Reported Decision : 137 LGERA 416 Land and Environment Court of New South Wales CITATION : Wollondilly Shire Council v Anh Nhu Le and Ors [2004] NSWLEC 524 APPLICANT: Wollondilly Shire Council FIRST RESPONDENT: Anh Nhu Le PARTIES : SECOND RESPONDENT: Thi Anh Le THIRD RESPONDENT: Thi Khanh Linh Nguyen FOURTH RESPONDENT: Hoc Dinh Duong FILE NUMBER(S) : 40547 of 2004 CORAM: Pain J KEY ISSUES: Costs :- Whether proceedings reasonably commenced and settled LEGISLATION CITED: Environmental Planning and Assessment Act 1979, s 121B Land and Environment Court Rules, pt 15 r 7 Beilby v Viney Pty Ltd & Anor [2000] NSWLEC 93; Latoudis v Casey (1990) 170 CLR 534; CASES CITED: Nati v Baulkham Hills Shire Council [2002] NSWLEC 71; Port Stephens Shire Council v Grivas & Ors [1999] NSWLEC 135 ; Re the Minister for Immigration and Multicultural Affairs of the Commonwealth of Australia; ex parte Lai Qin (1997) 186 CLR 622 DATES OF HEARING: 17/09/2004 DATE OF JUDGMENT: 09/20/2004 APPLICANT: Mr D. R. Baird (solicitor) of Marsdens FIRST AND SECOND RESPONDENTS: LEGAL REPRESENTATIVES: Mr R. Griffin (solicitor) of Goldrick Farrell Mullan Solicitors THIRD AND FOURTH RESPONDENTS: Mr C. Jackson (barrister) instructed by Apex Legal Services JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES PAIN J 20 SEPTEMBER 2004 40547of 2004 WOLLONDILLY SHIRE COUNCIL v ANH NHU LE & ORS JUDGMENT 1 Her Honour: The Council is seeking an order that the Respondents pay its costs in relation to these Class 4 proceedings. The Respondents argue that each party should pay their own costs in relation to the proceedings. Background 2 The Respondents own Lot 59 in Deposited Plan 751295, being 116 Moulders Road, Orangeville ("the land") which they run as a vegetable and herb farm. A greenhouse and number of '"gloos", being structures designed to grow plants, are located on the land. On 23 June 2003 Mr Savage, a Council officer, inspected the land in response to a complaint received about unauthorised structures on the land. On 25 June 2003 the Council sent a Notice of Proposed Order to the Respondents, by registered mail addressed to the land, indicating that the Council proposed to issue an order requiring the Respondents to demolish and remove the igloos and greenhouse erected on the land. On 12 August 2003 the Council issued an order under s 121B of the Environmental Planning and Assessment Act 1979 ("the EP&A Act") requiring the Respondents to demolish and remove the existing igloos and greenhouse erected on the land. A copy of the order was sent to the Respondents by registered mail addressed to the land. 3 On 17 September 2003 Mr Savage again attended the land and observed that not only were the structures the subject of the order still on the land but a further four igloos appeared to be being constructed on the land. On 19 September 2003 the Council wrote to the Respondents advising them that they had 14 days to show why the Council should not initiate legal proceedings in relation to their non-compliance with the order. It does not appear that the Council received any response to this letter. 4 On 18 November 2003 the Council wrote to each of the Respondents, care of the address of the land, indicating that if the order had not been complied with by 2 December 2003 the Council would commence proceedings in this Court to secure compliance. An inspection carried out by Mr Savage on 4 December 2003 revealed that the order had still not been complied with. Accordingly, the Council commenced these proceedings on 13 May 2004 by filing a Class 4 Application. The application sought declarations that the Respondents were using or causing the land to be used "for the purpose of intensive horticulture as defined in the Wollondilly Local Environmental Plan 1991 ("the LEP") contrary to the provisions of cl 10 of the LEP" and the EP&A Act and consequential orders. On 30 June 2004 the Council filed, without the leave of the Court, an amended Class 4 application which amended the declarations and orders sought by including the words "agriculture or" before the words "intensive horticulture". 5 The parties reached agreement and on 30 July 2004 the Court made consent orders reflecting the agreement reached between the parties. The consent orders filed do not contain declarations of the sort specified in the Class 4 application. The first order requires the Respondents to use the land in conformity with the EP&A Act. The second order provides that the Respondents are to demolish and remove a number of igloo structures and a greenhouse from the land unless a building certificate is obtained in relation to these structures by October 14 2004. No application for a building certificate has been lodged by the Respondents as yet. The Parties' Submissions 6 The Council argued that it was entitled to an order that the Respondents pay its costs. The Council argued that the consent orders made by the Court were substantially the same as those sought by it in its application so that it should be regarded as having been successful in the proceedings. The Council argued that it acted reasonably in commencing the proceedings as evidenced by the efforts made by the Council to secure the removal of the structures during the 11 months between the Council first becoming aware of the existence of the structures on the land and commencing proceedings. 