Land and Environment Court of New South Wales CITATION : Rockdale City Council v Axia Constructions Pty Limited [2007] NSWLEC 213 APPLICANT Rockdale City Council PARTIES : RESPONDENT Axia Constructions Pty Limited FILE NUMBER(S) : 41175 of 2006 CORAM: Jagot J KEY ISSUES: Costs :- work required by order done before first mention - proceedings commenced before expiry of time to give undertaking - no order as to costs LEGISLATION CITED: Land and Environment Court Act 1979 s 69 Local Government Act 1993 s 124 DATES OF HEARING: 30 March 2007 EX TEMPORE JUDGMENT DATE : 30 March 2007 APPLICANT Mr J Reilly (solicitor) SOLICITORS Home Wilkinson Lowry LEGAL REPRESENTATIVES: RESPONDENT Mr D Filacouridis (in person) SOLICITORS N/A JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES Jagot J 30 March 2007 41175 of 2006 ROCKDALE CITY COUNCIL Applicant AXIA CONSTRUCTIONS PTY LIMITED Respondent JUDGMENT Jagot J: 1 This is an application by Rockdale City Council, the applicant in Class 4 proceedings, for costs. The substance of the proceedings was resolved. Accordingly, costs is the only remaining issue. 2 The relevant circumstances, in brief, are that on 30 May 2006 the Council served a notice of intention on the respondent to give an order under s 124 of the Local Government Act 1993 requiring rubbish, waste materials and overgrown vegetation from the backyard of a property known as 24 Solander Street, Monterey to be cleared. Various photographs in the affidavits, which have been read before me, show the backyard area with piles of various waste materials. 3 The Council served the order on 13 June 2006. The order required the backyard to be cleared in the manner I have indicated by 27 June 2006. After the order had been served, Mr Filacouridis, on behalf of the respondent, wrote to the Council submitting that the notice of intention was premature. He raised a concern that his letter of 4 June 2006 about the proposed order had not been considered and set out his position of disagreement with the order. 4 The Council forwarded penalty infringement notices to the respondent on 28 June 2006 and 18 July 2006 with respect to failures to comply with the order. The respondent elected to have the matter dealt with in the Court rather than by a penalty infringement notice. A second infringement notice was sent on 2 August 2006 after the respondent had elected to have the matter dealt with in Court. 5 Apart from those penalty infringement notices and the conversation between Mr Filacouridis and the Council officer on 15 August 2006, it seems that the matter remained in abeyance until 23 November 2006. On that day the Council's solicitors wrote to the respondent referring to the order of 13 June and the fact that the respondent had not complied with the order. The Council's solicitors put the respondent on notice that failure to comply was a breach of the Environmental Planning and Assessment Act 1979, which I assume is an erroneous reference as the relevant statute was the Local Government Act 1993. Leaving that aside, the letter continued: The purpose of our letter to you is to advise you that we are instructed to commence proceedings in the Land & Environment Court, seeking an order from the Court that you comply with Council's order. Those proceedings will be commenced unless we receive your written undertaking by 4pm Wednesday 29 November 2006 to comply with the Order, and all the rubbish, waste materials and vegetation are actually removed by 15 December 2006 . In the event that we do not receive a written undertaking by that time, or the rubbish, waste materials and overgrown vegetation are not removed by 15 December 2006, proceedings will be commenced against you. 6 On 29 November 2006, the respondent wrote back to the Council's solicitors referring to their election to have the penalty infringement notices dealt with in Court, saying: It is our understanding that unless the matter is heard at court we are unsure as to the accuracy of the order and subsequent fine therefore we find your letter to commence proceedings in the Land & Environment Court slightly premature. If it is found that the order from Rockdale City Council is justified we will immediately demolish the three derelict houses that are earmarked for redevelopment. 7 The Council's solicitors wrote back on 5 December. They advised that the Council had withdrawn the penalty infringement notice. They made clear that the Council intended to commence proceedings in this Court seeking an order that the respondent comply with the Council's order of 13 June. They put the respondent on notice that, if proceedings were commenced in this Court and the Council succeeded, the Council would seek an order for costs. The letter concluded: We invite you to provide us with an undertaking forthwith that you will comply with Council's Order. If we do not have that undertaking by 12pm Thursday 7 December 2006 , we will commence proceedings that afternoon. 8 The respondent wrote directly to the Council on the same day stating that its aim was not to be in conflict with the Council but to work closely with the Council to eliminate its concerns. That letter also noted that the respondent had appointed a demolition company to start demolishing the three dwellings. The company was to start work on 6 December so the three dwellings would be removed and cleared from site within eight days. However, they had advised during a telephone conversation that morning (that is, 5 December) that one of their workers had fallen from another demolition site and had sustained injuries, causing death. As a consequence it was unclear as to when they would be able to commence work. 9 The letter continued: As per the letter from Jeff Reilly we are providing you an undertaking that we shall remove not only the items that are of a concern to Rockdale City Council… 10 The letter asked that the Council be patient so that they could resolve the matter and said: We shall be contacting the demolition company tomorrow and until then we cannot provide a completion date to you. Once we have this information we shall provide same to you. 11 It seems that this letter was sent after a conversation between Mr Filacouridis and the Council's solicitor. This conversation is set out in the affidavit of Mr Reilly of 2 March 2007. It is plain that Mr Filacouridis did not wish to clean up the site as required by the order separately from the demolition of the dwelling of the property. He also indicated to Mr Reilly that, as he was going away for six weeks, nothing could happen in that period. The earliest the work could be done was early February. Mr Reilly noted his instructions to commence proceedings because the matter had been going on too long for the Council. The conversation ended with a reference to Mr Filacouridis's intention to ring the Council. Mr Reilly notes in his affidavit he received instructions from the Council on the afternoon of 5 December to commence proceedings. 