; that is to say, his Honour found that the proposed subdivision was permissible under the instrument. On 12 May 2000 Commissioner Hussey delivered a reserved judgment in which he upheld the appeal and granted development consent to the subdivision subject to conditions. 6. The applicant asserts that there are many aspects of the council's handling of the development application, apart from the appeal itself, which would justify a finding that the circumstances in this appeal are exceptional. It therefore becomes necessary to examine in some detail the way in which the council handled the development application as well as the appeal itself in order to determine whether the council's conduct gives rise to exceptional circumstances justifying an order for costs against it. 7. The applicant's development application was for the subdivision of land known as lot 50 in Deposited Plan 751837 at Yaouk, near Adaminaby, into four (4) allotments being three (3) allotments of 15 hectares each and a residue allotment of some 309 hectares. The land had been purchased by the applicant in 1998 from the Wagonga Local Aboriginal Land Council, which had previously made a successful claim for the land under the Aboriginal Land Rights Act 1983. The council had objected to the granting of the land claim. 8. The council's Director of Environmental Services, Mr P G Beer, prepared a report on the development application for a meeting of the council held on 8 February 1998. The report recommended that the application be approved subject to conditions. The report noted that the council's draft Local Environmental Plan (Rural) will apply to the land and that the subdivision was consistent therewith. 9. The council resolved to refuse the development application. By a notice of determination dated 18 February 1998 the council set out the following reasons for the refusal: 1. That the proposal will have a significant adverse environmental impact on the area. Such proposal having the potential to adversely impact on native flora, native fauna, the visual aspect in the Yaouk Valley when land clearing, fire control measures, road construction and road maintenance are carried out. 2. That the proposal is not in the public's interest, in that this proposal is seen as being inconsistent with the public perception gained by the granting of Native Title over the site. 3. That the basis for the granting of Native Title and potential sale of the site required the Land Council to determine that the land is not of cultural significance to aborigines after having submitted a claim to the contrary on this basis. Council questions the integrity of the advice initially offered which claimed spiritual and cultural significance. Council is not assured that the disposal of this land, given the presence of known sites in the vicinity, should be developed in this manner. 4. That the development will threaten the historic Yaouk Bridle Trail by improving vehicular access to the area. 5. Council is not prepared to accept the responsibility for care, control and maintenance of the existing Crown road. 6. That proposed structures/dwellings and life have the potential to be put at risk in the event of a bushfire, despite any fire prevention measures. Council is of the view that it cannot accept responsibility to ensure maintenance of any protection measures as the area is subject to high rainfall and subsequent re-growth. 7. That alternative access has not been provided by the applicant for the development. 10. In April 1999 a motion to rescind the council's refusal of the application was received by the council. It seems that on 10 May 1999 the council considered a further report from Mr Beer in which he again expressed the opinion that the application should be approved. The council at that meeting resolved to rescind its previous resolution and to approve the application for subdivision subject to conditions. On 11 May 1999 the applicant's solicitor, Mr A Bradbury received a telephone call from the council's solicitor, Mr J Last, who said words to the effect: These matters were reconsidered by the council last night. The council has rescinded its resolution on the subdivision but not on the house. I will write to you to confirm the council's decision. 11. On 20 May 1999 the council's solicitors, Last & Maxwell, sent a letter to the applicant's solicitors, Messrs Deacons Graham & James (for the attention of Mr Bradbury) which states (inter alia): The writer refers to his telephone conversation with Mr Bradbury wherein he advised Mr Bradbury that the Council had resolved to rescind their opposition to the proposed subdivision being the subject of above-mentioned appeal. Council has now approved DA No. 74/99 subject to the following conditions: … 12. On 11 June 1999 Messrs Deacons Graham and James sent a letter to Messrs Last and Maxwell which states (inter alia): Thank you for your letter dated 20 May 1999 in which you indicate that the council has "now approved DA No. 74/99" subject to the conditions set out in your letter. Whilst our client is obviously pleased to see that the Council has withdrawn its opposition to the proposed subdivision, there are several matters of concern which arise from your letter. First, as the Council has already determined the development application by refusing consent it has no power to grant the approval unless a fresh application is submitted to it: see Somerville v