Land and Environment Court of New South Wales CITATION : Moodley T v Botany Bay City Council [2004] NSWLEC 183 APPLICANT Moodley T PARTIES : RESPONDENT Botany Bay City Council FILE NUMBER(S) : 11438 & 11440 of 2003 CORAM: Hussey C KEY ISSUES: Costs :- Application LEGISLATION CITED: Land and Environment Court Act 1976 CASES CITED: Tensat Chullora No. 2 Trust v Valuer-General (110 LGRA 227 p 233); Gee v Port Stephens Council [2003] NSWLEC 260 (17 October 2003 DATES OF HEARING: 16/04/2004 DATE OF JUDGMENT: 05/21/2004 APPLICANT Mr T Moodley LEGAL REPRESENTATIVES: RESPONDENT Mr T O'Connor, solicitor SOLICITORS Houston Dearn O'Connor JUDGMENT: IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 11438 & 11440 of 2003 Hussey C 21 May 2004 T Moodley Applicant v Botany Bay City Council Respondent Judgment 1. This costs application arises from the following two appeals, involving development of a site at 6 Ivy Street, Botany: - Appeal No. 11438/03; s 96 modification to an approved two-storey dwelling, on the rear portion of the site. - Appeal No. 11440/03; development application for the demolition of an existing dwelling and construction of a new dwelling on the front portion of the site. 2 . As the main issues in these initial appeals concerned access and privacy considerations in respect of both the new dwellings, the parties agreed that they be heard together at a s 34 conference. After hearing the respective cases, this resulted in the two appeals being upheld, subject to amended conditions. 3 . Subsequently, the applicant has lodged this Costs Application in respect of the two merit appeals, which the parties also agree be heard concurrently. 4 . Accordingly, Mr Moodley submits the following grounds for costs: i) A successful appeal, ii) Council unreasonably failed to determine the application within 40 days, iii) Council's conditional consent was unreasonable and contrary to the provisions of the EP&A Act, iv) Council's eventual consent was contrary to the well-established view of this Court, v) Council's defence was a failed attempt to mitigate issues already settled by the Court, vi) The appeal being unnecessary cost and loss to the applicant. 5 . Mr Moodley also provided an Affidavit outlining his reasons for costs. In summary, he submits that the appeal was unnecessary and could have been avoided because: 1) There was an initial development application lodged, which was refused by council and subsequently refused by the Court in Appeal No. 10974/02. In refusing this application, Commissioner Hoffman dealt with the identified issues, including the access to the rear dwelling, which he considered could be covered by a Deferred Commencement Condition. 2) Subsequently, the applicant submitted an amended application, which revised the access arrangements to the rear lot. 3) Discussions were held between the applicant and council officers, who apparently accepted that the access provisions could be covered by an Agreement- in-Principle (AIP). 4) This revised application and AIP was referred to council, who granted development consent subject to conditions, including the imposition of a Positive Covenant to effect the access arrangements. 6 . Because the condition requiring this Positive Covenant was imposed, Mr Moodley says this is in breach of the Agreement-in-Principle and not consistent with the prior determination of Commissioner Hoffman. Furthermore he submits that it is contrary to the "well-established view" of the Court that this form of positive covenant should not be imposed. 7 . In response to this, Mr O'Connor, submits that the revised application was dealt with appropriately and the negotiations on conditions were always subject to council's final decision. 8 . Having heard the submissions, it is apparent that a significant part of Mr Moodley's concern is with the processing of the applications, due to the lengthy history, which he considers should have resulted in a more expeditious council decision. Furthermore, he does not consider the imposition of the Positive Covenant condition, related to family use of the property reasonable. He also places significant emphasis on the fact that his consent was not granted on the basis of the AIP or on the basis of Commissioner Hoffman's previous decision. 9 . However after initial discussions, Mr Moodley conceded that Grounds i) and ii) are not reasonable in this case and elected not to pursue them. 10 . In my assessment of the other grounds, it is apparent that a revised development application is necessary, if the owner wishes to obtain development consent. This revised application was lodged and it is different to the initial application, in respect of the vehicular and pedestrian access, particularly to the rear house. Also, it did not propose the deferred commencement approach to secure the access as noted by Commissioner Hoffman. 11 . Accordingly, council assessed this revised application and granted conditional consent including the positive covenant. It seems to me that this assessment is part of the normal development application processing for a revised, or any application. Furthermore that council has the discretion to impose conditions requiring the positive covenant, even though this is not in the form of consent anticipated by Mr Moodley after his discussions with council officers. In these circumstances, I consider Mr Moodley's expectations somewhat unreal given that the council officers did not have delegated authority to grant a development consent. 12 . With respect to the Positive Covenant condition being contrary to the "well-established view of the Court", I note Mr O'Connor's submissions that each case is considered on its merits. Furthermore his submission that there have been situations where the Court has considered these covenants reasonable. 13 . Whilst I accept that Positive Covenants are not encouraged, nevertheless there can be appropriate applications for them. In this case, I do not consider that council was necessarily obliged to adopt discreet aspects of previous decisions on a different application. Instead it assessed the merits of the submitted development application. If subsequent negotiations and review of conditions of consent is unsuccessful, then a merit appeal can be made to the Court, on the basis of the current application. 