12 The proceedings were commenced on 6 December 2006, after the date of Mr Filacouridis's facsimile to the Council and before the date of 7 December 2006, referred to as the date for the required undertaking in the Council's letter of 5 December 2006. On the same day, 7 December 2006, the respondent sent a further facsimile directly to the Council noting that it had been in contact with the sub-contractor regarding the clearing of the properties. The sub-contractor had indicated that he could proceed within two weeks. 13 On 15 January 2007, a couple of weeks before the first mention in the Class 4 proceedings, the respondent informed the Council's solicitor that they had demolished the three properties and removed them from the site. This action was accepted by the Council as also having had the effect of complying with its order. The Council then notified the respondent on 30 January 2007 that it would be seeking its costs of the Class 4 proceedings. 14 The Court has a broad discretion with respect to costs in these types of proceedings, as set out in s 69 of the Land and Environment Court Act 1979, which refers to costs being in the discretion of the Court. The purpose of a costs order is to compensate a party who has had to come to Court to have its position vindicated. In this matter the Council submits that it had to take these proceedings in order to have the work required by the order carried out and completed. The order had been given in June 2006. The respondent received two warning letters. The respondent never gave an undertaking in the terms sought by the Council and the works were not ultimately done until 15 January 2007. 15 Mr Filacouridis, appearing as a representative of the respondent, submits that the penalty infringement notices confused him. The Council issued those notices before the appeal period had expired. It was unfair for him to have to pay the Council's costs in circumstances where he had given the undertaking the Council's solicitors required on 5 December 2006. 16 The considerations in this particular matter are very finely balanced. I say this because, although the Council issued the order on 13 June 2006 and a substantial period of time then expired, the real sequence of events insofar as the proceedings are concerned only commenced on 23 November 2006. There seems from the evidence to have been little communication about the matter in the period between June and November 2006. Further, at least insofar as the respondent is concerned, there is some explanation for the delay by reason of confusion about the penalty infringement notice and the election to have the matter dealt with in Court. Although the first letter from the Council's solicitors was clear about the time for an undertaking to be given (that is 29 November 2006), it is equally clear from the respondent's response that the respondent was labouring under some misapprehension as to the effect of the penalty infringement notices and the requirements of the order (for example, the response indicated that if the order were justified the respondent would immediately demolish the three houses). However, the terms of the order were more limited. This led to the Council's letter of 5 December extending the period for the provision of the undertaking until 12.00pm on 7 December, with a warning that proceedings would be commenced that afternoon absent the undertaking being received. I do not consider that the lengthy period between 13 June and 23 November can weigh too much in the balance against the respondent in the whole of the circumstances to which I have referred, particularly the evident confusion about the effect of the penalty infringement notices and the election to have the matter dealt with by the Court. 17 I have referred above to the conversation with the Council's solicitor, the Council officer and the somewhat confusing sequence of correspondence and events that culminated in the proceedings in fact being commenced on 6 December (before the expiry of the period for the undertaking). 18 The works referred to in Council's order were adequately completed by about mid January, well in advance of the first mention in the Class 4 proceedings on 2 February. The correspondence between the respondent and the Council made it clear that the respondent was willing to carry out the work, albeit not within the time period required because of the accident suffered by the third party contractor. Although there was a conversation between the Council's solicitor and the respondent on 5 December, the proceedings were nevertheless commenced before the time for the undertaking had expired. On that day, 7 December, the respondent also advised the Council that the sub-contractor would proceed to clear the properties within two weeks. These circumstances lead me to conclude that the discretionary considerations with respect to a costs order are so finely balanced in this matter that the appropriate order is that each party should pay its own costs of the proceedings. 19 Accordingly, I propose to order each party to pay its own costs of the Class 4 proceedings. I should also indicate that, unless anyone wants to say anything to me to the contrary, it seems to me that, again, the considerations are so finely balanced that there should be no order as to costs of today. **************************** 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.