Dalby (1990) 69 LGRA 422 (at 430). Subject to the parties reaching agreement on the conditions of consent and the Council waiving any additional application fees, our client is prepared to lodge a fresh development application to enable the Council to implement the decision it has now taken. While the matter could also be dealt with by Consent Orders, we note that paragraph 9(b) of Practice Direction 1996 notes that "when there is agreement prior to the commencement of hearing … the Court will usually expect a consent authority to give effect to the agreement by itself granting consent or approval". Secondly, our client is not prepared to accept the conditions of consent as formulated in your letter. In this regard we raise the following specific matters: … 13. Over the ensuing months negotiations took place between the applicant and the council in relation to the proposed conditions of consent. On 18 October 1999 the council sent a letter to the applicant's solicitors setting out revised proposed conditions of consent. On 21 October 1999 the applicant sent a letter to the council which states (inter alia): We accept your proposed conditions of consent subject to clarification of the Section 94 contribution calculations in Condition 6. As discussed, can you please forward those calculations as soon as practical. Attached is the requested calculation of roof area for rainwater supply to the proposed lots. We have instructed our solicitor to prepare consent orders which can be made by the Court on 8 November. 14. In a meantime, however, the council had on 10 June 1999 submitted a draft local environmental plan known as Cooma-Monaro Local Environmental Plan 1999 - (Rural) to the Department of Urban Affairs and Planning under section 68 of the EP&A Act. On 20 September 1999 the council sent a letter to the Department of Urban Affairs and Planning, requesting that the Department implement the plan. The draft plan submitted to the Department did not contain any savings provisions relating to the appeal that had been sought by the applicant in the Court against the original refusal of the applicant's development application and which was still before the Court. The omission of any such savings provision was contrary to Circular No. C30 issued by the Department of Urban Affairs and Planning in October 1997. That Circular is headed " Local Environmental Plans prepared for Development Applications under Appeal ". The Circular states ( inter alia): [C]ouncils are requested to include information on any DA which is under appeal in the Court and may be affected by the draft plan. The information should include the dates of lodgment of both the DA and the appeal, and advice on whether the draft LEP includes savings/transitional provisions for the DA. 15. The new local environmental plan was published in the New South Wales Government Gazette on 15 October 1999. 16. On 19 October 1999 the council wrote to Messrs Deacons Graham & James stating (inter alia): Council this day, received notification that on 15 October 1999 the Rural LEP Cooma-Monaro Shire was Gazetted. As the Plan contains provisions relevant to your client's Development Applications, I advise that a copy of the Plan can be inspected at the Council Chambers. 17. Notwithstanding the fact that the report of Mr Beer on the development application stated that the proposed subdivision was consistent with the then draft Cooma-Monaro Local Environmental Plan 1999 - Rural, (noted in paragraph 8 above) the council's solicitors sent a letter to Messrs Deacons Graham & James on 25 October 1999 which states: We advise that at the hearing we will seek to amend the Statement of Issues in each matter by adding "whether the provisions of the Cooma-Monaro Local Environmental Plan 1999 - Rural, gazetted on 15 October 1999, prohibit the Council from approving the application 18. On 27 October 1999 the applicant sent a letter to the council in the following terms: Further to our agreement on the Conditions of Consent for DA 74/99, we have just received advice from your solicitors Last & Maxwell that in their opinion the development may not be permissible under the recent LEP. Accordingly we suggest that the Council simply provide an amendment to the LEP that serves as a savings clause to allow Council to approve that application, as resolved by Council at the meeting of 10th May 1999, and in accordance with the advice we have received from Council in numerous correspondence, telephone conversations and meetings since the resolution. It has also been suggested that the LEP may prohibit the dwelling application 26/99. If Council stands by its original reasons for refusal, we suggest it would be appropriate to provide a similar savings provision to allow a determination of that application by the Court on the merits of the issues which have been previously identified by Council. Given these matters are set for hearing on 8 November, we request your advice on these issues as soon as possible. 19. On 4 November 1999 the council's solicitors replied by letter to the applicant's solicitors in the following terms: We refer to your letter dated 27 October 1999 to Mr Beer re the Cooma Monaro LEP 1999 Rural. We advise that as the matter is pending hearing in the Land and Environment Court, correspondence re same, should be directed to this firm. Your assertion as to an agreement is not accepted in view of the provision of the LEP gazetted on 15 October 1999. We expect that your suggestion of a savings provision will be subject of discussion within the Council but, at this stage, no assurances can be given. 