> Reported Decision : (2003) 126 LGERA 1 Land and Environment Court of New South Wales CITATION : Warringah Council v Hutchison 3G Australia Pty Limited [2003] NSWLEC 96 APPLICANT Warringah Council PARTIES : RESPONDENT Hutchison 3G Australia Pty Limited FILE NUMBER(S) : 40920 of 2002 CORAM: Pain J KEY ISSUES: Costs :- Class 4 proceedings - Respondent issued Applicant with notice concerning installation of low impact telecommunications facility on top of a light pole - Applicant commenced proceedings seeking orders restraining Respondent from installing the facility - Applicant removed light pole after commencing proceedings - Applicant alleged offer of settlement - discontinuance of proceedings - whether costs should be awarded - whether Pt 11 r 5 of the Land and Environment Court Rules 1996 should be applied - merits of matter not relevant Land and Environment Court Act 1979 s 69(2) LEGISLATION CITED: Land and Environment Court Rules 1996 Pt 11 r 5 Telecommunications Act 1997 (Cth) Telecommunications Code of Practice 1997 (Cth) Hamilton v Woollahra Council (Bignold J, NSWLEC, 9 July 1992, unreported); Jan Yee Australia Pty Ltd v Woollahra Council (Bignold J, NSWLEC, 26 March 1997, unreported); Latoudis v Casey (1990) 170 CLR 534; CASES CITED: Oshlack v Richmond River Council (1998) 193 CLR 72; New South Wales Aboriginal Land Council v Hoddinott (1999) 105 LGERA 55; Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; ex parte Lai Qin (1997) 186 CLR 622; Save the Showground for Sydney Inc v Minister for Urban Affairs and Planning (1998) 105 LGERA 254 DATES OF HEARING: 18/02/2003 DATE OF JUDGMENT: 03/07/2003 APPLICANT Mr D Thomas (solicitor) SOLICITORS Wilshire Webb LEGAL REPRESENTATIVES: RESPONDENT Mr D Wilson (barrister) SOLICITORS PricewaterhouseCoopers Legal JUDGMENT: IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 40920 of 2002 Pain J 7 March 2003 WARRINGAH COUNCIL Applicant v HUTCHISON 3G AUSTRALIA PTY LTD Respondent Judgment Introduction 1. The Respondent is seeking its costs in relation to these proceedings, which were discontinued by Warringah Council (the Council) without agreement from the Respondent in a Notice of Discontinuance dated 21 January 2003 in relation to the substantive part of the proceedings. 2. The Class 4 application filed by the Council concerned the installation by the Respondent of a low impact telecommunications facility (the facility) on top of a wooden light pole in Harbord Park. The Council was seeking orders that the Respondent be restrained from installing the facility. Chronology 3. The relevant chronology of events for the purposes of this application is that a Notice was served under the Telecommunications Act 1997 (Cth) and the Telecommunications Code of Practice 1997 (Cth) (the Notice) on the Council by the Respondent on 25 October 2002 advising of its intention to erect the facility in Harbord Park. The Class 4 proceedings were filed by the Council on or about 19 November 2002 and there was an interlocutory application heard by Lloyd J, who refused relief to the Council on 19 November 2002. 4. On 20 November the pole in Harbord Park, on which it was intended to erect the facility of the Respondent, was removed by the Council. Some time after that date the Respondent constructed the facility at a site known as the Polar Bar site on top of an existing private building. 5. The Council's solicitors wrote to the Respondent's solicitors by letter dated 22 November 2002 in which they sought advice as to whether the Respondent was intending to carry out the activities described in the Notice and, if not, indicating that instructions would be sought to discontinue these proceedings apart from costs. 6. No satisfactory response from the Council's point of view was received in that there was no undertaking forthcoming from the Respondent that the Notice would not be relied on. As I have already noted, the Notice of Discontinuance dated 21 January 2003 save as to costs was then filed by the Council. 7. I should note there was no material provided in relation to the decision of Lloyd J on 19 November 2002 when he refused the Council's interlocutory application. Mr Thomas, the solicitor for the Council, advised that there had been no decision of the merits on that day, but rather Lloyd J had held that as the facility could be removed if the Council was ultimately successful he would not grant its application for an interlocutory injunction. The Respondent's counsel, Mr Wilson, agreed with that summary. 8. The Council agreed at the hearing before me that it was appropriate to award costs in favour of the Respondent in relation to the interlocutory application. Accordingly, there is no issue before the Court in relation to that particular part of these proceedings. The costs issue before me is whether the Respondent should be awarded its costs in the substantive proceedings. Respondent's arguments 9. The Respondent noted that s 69(2) of the Land and Environment Court Act 1979 (the Court Act) provides that the Court has discretion in awarding costs in Class 4 matters. The Respondent submitted, relying on Latoudis v Casey (1990) 170 CLR 534 and Oshlack v Richmond River Council (1998) 193 CLR 72, two well known authorities before this Court, that the Court's discretion is absolute and unfettered but must be exercised judicially and the purpose of costs is to compensate rather than punish, 10. The Respondent also relied on Pt 11 r 5(2) of the Land and Environment Court Rules 1996 (the Court Rules) which provides, If a party to any proceedings discontinues them in whole or in part, the Court may, on the application of another party, order the discontinuing party to pay the costs of any party against whom the discontinued claim was brought and who does not consent to the discontinuance. It was submitted that this rule should apply in this case. 11. Further, it was submitted that in Class 4 proceedings costs would normally follow the event unless there are special circumstances. The Respondent submitted this is confirmed by the decision of Pearlman J in Save the Showground for Sydney Inc v Minister for Urban Affairs and Planning (1998) 105 LGERA 254 and her further decision of New South Wales Aboriginal Land Council v Hoddinott (1999) 105 LGERA 55, where her Honour granted an interlocutory injunction in the first instance but at a later hearing discharged the injunction and declined to grant any other interlocutory relief. Her Honour held that in the proceedings as a whole the respondents were successful in opposing the grant of the injunction and they were entitled to costs. 