14 . As that process has generally occurred in this case, I am satisfied that the revised application has been dealt with in an appropriate way and that the applicant has not presented any compelling evidence in respect of the other grounds for the granting of costs on a fair and reasonable basis. Accordingly, I consider the application for costs should be dismissed. 15 . In reaching this conclusion, I then note Mr O'Connor's further submissions that in the event of the costs application being dismissed because no exceptional circumstances were established, he request costs on behalf of the Council. In this regard, he refers to the matter of Tenstat Chullora No. 2 Trust v Valuer-General [110 LGRA 227 p 233], where His Honour Bignold J, stated at par 29 ; 29 For all these reasons, the second respondent, not having established exceptional circumstances in support of its claim for costs, its motion must be dismissed. 30 In consequence of dismissal, the applicant seeks its costs of the motion. In my judgment, the applicant is entitled to its costs of resisting the second respondent's motion. 16 . However this counterclaim is based on the provisions of the previous Courts Practice Direction 1993. But from 2 February 2004, the Land and Environment Court Rules 1996 (Amendment No. 8) provides for a different test. 17 . Amendment No. 8 inserted in a new Div 2 into Pt 16 of the Land and Environment Court Rules, cl 4 of which provides: (1) This rule applies to the following proceedings in classes 1, 2 and 3 of the Courts jurisdiction: (a) proceedings under Sections 95A, 96, 97, 98, 109 K, 121 ZK, 121ZM, and 149F of the Environmental Planning and Assessment Act 1979; (b) proceedings under sections 176, 177, 178, 182 and 611 of the Local Government Act 1993; (c) proceedings under s 37 of the Valuation of Land Act 1916; (d) proceedings under s 38A of the Land Tax Management Act 1956; and (e) proceedings under s 96 of the Taxation Administration Act 1996. (2) No order for the payment of costs will be made in proceedings to which this Rule applies unless the Court considers that the making of a costs order is, in the circumstances of the particular case, fair and reasonable. 18 . The amended paragraph 10 of the Land and Environment Court Practice Direction 1993 now provides: 10. Where an application for costs is made in proceedings that have been heard and determined by one or more Commissioner is the application shall be made to that Commissioner or those Commissioners (as the case may be). Where the Commissioner or Commissioners are of the opinion that a costs order should be made, the party shall be informed of that decision and the reasons for it and shall be given the opportunity to make submissions to the Chief Judge on the question of whether he should give concurrence to the proposed costs order. Normally, submissions shall be made in writing and must be made within 14 days of the publication of the reasons for decision by the Commissioner or Commissioner is (as the case may be) of the proposed costs order. If any party wishes to make oral submissions in addition to any written submissions, application must be made to the Chief Judge within the 14 day period. If such an application is not made or written submissions are not provided, the Chief Judge shall, without further notice to the parties, decide whether to grant concurrence to the propose costs order. If the Chief Judge concurs, the order for costs determined by the Commissioner or Commissioner's shall be made pursuant to s 69 (8) of the Land and Environment Court Act 1979. 19 . His Honour McClellan CJ set out the history of costs orders in the Land and Environment Court in Gee v Port Stephens Council [2003] NSWLEC 260 (17 October 2003), and stated: 56 I have already indicated there will be many cases in classes 1 and 2 where it is appropriate that there be no order as to costs. In my opinion this is likely to be the case where the issues in dispute are confined to merit considerations. However, a different approach may be required where a preliminary question is raised. If it happens that determination of the preliminary question will assist the commissioner who hears the merits of the matter by defining the content or limits on his or her discretion it is likely that no order for costs should be made. For example, the interpretation of a provision of a local environmental plan containing height or floor space controls may be a circumstance where no order should be made. There will be others. However where the preliminary point raised is said to preclude consent at all, the proceedings seeks to have the character of merits review and different considerations arise. 20 . In this case, a separate sitting of the Court was required to consider this additional costs application, incurring further costs. Although I do not consider there was a fair and reasonable basis to make a primary award of costs, nevertheless I consider it reasonable to award costs as compensation for expenses incurred in the costs hearing. However, the Rules of the Court provide that a Commissioner can only make costs order with the concurrence of the Chief Judge. Before the Chief Judge will consider whether to concur the parties are to have an opportunity to make submissions to him in accordance with the Practice Direction. When delivering these reasons the Registrar will make arrangements if the parties want to make further submissions in the matter. 21 . Accordingly the orders of the Court are: 1. The motion for costs of the merit appeals is dismissed. 2. Subject to the concurrence of the Chief Judge, I order the applicant to pay the respondent's costs of the application for the costs of the merit appeal. _________________ R Hussey Commissioner of the Court rjs 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.