20. I have already noted above that on 5 November 1999 the applicant sought directions from the court to have the new issue raised by the council determined as a preliminary question of law. On that day Talbot J declined to deal with the matter by way of the separate determination of a question of law since the court had no available time to determine the question that day and the case was due to be heard on the merits on the following Monday, 8 November 1999. Transcript of the proceedings before Talbot J discloses, however, that his Honour expressed the following view: What the Council raises is clearly untenable . 21. At the hearing of the appeal before the Commissioner the council adduced evidence from its Manager of Planning, Mr R W Dakin. Mr Dakin's evidence refers to the various heads of consideration under section 79C of the EP&A Act and does not seriously argue that the development should be refused on merit grounds. His evidence concludes with the following summary: The assessment above was done on the basis that this application is required to be refused as it is as it is not permitted under the new Cooma-Monaro Local Environmental Plan 1999 - (Rural). That assessment should be seen as an attempt to address the issues raised by Section 79C(1) only. 22. As noted above, the Commissioner referred a question of law relating to the permissibility of the development to a judge for determination. That question came before Cowdroy J on 6 March 2000 and, as noted above, in a reserved judgment delivered on 17 March 2000 his Honour held that the proposed subdivision was not prohibited by the new local environmental plan. The appeal was subsequently upheld by the Commissioner in a reserved decision published on 12 May 2000. The submissions of the parties 23. Mr A A Bradbury, who appears for the applicant, relies upon the following facts in support of the application for costs: (1) The original refusal of the application on 8 February 1999, against the recommendation of the reporting officer, was based on totally irrelevant grounds relating to the original land claim by the Wagonga Local Aboriginal Land Council; (2) The council did not bring forward any evidence in support of these grounds set out in the notice of determination at the hearing of the appeal; (3) The council led no evidence on any merit ground at the hearing of the appeal, but merely " went through the motions " and did not bring forward any evidence to justify a refusal on merit grounds; (4) Having then resolved on 10 May 1999 to support the approval of the application the council embarked on negotiations with the applicant in relation to conditions of consent. When the conditions were agreed upon (other than the section 94 contribution) the council announced, without any prior warning, that a new local environmental plan had been made and which, in the council's view, prohibited the application; (5) The application had been assessed to be consistent with then draft local environmental plan by the planner reporting on the development application to the council meeting on 8 February 1999; (6) Contrary to the Department of Urban Affairs and Planning Circular No. C30, the council made no reference to the fact of the appeal when it submitted the draft local environmental plan to that Department and, moreover, the council made no provision for any savings clause in the draft local environmental plan which it submitted to the Department; and (7) The council's decision to oppose the application in the Court was manifestly unreasonable and led the applicant to take part in hearings before both Commissioner Hussey and Cowdroy J which were avoidable and unnecessary, particularly, in the light of the council's previous decision to approve the application, in the light of the comment by Talbot J on 5 November 1999 that the question of law which the council raised was " clearly untenable " and that the question of law which the council sought to argue was contrary to the judgment of Bignold J in Glover v Yarrowlumla Shire Council (NSWLEC, 10 November 1998, unreported) in relation to a provision which was relevantly identical to the relevant statutory provision in the present case and which was to the contrary of the council's submission. 24. Mr W N Marks, who appears for the council, submits that there were in fact merit issues before the Commissioner, namely the question of access to the proposed subdivision and the proposed conditions of consent, particularly in relation to the proposed section 94 contribution; that both of the adequacy of access to the proposed subdivision and the conditions remained in dispute between the parties; and in relation to the non-compliance with the Department's Circular No. C30 the council had previously resolved on 10 May 1999 to approve the application subject to agreement being reached on the conditions. Conclusions 25. A reading of the Commissioner's decision discloses that there is no mention in his discussion of the evidence of the fact that the land had been sold to the applicant by the Wagonga Local Aboriginal Land Council following the making of a successful claim by that Land Council under the Aboriginal Land Rights Act 1983. The absence of any discussion of this ground of