7 The Council argued that these proceedings concern facts which are very similar to those considered by Bignold J in Port Stephens Shire Council v Grivas & Ors [1999] NSWLEC 135 and Sheahan J in Beilby v Viney Pty Ltd & Anor [2000] NSWLEC 93. 8 The First and Second Respondents disputed the Council's submission that it should be regarded as having achieved the relief it sought in its application and, in the alternative, relied on Re the Minister for Immigration and Multicultural Affairs of the Commonwealth of Australia; ex parte Lai Qin (1997) 186 CLR 622 to support their argument that, as they acted reasonably in relation to the proceedings, no order as to costs should be made. The First and Second Respondents argued that the consent orders, unlike the Class 4 application, contain no declarations of invalidity and are largely directed to giving the Respondents the opportunity to file an application for a building certificate. The First and Second Respondents argued that if the Council had elected to provide the Respondents with an opportunity to file such an application before commencing proceedings this matter could have been resolved without the need to proceed to court. 9 The First and Second Respondents argued that they had acted entirely reasonably in settling the proceedings as they did with the Council and that the fact that they had not taken any earlier action to remove the structures on the land can be explained by the belief held by the Respondents that the use of these structures was covered by existing use rights. Further the First and Second Respondents argued there were a number of procedural irregularities on the part of the Council, such as late service of the initial Class 4 application filed by the Council, which they could have pursued but did not in the interests of saving costs. 10 The Third and Fourth Respondents argued that they acted reasonably in settling the proceedings as they did with the Council. The Third and Fourth Respondents argued that they were not in a position to settle the matter earlier because they were unaware that there was any issue in relation to the structures until they received the Class 4 application because they do not live at the property and so did not receive the notice of intention to issue an order, the s 121B order or other correspondence which the Council sent to all the Respondents care of the address of the land. The Third and Fourth Respondents argued that as soon as they became aware, on the service of the application, of the Council's concerns in relation to the structures on the land they cooperated with the Council in relation to the settlement of the matter and agreed to consent orders so as to efficiently finalise it. Finding 11 I have broad discretionary power under s 69 of the Land and Environment Court Act 1979 to award costs in Class 4 proceedings. The existence of this discretion in circumstances where consent orders have been made by the Court is confirmed by Pt 5 r 7 of the Land and Environment Court Rules which provides that: The Court may order the respondent to pay the costs of the proceedings where a respondent satisfies or causes to be satisfied the claim of the applicant after the proceedings have been commenced. 12 In Lai Qin McHugh J stated at p 624 to 625 that in circumstances where: … a party elects not to pursue an action because he or she has achieved the relief sought in the action either by settlement or by extra curial means. … If it appears that both the parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled … the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings. 13 In this case the proceedings have been settled by the parties in relation to all matters other than costs so that there has been no adjudication on the issues. The initial inquiry to make in these circumstances is whether the Council achieved the outcome it sought in the Class 4 application in the final orders agreed by the parties. I am of the view that the orders made do not reflect those sought by the Council in its Class 4 application in that: (a) they do not include any declarations to the effect that the Respondents are using the land in breach of the LEP or the EP&A Act; (b) rather than the simple order for demolition sought in the application, order 2 contains a mechanism whereby the structures on the Respondents' land can become 'regularised' through the issue of a building certificate and are only required to be demolished if such a building certificate has not been obtained by 14 October 2004. 14 However it is clear that the orders made, while differing somewhat from those sought in the Council's application have achieved the substantive result sought by the Council in that the offending structures on the land will be either approved in a building certificate process or demolished. 