12. The Respondent referred to the decision of McHugh J in Oshlack in relation to his Honour's comments regarding the exception to the usual costs rule, namely, that there could be disentitling conduct on behalf of the successful party which may disentitle it to costs. The Respondent submitted that in this case there was no disentitling conduct on its part. 13. The Respondent argued the Council had acted unreasonably. At the time the Council commenced proceedings it was clear there was no real basis to argue that the facility was a low impact facility and correspondence was tendered to the Court to support that proposition. As it is not my role in this costs application to determine the merits of the matter I will not be dwelling on that material here. Council's argument 14. It was argued by the Council that if a costs order is made in favour of the Respondent it should be limited to those costs incurred between 19 and 22 November when the Council offered, through its solicitor's letter, to discontinue if the Notice was withdrawn or not proceeded with. 15. It was noted the usual rule is that the successful party is awarded its costs. However, the Council argued that there had been no hearing on the merits so the Court cannot make a determination on the basis of the merits as to whether there is a successful party for the purposes of a costs order. It is not the Court's role to embark on a hypothetical trial of the merits between the parties: see Re the Minister for Immigration and Ethnic Affairs of the Commonwealth of Australia; ex parte Lai Qin (1997) 186 CLR 622. Other cases were also referred to in support of that submission. It is certainly a submission I agree with. 16. It was further submitted by the Council, once again relying on the decision of Lai Qin , that if both parties have acted reasonably in commencing and defending the proceedings and the conduct continues to be reasonable until litigation is settled or the prosecution becomes futile, then in the proper exercise of the Court's discretion the Court should make no orders as to costs. 17. The Council also referred to a decision of Bignold J in Jan Yee Australia Pty Ltd v Woollahra Council (Bignold J, NSWLEC, 26 March 1997, unreported). The Council submitted that his Honour said the correct approach in matters of this nature should be whether: the proceedings were justifiably commenced, justifiably continued, justifiably settled, and in all probability would have succeeded had they been fully litigated The Council submitted this would apply in this case such that I should make no order for costs. 18. In relation to the issue of whether the proceedings were justifiably commenced, to counter the Respondent's suggestion that the proceedings were not reasonably commenced, submissions were made in relation to the nature of the claim by the Council to the effect that the proposed facility was not a low impact facility such that there were reasonable grounds on which the Council could maintain the proceedings. 19. As I have already stated, it is not my function to determine the overall merits of this matter and I simply note both the Council's and Respondent's submissions in this regard. I will not be making any finding as to whether the proceedings were reasonably commenced or not. It is not necessary that I do so in terms of my decision today. 20. Were the proceedings justifiably settled? The Council put to me that after the failure to obtain an interlocutory injunction on 19 November 2002 the Council wrote to the Respondent on 22 November 2002 after it became apparent that the continuation of the proceedings were futile, at that stage the pole having been removed by the Council, and asking the Respondent to obtain instructions as to whether it intended to rely on the Notice. 21. The Council submitted there had been no satisfactory response from the Respondent in that no undertaking was forthcoming. The Council submitted it was within its rights as the owner of the pole to remove the pole from Harbord Park on 20 November 2002. The Council further submitted that despite not receiving a satisfactory response from the Respondent the Council acted reasonably in having the proceedings discontinued by the Notice of Discontinuance in all matters save as to costs. In these circumstances the Council said it had acted reasonably and it should not be liable for the Respondent's costs. Finding 22. It appears to me that Pt 11 r 5(2) of the Court Rules should be applied in the Respondent's favour. The Council commenced these proceedings and has now discontinued them without consent. 23. I apply the decision of Bignold J in Jan Yee but in a different manner to that submitted by the Council. I note that in his judgment Bignold J refers to a decision of his Honour's in Hamilton v Woollahra Council (Bignold J, NSWLEC, 9 July 1992, unreported) in which he ordered costs against the discontinuing party holding the discontinuance to be relevantly an event or a result in the litigation upon which the ordinary rule, that is, that costs follow the event, would operate. The passage in Jan Yee relied on by the Council in its argument is preceded by observations by Bignold J which I think apply in the Respondent's favour and echo those that I have just stated in relation to his Honour's decision in Hamilton v Woollahra Council . The paragraph in Jan Yee I am referring to is: In the circumstances, the only suggested basis for departing from the conventional rule that costs follow the event by regarding a discontinuance as an event … namely, that the proceedings were justifiably commenced, justifiably continued, justifiably settled, and in all probability would have succeeded simply had they been fully litigated, has not been made out in my view, by the Applicant. It seems to me that his Honour's approach to discontinuance in that matter applies in the matter before me. 24. I do note the Respondent did not abandon the Notice although the Council requested that it do so in its letter of 22 November 2002. The Council submitted that this was a basis on which it could argue that it essentially took a risk in discontinuing and it did so to demonstrate its reasonableness in the matter. Nevertheless it seems to me it was the Council's actions which were the reason why the proceedings did not need to proceed. 25. I do not think that in these circumstances it is a Lai Qin situation in that it could not be said that the parties have been reasonable so that each party would pay its own costs, nor should the costs be limited to the period of 19 to 22 November as the Council also argued. Order 26. The Court orders that: 1. The Applicant pay the Respondent's costs of these proceedings, including the costs of the application seeking costs, as agreed or assessed. 2. 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.