refusal in the Commissioner's reasons suggests that it was not relied upon by the council at the hearing. There is brief discussion in the Commissioner's decision of the question of access to the subdivision and bush fire precautions which, the Commissioner states, can be covered by conditions of consent. The Commissioner's discussion of the issues confirms that the principle issue raised was the legal issue, namely whether the proposed development was permissible under the newly made local environmental plan. It seems to be unexceptional for the council to have merely gone " through the motions " as far as merit issues are concerned and relied on the legal issue, which seems clearly to have been the principal issue in the case. 26. The fact that the legal issue was a principal issue is confirmed by the fact that 85% of the hearing time before the Commissioner was related to the associated appeal in matter No. 10201 of 1999 ( the application for a dwelling), both appeals being heard together. The council was fully entitled to raise the legal issue. The Commissioner referred that issue to a judge for determination pursuant to section 36(5) of the Court Act. The present application for costs is in substance an application for the costs of the hearing before Cowdroy J. The costs of hearings on questions of law referred to a judge for determinations are themselves governed by the Practice Direction. In Outdoor Australia Pty Limited v Auburn Council (1996) 89 LGERA 365, Pearlman J said (at 369): It is true that, in this Court, questions of law arising in class 1 and 2 are not determined by assessors of the Court, but by judges. Questions of law in those may be identified by the parties at the first callover (Land and Environment Court Rules 1980 (NSW), Pt 13, Div 7, r 1), upon which they are referred to a judge for determination or they may arise during the course of proceedings and be referred for determination by a judge of the Court on the parties' motion or the assessor's motion (Land and Environment Court Act (s 36(5)). But the fact that judges of this Court decide legal questions and assessors are confined to decisions on the merits of the case does not of itself, it seems to me, call for a distinction in the awarding of costs.. That is because this is one Court, and the class 1 or 2 proceedings in which a question of law arises are one set of proceedings. 27. In my opinion it was not an exceptional circumstance for the council to raise as its sole or principal issue a question of law, which question was likely to be determinative of the appeal. 28. I am unable to determine whether the arguments put by the council to Cowdroy J were so untenable as to amount to an exceptional circumstance justifying an order for costs. The transcripts of the proceeding before Cowdroy J were not before me. A reading of his Honour judgement discloses that it was necessary for his Honour to refer to some eight authorities, which suggests that the legal question was at least arguable. I am thus unable to conclude whether, if this application for costs had came before Cowdroy J, his Honour would have found the existence of exceptional circumstances justifying an order for costs of the proceedings heard by him. 29. Neither do I regard as an exceptional circumstance the fact that the council resolved to support the approval of the application and to negotiate the terms of conditions with the applicant whilst at the same time preparing a new local environmental plan. The negotiations between the parties over the conditions were somewhat prolonged and had not been concluded by the time the new environmental plan was made. The fact that the council did not alert the applicant to the new local environmental plan when it was in draft form is understandable in view of Mr Beer's expressed opinion that the proposed subdivision was consistent with the then draft local environmental plan. The council first raised the question of whether the proposed development was permissible under the new local environmental plan when, on 25 October 1999, its solicitors advised the applicant's solicitors that they would seek to amend the Statement of Issues by adding the new issue relating thereto. In others words, whilst the applicant and the council were conducting their extended negotiations over the conditions of consent, the advice to the council by its relevant officer was that the proposed development was consistent with the draft local environmental plan. It was only subsequently, following the making of the new local environmental plan, that somebody - the evidence does not disclose who - thought there might be a problem. 30. For the same reason it is my opinion that it was not an extraordinary circumstance for the council to make no provision for a savings clause in the draft local environmental plan. It had been advised that the proposed development was consistent with the draft local environmental plan. A savings clause would have been considered unnecessary in such circumstance. 31. It follows from the conclusions that I have expressed above that I am not satisfied that there are exceptional circumstances in the present case so as to justify the making of an order for costs. Orders 32. I make the following orders: 1. The applicant's notice of motion for costs is dismissed. 2. The applicant must pay the costs of the notice of motion. 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