15 Were the proceedings reasonably commenced and settled? It is not appropriate in these proceedings that I consider the merits of either the Council's claims or the Respondents' defence to that claim. What I am considering is whether, given the history of the matter, the parties acted reasonably in commencing and settling the proceedings. 16 I accept the Council's submission that it proceeded to Court as a result of the Respondents' non-compliance with the order which it issued under s 121B of the EPA&A Act. The Class 4 application was filed by the Council after some 11 months of contact and communications with the Respondents in relation to the structures on the land. 17 The solicitor for the First and Second Respondents said that he was not aware of any reason, beyond the First and Second Respondents' belief that the use of the structures was authorised by existing use rights, why the First and Second Respondents failed to comply with the order issued by the Council prior to it commencing proceedings. 18 Given the orders ultimately made with the consent of the Council, I see much merit in the First and Second Respondents' submission that the Council ought to have raised with the Respondents the possibility of permitting them to make an application for a building certificate in relation to the structures before commencing proceedings. In my view, it certainly would have been desirable for the Council to have raised this issue with the Respondents prior to commencing proceedings. However, this does not mean that the Council was unreasonable in commencing or settling the proceedings on these terms as the carrying out of prohibited development or development without consent is an offence under the EP&A Act which the subsequent issue of a building certificate cannot cure. Further, it is an offence against s 125(1) of the EP&A Act to fail to comply with an order issued under s 121B of that Act. Accordingly, in my view, the decision of the Council to commence civil enforcement proceedings in relation to the structures on the land was, in the face of its earlier unsuccessful attempts to have to the structures removed, reasonable. The First and Second Respondents' actions were unreasonable prior to the Council's Class 4 application being filed and accordingly Lai Qin does not apply. 19 Further, I am of the view that the decision of the Council to settle the proceedings on the basis contained in the order was reasonable, representing a genuine attempt to accommodate the respective interests of the parties by allowing the Respondents time in which to attempt to obtain a building certificate and only requiring demolition if the Respondents prove unsuccessful in this regard. Accordingly, the Council achieved the substantive outcomes which it sought and acted reasonably in commencing and settling the proceedings and is entitled to an order of costs in its favour. 20 I add that this matter is finely balanced as to whether the Council should receive its costs, although I have ultimately determined that it should. Careful consideration by the Council and its solicitors should be given in future to whether all avenues of settlement have been explored before commencing proceedings. I also do not consider the Council should have its costs in relation to the preparation and filing of the Amended Class 4 application as no leave was sought for its filing as required by the Land and Environment Court Rules. 21 The position of the Third and Fourth Respondents does not suggest that the Council should not get its costs from them. Counsel for the Third and Fourth Respondents referred to my decision in Nati v Baulkham Hills Shire Council [2002] NSWLEC 71 to support their argument that they acted reasonably in relation to the proceedings and should not therefore be ordered to pay the Council's costs. However I do not find my decision in Nati of much assistance in this case as it dealt with different facts to those currently before me. While I understand that the Third and Fourth Respondents were not occupying the land or running the herb farm on the land they are, with the First and Second Respondents, the owners of the property in question. In the absence of any evidence suggesting the Council should have been aware that the Third and Fourth Respondents were not involved in the business or were living elsewhere, I consider that the notice of intention to issue an order and the order were validly served under s 153(1)(a) of the EP&A Act. While I consider that the Third and Fourth Respondents acted reasonably once aware of the proceedings I have found that the Council did also. Costs are compensatory, not punitive; Latoudis v Casey (1990) 170 CLR 534. I consider therefore that the Third and Fourth Respondents are liable, with the First and Second Respondents, for the Council's costs. I consider that each party should pay its own costs in relation to the hearing as to costs on 17 September 2004. Orders 22 I make the following order: The Respondents are to pay the costs of the Applicant in relation to these proceedings, other than those costs relating to the amended Class 4 application filed by the Applicant on 30 June 2004 and the hearing on 17 September 2004. 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.